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.
- 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
In this massive review article, we invited Peter Taylor – best known as The Lazy Project Manager – to share his many years of experience as a PMO leader.
The Lazy Project Manager’s Guide to PMO
Peter will share his insights into:
- What is a PMO?
- The PMO Operational Mode
- PMO Maturity: All PMOs are not Equal
- Peter Taylor’s 10 Tips to Succeed and Stay Successful with a PMO
What is a PMO?
A PMO may serve an organization’s projects, programs, and/or portfolios.
- Project Management is all about doing something (a project) in the right way. The ‘right way’ is all about method, discipline, 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 it as doing all the above, but with the right team.
‘The right things, in the right way, in the right order’.
The PMO Operational Mode
A Project Management Office can operate in a number of ways:
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,
- 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 organization.
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
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 risk, or higher risk than normal
- A project or projects are a high profile, or higher profile than normal
- This is a new business endeavor
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
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 needs.
PMO Maturity: 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 troubleshooters 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 behavior 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.
Peter Taylor’s 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 critical.
A good PMO leader must champion project management and project managers across their organization.
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’:
- 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 good project management through methodology and quality assurance. But this approach 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, 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.
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, these stakeholders were 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.
- But, 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 measure 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’.
Lesson 5 – Move with the business
The PM-Partners: PMO Trends 2012 report summarises this well:
‘It is generally accepted that the Project Management Office (PMO) typically defines and maintains the metrics, standards and repeatable practice for project management within an organisation and is the first step towards:
- Increasing project, programme and portfolio success
- Strategy execution and business transformation
- Increasing the speed of time-to-market
- Visibility and cost control of execution on time and on budget
Our survey results suggest that merely implementing a PMO in itself is not enough. The PMO must evolve over time with a continuous plan to mature the practices that are of the greatest value to executives. As a PMO matures and implements high value services such as portfolio management and resource management, the organisational success metrics improve, and the value of the PMO increases’.
Regularly ‘take the pulse’ of your Project Management Office and how the business sees it. If something has changed you may need to return to the business case and re-validate or update accordingly.
Questions to Ask
You need to ask yourself and the PMO:
- Has anything significantly changed in the business, that requires an adjustment by the PMO?
- What is the view, within the business, of the value of the PMO?
- Are there any key opponents to the PMO operation?
- Are the methods you have established well adopted and adhered to? And have recommendations for improvements been acted upon?
- Has the level of project maturity risen?
- Are project managers reporting the same issues as before?
- Has there been a change in the PMO sponsorship role(s); personnel or approach?
- Has project ‘health’ improved or stagnated?
- Is the PMO approach the right one?
- Is the PMO model the right one? (We saw four broad models above.)
You may need to survey the PMO’s stakeholders to understand in more detail what needs extra effort and focus. Alternatively, it may be that you just need to get together with your Project Management Office team and revisit its purpose.
Whatever the situation you must ensure that your Project Management Office is in step with the current business needs.
Lesson 6 – Connect to strategy
For a Project Management Office to be successful in the long term it needs to connect to the strategic activity of the organization that it supports.
The 2012 KPMG report – ‘Business Unusual: Managing projects as usual’ explored the importance of strategic connection for a project:
‘Strategic Alignment: The success of a project ultimately depends on whether the initiative aligns with the strategic and financial goals of the organization. It is, therefore, as important to do the right projects, as doing the projects right. 94 percent of our respondents indicated that they have some sort of strategic IT roadmap that acts as a major input to their selection of projects. This possibly explains why organizations scored the maximum for this dimension; still a significant gap is seen between identifying the right projects, setting clear expectations and tracking benefits of the project’.
Pete Swan, Director PM-Partners Group declares
‘A PMO is really adding value when it can adapt to the needs of the business and is viewed as a strategic asset during executive decision making’,
A PMO can operate at three levels of ‘Strategic’ maturity within an organization.
The First Level
The first level is the custodian of strategic intentions through the ownership of the projects themselves. Each of these should, in some way, relate directly or indirectly to the strategic intention of the organization.
You can think of this as ‘Strategy Management’. Here, the Project Management Office acts as the governing and advisory body to the executive by:
- Validating that all projects fit one or more strategic initiative
- Tracking the current and valid alignment between projects and strategies
- Making recommendations for ‘stalls’ and ‘kills’ for projects that no longer align with current business strategic thinking
The Second Level
The second is ‘Strategy Delivery’. Thus, the Project Management Office translates the key strategic objectives into new projects to add to the existing portfolio. And perhaps it will also remove some from the portfolio if such objectives have changed. This ‘Strategy Delivery’ is supported by the ‘Strategy Management’ capability.
It may be that the PMO also takes some direct ownership of the execution of large and complex programs (or projects) that are specifically critical to a key strategic initiative, such a relocation activity for example.
