As an organization begins to grow and the number of projects starts to multiply, it can quickly become challenging to ensure every project is organized and planned meticulously. While project managers keep track of their own projects, their focus is too narrow to monitor projects across the company. Therefore, organizations need project management offices (PMOs) to ensure all projects meet their standards.
With organizations in all industries seeking to improve efficiency, the number of PMOs is on the rise. But what role do PMOs perform? And why is it so important for project-based organizations to invest in developing them? Find the answers and more in this article.
What Is a PMO?
A project management office is a unit or a group in an organization that defines, maintains, and supervises all project management standards. They maintain the strategy, documentation and best practices for projects, while keeping track of the status of all projects. PMOs help direct projects and track key metrics for project execution, to ensure timely deliveries and a return on the organization’s investments. PMOs can be internal or external.
Broadly, the term PMO can refer to one of three categories of project management offices, depending on what area of project management they operate in.
Project Management Offices
The most common type of PMO, this type is responsible for supporting project managers. They also help standardize all processes related to project management for their organization.
Program Management Offices
As the name suggests, they manage processes associated with program governance. They also coordinate the efforts of the entire program management team instead of specific project teams.
Portfolio Management Offices
This type of PMO is responsible for all projects and programs. They provide oversight over the entire project portfolio of their organization.
Roles and Responsibilities of a Project Management Office
While PMOs are by no means mandatory, they can be a real game changer for organizations beginning to juggle several projects simultaneously. Outlined below are some of the key roles PMOs play, which can be a real asset to growing businesses.
Align Projects to Strategic Business Goals
PMOs analyze each project and ensure they are aligned to the strategic and operational goals of the organization. Based on these goals, they will also help choose and prioritize incoming projects.
Standardize Processes and Workflows
One of the key functions of a PMO is to standardize all activities around project management for the organization. This includes management methodologies, standards, processes, metrics, templates and tools. The PMO may also evaluate its industry’s best practices and apply them within the organization, as needed.
Supervise Resource Management
To ensure successful project deliveries, PMOs may oversee resource allocation and utilization. PMOs can easily anticipate resource requirements as they already know which projects are in the sales pipeline. To help optimize resource allocation, PMOs are also involved in capacity planning. They are responsible for running simulations and analyses to determine future resource and skill requirements, plus they keep the hiring or training departments apprised of those requirements.
Report to Stakeholders
A PMO is responsible for determining and monitoring the various KPIs for project or portfolio performance. They perform forecasting around risks, projects, resources, etc. Additionally, a PMO generates reports for the various stakeholders and leaders to help them make the right decisions in a timely manner.
Enable Knowledge Sharing and Reusability
It is the PMO’s responsibility to ensure that all lessons from any project are distributed to all relevant team members. As the PMO handles all templates, documentation and project plans, they can share these details whenever a new project begins. This centralized repository can save considerable time and effort as project managers can easily learn what worked for previous projects and reuse existing data.
Support Training and Mentoring
As PMOs are at the heart of any project lifecycle, they are the obvious choice to provide coaching and mentorship to any new project manager joining the organization. PMOs have all the data, knowledge, and tools needed to help project managers develop their skills.
Streamline Collaboration and Communication
Since PMOs are involved in all projects in an organization, they are often responsible for facilitating communication and collaboration between team members. They can help align different teams to ensure everyone is on the same page for faster task completion. Plus, being involved in all projects helps PMOs identify and solve potential problems efficiently and effectively.
Watch this explainer video to learn everything about a PMO, its roles and responsibilities, different categories, and the qualities to become a PMO manager.
What Are the Qualities of a Good PMO Manager?
To get the most out of a project management office, the organization needs to staff it with the right leader. A good PMO manager brings a certain set of qualities to the table, as described below.
It is vital for PMO managers to be as transparent as possible given the complexity of projects prevalent in today’s business landscape. Project management officers have access to key project data such as budgets, progression, and KPIs. It is their responsibility to disseminate that information among the relevant stakeholders and to keep team members informed of all updates.
The ability to communicate effectively is highly valuable in a PMO manager. After all, they are responsible for building and maintaining transparent communication between all stakeholders, team members, executives, and managers. Their responsibilities also include reporting updates and findings to different teams and leaders, which makes excellent communication skills a priority in their day-to-day work.
A good project management manager needs to help develop a range of consistent processes and practices to be used across the organization. They must be capable of identifying and eliminating any and all redundancies that are affecting a project’s life cycle to improve overall efficiency. PMO managers must also ensure that all projects and tasks are evaluated using the same quality standards.
In its daily operations, a project management office may need to deal with a multitude of new challenges, elements and guidelines. As a result, a good PMO manager must have the flexibility needed to thrive in this kind of dynamic environment. They should be willing to adapt existing organizational structures to accommodate changes in project execution and delivery.
Analytical and Critical Thinking
No matter how well planned a project is, challenges or errors can occur at any time. PMO managers cannot afford to panic when issues occur. Rather, they must be critical thinkers with strong problem-solving capabilities. Project management officers need to quickly identify what’s creating an issue and develop strategies to resolve it. Sometimes, they may even need to make critical decisions on the fly. If they possess the ability to come up with effective solutions, a good PMO manager can make a significant difference to project outcomes.
