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Superior PMO Guide: All You Need to Know about Project Management Office

  • a couple of weeks ago
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Superior PMO Guide: All You Need to Know about Project Management Office

Many Project Managers need to work with a Project Management Office. And, when it’s your first time, you wonder what you can expect. And for some, this can lead to the recognition that a PMO career is an appealing option. So, in this guide, I will survey everything you need to know about a Project Management Office.

Superior PMO Guide: All You Need to Know about Project Management Office

Buckle-up

This will be one of our biggest Guides yet. So, buckle-up, as I set out to cover:

  1. What is Project Management Office?
    …and why would you need a PMO?
  2. How to Set-up a Project Management Office
  3. Running and Optimizing a Project Management Office
  4. Measuring the Success of Your PMO
  5. A Project Management Office Career
  6. The Future of Project Management Offices
  7. Additional Guidance on Building and Running a Project Management Office

What is Project Management Office?

There are as many definitions of a PMO as there are PMOs. So, let’s start with a couple of trustworthy sources, the Project Management Institute (PMI) and the Association for Project Management (APM).

PMI Definition of a Project Management Office

A management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.

Guide to the Project Management Body of Knowledge, 7th Edition

APM Definition of a Project Management Office

An organisational structure that provides support for projects, programmes and/or portfolios.

APM Body of Knowledge, 7th Edition

Our Definition of a Project Management Office

I like to keep things simple. 

A PMO is a group that serves the needs of Project Managers and project teams.

They can do this in a number of ways that we’ll look at in more detail shortly. But which of those ways they select will be different wherever you look. The selection should arise from the needs of the project community within the organization.

The most common activities are:

  • Setting and maintaining project management standards
  • Developing and promoting standard processes
  • Providing support to project governance
  • Sharing of knowledge and tools
  • Supporting project management practitioners
  • Coordinating project and program activities
  • Monitoring and documenting status across a portfolio of projects 
  • Maintaining documentation on process, standards, and performance

I discuss all of this in my short video, What is a PMO?

The Concept of a P3MO or P3O

As I discuss in the video, we equally find Project Management Offices, Program Management Offices, and Portfolio Management Offices. These may genuinely operate at different levels in the organization. However, they may also be different names for largely similar internal organizations.

Projects, Programs, and Portfolios are often contracted into the convenient acronym, P3. This leads to the term P3MO or, indeed, P3O. While I shall use the term PMO and Project Management Office as the generic term throughout this article, I shall sometimes use P3 as a shorthand for Projects, Programs, and Portfolios.

Are there Differences between Project, Program, and Portfolio Management Offices?

Broadly, the answer is yes. And that is why I will stick with the term Project Management Office in this article. Because that is my primary focus.

Project Management Office
The focus is on support for project management teams. They offer standard tools and processes for project delivery. They often have an additional focus on project assurance.

Program Management Office
The focus is on support for program management teams. They offer standard tools and processes for program delivery. They often have an additional focus on governance.

Portfolio Management Office
The focus is on forming and overseeing a balanced portfolio of projects and programs and supporting project and program management offices.

We have a couple of articles about Project Assurance:

Why Would You Need a PMO?

Building and maintaining a PMO is a substantial investment for an organization. So, they will need to see a return on their investment. We’ll look at that in a moment. 

But first, is there a compelling need for a PMO?

Often, there is. And that need arises from a recognition that there is a pattern to a series of failures. If there is a case that a PMO can be an important part of finding or implementing the necessary solutions, then that creates the need.

In an organization where projects run well, there is a real risk that a PMO will be nothing more than an overhead. It would need to work doubly hard to demonstrate true benefits that exceed its costs.

But here’s the thing… If we create a PMO to fix a set of problems, and it does: what next? Now the projects are running well, do we still need the PMO? That’s going to be a tougher question for a PMO community to answer.

So, let’s see what the benefits are. First, we will look at the benefits to the organization (it is paying for the PMO, after all!). Then we’ll turn to the Project and the Project Management Community.

What Benefits can a Good PMO Bring to an Organization?

