A survey conducted by PMSolutions in 2017 found that the prevalence of Project Management Offices (PMO) has risen significantly in the past decade, with the proportion of firms having a PMO having increased from 61 percent to 71 percent.
In an increasingly complex digital environment, companies are facing growing pressure to produce more with fewer resources while expanding their business. The rapid development of digital technology and the frequent innovations that come along with it have created an environment where established companies must either keep and grow their market share or risk being left behind. Failure to adapt could prove to be fatal.
As businesses become increasingly competitive, the ability to effectively manage multiple projects is becoming increasingly critical. Companies are recognising the importance of optimising resources and meeting deadlines, as doing so can be the difference between success and failure in today’s fast-paced business climate.
The Project Management Office (PMO) is founded on industry-standard practices as outlined in the PRINCE2 and PMBOK standards. These standards emphasise the importance of a deliberate planning process, the efficient organisation of resources, the suitable staffing of a project team, the successful implementation of activities, and the effective management of the organisation’s activities in order to generate optimal results with minimal errors.
It is often debated whether or not a single, all-encompassing Project Management Office (PMO) can be created that would be suitable for all businesses. In order to answer this question, we must first consider the purpose of a PMO and whether or not it would be beneficial for a particular organisation to employ such a structure.
What Is a Project Management Office (PMO), and Why Do You Need One?
The Project Management Office (PMO) is essential to the success of strategic project management initiatives. Unlike project management which focuses on the day-to-day operations of a project team, the PMO provides a framework for project managers, offering PMO tools and templates to facilitate the program management process within the organisation. It is responsible for the necessary project management resources required to ensure that projects are kept on track and deployed efficiently. Additionally, the PMO provides guidance and assistance to other teams in their project management endeavours by making use of PMO technologies such as Smartsheet, Pert and Gantt charts.
Leadership teams within an organisation often have other tasks of utmost importance to attend to in order to ensure the successful management of the company, leaving them little time or potential to monitor the various projects and initiatives taking place at a high level.
Due to project managers being overly occupied with their daily tasks and teams, there is often a lack of awareness of the bigger picture and no one taking the necessary steps to ensure the successful delivery of the corporation’s projects during the fiscal year. Furthermore, communication between upper management and the ground level is often inadequate, as the former lacks the necessary insight into the current state of the business.
Responsibilities of the PMO
GOVERNANCE
In order to ensure the most effective and efficient program development across the organisation, it is essential to create and implement best practices. In doing so, the organisation will be able to standardise the approaches of the Project Management Office (PMO) across all departments, thereby providing a consistent and reliable framework for program development. Establishing best practices for program development throughout the organisation will ensure the highest quality of results.
COMMUNICATION
Organisations with large teams and multiple departments may find it difficult to bridge the communication and project status update gaps between their senior management, department heads, and project managers. Implementing a Project Management Office (PMO) at the central level ensures that key stakeholders are informed of any projects that are in danger, which permits them to assess any missed opportunities and develop a mitigation plan to address any issues. A centralised PMO also allows for better oversight and better decision-making in the organisation.
RESOURCE MANAGEMENT
The Project Management Office (PMO) plays a pivotal role in ensuring projects are completed effectively and efficiently. By controlling project interdependencies, the PMO eliminates resource waste and costly mistakes, as well as redundant work that has already been completed. Additionally, the PMO capitalises on these findings and collects the lessons learned, making them available to other project teams to further enhance optimisation and reduce project timelines. Furthermore, the PMO encourages collaboration among project managers, resulting in smoother execution of projects.
COACHING
The Project Management Office (PMO) provides training and guidance to project managers and team leaders, which increases the collective expertise of the team. Additionally, the PMO advocates for the adoption of industry-standard project management practices within the organisation, and serves as a source of support and counsel to ensure projects are executed responsibly and efficiently.
PLANNING STRATEGIC
The Project Management Office (PMO) plays an essential role in helping senior management decide which projects should be terminated and how to prioritise based on the organisation’s long-term strategic ambitions.
PMO Types
The precise location of the Project Management Office (PMO) within the organisational hierarchy depends on the objectives the company seeks to achieve through its projects and the associated necessity for a PMO to manage specific assignments. These tasks are prescribed by the demands of the organisation.
You might look into several kinds of PMOs.