The Third Level
The final level is ‘Strategy Creation’. This refers to having a role in helping organizations decide on which strategic options to pursue. It will then:
- translate them into projects – Strategy Delivery, and
- manage their success – Strategy Management.
It is rare that a Project Management Office has reached this position of trust and influence inside an organization. However, it is the potential future for the enterprise PMO. A future that sees Project Management Offices embedded within an organization, with the right sponsorship.
In fact, as observed in the PM-Partners: PMO Trends 2012 report, most PMOs don’t even really ‘get off the ground’. When it comes to any of the three levels of strategic interaction or involvement:
‘The PMO trend is unmistakable, with over 90% of organisations surveyed having an active PMO. Over 96% have standard project management practices or methodologies, whilst only 47% have project portfolio management practices and methodologies. This is further reinforced by the fact that only 34% of PMOs are providing supply and demand planning, highlighting that there is significantly more focus on doing projects right than doing the right projects… against a tough economic climate where the right investment decisions become more important than ever’.
Lesson 7 – Size Matters
It was interesting. Attending a PMO Symposium and lecturing at a local University the same question was raised in the space of a week. And that question was
‘Is there a minimum size for a Project Management Office?’
Thinking across the range of small to medium-sized companies, the answer has to be a resounding ‘yes’.
Why is this? Well, partly because if you ‘do’ projects then a PMO is generally a good idea. What we mean by a PMO can be many things to many organizations of course, and we have to take that into account. But also because if you only ‘do’ a few projects then when one comes along that demands significant investment from an organization then the cost of failure is greater accordingly. A much larger organization will have a large project portfolio and an equally large project community. So it will be able to absorb and manage such a demanding project far more easily. And with reduced impact of failure too.
So how small are we talking?
How about ‘one’?
Can the sole project manager also be the whole Project Management Office?
Well not really, in truth. A sole project manager can’t act like a PMO of many people since they can’t act objectively with regard to their own project performance. And they can’t spend time investing in self-development, method improvements, and so on.
So not ‘one’ then.
Can a Project Management Office be implemented in a small company that has limited resources with a small team of project managers – perhaps two or three?
Well perhaps not a ‘PMO’ as such, but certainly a virtual equivalent with shared responsibility of some of the basic PMO functions. These could be allocated to the remaining project resources. For example, perhaps:
- one person could focus on the training of project managers,
- another on method enhancements, and
- another on community aspects
- and so on…
In this way, a lot of PMO duties could be delivered to a reasonably high level.
Yes, I think a PMO can be applicable to all scales of project business but it might not be a permanent, dedicated unit of course, but more of a ‘part-time PMO’.
The biggest risk to such a PMO is the ability to offer objective insight and support to all project managers, and the business. The smaller the team then the harder it may be to do this in a constructive, non-emotional, positive way. Not everyone has the skill to do this and with a close team of peers, it isn’t always easy to do (or easy to receive at times).
Lesson 8 – You do not have infinite capacity
The Project Management Office is, if not here to stay, at least here for the foreseeable future. And more and more executives are supporting PMOs within their organizations.
The PM Solutions State of the PMO 2012 reported that
‘Most companies have a PMO (87%). Of the few that don’t, 40% are looking to implement one within a year’ which is great news for all of us champions of the PMO’.
The ESI Global State of the PMO 2012 report stated
‘The Project or Programme Management Office (PMO) has moved up the ranks in most organisations as more than just a warehouse of methodology, tools, and process. In an effort to impact business performance through training, methodology and project guidance, many PMOs seek to support project, programme and portfolio management in a more focused, strategic manner. Regardless of its particular position in a given organisation, the PMO is prevalent in virtually every industry and many governmental organisations’.
So, this is all good news.
The PM Solutions report also stated
‘The greater the capability of the PMO, the greater the value the PMO contributes to the firm’,
…which you can also consider to be good news.
Good news with a ‘but’.
There is a strong argument for a ‘green’ Project Management Office to try and involve itself as much as possible inside the organization. But there are dangers in taking on too much. There is a lot of respect for the PMO these days. But there is also the risk of seeing this as a solution for everything that is not ‘operational’. In addition, the organization may act as if it can deal with anything even loosely associated with project work.
For example, there are other pressure points inside the same organizations that now advocate PMOs. A good example is the weakness that many experience in the area of executive sponsorship. The PMO can have a role here to act as a temporary sponsor, as well as a role in developing sponsorship capability internally. But that is extra work.
Organisational Change Management (OCM)
As another example, many projects and programs suffer from a lack of focus and resources in the area of Organisational Change Management. One large PMO ran a number of ‘Health Checks’ in the most significant projects and a common issue was in the area of OCM. There was a recognition of the importance and value of good OCM, but an equal lack of investment in this key area. The question then was whether this was a potential role for the PMO. Of course, we associate the Project Management Office with projects and project success. But was this just a distraction too far?