Certainly, if you have a PMO and now your Projects repeatedly finish on time and within budget, that is a benefit. But the skeptic will ask ‘how instrumental is the PMO in that success?’

There are other benefits a PMO can bring, that cannot be ascribed as easily to the efforts of individual Project Managers and their teams:

  • Projects are aligned with business strategy and objectives
  • Resource allocation that matches strategic priorities
  • Stakeholders have good visibility of project status
  • A standardized process for project delivery brings efficiency and economy
  • Centralized tracking and data analysis allow best practices to become clear
  • Quality assurance and control reduce risk and use of contingency time and budget

What Benefits can a Good PMO Bring to the Projects it Oversees and Supports?

Project Managers and project teams tend to be fiercely proud of their successes. So, anything that can help them (and does not get in their way) will be welcome. A good PMO can provide them with:

  • Standard processes
  • A toolset of software, and templates
  • Centralized provision of resources
  • Relief from certain data gathering and analysis
  • Objectives review that provides lessons to learn
  • Ability to learn from other projects
  • Support for multi-project management
  • Provision of training and coaching support
  • A powerful advocate in support of the project team

These can all potentially lead to better performance against:

  • Quality specifications
  • Milestones and schedules
  • Budget
  • Stakeholder or customer satisfaction
  • Project success or failure

What are the Roles of a PMO?

So, with all these benefits to be had, and with a recognition that every PMO is different, let’s look at the range of roles a PMO can fulfill.

Many authors categorize these under three headings that reflect different operational priorities for the PMO. However, these headings are of most use to us now for classifying the roles. Because all but a few PMOs in the real world take a blended approach that combines elements of all of these.

The three operational modes are:

  • Supportive
    A consultative style that empowers the teams with knowledge and advocacy 
  • Controlling
    A style that emphasizes good governance and enforces compliance with standards
  • Directive
    This style has direct control of the projects within its compass

Supportive PMO

The aim here is to be as helpful as possible to the projects and project teams the PMO serves. They provide:

  • Guidance, expertise, mentoring, coaching
  • Tools, templates, processes, good practice
  • A knowledge repository of P3 experience and methodologies
  • A center for the P3 community 
  • Central records of available project managers and project staff within the organization – and also preferred contractors
  • Facilitating secondment of project team resources
  • A supportive voice at the Project Board level

Controlling PMO

In this model, there is a lot more enforcement of preferred approaches and a move from ‘good practice’ to ‘best practice’. This may be driven by genuine regulatory needs, but may equally be a result of the organizational culture.

Here we see a bigger emphasis on governance and, as a result, more resources allocated to data gathering, analysis, and presentation. Many of the chosen methodologies will focus on meeting this need for good governance and a consistent data set. Tools like Discounted Cash Flows and Earned Value Management may become mandated.

Additional things this form of PMO may provide include:

  • Defined methodology, process, and toolset
  • Standardized software tools
  • Administrative support, document management, archiving
  • Facilitation of project and program governance structures
  • Coordination of project schedules
  • Provision of skilled project management resources
  • Input into which projects proceed and which will be closed down
  • A strong voice at the Project Board level

Directive PMO

A directive PMO becomes responsible for the projects in its portfolio. It often provides its own Project Managers to lead them. If not, the Project Managers are accountable to the PMO.

Now, we see the PMO supplying:

  • A standard project culture through communication, training, and expectation-setting
  • Allocation and management of project resources
  • Single consolidated Project Management Information System
  • Single point of interface between projects and senior business leaders
  • Determination of which projects proceed and which will be closed down
  • A dominant voice at the Project Board level

PMOs at Different Levels of the Organization

Another way that we see different PMO models is the level of the organization at which they operate.

The earliest PMOs were single-project or single-program PMOs. These formed a central office function to serve a single large project or program with administrative support, resource management, communications management, data-gathering, and reporting.

At the next tier, there may be a regional, divisional, functional, or multi-project PMO, serving projects or programs across a specific portion of an organization. This would centralize a number of additional functions across a range of projects providing some consistency, support, shared resources, and economies of scale.