- Enterprise PMO:
The Enterprise Project Management Office (PMO) is responsible for ensuring that any and all initiatives are in line with the organisation’s vision and strategy. With direct oversight from the Chief Executive Officer (CEO), the PMO has the authority to make both strategic and tactical choices that affect all projects. - Divisional PMO:
This position provides support to initiatives of a specific business line within the organisation. This includes overseeing program operations, providing training and guidance, developing resource plans, and managing project coordination. - Project PMO:
This particular project or program is established for a specific duration. Administrative support, oversight, tracking, and reporting will be provided throughout the duration of the project or program. - The Project Management Centre of Excellence has the following advantages:
This position is responsible for developing and implementing project management standards and processes to support the organisation. Additionally, they will be responsible for creating strategies and tools to help project teams across the enterprise carry out their projects effectively.
Is there a Need for a Project Management Office?
To successfully apply PMO methodologies, these are the things to keep in mind:
- There must be no grey area about the PMO’s duties.
- Rather than allocating multiple PMO roles and duties, it is essential to focus on the objectives that the organisation is aiming to accomplish both in the short-term and long-term. By doing this, the company can ensure that all efforts are aligned towards its desired outcomes.
- Without the unwavering commitment from senior management, the Project Management Office (PMO) will fail to gain acceptance and respect from all departments of the organisation. Without a clear purpose and mission, the PMO will be nothing more than another separate entity struggling to be heard. It is therefore imperative for senior management to express their commitment to the PMO in order to ensure its success.
It is important to take the time to familiarise oneself with the concept of a Project Management Office (PMO) and how it could potentially benefit the firm in the long-term before making the decision to implement one. After taking the time to do the necessary research and understanding the advantages of having a PMO, it is then advised to create a well-defined action plan with specific Key Performance Indicators (KPIs) to measure the advantage of the PMO.
It is essential to bear in mind that not every business necessitates the creation of a Project Management Office (PMO), particularly in the early stages of operations. As an organisation expands and grows in size, the decision to invest in a PMO becomes increasingly important. Investing in the PMO framework can be highly beneficial for larger companies with various projects and initiatives running concurrently, allowing them to promote better communication between internal stakeholders and to meet the Project Management Office Key Performance Indicators (KPIs). To further demonstrate the relationship between the size of a company and the necessity for a PMO, let us explore some statistics.
- 90% of big businesses use a PMO.
- Midsize companies employ a PMO 88% of the time.
- 61% of small businesses use a PMO.
PMOs are on the rise, rising 10 percent since 2000.
Organisations often set up a Project Management Office (PMO) without fully assessing the potential risks and benefits. If the PMO is not implemented properly, it can have a negative effect on project delivery, as well as create a negative perception of project management among stakeholders, leading to a reluctance to invest time and resources into using it again.
According to the 2017 Pulse of the Profession survey conducted by the Project Management Institute (PMI), companies which structured their Program and Portfolio Management Office (PMO) to align with their senior management strategy achieved 38% more success in meeting initial targets than those without such alignment.
Adopting PMO has positive impacts on all firms, regardless of industry.
- We are committed to delivering sustainable benefits to companies by employing standardised project management processes and the most effective project management office (PMO) practices. Our aim is to guarantee that these strategies will generate long-term advantages for the organisations we serve.
- Through optimised communication protocols, teams can work more efficiently.
- Project managers are responsible for overseeing the day-to-day operations of a project, providing support and guidance to team members, and helping them develop their skills and capabilities as necessary.
- By providing consistent access to project management tools and software, we are able to make it easier to shift resources between projects. This helps to streamline the workflow and ensure all relevant parties have the necessary access to the right tools, allowing the projects to progress more efficiently.
- Strong teams will thrive when resources are shared across projects.
Examining a PMO Framework
Project failures can be a costly endeavour. According to research conducted by the Project Management Institute (PMI) in 2017, for every 1 billion dollars invested in projects, an average of 97 million dollars were lost as a result of unsuccessful projects.
It is essential to analyse how teams collaborate through multiple platforms to evaluate a company’s Project Management Office (PMO) objectives. It is necessary to assess whether stakeholders have a clear understanding of how projects function, and to gain insight into project performance by focusing on the process of collaboration both internally and externally.
When teams are divided into separate groups, or “silos,” there is a financial cost to the organisation that can lead to missed opportunities. Silos impede progress and can lead to a duplication of work between different divisions and a lack of motivation among employees. This can result in a decrease in performance and productivity and can prevent the organisation from achieving its key performance indicators.
The Project Management Office (PMO) should ensure that all teams within the organisation are leveraging uniform project management practices and are utilising standardised tools. Proper use of such tools and software is essential for maximising operational effectiveness; however, if not implemented consistently across the enterprise, they may prove to be costly. This could have an impact on the implementation of management solutions, ranging from security to compliance regulations.
