What is PMO: Roles, Responsibilities, Types, and Benefits

What is PMO: Roles, Responsibilities, Types, and Benefits

Do you, as a project manager or team member, find yourself looking for additional support or guidance so that your projects can be delivered on time? In today’s rapidly evolving business environment, it’s easy for projects to get derailed, go over budget, or exceed deadlines. Sometimes project leaders and team members need to get external guidance and support. This is exactly where the project management office (PMO) comes into play. 

What is the meaning of PMO? What are the roles and responsibilities of this group? You probably have a lot of questions. Luckily, we have the answers. This blog not only explains the meaning of a PMO but it also gives valuable insight into how a PMO can be helpful for your business. 

Let’s start at the basics, shall we? 

What is the Meaning of PMO (Project Management Office)? 

Project Management Office, or PMO, is a designated group, team, or department that is solely responsible for defining best practices, processes, and reports that the company will use to execute and implement projects. It’s easier to think of the PMO as the group that wants to ensure each and every project your company takes on is a success and delivers the best return on investment (ROI). 

Roles and Responsibilities of PMO

The primary responsibility of the PMO is to make sure all projects are executed following appropriate (standardized) processes and procedures. They are the central point of contact for any information regarding any project for all stakeholders (upper management, clients, finance team, etc). Therefore, one of the key roles of the PMO is to ensure that all data, statistics, and other relevant information pertaining to a project is up-to-date and verified. 

Next, we look into the key roles the PMO plays in further detail. 

Establish Centralized Procedures and Governance Structure

Just as the main chef curates a recipe for their most prized dishes for others to follow, the PMO establishes the main, centralized procedures for the successful execution of any project. According to the Project Management Institute’s Pulse of the Profession, organizations that have standard project practices have a 92% success rate. This standardization of policies and processes ensures that each project has the highest chance of being completed on time and within budget. 

The PMO establishes the format of how a project should be defined, prioritized, communicated, and executed. Furthermore, the office also decides how resources will be allocated and highlights the standardized metrics against which project success is measured. 

Aspects of resource planning that can be streamlined by PMO include:

  • Criteria for how resources are identified, requested, and allocated
  • Approval process for requesting shift changes
  • Establishing over-time or part-time work criteria and pay
  • Setting up a leave-request submission process

The benefits of standardizing include rapid completion of projects as everyone knows what they have to do (no confusion) and establishment of best practices. 

PMO is also in charge of setting up a governance structure that includes an ongoing risk assessment of the projects and the development of migration strategies to reduce negative impacts and unfavorable circumstances. 

Prioritize Projects as Per Business Goals

The PMO is also in charge of prioritizing projects so that not only the most crucial ones get completed, but also ones which align with the company’s short and long-term objectives. To do this properly, the PMO or members generate a prioritization criteria that integrates historic project data, the business’ operational and strategic goals, and other key performance indicators (KPIs). 

Effectively Identify, Schedule, and Monitor Resources 

One of the main responsibilities of the PMO is resource planning. Resources are the most expensive cost of a project and the majority of the project success depends on the right people being available to work on the crucial tasks. Effective and efficient resource planning and scheduling will establish the following precedence:

  • Eliminate departmental or location silos of spreadsheets with a centralized resource dashboard
  • Avoid resource conflicts 
  • Create real-time visibility on resource capacity, competency, and availability for all stakeholders
  • Set up a resource scheduling tool that can accommodate changing requests and requirements.
  • Create accurate tracking of all types of work being done and identify if it’s billable, strategic, administrative, etc.
Schedule resources effectively and avoid project conflicts

Build Resource Capacity Plans and Forecasts

Once the PMO has designed the most efficient way to identify, allocate, and track resources, they also need to be able to build resource capacity plans and forecast models. This responsibility is crucial for the company’s ability to take on and deliver successful projects in the long run. 

Capacity planning provides insight into how many hours a task will take and whether there are enough hands on deck to complete the assignment. This tool ensures that all resources are working to their maximum efficiency and that the projects will be completed within budget and deadline.

Some of the common forecasts generated by the PMO include: 

  • Number of people sitting idle on the bench vs. project vacancies
  • Number of resources required vs. number of resources available with the right skillset (will highlight surplus or shortage)
  • Estimated costs of incoming projects and potential profitability

Generate Project, Resource, and Financial Management Reports

As the PMO is the central communication point for all projects, they are responsible for communicating project status and all key data to the appropriate stakeholders in a timely manner. This will ensure the right decisions are made, profits are maximized, and risks are avoided. 

Key reports prepared and delivered to relevant stakeholders by the PMO are:

  • Overall status of the project (completed, in-process, delayed). 
  • Status of KPIs and deliverables across the portfolio
  • Financial reports that include details on costs, budgets, margins, and estimates
  • Project risks and progress on mitigating these risks
  • Resource efficiency and utilization rates 

Support Project Goals and Staff by Mentoring 

As a member of the PMO team, one is also responsible for providing adequate support, mentorship, and training for project leaders and team members. This support can come in the form of providing ongoing training on best project management practices, consistently reviewing project plans and templates to make sure they are being used properly, and providing mentorship. 

