Updated June 12, 2023
PMO – Order or Chaos?
PMO can serve as both, but order most times can be a boon for any project. With many entities coming together, there is also a chance of a scramble that might not be the best way to conduct your business or run your projects.
In an organization, many projects in work benefit a way of life. These projects are born out of a need that arises, and it is the responsibility of program managers and project managers to be organized in such a manner as to resolve the issues at hand with ease and simplicity for everyone to benefit from.
Projects are a subset of a program, with multiple projects taking place at different times, in succession, all with the view of getting the program closer to the company’s goals and objectives of progress. Project and program managers must be cautious and organize a PMO or Project Management Office to deal with all these things happening simultaneously or at different times. This PMO will be the organizing body that helps in every project undertaken and every program dealt with. In this article, we’ll learn everything you need to know about a PMO.
What is a PMO?
A PMO (Project Management Office) can be perfectly described as a centralized entity within a particular organization that is responsible for setting standards, maintaining discipline, providing a governance body, and enforcing the right set of accountability toward managing and steering projects in a clear, concise, and consistent manner.
Standardization and discipline are essential for executing multiple projects effectively. A PMO can provide organizational standards, consistent training, and project management guidelines to ensure successful project outcomes.
It provides a consistent project management approach for handling multiple projects, overseeing standards, procedures, and adherence to quality, customer care, and quantity requirements.
A PMO can be a dedicated group or even a single person, depending on the program/project scale. It helps organizations establish and maintain standards to handle growing demands and expansion.
The project management office can be of different types and need to comply with the needs stated by the organization in its endeavor to make projects adhere to standards and norms. If a PMO is established with a clear objective, a solid foundation, and strong support from sponsors, along with a well-defined business model, it can operate effectively. In that case, it can be a powerhouse of value creation and project excellence for the company.
Bringing project management to the forefront is a great idea. You can have standardization and even monitor against a set of norms for your project team and other members associated with the project. So, why a PMO? Let’s go through the key benefits mapped out when we use a PMO:
- Delivering a project could never be easier; with predictable consistency and efficiency, you can guarantee success
- Establishing a foundation for your company’s initiatives and managing an organizational portfolio at the same time
- Encouraging transparency and efficient financial reporting to encourage leadership
- Aligning business strategy with investments to gauge the level of success
- Improving customer satisfaction and employee productivity to boost business performance
- Implementing standard practices in accordance with the best practices followed worldwide
- Ensuring long-term savings and return on investments (ROIs) for all the training and mentoring
What Makes Up a PMO?
A PMO comprises 3 different and varied components or facets that contribute to the PMO’s effectiveness within the organization’s walls. These facets are highly interdependent on each other, and the success of the PMO truly relies on these 3 pillars of strength. These facets are as follows:
Each component is widely different from the other and complements each other in a way as to bring forth the purpose of the PMO right in front of the business and the management. In this section, we’ll have a look into each of the components and understand them. Once the setup is complete and all necessary preparations are in place, we will establish and kick-start our PMO.
Establishing the functional aspect of the PMO is an important initiative that can boost how your PMO turns out to be. The role or scope of the PMO needs to be measured and defined within the organization to start the process. The PMO maintains order throughout its functional tiers, ensuring adherence to established standards and procedures. The following image provides an overview of the functional tiers of a PMO and highlights the importance of maintaining order for effective functioning.
By definition, a PMO is a standards-setting entity, which is a governance body to maintain the delivery management unit and as the strategic support system to the management and the project team members within the organization.
There is progressive order that the PMO maintains. Each tier is dependent on the tier outside of it. The organization’s strategy guides and influences all aspects of the PMO, including its functional tiers, which are closely examined and aligned accordingly.
This forms the qualitative foundation of the PMO and how it affects the elements of a project or organization —People, Processes, and systems/tools.
- People – The people within a PMO system are its leadership unit and personnel working towards putting up a fine project to achieve the company’s business objective.
- Process – The process is the SOPs based on the disciplines that the PMO manages. Processes should be practical and in-bound with the workflow of the complete organization. While setting up this aspect of the office, it is essential to conform to adaptability, scalability, and buy-in from the people within the organization.
- System/Tools – Tools must be tailor-made per the availability of resources and the knowledge set of its users. The systems should be designed in such as way as to encompass the following elements:
- All the required information is accurate and in real-time formats
- Disciplines of the PMO to be set up
- Should have reporting mechanisms to ensure efficient decision-making at all times
The Project Management Office should address the following quadrants of business management when running projects or programs within the organization.