Technical Project Office (TMO)
In some businesses, there is a focus on good ‘technical’ capability to support project-based activity, and the bringing together of these technical consultants into one community. Some refer to this community as a Technical Project Office (TMO). So should we link this TMO with the PMO? Or should it come under the management of the PMO and be another skillset resource? Should the PMO remain ‘pure’ project management or spread itself across a wider community?
These are big and potentially distracting challenges within organizations. They are ones that a good Project Management Office leader will be aware of, and will have a voice to contribute to. But a good PMO leader will also want to concentrate on the key PMO work that they need to do.
When your Project Management Office is secure, then consider these other matters. But for now, be wary of making your PMO a bottomless resource for anything and everything that the business pushes in your direction.
Lesson 9 – Make things better
Marissa Mayer, the new CEO of Yahoo, tasked with rescuing this once mighty company, did many things in her first few months in charge. These included the creation of ‘PB&J’.
PB&J commonly stands for ‘peanut butter and jelly’ – the much-loved sandwich filling in the US. Mayer cut away ribbons of red tape and instituted an internal online service called ‘PB&J’ which Mayer used to stand for ‘Process, Bureaucracy, and Jams’. This service allows employees to complain about organizational blockages and excessive overheads that slow action and decision-making.
Balanced Project Management Office
It is critical that a successful Project Management Office should be a ‘balanced’ PMO and this includes getting the balance right between people and process. Both are critical to project success, and both come under the remit of the PMO.
But it is the responsibility of the PMO to ‘make life better’ for people:
- Project managers, so that they can effectively and efficiently do their jobs – and
- The business, so that the projects are clearly under control and delivering benefits.
As you will have seen, one of the critical tasks in setting up, or improving, a PMO is to review the method or framework that the organization uses to guide their project managers. And, in many cases, it is often a need to add quality reviews and some control points or stages to improve this control. But it is always a concern that anything added should add proportional value. Quality assurance should deliver quality (and not be a burdensome overhead that delivers no real benefit to anyone).
One way to do this is to think carefully when you design such a process.
The other is to make sure that you have a ‘PB&J’ in place for the PMO team to let you know when you have got it wrong.
Lesson 10 – Learn the Lessons
The question that we often ask in project management is:
‘why didn’t we learn from that experience?’
…and the same is true many times over when it comes to Project Management Offices.
Albert Einstein said ‘Insanity is doing the same thing over and over again and expecting different results.’
So why do we accept ‘insanity’ as the path of project management?
The next time you are in a meeting just try this out. Whether you are presenting, or someone else is, doesn’t matter. What happens when the inevitable happens, you go to write something on the flipchart or the whiteboard and the pen is dry? Have you ever (and I freely admit I am guilty) put the pen down on the rack again, picked up another one, and carried on with the point you were making? So now you have left the same dry pen for the next person. Or worse, for yourself to do the same thing again a little later in the meeting.
Did you expect the pen to magically refill itself? Of course not, madness!
Did you put the pen in the bin and ensure that a new one was put in its place? Or did you at least tell someone? Of course not, madness!
A simple lesson in lessons learned, or the process of not learning to be more precise.
So are we programmed to not learn lessons?
Clearly not. If that were the case, then we would have wiped ourselves out as a race a long, long time ago.
So why don’t we learn lessons when it comes to project experiences?
Well, we do learn and we do progress and grow as project managers and we are all the better for it. The challenge comes from sharing the knowledge of those lessons amongst others, and in learning from other people’s experiences in return. It is a matter of scale and capability, along with time and priorities.
It is not the process of binning the empty pen and replacing the pen. But it is letting others know what you did, and why you did that. And how it can benefit them in the future, and why they should also pass on this piece of knowledge.
It is less ‘lessons learned’ than ‘lessons shared’.
It is a critical role of a Project Management Office to make sure the team both learns and shares these lessons in a practical way. And this means including the PMO members in that process as well.
So the next time you go to write something on the flipchart or the whiteboard and the pen is dry, stop. Turn to face your audience and say
‘Right, this pen is going in the bin and let me tell you why …’
Take a look at Peter Taylor’s two books about PMOs:
Click the image to learn more about each book
Peter Taylor is, perhaps, best known as The Lazy Project Manager.
OnlinePMCourses has a wealth of additional material about PMOs
This includes our own review articles and videos, and also interviews with and articles by other PMO experts.
The PMO Basics
- What is a PMO? | Video
- Project Management Office – PMO 101 | Video
- Superior PMO Guide: All You Need to Know about Project Management Office