Inconsistency in project management process between one project and another is a common problem that plagues a lot of organisations, especially those whose project management capabilities are not yet mature. They are faced with difficulty in consistently measuring the performance of various projects.
For example, Project A and Project B are two very similar projects with very similar outcomes. However due to inconsistent project management practices, these projects are managed differently with different performance metrics. As a result, project A is deemed a failure and Project B a success, even though that may not be the case if consistent measure were applied to both projects.
The running of multiple projects without existence of centralized coordinator will almost certainly result into chaos and inefficient and ineffective business operations.
Definition of Project Management Office
The Project Management Office (PMO) is centralized agency that offers standard set of tools, processes and templates to project teams. These set of tools and processes can be used across all the projects in uniform manner. As per Gartner Research, the world’s leading information technology and advisory company, “organisations that establish PMO, have experienced half the major cost overruns, and delays as compared to those that do not have PMO”
PMO is acronym of project management office. In some organisations, it is also known as Portfolio Management Office or Program Management Office. These may operate at different levels in the organisation.
Project Management Office supports the project teams.
Program Management office supports the program team. They offer standard sets of tools and processes to program mangement. They may have additional responsibility of project governance.
The portfolio management office is responsible to define and oversee a balanced portfolio of projects and programs that will deliver the organizational strategic objective.
Here are the common names for PMO used in various organisations.
Image source: PMI and PWC global survey on transformation and project management , 2021
This article will delve into the advantages of implementing a PMO within an organization, discuss various PMO types, and offer some practical advice for establishing a PMO in your organization.
Interested in learning different project management methodologies, here is an article for you.
Benefits of Project Management Office
Project Management office, as centralized agency, has the main role in implementing a standardized project management processes and procedures across the whole organisation. It has number of benefits to the organisations such as:
- PMO provides standardized set of tools, templates and processes. Hence it reduces the time and cost associated with setting up the project from scratch.
- It provides consistent means of measurements for all projects’ performance
- PMO acts as escalation channel between project manager and business executives of critical project issues that require timely intervention
- PMO assists business executives by providing high level view of projects, thus assisting them in making decisions on resource allocation
- PMO provides training and coaching to project team members
- As projects come and go, PMO facilitates formal retention of knowledge in the form of lessons learned document.
- PMO ensures projects are aligned with business strategy and objectives.
These examples offer a glimpse of how PMO offers benefits to the organisation. However, different types of PMO’s provide different level of benefits and support to the organisation. In the next section, we will look at different types of PMO’s
Different types of Project Management Offices
Enterprise PMO
An Enterprise Project Management Office (EPMO) creates standards, processes and delivery approaches to improve project performance across the organization—and typically is the go-to authority for allocating resources to different projects.
Designed to operate at the corporate level, EPMOs hold maximum strategic influence and ensure that projects are aligned with organizational objectives and priorities. By having executive support, EPMOs drive mission-critical initiatives, accelerate change across an organization and report to the highest levels of the organization, like the COO.
Department PMO
A departmental PMO supports multiple projects at a department or business unit level. Its primary role is to integrate initiatives of different sizes within a division, such as IT or finance—from small, short-term initiatives to multiyear programs with multiple resources and complex integration of technologies.
Individual PMO
Individual PMOs set basic standards and oversee planning and control activities for a single project. It can be used when a particular project is so big, or vital, it can benefit from added attention that a departmental PMO is not suitable to provide.
Supportive PMO
A supportive PMO provides assistance to projects by supplying templates, good practices, training, access to information and lessons learned from other projects. It takes a help of internal project management experts and subject matter experts to design the templates, and add value to the projects.
Controlling PMO
Designed to provide more control by facilitating compliance, the objective for this type of PMO is to adopt project management frameworks or approaches and designate specific templates, forms and tools. With a top-down structure, it might conduct regular audits and require project teams to follow rigid processes.
How to set up Project Management Office?
In setting-up PMO, you can incrementally do it or do it all at once – also known as big bang approach
Incremental approach enables you to tailor made the PMO services and change them or tweak them as you go on implementing them in practice. Incremental approach also helps to bring people on board and garner support.
The big bang approach is likely to have greater level of resistance since the change is not incremental.
Here are few practical tips you can use while setting up incremental PMO.
- First establish a clear business case. Why you want to create a PMO and what are benefits it will bring to the organisation? Determine which type of PMO you want to establish.
- Identify PMO’s source of funding.
- Outline PMO’s main responsibilities, services and functions.
- Determine where PMO will fit into organisation’s structure
- Define PMO’s key performance indicators, targets, milestones, and so on to measure its success.
- Gain some quick wins. Once you start setting up PMO, start with simple services that will develop evident value to projects under PMO. You can show the benefit to other stakeholders and gain their buy-in the implementation.
- Always communicate and consult with stakeholders on what you are going to do in PMO and how they will benefit from a process. Find out what their priorities are and what you can do for them.
- Involve stakeholders in frequent reviews so that you can adapt as you go on PMO implementation.
Summary
The Project Management Office (PMO) is centralized agency that offers standard set of tools, processes and templates to project teams. There are many definitions of PMO used commonly in different organisations. Benefits of PMO include, from providing standardization to project management practices to ensuring projects are aligned with business strategy and objectives.
Different types of project management offices serve different purposes. From establishing an enterprise-wide governance framework or monitoring organization’s specific initiative, different types of PMOs provide different levels of guidance, control and support.
In the end, we also looked at some practical tips you can follow in setting up the PMO in your organisation.
It’s your turn
Do you have Project Management office in your organisation? Which type of PMO does it belong to? What are its roles and responsibilities?
Write your comments in the comments section below. I would love to read your comments.
References
Here are further resources if you want to deep dive in this topic.
- The evolution of PMOs – Thought leadership in Project Management (PMI publication, 2023)
- Project Management Body of Knowledge – Appendix X3
- PMO – wikipedia article