Issues that can be tackled by the PMO team could be how to resolve internal project conflicts quickly, how to identify each member’s strengths, and how to facilitate employee engagement

Serve as a Knowledge Sharing Hub 

Your organization's PTO also serves as a knowledge hub. As the PMO is the heart or “coordinating center” for all the organization's projects, it’s easy for the PTO members to identify similarities in scope between projects and departments. They can then turn around and share knowledge with other teams. The PTO understands project requirements and can therefore point teams to the right educational resources for successful project completion.

Increase Project Quality 

Members of the PMO are often outside the daily workings of a project and its tasks. Therefore, they can offer an objective and qualitative perspective on the quality of a project or highlight an issue that others may not notice. They can easily identify areas for improvement and provide constructive feedback. 

For instance, someone from the PMO may identify that a resource is close to its maximum capacity and can inform the team leader to take corrective action immediately. This will result in the identified resource being able to work efficiently and without stress. 

Various Types of PMO

Now that we understand the roles and responsibilities of a PMO, we’ll discuss the various types of PMO structures an organization can opt to have. The PMO can be supportive, strategic, departmental, or even digital. 

PMOs Based on Degree of Control

The three types of PMO structures are defined by the degree of control they have over the projects. 

  • Supportive - Focused on creating a framework of processes, governance, training modules, and mentoring programs that help project managers in their daily operations. It is easier to think of a supportive PMO as an internal consultant for projects. They can only guide and recommend, not enforce compliance. 
  • Directive - Probably the most important type of PMO. Serves as a decision-making authority and typically has complete control over projects. Their duties include assigning project managers, providing support resources, and monitoring project budgets. 
  • Controlling - Focused on driving standardized processes and procedures within an organization. Daily functions include reviewing project plans and reducing risk exposure. 

PMOs Based on Level of Participation 

These structures are defined by the level of participation the PMO has in the project phase. 

  • Strategic - Serves as a bridge between organizational strategy and project execution. They are in charge of making sure the projects are delivering value. To have a strategic PMO, there needs to be clear planning and a crisp vision with a detailed path for execution. 
  • Governance - Focus on establishing project-related governance processes and making sure they are adhered to. Facilitates the sharing of knowledge, best practices, methodologies, tools, and techniques. 

PMOs Based on Gartner Inc., 

International consultancy firm, Gartner & Inc., has also defined the framework for four different kinds of PMOs. 

  • Activist - This type of PMO holds a broad view of projects and how they fit within the organization’s long-term goal. This structure serves more as an enabler than a director. They review plans and project proposals and offer support to the project leaders. Activist PMOs are commonly found in large enterprises and businesses with multiple offices. 
  • Delivery - The Delivery PMO is again an enabler like the Activist PMO, however, they are more focused on short-term goals and results. This type of PMO works best for agile projects where there are quick deadlines and deliverables. As per Gartner, Delivery PMO is the most common type of PMO structure. 
  • Compliance - If your organization is in a highly regulated industry, then the Compliance PMO type might be the right fit for you. The Compliance PMO is more focused on establishing consistent practices and policies in place. They ensure that projects are completed while meeting the basic requirements. 
  • Centralized - This kind of PMO is ideal for large businesses that require standardized practices and protocols. A centralized PMO is typically established to reduce reliance on a few key resources for successful project outcomes. By creating reliable processes for project tracking and reporting, a centralized PMO takes the burden off key performers and distributes the ownership amongst the rest. With a centralized PMO new hires can quickly learn the ropes and get to work as they know what to do from the beginning. 

Do remember that how you set up your PMO is completely dependent on your business’s needs and goals. There is no one right type. Also, these PMO structures and definitions are bound to keep changing alongside the evolving business climate. 

Benefits of Having a PMO

A PMO does much more than just support projects. The office impacts a company’s long-term growth, profitability, and overall value proposition in the marketplace. Other benefits of having a dedicated project management office in your business are discussed in further detail. 

1) Standardization that Leads to Improved Coordination and Communication

The majority of businesses use the PMO to standardize project processes and communication channels for their business. Think about this: without standardization, two project managers might write two different types of project reports. Then there is no way for upper management to objectively compare the two projects. Standardization increases the overall efficiency within the company. 

With a PMO, everyone knows who to direct their concerns to about a project or who to reach out to in regards to getting help. The PMO reduces confusion and builds streamlined communication channels. 

2) More Cost Savings and Reduced Errors 

According to PMSolutions, PMOs have delivered $175,000 in savings per project. That’s quite a number! 

In addition to delivering substantial cost savings, PMOs also reduce the number of errors within a project. For instance, with the help of a PMO member, project leaders can assign the right resource for every task. This will reduce the chances of people committing mistakes because they have the right skill set and expertise for the job. 

With the constant monitoring and diligence that PMOs are in charge of, they are capable of identifying risks and potential errors. They can therefore identify and fix the mistakes early on or at times even before they happen. 

3) Increased Productivity

One of the top benefits of a PMO is that it increases the overall productivity of the entire organization. The PMO prioritizes the right projects and tasks, locates and assigns the appropriate resources, and ensures all members have a manageable workload. As highlighted earlier, the PMO is in charge of designing a framework for collaboration and communication. The streamlined processes reduce chaos and foster innovation, growth, and productivity. 

