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Introduction to the PMO – The Absolute Essentials You Really MUST Know

Introduction to the PMO - by Peter Taylor

The Project Management Office (PMO) in a business or professional enterprise is the department or group that defines and maintains the standards of process, generally related to project management, within the organization.

Introduction to the PMO - by Peter Taylor

Introduction to the PMO – by Peter Taylor

The PMO:

  • Strives to introduce economies of repetition in the execution of projects
  • Aims to reduce project risk through common practice and quality assurance
  • Links business strategy to project-based execution of that strategy

What is a PMO?

  • Project Management is all about doing something (a project) in the right way. The ‘right way’ is all about method and discipline and quality and control.
  • Program Management is all about doing those things (the projects) in the right sequence or order.
  • Portfolio Management is about doing the right things.

Which leaves the PMO. And you can think of the it as doing all the above, but with the right team.  ‘The right things, in the right way, in the right order’.

Portfolio - Program - Project - PMO

Operational Mode

A Project Management Office can operate in a number of ways:

  • Supportive
  • Controlling
  • Directive

Supportive

The Supportive Project Management Office is all about helping project managers. It does it by providing some level of support in the form of:

  • project expertise,
  • templates,
  • guidelines,
  • best practices (or at least proven practices),
  • knowledge and project expertise,
    typically based on personal experience and/or a network of experienced people throughout the organisation.

You can see this as a process of bringing together of a project community. Before this, there have often been silos of project-based activity, with little knowledge sharing.

Why use a supporting model?

  • The requirement is to merely aid the existing project activity to raise the levels of project success
  • To share project management information across a wider group of project managers
  • To empower the project managers and project teams to solve common problems and be more successful

Controlling

The Controlling Project Management Office is applicable where you want stronger discipline on all project activities, methods, procedures, documentation etc.

Why use a controlling model?

  • To ensure that a standard and consistent methodology is used
  • To ensure that regulatory compliance is adhered to
  • Where there are regular reviews that need to be passed
  • A project or projects are high or higher risk than normal
  • A project or projects are a high or higher profile than normal
  • This is a new business endeavour

Directive

This Directive Project Management Office goes beyond control. Here, the PMO takes over the project or projects by providing the necessary project management experience and resources. Project managers from the PMO are assigned to each new project and reporting of project progress is direct to the PMO itself.

Why use a directive model? Use it to:

  • Guarantee the highest level of consistency of project management practice across all projects
  • Reduce costs by centralizing project services
  • De-risk project delivery

Blended

Blended PMO

Blended PMO

There is another way that Project Management Offices can operate. This is a combination of the three: directive, supporting and controlling. So this is perhaps better described as a ‘blended’ approach. And the blend can be of any two modes or a combination of all three.

This is quite a common approach. It is flexible depending upon the actual and individual need.

All PMOs are not equal

Project Management Office leaders should try and move their PMO to a level appropriate and relevant to the organization funding and sponsoring it. There are five levels in the Maturity Scale:

Level 1: Ad-hoc

Here the projects have few, if any, formal definitions. They are performed on an ad-hoc basis. So the PMO will typically get involved as trouble shooters and recovery agents.

At Level 1, I would suggest that this is not really a PMO. Rather, it is some form of SWAT team activity; a specialist group of senior project managers who enter projects to solve issues. They can deploy their ‘seen it and done it and lived to tell the tale’ experience. The real PMO enters at maturity Level 2: Defined.

Level 2: Defined

Where the project discipline is defined, executed and repeatable. Here the PMO will have set up standards and methods, and will measure adoption and compliance accordingly.

Level 3: Controlled

Where the project discipline targets align with business goals and are defined with greater detail. Results are qualitatively predictable and the PMO will operate a governance model against this, through reporting and deviation correction.

Level 4: Measured

Quantitative goals are clearly set and measured. The PMO will lead the measurement of project behaviour through KPIs and metrics dealing with intervention by exception.

Level 5: Optimized

There is a focus on continually improving performance. Here the PMO moves beyond the individual project focus. Instead, it looks more towards incremental and innovative improvements. To this end the PMO may well initiate projects for self-improvement.

10 Tips to succeed and stay successful with a PMO

Lesson 1 – Get help

The reality out there in ‘PMO land’ is that there is not a plethora of wise and experienced Project Management Office managers, directors, or leaders. So it is sensible that if you need to set-up a new PMO, or advise on improvements to an existing one, to reach out for help.

Lesson 2 – Get the right leader

Having the right ‘head’ of the Project Management Office is also critical.

A good PMO leader must champion project management and project managers across their organisation.

