As more and more companies recognize the importance of project managers, the popularity of the PMO — or project management office — is rising. According to research conducted by PM Solutions, the percentage of businesses with designated PMOs rose from 48% to 85% from 2000 to 2016.
But what is PMO? In this post we’ll explain its meaning, discuss the core structure of an efficient PMO, and help you figure out whether it’s the right fit for your business.
What is PMO?
Put simply, a PMO is a group within a business or organization whose main job is to set standards for work and processes amongst internal project managers.
The PMO establishes best practices, key metrics, documentation, and necessary training for the project managers within a company. Think of the PMO as a kind of headquarters, or home base, for everything project management-related within a business or organization.
The PMO lays the foundation on which businesses can build a proactive approach to project management. With this central base, project managers across departments are able to work consistently, and confidently. There’s no guessing whether the process you’re implementing is right for the business — the PMO lays it out for you.
What does a project management office do?
It’s one thing to say that a PMO is responsible for laying out best practices. But let’s take a moment to drill down into specific responsibilities of a project management office.
- Create processes and standards in alignment with the organization’s overall goals, culture, and strategies in mind.
- Adapt and change these defined processes and methodologies as needed.
- Identify any issues or gaps in project management methodologies and processes within the business.
- Use research and data to inform their strategic decisions.
- Share tips, processes, data, and resources regularly with the entire company.
- Coach and train project managers and any relevant team members.
A project management office goes beyond just printing out project management best practices and sticking them on the wall. They’re deeply involved in making sure that each project goes off without a hitch. Project managers can look to their PMO at every stage of a project, whether things are going well or not. If they need to improve adoption of project management practices across the organization, they’ll rely on their PMO as well.
The three types of PMOs
Every project management office is different, but they can be broadly organized into three categories. These categories are organized across two variables: influence and control. A PMO will fall in one category or another depending on how much influence and control they exert over projects and their contributors. The three types are:
- Supportive: This kind PMO is less about direct control and more about influence. They act like more of a consultant, advising project managers, teams, and individual contributors alike on best practices without having the authority to tell anyone what to do.
- Controlling: PMOs that fall in this category use direct control to implement best practices. They have means of forcing compliance to their guidelines, whether that’s directly or through other leaders in the organization.
- Directive: These PMOs don’t worry about influence or enforcing compliance. Instead, they take direct control of an organization’s projects.
No type is inherently better than another. One type of project management office might work for a specific organization while another would just create friction. Adopt one type, see if it works for your projects, and re-evaluate.
Structure of the PMO
As the central structure responsible for project management success within a business, the members of a PMO must understand exactly what the organization — and their team — requires. Due to this high level of responsibility, it’s important to take seniority and experience into account when building your project management office.
Roles within the PMO often include:
- A PMO Director who is in charge of projects and procedures across the entire business. This person will ultimately establish standards, tools, project processes, and decide on resource distribution and management. They will also act as liaison between the project managers and executives in the organization.
- Project and program managers who report into the PMO. They follow the lead of the PMO Director and implement the established processes and best practices.
- Project schedulers who work with the PMO Director and project managers to schedule projects and tasks.
- A project specialist who provides hands-on, direct assistance to project managers .
- A PMO trainer or coach who, depending on the size of the organization, trains staff members on topics such as process, leadership, software and tools, and strategic alignment.
- Administrative staff who help with various tasks and key follow-up initiatives to ensure the PMO is working efficiently.
PMO benefits and challenges
Like any organizational structure, a PMO has its own set of benefits and challenges. The key here is to understand these pros and cons before your organization moves forward with establishing your internal office.
- Keeps projects on track. A successful PMO will ensure that projects run smoothly and efficiently, ultimately decreasing the number of failed projects.
- Delivers projects on or under budget. With standardized resource management in place, and a number of gatekeepers involved, working according to a budget is much easier with a dedicated PMO.
- Aligns projects with company strategy. Project managers are given the tools and support they need to actually apply business strategy and work with company goals in mind.
- Improves business outcomes with talent. With a dedicated training development plan, employees are empowered to improve their knowledge and skills within the organization.
- Boosts communication across the organization. As the connecting force between executives and employees executing tasks, the PMO helps establish clear communication between all parties.
While it might seem obvious why a business would want a PMO, there are definite challenges to consider before diving right in.
Here are some of the issues or constraints to think about when considering a PMO:
- Proving the value. Establishing a PMO isn’t a cheap endeavour, so it’s important to show, rather than tell, how it could benefit your organization.
- Change management. When things have been done a certain way for a long time, it can be difficult to initiate new processes across an organization. If you decide to establish a PMO, you may face backlash or roadblocks from other members of the business.
- Lack of understanding. Stakeholders, executives, and other project managers may have a hard time understanding the role of the PMO within the business. And the office’s members may not have a deep enough understanding of the business itself (goals, strategy, business cycles, etc.). This would need to be remedied before moving forward.
- Lack of resources. There’s no denying that a PMO will require resources, whether that be budgetary, talent, or time. If your organization lacks any of these, you may have a difficult time establishing and managing a project management office.
- Consistency. If you don’t have the right trainers or educators in place, there’s a good chance that processes will not be carried out consistently across the business. In the end, this could end up being a bigger issue than not having a PMO in the first place.
Do you need a PMO?
Now that you understand some of the benefits and challenges of a PMO, we can dive deeper into figuring out whether your organization requires one. First, ask yourself the following questions:
- Are projects consistently completed past due dates?
- Do your projects often go over budget?
- Are stakeholders regularly asking project managers for updates on projects?
- Does every project seem like it follows a different workflow?
- Do you often find yourself confused when trying to determine whether a project was successful or not?
If you answered yes to three or more of these questions, your business could benefit from a PMO. That said, there are other factors to consider.
What is the size of your organization?
The larger the business, the more effective and necessary a project management office becomes. That’s not to say that a smaller business wouldn’t benefit, but the resource allotment and ROI might not be the most effective here.
What is your business’ budget?
Even in big organizations, budgets can be tight. If your organization is going through a rough patch, or trying to reserve resources immediately, it might not be the best time to introduce a PMO (which possibly requires new senior talent, time resources, and change management).
Why does your business want a PMO?
If it’s because other organizations have one, you might want to take a step back. You should only create a project management office for the right reasons. Consider the need before you start investing any internal resources. To be successful, the goals of the PMO need to align with the goals of the business.
As projects — and organizations — get more sophisticated, a dedicated PMO can help you deliver projects on time, within scope, and save you a bunch of effort along the way. With the right investment, it will also help you scale your projects and ultimately reach and exceed your business goals.
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