You may wonder if your organization needs a project management office (PMO). Ask yourself: Do you work in an enterprise-sized organization that handles large projects with a lot of moving parts needing to be coordinated? Would this work benefit from standardized processes, improved efficiency, better teamwork, set metrics to measure support and success, and better-managed budgets?
If your answer is “yes” or “maybe” to any of these questions, read on to learn how a well-organized PMO can benefit you.
What is a project management office?
A Project Management Office (PMO) is usually an internal department that oversees all project management activities, with the goal of standardizing processes and improving efficiency across the organization. But this work can be outsourced to an external group as well.
The history of PMOs dates back to the 1800s, beginning as a way for a country to govern its agricultural industry. Over time, the duties evolved until the function became known as a “project management office” in the early and mid-20th century, and the scope of the work it managed expanded.
Today, PMOs deliver value to stakeholders, projects, and programs in a wide variety of industries and contexts. It is responsible for setting and policing standards for project management across a company or organization, monitoring best practices, project status, and much more.
Some of the industries relying on PMOs include:
- Transportation and infrastructure
- Information technology
- Product development
- Building and construction
- Professional services
- Health care
- Human resources
- Creative teams
While there are many different types of projects and management practices, certain universal principles apply. These include:
- What: What does “done” or the result of the project look like?
- Why: Why are we doing this project? What are the expected benefits?
- How: How are we going to manage this project? What kind of methodology will we use?
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The six most common types of PMO methodologies include:
- Agile: This is a popular, iterative, or change-driven approach to project management. Agile enables faster turnaround and has the built-in ability to quickly adapt to needed changes or course corrections. It is an umbrella term that includes the Kanban and Scrum methodologies.
- Kanban: Kanban is a continuous development process that keeps work flowing from the To-Do list, to the Work-in-Progress board, to the Done list, all tracked on a centralized Kanban board.
- Waterfall: This is a more traditional work management methodology, using a sequential, top-down approach to project management. It’s best suited for projects that have clear requirements that can be fully understood and planned up front, rather than projects that have significant amounts of uncertainty baked in.
- Scrum: This is another Agile framework that divides projects into user stories, which are tackled in sprints, or well-defined time periods. Teams pull the tasks for each sprint from an ongoing backlog of tasks.
- Six Sigma: This is another commonly used methodology designed to reduce process variation and enhance process control, with the goal of improving a process so much that resulting products are 99.99966% free of defects.
- Hybrid approaches: A single approach doesn’t always suit every company or project. So, project teams sometimes blend methodologies to suit particular needs. For example, they might consider blending Agile and Waterfall, or Scrum and Kanban into “Scrumban.”
How a PMO is set up and interacts depends on the methodology it uses. But to deliver true value on a tight schedule, the PMO must be guided by a set of best practices. These can include defining a project’s life cycle and completion criteria, outlining its scope and requirements, structuring teams, implementing a quality management process, building a project plan, and determining corrective action procedures.
PMO: Purposes and benefits.
A well-organized PMO can deliver important benefits to organizations and project teams. These include:
A PMO has an overview of an organization’s projects and each project’s status. So, it is well-positioned to support high-level management teams throughout the lifecycle of projects, such as planning and control. This support can improve areas that include accuracy, cost savings, overall standardization, and quality assurance.
The PMO allows project teams to do their jobs by reducing bureaucracy and providing training, coaching, and mentoring as necessary.
With their visibility within an organization, PMOs are well-positioned to assess risks to project outcomes and use these reality checks to align everyone involved with a set of agreed-upon facts and goals. Too often, project managers know about upcoming problems and impediments to achieving project milestones but do not have the means or direction to supply that information to the people who need it to make a difference.
Greater transparency and visibility ensure that everyone is on the same page regarding where things stand and the challenges ahead, so decisions are made according to known facts and not by feeling and intuition. Projects centralized into a single system of record give stakeholders a complete picture of business activities.
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Tracking useful metrics.
By closely tracking relevant metrics, a PMO can improve team performance. Metrics support fact-based project selection and decision-making. They also help management understand team capabilities and enable better planning for production, service delivery, or product development. Metrics can also help with assuring quality, controlling costs, and identifying important industry trends.
With metrics in place, a company can determine success parameters for any given project and allow project managers to track a project’s status—including team productivity and upcoming risks—making any needed adjustments if it goes off course.
Documenting and standardizing information.
The PMO enables sharing of knowledge by documenting and standardizing processes to develop a set of best practices. By doing this, each project team no longer needs to reinvent the wheel individually. Instead, they can look to the PMO as the central reference for lessons learned, templates, and best ways of working.
When using the Waterfall methodology, documenting all features, functions, and tasks of a project upfront also ensures that teams meet project goals. Project requirements should be captured at the concept stage, answering questions such as, “What do we need to do?” “How can we perform the work?” and “What are the standards of performance?”
Breaking down silos.
A PMO provides a good way to break down silos in a company. Projects often bring together people from different areas of an organization, with varying priorities and different managers. For the project to be successful, everyone has to be guided by the same goals and vision.
By establishing harmonious cross-department working relationships in project teams, a PMO can eliminate uncommunicative, uncooperative silos and change a company’s overall working culture for the better.
Guiding strategic decisions.
With feedback from PMOs, organization leaders can make strategic decisions about which projects to continue to invest in. Not only can a PMO offer input into an organization’s strategic goals, but the organization must also turn around and ensure that the PMO focuses on work that aligns with the wider company’s strategic goals and objectives, incorporating this into the project plans its teams create.
The PMO can also help with governance, ensuring that people make decisions based on the right information. Governance can also include performing audits or peer reviews, developing project and program structures, and ensuring accountability at all levels.
Gaining a competitive advantage.
By helping project teams work more effectively and strategically, PMOs can help organizations offer products and services for less money and implement work of real value, helping to differentiate it from competitor offerings and give the organization a competitive edge.
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Generally speaking, there are three basic types of PMO organizations, which vary in how much control and influence they have over projects. They include the:
- Supportive PMO: This type of PMO acts as a repository for a company’s projects; supplies templates, best practices, and training; and keeps track of lessons learned. Typically, a supportive PMO has a low degree of control in projects.
- Controlling PMO: This PMO acts like an auditor, controlling activities, processes, procedures, and documentation. It provides support and requires teams to use the support. It exercises a moderate degree of control in organizations.
- Directive PMO: This PMO goes beyond control and provides direction, giving project managers the resources and guidance they need to do their work effectively and take charge of projects.
Optimize your organization’s project management.
An effective PMO will enable you to take your project management to the next level. You can identify and establish best practices in one team and turn them into repeatable outcomes for other teams tackling other projects. The centralized focus of a well-run PMO can help energize and organize project management teams throughout the business, revolutionizing how an entire organization operates and measures success.