They must also believe in the business strategy and communicate it with conviction. They must be enthusiastic about leading change and negotiate fairly but strongly for the PMO and the projects. And critically, they must have a strong belief in their own ability and that of the PMO they lead. 

Lesson 3 – Measure the PMO value

A ‘balanced’ approach to a Project Management Office is important. One way to achieve this balance is to consider structuring your efforts under the ‘5 Ps’:

  • People
  • Process
  • Promotion
  • Performance
  • Project Management Information System

It may be tempting to just think of the PMO as all about the process. This sets it up as the way to ensure that good project management through methodology and quality assurance. But that ignores the people side.

And it may be that you lean towards the project management community and your focus is on the people. Projects are all about people after all. So you direct your efforts as a PMO leader towards training and team building. As a result, you ignore the project mechanics. You may also accept the need to build a good tracking and reporting system, supported by an investment in a project management information system. This will deliver the visibility of project health and progress towards business goals.

But without a promotional program then all of the good work you, and your team, achieve in the areas of process and people, will go unnoticed and unappreciated by both your peers and the executive.

The best PMOs balance all of this. They achieve the most effective development of capability, representation of capability, sharing of capability, and achievement.

PwC Findings

In the PwC report: ‘Insights and Trends: Current Portfolio, Programme, and Project Management Practices’ there are a series of Key Findings. One relates to measuring value:

‘Key Finding: A majority of organisations do not conduct regular evaluations of their PMO and also do not consistently measure benefits or returns from the PMO.

… using a PMO contributes to improved project performance; however, organisations currently do not consistently evaluate and measure the success or returns on investment (ROI) of the PMO… 29% of organisations never evaluate their PMO and 30% conduct evaluations on an annual basis. However, the 14% of organisations which evaluate their PMO on a monthly basis also measure their PMO for ROI (65% of the time). Those organisations that never evaluate their PMO measure their ROI only 9% of the time. Organisations can benefit from finding similar positive correlations between using a PMO and project performance, through conducting more regular evaluations of their PMO, as well as, business ROI’.

Measuring the PMO value will ensure that you are ready to articulate its true value to the business. It will also allow you to continuously improve your PMO’s performance.

Lesson 4 – Lock the value in

The ESI report from 2012: The State of the Project Management Office: On the Road to the Next Generation is also helpful. It identified that some 55% of respondents reported that key stakeholders questioned the value of their Project Management Office over the last 12 months. Usually this was by senior management. Further it  noted that this was an increase of about 15% on the results from 2011.

Despite one in three PMOs being managed at the level of the C-suite, it looked like many were still struggling to prove that they add (or can add) value. Even after being in place for years, PMOs are still subject to scrutiny. One in three of the PMOs which the ESI survey reported to have closed this year were 5 years old, or older.

So maturity is not a safety net for PMOs. The top reason cited in the survey for disbanding a PMO was ‘corporate restructuring’.

  • On the positive side, this restructuring could mean consolidating PMOs into a single enterprise model.
  • On the negative side, an executive decision or change in management was the reason for the closure of one in four PMOs. This came with an associated argument that PMOs did not deliver value.

The key here is that you need to ‘lock in’ the value of the PMO during the delivery period. Additionally, you should regularly re-assess and measured your PMO. Better yet, seek a good external PMO leader to do this.

It is critical for a PMO to achieve a level of maturity. The PM-Partners: PMO Trends 2012 report states:

‘There’s a direct link between the maturity of the PMO and the value it provides. Mature PMOs are far more likely to offer real competitive advantage to a business by increasing the speed and quality of business returns’.

Six more lessons…

In the next article, we’ll see Peter’s remaining six lessons for running an effective Project Management Office:

  • Move with the business
  • Connect to strategy
  • Size Matters
  • You do not have infinite capacity
  • Make things better
  • Learn the Lessons

Take me there now, please.

If you can wait, take a look at Peter Taylor’s two books about PMOs:

Delivering Successful PMOs by Peter Taylor & Ray Mead

Delivering Successful PMOs by Peter Taylor & Ray Mead

Buy Delivering Successful PMOs from Amazon.com

Buy Delivering Successful PMOs from Amazon.co.uk

About the Author Peter Taylor

Peter Taylor is the author of two best-selling books on ‘Productive Laziness’ – ‘The Lazy Winner’ and ‘The Lazy Project Manager’. In the last 4 years he has focused on writing and lecturing with over 200 presentations around the world in over 25 countries and has been described as ‘perhaps the most entertaining and inspiring speaker in the project management world today’. His mission is to teach as many people as possible that it is achievable to ‘work smarter and not harder’ and to still gain success in the battle of the work/life balance.

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