Many CIOs are often faced with the challenge of building or upgrading the PMO. There is often a temptation to go for ‘best practice’. As result, some CIOs set the goals too high. I have seen many a organisations bogged down with PMO processes that everyone detests but without any improvement in effectiveness. Before we can talk about setting or upgrading PMO, we need to know why your organisation needs a PMO? Because one type of PMO does not fit all organisations.
Why do you need a PMO?
According to the Project Management Institute (PMI), the primary goal of a PMO is to help maximise the value of ‘project management’ by standardising the practices and consolidating the initiatives across the enterprise. A PMO helps organisation get efficiencies of scale and improve governance of projects. It can help an organisation meet its goals by right project choice, delivery and benefit realisation.
One size does not fit all
While PMOs exist in many organisations they are not all alike. Even the abbreviation PMO can mean a Project or Programme or Portfolio Management Office. Generally speaking, an organisation’s maturity in managing small and large projects determines what type of PMO they need. With maturity, the PMO focus shifts from managing projects to governing portfolio of projects for an enterprise.
What are the PMO functions ?
There are different types of PMO. The scope often varies based on its purpose, here are some common PMO functions:
- Monitoring and controlling project performance
- Project tracking, dashboard and reporting.
- Periodic project review.
- Developing Project management (PM) competencies and practices
- Coaching, mentoring, support and training on project management (PM) practices and standards
- Standardisation and continuous improvement of PM practices
- Assisting with business case development.
- Multi-Project Management
- Managing project repository of all projects undertaken.
- Coordination between projects
- Centralised project resource management and allocation (or a pool of project managers).
- Organisational learning
- Monitor and manage PMO performance
- Conduct post-project reviews and audits
- Support the project governance committees
What type of PMO do you need?
Before setting up a PMO, you need to be clear about what type of PMO your organisation needs. If project management practice is ad hoc or lacks a standard approach, then perhaps a Project Management Office is what is needed. Or perhaps a major programme needs its internal project office to help the Programme Director keep control over different aspects of the programme. In a more mature, large enterprise there may be a need to control and manage a diverse portfolio of projects and optimise project investments.
An assessment of the maturity and readiness levels in relation to project management practices and experience ought to be performed to set up a clear baseline. Target levels must align with executive expectations but more importantly make a realistic estimation of the effort required to close the gaps. In my experience, gradual steps that increase transparency and allow the organisations to learn and see the benefits are more effective than accelerated programs.
Defining PMO Role
Once you understand what is needed, it is important to clearly define the PMO purpose and its role. Greater clarity about what the PMO is trying to do, how it will work and who the stakeholders and sponsors are, would improve the chances of success.
Mission: It describes what PMO does, how and for whom in simple language. It may be something like “Our PMO establishes and supports project methodology to enable us to deliver projects faster, cheaper and with high quality”.
Strategy: It describes the key strategies the PMO will use in achieving the mission. For example the strategies may include agreeing a project methodology, training and supporting stakeholders to apply the methodology and ensuring preparation period project status reports. Adopt a phased approach and try not to do too much in a year.
Reporting: Focus on what is important when deciding what measures to report on. Measures around (plan-vs-actual) scope, schedule, budget, resources and quality are important to project managers and for governance. Consistent definitions of status (Red/Amber/Green) are important. Reporting should not become a burden and needs to be meaningful to the governance committee. For the reports to be meaningful, PMO must make sure that the data is correct, timely and complete.
Sponsor: Many PMOs become ineffective due to lack of sponsorship. PMO brings new methods and disciplines. Establishing PMO is a change program. There is often resistance to change. An effective sponsor is needed to champion and enforce the new way of managing projects.
Stakeholders: Many people often underestimate the range of stakeholders who are affected by the PMO. Other than the obvious project managers, often project sponsors and others involved in project initiation are affected. Project steering committee members may start seeing modified reports. The methodology may ask for scope control or risk assessments, which may be new. Education of the stakeholders is a key to PMO success.
Project Governance committee: A PMO usually operates under a project governance committee. A key function is to update the committee on project progress and health of the project portfolio. This enables better project governance. Governance committee consisting of key executives from IT and business areas are more effective than IT only committees.
Funding: Like any project, defined budget and resources are needed for PMO. It is better to start with modest goals and a budget to match. PMOs that try to do too much too quickly often fail as the stakeholders cannot keep up and get frustrated.
Staffing: Small PMOs may start with just one Project Officer. However, typically a leader and support staff are needed. Some organisations see PMO as a centre of excellence for Project managers and recruit experienced PMs into PMO.
More tips for success
We have already talked about having realistic goals based on the understanding of the current level of maturity and readiness levels. In addition, consider the following:
- Treat PMO as a change Program: Do not under-estimate the impact of this change and the likely resistance from existing project managers and business sponsors. Having an executive sponsor plus the CIO in your court is important.
- Adopt a simple methodology: Even if your goal is to set up ‘best in class” methodology, start implementation with only a few core elements of this methodology. Where multiple methodologies are being practiced, agree standard reporting templates, key milestones and key approval stages first. When these are in place, gradually increase consistency.
- Focus on outcomes: Too many PMOs spend a lot of energy in processes, tools and methods. It is better to focus on creating greater visibility of project performance and helping improve governance effectiveness. Ensure that extra work demanded of project managers is worth the benefits and is not a burden.
- Assess progress and promote success: Periodically take stock to check what is working and what is not. Get feedback from the practitioners and the governance committee and make adjustments. Communicate your successes.
PMO is not a “one size fits all” proposition. Depending on your organisation’s needs and readiness, you may need more or less advanced PMO. No matter what PMO you choose, having a clear purpose, strategy and sponsorship is critical. Adopt a phased approach and take small steps. Treat the PMO establishment as an organisational change program and you are more likely to succeed.