4) Improved Resource Management and Tracking 

The PMO team ensures that not only do projects have access to the best talent for each task, but they also monitor the utilization of each resource. This means they make sure that each resource is working at optimal levels and thus maximize productivity. The resource tracking managed by the PMO helps organizations prevent burnout and attrition. 

Monitoring resources will also enable the PMO to ensure that the majority of the top resources are given strategic and billable tasks. This will generate more revenue and positively impact the company’s growth prospects.

Manage your resource tracking and improve billings, productivity, and efficiency with eRS

How to Set up a PMO in Your Organization

Ready to reap the benefits of having a project management office in your company? Great! But how do you implement one successfully? Follow our steps and you’ll be well on your way to experiencing the positive impact of having a PMO. 

1) Know Current Project Management State and Organizational Needs

The first step in setting up a PMO is assessing the current status of project management in your company. Is it in a nascent stage or a mature state? An assessment can be completed by looking at historical project data and identifying what went well and what needs improvement. 

Next is understanding what your company wants to achieve by setting up a PMO. Do you want to improve resource utilization or reduce costs? Or is your goal actually reducing delays? A way to pinpoint goals is by holding a brainstorming session with relevant stakeholders like management, project leaders, team members, and even client representatives. 

Possible PMO Initiatives

  • Creating standardized and scalable processes
  • Reducing project costs 
  • Helping in prioritizing projects and tasks
  • Aiding the digitalization of project and resource management 
  • Increasing client satisfaction
  • Better resource utilization and productivity

2) Gain the Support from Staff and Upper Management

Your PMO will not be successful if there is no buy-in from the rest of staff and management. This championing is crucial because the PMO will create changes and only be able to deliver desired results when everyone in the organization understands their role and responsibilities and the benefits they bring. 

Hold sessions with members of the staff and management to explicitly share the knowledge and positive change the PMO can bring. Use statistics and data to build your case. Get into details of why you need a PMO and how they will aid the existing teams instead of taking away their jobs (which is always a fear). The buy-in and support will not only give the PMO credibility and authority to make changes, but it will also ensure that their processes are accepted and successful. 

3) Hire the Right Talent

A PMO isn’t just made of project managers; the team needs a variety of professionals with different skill sets, like data analysts, administrators, and training professionals. These people will also need to demonstrate leadership, communication, emotional intelligence, and problem-solving skills as they will be the change agents in your company. 

You can work with a recruiting firm to hire the right talent and conduct interviews with multiple stakeholders to ensure you have a proper cultural fit as well. 

4) Choose a PMI Model and Develop Details Key Performance Indicators (KPIs)

Select the appropriate PMO structure for your business. You can refer back to the PMO structures we outlined earlier in the blog. Once the structure is established, build a detailed outline of the KPIs the PMO office will be monitored against. Why? Because the best PMOs measure, track, and analyze their own performance. These KPIs should be aligned with organizational goals and be S.M.A.R.T. in nature. 

The nature of KPIs is entirely dependent on what your organization needs, but some could be: 

  • Reducing project cycle time and costs
  • Implementing a digital workforce scheduler at a specific time
  • Training and upskilling project leaders and team members
  • Increasing resource utilization 
  • Decreasing the number of resources sitting on the bench 

5) Revisit and Improve PMO Practices 

The best way to ensure the PMO is doing what it was created for is by continuously reviewing its performance and practices. Just as the business climate and economic conditions will change, so will the requirements of your PMO. The team has to evolve in response to the altering business landscape. 

One way to set up your PMO for better and sustainable success is by using project management or resource management software. This software will improve decision-making and performance by providing the PMO with insightful tools and data like:

  • Visual map of project progress
  • Real-time data on project and resource billings, budget, costs, and profit margins
  • Insight on resource shortages, utilization, and schedules
  • Information on estimated time for task vs. actual time taken 
  • Centralized dashboard with drag-and-drop scheduling that makes it a breeze to allocate people to jobs 

Support Your Project Management Office (PMO) with eRS, a Resource Management Software 

Implementing a project management office in your company is a highly efficient way to optimize project performance. When the PMO is aided by a project management tool, the return on investment is even greater. eResourceScheduler is a resource management and allocation tool that will increase the overall efficiency of your projects. 

eRS will not only help you maintain project standards but will also predict resource demands, identify shortages or skill gaps, and identify the right person for each task. Take a sneak peek into this versatile software by starting the 14-day free trial now.

CEO & Founder
Rudraksh Vyas
Rudraksh Vyas, an accomplished CEO at ENBRAUN since 2011, has a proven track record in leading and growing technology-driven businesses. His expertise lies in product development, client management, and implementing effective business strategies, ensuring robust financial and resource management. Prior to his current role, Rudraksh honed his skills in business development, where he excelled in account management and export marketing. He holds a PMP certification from the Project Management Institute and an MBA in International Business from the University of Technology Sydney. Rudraksh's journey reflects a deep commitment to excellence and innovation in the tech industry, making him a respected leader and visionary in his field.

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