An Enterprise PMO (EPMO) serves a whole organization. It will often have a Portfolio Management remit, to ensure that projects align with organizational strategy and objectives. They will also have a clear focus on value and, for this reason, I am attracted to the term VMO or Value Management Office, coined by Hélio Costa in his Fleks methodology

An EPMO or VMO will either be led by a C-suite executive or its director will report to one. The EPMO director will have the authority to make strategic and tactical decisions across the portfolio.

Centers of Excellence

There is one further variant on the PMO we must address. This is that of a Project Management Center of Excellence. This form of PMO has a limited remit to define project management standards, policies, processes, procedures, methods, and tools that all project teams across an entire organization will use. In support of this, it may also:

  • Either provide or specify and commission training
  • Maintain a knowledge base and archive
  • Offer coaching and mentoring
  • Conduct project assurance reviews

How to Set up a Project Management Office

In setting up a new PMO from scratch, the first decision is likely to be ‘an incremental or a big bang approach?’

Whilst it may be possible for a seasoned PMO executive or consulting team to build a fully formed PMO from nothing, my assessment is that an incremental approach is far more likely to provide continuing beneficial returns on investment. In addition, it will be easier for its proponents to garner internal support and counter the inevitable resistance.

Stages in an Incremental Approach to Creating a New PMO

This is not a complete checklist. Rather, it should give a sound impression of the kind of process you are likely to adapt and follow. I have divided it into two stages.

Initial Stage

  • Establish the core business case 
    This includes establishing a baseline of project delivery performance: project completion (…and specifically to schedule, budget, scope, and quality performance).
  • Quick wins
    Start by looking for small, easy things your new PMO can do to provide obvious value in supporting the project delivery processes.
  • Communicate and consult
    Build relationships with key stakeholders like project managers, the customers of the organization’s projects, and the people who will be working on them. Let them know your aspirations and consult them on their needs, priorities, and preferences. Think of this as the scoping stage of any other project. Because it is!
  • Determine the Why 
    Articulate the case for why we need a PMO. This will help dictate what the PMO needs to deliver, and determine who the PMO needs to employ.
  • Core functions
    Start with what, for your stakeholders, are the absolute must-have core functions.

Intermediate Stage

  • Tailored expansion
    As you demonstrate value, look for additional services your PMO can provide, that will give positive additional net benefit.
  • Implement the right toolset 
    I particular, look for software tools that will make lives easier, data more rigorous, and processes more robust. Follow the sequence of: specify, search, evaluate, implement, utilize, and adapt.
  • Involve ‘customers’ in frequent reviews
    Every time you reach a fixed state of your PMO, consider it provisional. Meet your stakeholders again to assess its functioning and value, and determine what the next evolution needs to be.
  • Communicate the value you deliver
    Keep the senior stakeholders who are providing the support and funding for your PMO aware of your progress. Don’t be shy to communicate your successes. But, equally, own up to setbacks and mistakes. They will be astonished (and, therefore, mistrustful) if there are none.

Running and Optimizing a Project Management Office

There are two aspects of running and optimizing your PMO. First, we’ll look at raising its maturity level. Then, I’ll address the operational review.

PMO Maturity Levels

In the first part of the two-part article that PMO expert Peter Taylor wrote for us, Taylor describes a simple 5-part Maturity Model for PMOs:

  1. Ad-hoc
  2. Defined
  3. Controlled
  4. Measured
  5. Optimized

This is a journey. At any point, you can expect aspects of your PMO to be at different maturity levels. Your first priority is to bring the trailing capabilities up to meet the standard of the majority in the middle. Then, you can start to lift more of them to meet the level of the best. Finally, you can start to increase the levels of capability in some areas to the next maturity band, and thus repeat the process.

Periodic Operational Review of Your PMO

As well as maturing your PMO offering, you must keep its service portfolio relevant to the needs of its clients and the sponsoring organization. And yes, I do appreciate that there may well be conflicts between these two stakeholder groups!