- Communication Management – 360° communication for all partners
- Stakeholder Management
- Reporting and Metrics
- Resource Management – Important for project execution
- Staff Management
- Vendor Management
- Asset Procurement and Management
- Change Management – Tackling issues and resolving risks scenarios with change
- Scope Management
- Risk and Issue Management
- Training and Development Management
- Execution Management – Time and Cost are critical aspects of any business
- Critical Path Management
- Financial Management
Setting Up and Running a PMO
Setting up a PMO isn’t just about finalizing a bunch of criteria and starting the implementation. Similar to project implementation, a PMO requires assessment, analysis, documentation, and planning to initiate and establish its operations effectively. I’ve jotted down the best 6 steps you will need to set up and run a PMO that will address all your needs in a project management scene with your organization and your projects. Let’s jump right in!
Step 1 – Jotting Down an Assessment
Understanding the inside and out of your requirements and your objective of setting up a PMO is key in setting up and eventually running a PMO. Assessment is a necessity when it comes to setting up a PMO. You would need to review and measure the current status of the project management office organization and check for the desired target scenario the company would like to be in.
To perform this assessment, I suggest you utilize the project management office PMI’s OPM3 (Organizational Project Management Maturity Model) assessment which will help you gauge the level the organization is at against the current state of the PMO residing within it.
This step will look at the functional areas that would be governed and regulated by the PMO and the gaps between your business and the requirement of the PMO. Check out the Disciplinary section of this article to learn the different quadrants of the business management paradigm. The PMO can be placed within the appropriate maturity level by carefully examining these areas.
Step 2 – Listing Down the Recommendations
You’ve now assessed where your project management office organization stands and where the PMO has to intervene. Your next step is to carefully list recommendations on how to fill in the gaps with processes, people, or systems and combinations and permutations of those. These recommendations could include the following:
- Have gate reviews for better decision-making
- Track the progress of your projects and accordingly make risks known to these project managers
- Have quality assurances rendered to projects to check adherence to project management methodologies that have been set up
- Train, mentor, and coach new project managers in the different project management processes and systems put in place for standardization.
- Collaborate and ensure that all necessary steps and methods are well-documented for reuse.
Keep in constant touch with employees working within the organization and ask them for frequent feedback. You will be able to discover the weaknesses and strengths of the processes and systems put up during the execution of each project.
Step 3 – Building an Execution Plan
You have the areas that need permanent fillers, the recommendation, and the level they are at. Now comes the part where you design an implementation plan to get things kicking off. You have tactical recommendations, while some need more in-depth organizing; they are called strategic recommendations. Initiate the tactical aspects of the PMO, similar to project management, by maintaining time, cost, and resource requirements, and developing an implementation plan.
Get buy-in from your management team when you propose the execution plan you have set out to achieve, considering all that needs prioritization. Keep in mind also the strategic view of the company and how it’s placed. Top management loves to see a dedicated and influential manager all ready to walk the mile.
Step 4 – Implementing the Execution Plan
Engines on… foot on the acceleration… map in hand… all left to do is release the clutch! Zoom past to a great PMO in front of you! Though it sounds like a cake-walk when you put about racing cars, the execution of a PMO requires diligence and extremely hard work, with a tinge of a unique perspective to go and achieve. Head for the tactical plans and gather those “wins” under your wings. With this boost, you are ready to conquer the next mile.
Show up the value the PMO has been holding for you with every win that goes by, and always keep in mind the objective at hand while keeping a stern eye towards not deviating from the plan. The PMO must help people with their projects to conform to the company’s standards. With these short wins, you can establish confidence in the many things a PMO can turn into.
Step 5 – Communicating the Update in Frequent Intervals
Communication is an extraordinary factor in our lives, making transferring knowledge and information very convenient if utilized effectively. In the case of setting up and validating the moves of a PMO, communication is a crucial component to its success and meaningful implementation. For a PMO to last, the communication framework must be strong and address all the concerns.
As we direct ourselves to the tactical plans and their completions through the strategic changes, we need to be able to communicate each update systematically. This will ensure and boost communication throughout and update the necessary stakeholders on the PMO’s progress and how apt the PMO implementation is for the organization.
Step 6 – Stop. Watch. Fix. Repeat
Continuous improvement is the best way for a project or any undertaking to grow and mature into the systems and processes we’d like them to be. Your PMO would have short- as well as long-term recommendations made. These should be reviewed frequently, mostly annually, to make plans and deal out opportunities from them. With every review, plan, and implementation, your PMO grows, and so does the project management office organization’s implementation of projects and programs.
Your PMO is not a stagnant entity. It evolves, and the way it evolves is an iterative process. Review each opportunity or risk encountered and how the process is yielding value. Once you do that, you will be able to find gaps that need filling till you reach perfection.