It is important to take into account the fact that when teams are allowed to make use of a wide range of tools, this can lead to different approaches being taken to work. Consequently, it can be difficult to move resources to where they are most needed, which can have a negative impact on project costs, the time needed to bring a product to market, and the overall profitability of a company.
Many organisations fail to recognise that senior management should be closely involved in the monitoring of ongoing projects to avoid potential risk factors such as late delivery, the misallocation of resources, and budget overruns. Without proper oversight from the highest levels of management, these issues can be difficult to identify and address in a timely manner.
Organisations recognise the importance of being results-oriented in order to achieve their business goals. To this end, the Project Management Office (PMO) framework can be a valuable tool in identifying areas for potential improvement and making sure that projects are completed in a timely and cost-effective manner. By leveraging this framework, organisations can ensure that they are taking the necessary steps to ensure the success of their business objectives.
What Is Success in a PMO?
A recent study conducted by KPMG revealed that the majority of businesses (80%) assessed the performance of their Project Management Offices (PMOs) as either “moderately” or “very successful” in terms of facilitating organisational transformation.
A recent study conducted by Gartner discovered that seventy percent (70%) of companies that implemented a Project Management Office (PMO) observed an increased rate of success for their projects. By assessing the performance of the PMO, senior managers are able to make informed decisions regarding the best way to obtain the desired results of their projects.
In order to ensure the success of the Project Management Office (PMO), it is essential to first determine and agree upon the criteria for evaluation. To do this, it is recommended that three to five realistic Key Performance Indicators (KPIs) be established. The following KPIs should be considered when measuring and tracking the PMO’s performance:
- The ratio of projects that were finalised compared to those that were left unfinished or abandoned needs to be assessed. Projects which have been subject to oversight from the Project Management Office should be given precedence over those which have not received any PMO involvement.
- It is important to compare the estimated costs of a project with the actual expenses incurred by the business. This is a critical factor that should be taken into consideration when making any decisions, as it can significantly influence the success of the project.
- We need to evaluate the Return on Investment (ROI) for initiatives that were coordinated by the Project Management Office (PMO) compared to those that did not involve PMO participation. This comparison will be beneficial in verifying the effectiveness of the existing PMO framework. Alternatively, the results of this analysis may be used to identify areas where improvements to the PMO framework are necessary.
- On an annual basis, it is essential to compare the amount of time needed to complete projects of similar size and priority. To ensure that this Key Performance Indicator (KPI) is evaluated accurately, it is important to ensure that like is being compared to like; otherwise, the results will not be reflective of the project’s performance and will not be of use in improving the project output.
- The Project Management Office (PMO) will assess the efficiency of resource allocation for a given project. This Key Performance Indicator (KPI) will evaluate the impact of resource availability on the timely completion of the project. Allocation of the right amount of resources will be determined and monitored to ensure the project stays on track and is completed on schedule.
- It is recommended to reach out to the respective project teams and inquire about their experience with the Project Management Office (PMO) process and how it has impacted their projects. It would be beneficial to ask if the PMO provided support such as coaching and mentoring to help project teams to improve their skills. Furthermore, it would be advantageous to gain an understanding of whether the PMO engagement was advantageous in terms of successful project delivery.
The successful monitoring of the Project Management Office (PMO) should lead to improvements in the PMO’s operations for subsequent projects. Evaluating the PMO’s Key Performance Indicators (KPIs) following the completion of each project will ensure that the PMO continues to grow and remain viable.
PMO is critical now than ever
In spite of the progress made in program delivery with both waterfall and agile methods, more attention should be devoted to project delivery, including deployment and product launches. It is important to bear in mind the ultimate goal of the projects as well as some of the issues that are currently being faced. Evaluating these pain points will enable the business to create a better fit for the project management office (PMO) tasks required for project management. With this complex technical landscape, the PMO can be of great aid to both management and project teams.
As the project management landscape continues to evolve with the introduction of new technologies, processes, and project team dynamics, Project Management Offices (PMOs) have been adapting to meet the varying needs of organisations. By proactively responding to the unique environment within a company, PMOs can provide a wide range of services, from guidance and support to project teams, to oversight and governance of the entire portfolio. As a result, PMOs can play a crucial role in the successful execution of projects and the overall success of the organisation.
In order to foster program development and ensure alignment with an organisation’s long-term strategy, a PMO framework needs to be highly adaptable. As companies face the new challenges of technological advancements, remote working, and more complex projects, the advantages that the PMO can provide become increasingly appealing.