Here are some essential things to keep under review:

  • Strategic status and sponsorship
  • ROI, (see measures of success below)
  • Stakeholder satisfaction
  • PMO model and services provided against needs
  • Prioritization of activities: The roles you fulfill, and which are adding most and least value
  • Personnel and skillsets
  • Tools in use by the PMO
  • Tools available to the P3 community
  • Lessons learned and making the incremental improvements they indicate

Measuring the Success of Your PMO

I talked above about the benefits of a PMO. And, for hard-nosed executives, your PMO will need to continue to represent good value for money. Arguably, the Chief Financial Officer or Finance Director will be looking at one measure ahead of all others: Return on Investment, or ROI.

ROI = Net Benefit / Total Cost

Net Benefit = Total Benefit – Total Cost

Cost is (relatively) easy to measure. And most organizations will have their own approach to apportioning fixed costs and overheads to teams and initiatives like a PMO. But, what are the measures that will contribute to assessing the total benefit?

Performance Indicators

The kinds of performance indicators you will need to gather will be things like:

  • Project completion rates
    …and specifically, rates of completion to schedule, budget, scope, quality
    This is why you need to gather baseline data before establishing your PMO
  • Value delivered
    Measures of the net benefit that projects deliver, with the help of your PMO
  • Resource utilization
    Effective allocation of project resources should lead to greater efficiency and less downtime
  • Use of data in decision-making
    Better decision-making is a huge benefit to an organization. And better quality data, supported by more rigorous analysis, is one key input to more robust decisions
  • Governance standards
    Accountability, transparency, and integrity all lead to improved outcomes and reduced risks of mistakes, non-compliance, and reputational harm
  • The efficiency of project delivery 
    Better guidance, training, tool availability, and standardization can result in reduced overheads across a portfolio of projects. These may be additional to the direct costs attributed to projects and therefore not appear in project budget performance assessments
  • Perceptions of project community
    The soft measures do matter – even if the accountants can’t account for them. How do your project managers and team members feel about the services they receive, what do those services do for morale and motivation, and how do they contribute to effective career progression?

A Project Management Office Career

I always say that Project Management is a brilliant core competency that is a springboard for a great number of different career paths. And one of those is a PMO career.

The Benefits of a PMO Career

For Project Managers used to long and unpredictable hours – and maybe a lot of travel, PMO work can often offer greater stability and predictability. For some people, ad at some stages in life, this will be very welcome.

However, for others, a PMO role can seem dull. What matters is what suits you.

At the start of a career, however, junior PMO roles can be a fabulous place to learn core Project Management skills, and to observe and learn from experienced Project Managers. You can also observe multiple projects with a wide range of challenges at the same time. This can truly multiply your rate of experiential learning.

What are the Roles in a PMO?

Within the PMO career path, there are many roles. However, I shall focus on five: four of which are taken from the excellent House of PMO publication, ‘The PMO Competency Framework’.

  • PMO Director
  • PMO Manager
  • PMO Analysts – planning and scheduling, data analysis, financial analysis
  • PMO Administrators – Data gathering, meeting support, financial admin, supplier liaison
  • PMO Coaches and Trainers (not in the PMO Competency Framework)

What is the Role of a PMO Director?

The PMO Director is the figurehead of the PMO and therefore needs to play the role of an inspirational leader. This does not mean they need to be a charismatic individual. But they must inspire confidence in the PMO from among:

  • Senior sponsors and C-suite executives
  • The Project Community
  • The PMO team itself

Indeed, they are the senior-tier champion of the practitioners. Their principal focus is upwards in the organization, working at the board level to understand, interpret, and possibly help shape strategy. This means working with the PMO Manager to shape PMO strategy in response. They are the interface between the PMO team and the Projects community on the one hand, and the Enterprise strategy and leadership on the other.

What is the Role of a PMO Manager?

The PMO Manager is the day-to-day leader and manager of the PMO team. As such, they need to be a mentor and coach to the PMO team – and to senior Project managers in their community. They must also champion the PMO’s services and approach, while listening to the feedback that will allow them to adapt and improve the PMO continuously.

