What is a PMO?
The basic definition of the PMO in a business or professional enterprise is a permanent organization tasked with one or more of the following objectives:
- Define and maintain the guidelines, policies, processes, and standard documentation around projects.
- Encourage and sustain repeatability related to project management.
- Provide central, coordinated management/oversight into the initiation and strategic planning of projects.
- Coordinate and develop project management training for continuous organizational improvement.
- Offer a broad range of services from budgeting, to product management, to direct project leadership, to support functions such as coaching, consulting, and marketing.
- Support the prioritization of strategic projects to ensure that the organization is working on initiatives aligned with strategic business goals.
- Provide oversight across the resource pool to support the assignment of resources to the highest prioritized initiatives.
In today’s competitive business environment, more and more organizations are establishing PMOs as a method to create business agility and efficiency and to ensure key executives remain abreast of strategic initiatives within an organization. Every organization is different, however, there are a few best practices that all organizations can implement to ensure that, when establishing a PMO, they are setting their PMO up for success.
- Ensure that you have Support and Involvement from the Right Executives
Often one of the most difficult duties of a new PMO is to establish itself as the de facto authority for any new major project work. This can be especially difficult to maintain if the PMO is being operated with little organizational support or involvement. When establishing a PMO it is critical to ensure that C-Level executives are involved and understand the value of establishing a PMO.
- Focus on Portfolio Planning First
Better planning leads to better execution, and one of the biggest reasons that projects fail is that those projects were poorly planned and scheduled without consideration of the broader portfolio. Poorly executed projects and a lack of ability to deliver on commitments to key stakeholders will lead to an organizational lack of confidence in the PMO. A lack of confidence in the ability of the PMO is one of the biggest reasons that PMOs fail.
Resource capacity and demand constraints are often the biggest impediment to scheduling and completing project work and often new PMOs struggle to get visibility into how resources have been allocated across project and non-project work. It’s often a smart idea to adopt a light weight project portfolio management tool to help with resource capacity and demand planning across key initiatives.
- Minimize Organizational Change
Too often, when establishing a new PMO, PMO Directors will place a mandate on the organization to track project information at a level of detail so granular that it becomes extremely time-consuming for organizational personnel. This level of change tends to backfire and many of these resources will reject the PMO outright.
When establishing a PMO it is important to minimize this change and focus on initially establishing and collecting only the project KPIs with the highest value for key executives and stakeholders. We often recommend starting with just 15 to 20 KPIs per project to limit the amount of maintenance and reporting required by project personnel. This facilitates adoption of the new PMO, and KPIs can be expanded upon as the organization matures.
- Think about the Right PMO Structure
There are two basic models of PMOs:
- One acts in a consulting capacity, providing project managers in business units with training, guidance and best practices.
- Another acts as a centralized organization for handling all project management activities. Often this type of PMO will have project managers on staff who are loaned out to business units to work on projects.
When building your PMO make a determination about what structure is right for your organization based on input from key stakeholders and organizational objectives.
- Don’t think of your PMO as a Cost Cutting initiative
Although the consistency and efficiency promoted by a PMO may result in reducing the project workload and better on-time rates…which will save costs, the goal of the PMO should be to ensure that the organization stays focused on executing the projects that will bring the highest value to the organization.
To learn more about the value of a creating a PMO check out this whitepaper: Project Management Office: Seeing the Whole Picture.