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?
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).
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.
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:
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.
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).
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:
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:
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:
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.
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.
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.
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.
The three types of PMO structures are defined by the degree of control they have over the projects.
These structures are defined by the level of participation the PMO has in the project phase.
International consultancy firm, Gartner & Inc., has also defined the framework for four different kinds of PMOs.
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.
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.
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.
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.
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.
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.
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.
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.
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Possible PMO Initiatives |
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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.
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.
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:
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:
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.