The PMO Manager will also be the face of the PMO to various departmental and functional teams and will negotiate with them and deliver reports. Stakeholder engagement will be a large part of their role.

What do PMO Support Roles Deliver?

The three support roles I identify are:

  1. Analyst
    Support projects and help drive the PMO with technical capabilities across the PMO and P3 Management spectrum. Skills will include planning, budgeting, data collection and analysis, liaison, reporting
  2. Administrator
    Support the PMO team and maybe also the Project community with secretarial and administrative functions. This could include data entry, document management, minute-taking, time and expense reporting, supplier management, purchasing, maintaining change, risk and issue registers, and report production.
  3. Coach/Trainer
    Some PMOs will contain dedicated resources to support, coach, and train Proj Managers and other project professionals. This could also be a part-time role for a Project Analyst. 

The Future of Project Management Offices

A couple of years ago, Nicole Reilly wrote an excellent article for us: Setting-up PMO 3.0 |The Project Management Office in the Age of Digital Transformation. I won’t rehearse Nicole’s comments on the history of PMOs (through v.1 and v.2) nor her speculations about their future.

Here are my thoughts.

The Value PMOs will Add in the Future

Undoubtedly, PMOs will need to adapt to the future needs of their organizations – and to the new ways of conducting enterprise transformation. This is likely to mean an ever-increasing focus on, and success at, delivering value from Projects, Programs, and other initiatives. 

At the same time, this will also mean adapting to the need for ever-faster delivery and speed-to-market or speed-to-user of new products, processes, and services.

So, PMOs will continue to need to innovate – but while keeping firm oversight of their projects and programs. I expect that this innovation will lead to a marked evolution… 

The Evolution of PMOs

The big driver to the evolution of PMOs will be Artificial Intelligence, AI. Indeed, PMOs are where we are likely to see the first big implementations of AI in Projects. This is because AI is good at assimilating and using large data sets, and PMOs are where these data sets are collected and are at their largest. I expect PMOs to use AI to support planning, resource scheduling and optimization, data analysis and reporting, and much more. 

If AI can prove its value to PMOs, then PMOs will be able to prove their value enough to progress up the food chain to become Enterprise PMOs and VMOs with an ability to participate in strategy development and delivery. More and more, we will see seats at the top table for PMO Directors.

Additional Guidance on Building and Running a Project Management Office

If you are interested in or employed within a PMO, there are places you can go, learning materials you can access, and qualifications you can take.

PMO Organizations You Can Join

PMO Certifications You can Earn

The House of PMO offers accredited courses in PMO skills. They set the standard and the syllabus for their PMO Essentials range of courses. They work with APMG International to assess individuals through examinations against those standards.

The four accredited courses are Essentials for PMO:

  • Directors
  • Managers
  • Analysts
  • Administrators 

Axelos (the home of PRINCE2 and Managing Successful Programmes – MSP) offers Portfolio, Programme and Project Offices (P3O®) Certification, at two levels:

  1. Foundation
  2. Practitioner

From OnlinePMCourses

Our website has several valuable free resources, featuring world experts on PMOs:

From Peter Taylor (The Lazy Project Manager), a two-part series

  1. Introduction to the PMO – The Absolute Essentials You Really MUST Know
  2. More of Peter Taylor’s Project Management Office Essentials

A review of the concept of PMO 3.0, from Nicole Reilly:

And two video interviews:

  1. PMO Competency Framework: A Conversation with Lindsay Scott of House of PMO
  2. Working with a PMO and Building a PMO Career – with Curtis Jenkins

From Associations and Institutes

Two indispensable references for serious PMO professionals are:

From Trusted Authors

The three PMO books I most recommend are:

  1. The PMO Lifecycle, by William (Bill) Dow
  2. Leading Successful PMOs, by Peter Taylor
  3. Delivering Successful PMOs, by Peter Taylor & Ray Mead

What is your Experience with PMOs?

I love to hear perspectives from my community, so please do comment below and I will be sure to respond.

About the Author Mike Clayton

Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 14 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.

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