The Benefits of a Project Management Office | Velopi

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On this page:

  1. Considerations for establishing a PMO in your organization
  2. Evaluating the need for a Project Management Office (PMO)
  3. Choosing the right form for your organization’s PMO
  4. Exploring the benefits of establishing a PMO
  5. Designing an effective PMO structure for your organization

Companies that find themselves chartering large projects on a regular basis often consider establishing a Project Management Office (PMO) in order to improve the management of these projects. Unfortunately, a PMO is not a clearly defined concept and even Project Management Professionals (PMPs)® struggle to provide a well-established template for such an office.

Considerations for establishing a PMO in your organization

This is because the basis for all project management wisdom – the Guide to the Project Management Body of Knowledge (PMBOK® Guide) – provides such a wide range of options that virtually anything could be classed as a PMO. The guide provides three broad classifications:

  1. Supportive. Here the PMO’s role is to archive documents from previous projects, collate lessons learned and develop best practices for future projects to adopt. It will supply templates and training to project managers and generally seek to establish a consistent and effective project management methodology for the organization.
  2. Controlling. Here the PMO acts as a sort of quality control for project management. They will ensure that Project Managers follow established processes and manage their projects within the constraints set for them. In other words, they provide governance for the projects.
  3. Directive. Now the PMO is like a functional department that provides Project Managers to the various project teams. So, when a new project is chartered, a Project Manager is requested from the PMO who will then commence work on the project.

The interesting aspect of this classification is that adopting one does not rule out the others, so it is possible that your PMO combines all three responsibilities. A more useful piece of advice is found in page 48 of the PMBOK® Guide: “The PMO is the natural liaison between the organization’s portfolios, programs, projects, and the organizational measurement systems”. This suggests that the PMO needs to be positioned at a level where it has overall visibility of the organization’s projects in the context of the overall portfolio of work.

Evaluating the need for a Project Management Office (PMO)

An organization’s portfolio is made up of all the work that is necessary to achieve its strategic objectives. Projects and logical combinations of projects, called programs, will be identified, along with day-to-day operational work. However, reviewing the entire portfolio reveals that not all projects undertaken by the organization require the same sort of project management.

Obviously, there will be major projects to be done. If your company is subject to the Sarbanes Oxley legislation, your biggest projects may have to be declared under the act. This means that the financial management of these projects is crucial to avoid falling foul of the authorities. A PMP® will recognize the need in these cases to manage such projects carefully, providing well-documented evidence that all 47 project management processes were carried out with due diligence.

Choosing the right form for your organization’s PMO

However, not all projects carried out by organizations require the level of management that the PMBOK® Guide advises. These might be about the size of a single Work Package and may only have one person working on it, but they do conform to the definition of a project, having a temporary duration and a unique aspect. Such a project might be the replacement of a machine on an assembly line or a change to a business process. While a PMP® would not be required to manage such a project, the person responsible needs to understand project management and the need for proper scoping, scheduling, reporting and risk management. A PMO can provide significant benefits by providing project management training to senior staffers who regularly embark on such small, but vital, projects.

Another type of project that organizations encounter is the research project. These often have no clear defined end state. For instance, your laboratory has come up with a novel technology. The organization has filed a patent on it, because it recognizes the technology’s potential. However, no one is exactly sure what to do with it. In these cases, it might be best to explore alternative applications and obtain feedback from other functions in the organization to see if this is a useful direction to take the new discovery. In other words, an iterative and incremental approach is appropriate and well-established agile methods, such as Scrum project management can be applied here. The PMO should be able to supply a scrum master to guide the project to some, as yet unknown, conclusion.

Exploring the benefits of establishing a PMO

Depending on the project mix, the PMO can provide training, standard templates, governance and personnel. All this takes time – it will take several projects before practices best suited to this particular organization will be identified and put in place. It will also take time for project management training and awareness sessions to bear fruit. Of course, historical data have to be assembled and analysed. The consensus among companies that have set up their own PMOs is that this is a long-term investment and you should not expect to see a return on investment in under five years. But that return will see projects becoming more predictable and better tracked. Because a standard approach will be taken for each type of project, more consistent results can be expected.

Designing an effective PMO structure for your organization

Velopi’s PMP® and PgMP® exam preparation courses cover the Project and Program Management Offices respectively. For more details of these courses, please visit our training page, or contact us directly.

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