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What is a project management office (PMO) and do you need one?

What is a project management office (PMO) and do you need one?

Companies seeking more efficiency and tighter monitoring of IT projects are opening project management offices (PMO) in growing numbers. here’s what a PMO should do, what types you should consider, and who really needs one.

A project management office (PMO) is a group — internal or external to a company — that sets, maintains and ensures standards for project management across that organization. They’re the keepers of best practices, project status and direction — all in one spot.

“At the end of the day, PMOs are in place to help orgs deliver value to their stakeholders to projects and programs,” says Brian Weiss, vice president, practitioner career development of the Project Management Institute.

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According to PM Solutions research, 85 percent of companies had a PMO in 2016, up five percent from 2014. They also found that 30 percent of companies without a PMO plan to implement one.

The role of the PMO could change as artificial intelligence and digital transformation take hold, but in today’s business climate, here’s what a PMO should do, what types you should consider, and who really needs one.

Roles and responsibilities of a PMO

A PMO makes sure company procedures, practices and operations go right — on time, on budget and all in the same way. “PMOs are there to ensure project and program success, and that’s critical because organizations deliver value through projects and programs,” said Weiss. “How they do that depends upon how they’re situated within the organization.”

According to PMI’s 2017 Pulse of the Profession, those companies that align their enterprise-wide PMO to strategy had 38 percent more projects meet original goals and business intent than those that did not. They also had 33 percent fewer projects deemed failures. 

[ Learn how to decide when to kill (and when to recover) a failed project ]

Michael Fritsch, vice president PMO at Confoe, which both provides PMO services and helps companies create their own internal PMOs, says that a good PMO:  

  • Provides tangible, repeatable, long-term benefits to the business
  • Aligns with corporate strategy and culture
  • Is agile enough to adapt as strategy shifts
  • Is a key enabler for the high-performing organization
  • Integrates data and information from corporate strategic projects/supports the balanced scorecard
  • Enables sharing of resources, methodologies, tools and techniques for project success across the enterprise
  • Identifies and develops project management methodology, best practices and standards
  • Coaches, mentors, trains and provides oversight for project managers and staff

While all of the above are important, Fritsch says that the last item is also a way for companies to develop talent — even outside of the PMO.

“That center of excellence also can be the career path,” he said. “It shepherds folks through career progression.” It’s not uncommon, he says, for project managers to move up to the executive level in a company. This is a key part of retention, too, so that project managers within the PMO don’t see that office as the end point of their careers (and, possibly, a dead end, and leave).

Different types of PMO

In order of least support to most support, the three general types of PMO are Supportive, Controlling and Directive.

  • A Supportive PMO is “the kumbaya” kind of PMO, says Fritsch, where a PMO provides help if it’s needed. “Come on in, we’ll give you ideas, give you best practices and you can ignore us completely and we won’t say a thing.”
  • A Controlling PMO isn’t entirely hands off but it’s not a task master either. “It puts in some measure of control of the projects,” said Fritsch. It gives the company templates, procedures and reporting. It’s “that mid-point sweet spot of enforcing some standards, providing all that support, but the PMO is not in charge of everything,” he said, adding that this is the most common type of PMO.
  • A Directive PMO is where the PMO directs project management of the work, support and controls the world, and leaves no space for wiggle room about following the templates, procedures and reporting requirements outlined by the PMO. These are most common in highly regulated, high risk environments.

PMOs can be internal or external facing too. Internal PMOs “bridge the gap between teams that are doing agile development and very iterative development,” said Jeff Grieshaber, senior manager at World Wide Technology. They’re also common in organizations that are running large programs in business process transformation.

External PMOs have many of the same qualities as internal ones, but are also “really good at communicating with the customers and the stakeholders and product teams that are doing the development of the work that you’re managing,” said Grieshaber.

PMOs, like everything, will evolve and change during the digital revolution. Gartner expect the role of the PMO to change because of digital transformation, especially as artificial intelligence becomes more pervasive and takes on traditional PMO functions. By 2030, they predict that multiple PMOs that may now exist within an organization will “amalgamate into one function concerned with change, strategy, project evolution and organization governance,” according to an April 2017 report.

Do you need a PMO?

The best place to start when considering whether or not you need a PMO is to take a good, hard look at how your company operates and see if different segments of it are already working together across systems and groups in harmony, or if they operate as silos with different systems and don’t often talk to each other. If your company is the latter, then a PMO can help. Also, if you’re about to implement any significant projects or strategy changes — or the strategy you already have isn’t being met, a PMO might be right for your organization.

“If you run projects, the projects have a significant level of cost or have significant level of impact, then you can really benefit from PMO,” said Fritsch. “Certainly, the larger the projects, the bigger the budget, the more there are projects, then the more you can benefit from a PMO.”

What companies recognize as PMOs today might not be what they see in the future, though. Gartner expects the number of IT PMOs to decline as a result of the digital revolution, though some will transform into change management functions and become part of the C-level strategy function. The analyst firm also expects that, by 2030, partnerships between humans, smart machines and AI will eliminate “some 80 percent of the ‘work’ that represents the bulk of today’s project management discipline, practices and activities,” according to the report. For PMO professionals, that means adapting behavior and practices. For companies, that means embracing changes to the profession for the benefit of their organizations — and their bottom lines.

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