The rise of the Project Management Office (PMO)

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Not too long ago the Project Management Office (PMO) was an admin function that checked risk management reports, collated timesheets and even booked hotel rooms. Some organisations still use PMOs for these activities but more and more organisations are implementing ‘value-adding’ PMOs.

We have worked with some of our clients to establish these value-adding PMOs and they have been very successful in helping drive the right portfolio of projects. Once the portfolio has been approved by the business, the PMO’s role is to help ensure the projects are governed properly, predicted benefits are on track and poor performing projects are targeted for intervention or even termination.

The OGC has produced a guideline on implementing portfolio, programme and project offices entitled P30. This is a very good publication and is well worth reading if you are looking to implement a project office.

Challenges in implementing a PMO

Like any new function, there are challenges or obstacles to overcome if a high-performing PMO is to be created. Two of the most common ones that we come across are:

  • PMO is still seen as an admin function, adding no value to the project managers and hassling them for progress reports, etc. This is, in our experience, probably the most common blocker to a PMO functioning properly. This is where strong sponsorship is required from the Portfolio Director, IT Director or similar executive. In addition to strong sponsorship what is needed is a communications plan explaining why the PMO is important to the success of the portfolio and how it can make the project manager’s life easier not harder. For example, in a high-performing PMO, there is a drumbeat of reporting that has weekly and monthly reports. Once set-up, they should be relatively easy to produce and obviate the need for a plethora of ad-hoc reports. This saves the project manager’s time and hassle.

Populating the PMO with senior project or programme staff is another way to overcome the ‘Oh, let’s ignore the PMO, they are just an admin function.’

  • PMO is a ‘central resource’ and an overhead. This is a view taken by some organisations which then either understaff the PMO or refuse to have one in place at all. This can be hard to overcome but in most organisations project delivery is poor and costs an enormous amount of wasted resources. A value-adding PMO can intervene early in poorly performing projects. With an early intervention the PMO can work with the team to get the project back on track. In some cases the PMO may calculate that the project’s cost/benefit/risk mix has changed so that it no longer meets the organisation’s objectives. In such cases the project should be stopped. The business case for the PMO can often be made in terms of more projects stopped (which can be a good thing) and/or less budget and schedule overruns due to early intervention by a PMO.

To help overcome this ‘admin and central overhead view’, the PMO should be staffed with experienced project/programme managers who have the credibility to help and advise the project managers.

To improve buy-in, the PMOs can develop a ‘service menu of offerings’ to help projects. In some cases, organisations make some of these services, e.g. initiation workshops, mandatory as they see the real importance and value of these services.

Below is a service menu that we developed for one of our clients:

  • Facilitation on initiation workshops;
  • Resource management;
  • Facilitation on risk workshops;
  • Independent project audit/healthcheck
  • Cross project dependency management;
  • Training in the project framework;
  • Change management forums;
  • Approving quality gates status.

In summary, a PMO will offer real value if:

  • Strong sponsorship exists;
  • PMO is staffed by senior and experienced project managers;
  • PMO offers and is seen to offer value adding services to the project teams.

Please note that the service menu should not include booking hotel rooms!

Find out more on how our PPM tool, PM3, supports P30.

David Walton
About the author
David Walton

I am David Walton, Programme,Project and Portfolio Management specialist and director of Bestoutcome here in the UK. We make the PMO tools PM3, PM3time and PM3change, the only PMO tools designed by practitioners for practitioners.

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2 Responses to “The rise of the Project Management Office (PMO)”

March 19, 2013 at 2:19 pm, Governing Projects – the problems with Excel! | Bestoutcome said:

[…] that the project manager inputs their data into and then either stores centrally or emails to the PMO which then takes responsibility for combining all the spreadsheets to create one master […]

June 25, 2013 at 9:24 am, Risk Management said:

[…] However, the Project Management Office should be taking a closer look at risk registers and making a judgment on whether they are up to date, have the right actions and owners, etc. and not just be content that one exists for each project. I have seen this happen with PMOs who fit into the admin PMO category as opposed to the value-adding PMO category. (See blog – The rise of the PMO.) […]