PMO managers are responsible for organizing multiple facets of a project, such as scheduling, budgeting, and KPI tracking. As such, their organizational skills must be excellent so they can perform well every day. PMO managers or officers typically need to deal with a variety of deadlines, several stakeholders, multiple reports, and more, – all of which require considerable organizational skills to juggle successfully.
With today’s rapid digitization of organizations, data has become widely available. Project management officers must have the ability to leverage available data to drive the decision-making process. They need to be able to identify and prepare the right set of KPIs to deliver on strategic objectives and advise stakeholders.
Do All Organizations Need a Project Management Office?
While having a project management office is not a requirement for all organizations, their popularity is on the rise. According to the State of Project Management Report 2020 by Wellingtone, 89% of organizations have at least one PMO, with around a quarter of those offices opening within the last 2 years.
The fact is, a PMO can bring considerable benefits to an organization as the number of projects increases. The risk of failure rises with the number of projects, as different priorities crop up and compete with each other. Resources and budgets get spread out as well. A PMO can bring a much-needed balance to the organization by analyzing and determining how each project contributes to the overall business strategies and goals. As a result, organizations may need to add a PMO to their operations sooner or later.
Here are some more reasons why organizations should invest in a PMO:
- They prevent projects from delays and going over-budget
- They standardize processes for project execution
- They provide visibility into projects for stakeholders
- They provide a clear picture of what project success looks like
- They ensure that team members have a clear vision of project goals
Things to Consider Before Opening a PMO
Is More Billable Time Being Spent on Project Management Tasks?
It is not uncommon for skilled specialists to end up spending their time on administrative and project management tasks. However, if they are spending time on these non-billable activities instead of doing actual billable work, the organization may have a problem. A PMO can help with this by taking on the management work, which may lead to improvements in billables.
Are There Too Many Projects?
As the number of projects increases, it can be difficult for project managers to handle them effectively on their own. Organizations may experience a lack of coordination between teams, leading to bottlenecks and clashes over allocation of resources. A PMO can help streamline all projects by looking at the bigger picture.
Is It Difficult to Govern and Report on All Projects?
If projects tend to follow their own siloed processes, it’s difficult for organizations to properly evaluate the larger picture or arrive at strategic decisions. Without standardization, it’s challenging to gather all the reports in one place to arrive at strategic decisions. A PMO can provide standardized workflows and processes, and offer a centralized report repository, so they can provide stakeholders and leaders with a complete picture, so they can make better decisions.
If an organization faces one or more of the above challenges, they will likely benefit from implementing a project management office.
How to Set up a Project Management Office
Opening a PMO is not as easy as hiring some people and buying some tools. Organizations must carefully evaluate several factors before embarking on this complex endeavor. Below is a brief guide for organizations seeking to establish a PMO.
Understand the Organization’s Needs
Organizations require PMOs for a variety of reasons, therefore it is important to outline your organization’s goals and expectations before opening a PMO. This will help determine the functions of the PMO after it is established.
Some organizations might need a PMO to improve overall project performance and delivery. Others may be looking for a reduction in risks and costs. Yet others may seek an improvement in client or stakeholder satisfaction. It is also important to consider the organization’s overall business goals and strategy, and how a PMO might fit into them.
Establish the PMO’s Structure
There are various possible structures for a project management office, making it necessary to tailor the structure to the specific needs of the organization. The structure can depend on the degree of process control and standardization needed and whether coordination between projects is required. The organization must also determine how much authority the office should have over project management decisions.
Based on these criteria, here are three of the most popular models:
These PMOs oversee all project management activities in the organization. They are responsible for developing and maintaining standards, processes, guidelines, and tools across the entire project life cycle.
As the name suggests, decentralized PMOs are bound to individual projects or business units. Each PMO supports and guides only a single unit or project. They are an excellent choice for organizations with a decentralized decision-making structure or those with complex projects.
This is a mix of the above models. They are a viable choice for organizations with a mixture of complex and simple projects.
Establish PMO Processes and Expectations
After finalizing the PMO’s structure, the organization must clearly define and establish its processes. These include standard operating procedures, communication protocols and more. The organization must correctly document all of these processes and make them easy to put into practice. After all, a PMO that does not operate efficiently cannot ask for efficiency elsewhere.
In addition to setting up the procedures, it is also important to define stakeholder expectations. One of the most difficult challenges that any PMO encounters is when stakeholder expectations differ from the PMO’s expectations. As such, clearly outlining expectations from the onset can help reduce difficulty down the road.
Invest in Maintenance
Like any other business unit, a project management office needs regular maintenance to function at optimal levels. This does not only apply to the tools and software the PMO uses; the organization should encourage the PMO team to participate in regular training sessions. Regular reviews of their policies and procedures should also take place.
Choose the Right Software for a Project Management Office
When establishing a project management office, the organization must ensure that it is equipped with the right tools. In today’s incredibly challenging business landscape, that means implementing a professional services automation (PSA) platform like Polaris PSA.
With Polaris PSA, organizations gain advanced AI/ML-enabled capabilities to derive greater efficiencies while delivering projects.