What is PMO in Project Management? A Guide to PMO Role, Types & Measuring Success

in Research   Posted on May 28, 2021  Author: Imed Bouchrika,

In project management, one particular acronym that has been getting a lot of buzz and attention is the PMO. (Genius, 2015) But not many know about itwhat is PMO in project management and why is it considered such an important component?

PMO stands for Project Management Office. Its importance lies in the fact that it is the dedicated department within an organization focused on defining and maintaining standards for project management (Genius, 2015). The PMO acts as the organization’s centralized hub in all matters related to a particular project, from ensuring that the project is aligned with the organization’s overall goals to overseeing all activities related to the project throughout the entire period.

In this article, details on the PMO role in project management will be discussed, as well as its types, success metrics, and the challenges it faces. Anyone interested in a PMO—a manager, business owner, project leader, a management student—will find this guide of value.

PMO in Project Management Table of Contents

  1. 5 Key Responsibilities of the PMO
  2. Types of PMO
  3. When an Organization Needs a PMO
  4. Measuring a PMO’s Success
  5. The Challenges Facing PMOs

5 Key Responsibilities of the PMO

The PMO is considered the sole authority in an organization’s project management activities, whether relating to the general standards and processes the organization follows for all projects it is implementing or to matters specific to a particular project. As such, the PMO’s work encompasses a wide range of responsibilities. But there are five key ones that define what is PMO in project management.

Plan for Projects

When an organization’s leadership prepares an initial list of projects it intends to pursue, it is the responsibility of the PMO to determine which of these projects it should ultimately pursue. In most cases, the PMO would do an in-depth analysis of whether a project aligns with the organization’s goals and calculates the cost-benefit ratio of the project in order to determine if it is worth the organization’s effort and resources to kickstart the project.

Ensure Governance

As a standards hub for all project-related activity in the organization, the PMO primarily works with the project manager in ensuring the standards it has set are satisfactorily met. It also coordinates with key people working on a particular project to ensure such standards are consistently met by conducting activities, such as audits and peer reviews as part of the PMO job description.

Institutionalize Best Practice

The PMO is expected not only to be knowledgeable of the current trends and insights in project management but also to establish the specific practices and processes that will facilitate the overall efficiency and greater success of a project. Given the constant evolution of technology and work processes, the PMO is expected to keep track of these changes in order to constantly improve the way the project is conducted in the organization so that there is no loss in efficiency or success in the conduct of projects in the future.

Oversee Resource Management

As part of its responsibility to ensure efficiency in project workflows, the PMO handles the management and allocation of resources, such as files and file management systems across projects based on priorities, schedules, and budgets, among others. It ensures that these resources are available to all departments involved in the project management and they are available to access at any time.

Secure Needed Resources

The PMO supplies and invests in resources needed for the completion of a project, whether it is a piece of hardware, a project management software solution, or even pre-built document templates, the PMO ensures these items are secured and made available to the team, either by developing them in-house or sourcing them from elsewhere.

PMO structure

Types of PMO

While the responsibilities of the PMO are more or less consistent across all organizations, each PMO holds varying degrees of supervision and control over the project management aspect of their respective organizations. Depending on the needs of the organization and the projects it intends to carry out, there are usually three types of PMO an organization may employ.

Supportive PMO

A supportive PMO generally provides support services in the organization’s project management activities but otherwise exercises a “hands-off” approach, which means it is not actively involved in the management of the project itself. Instead, it provides on-demand expertise or information, prepares project templates, suggests best practices, and the like.

The supportive PMO fits well in an organization where projects are done successfully in a loosely organized environment and where additional control is deemed unnecessary. It also fits well in cases where there is a need to have a “clearing-house” of project management information across the organization that can be used freely by its project managers.

Controlling PMO

As the name implies, the controlling PMO exerts a little more control on the project, where it will not only provide support and information but also require those working in a project to use the documentation, procedures, templates, activities, and other details the controlling PMO requires the organization to adopt. Also, as part of its function to ensure compliance, this PMO will require project teams to undergo audits or reviews to ensure they are following the prescribed workflows.

The controlling PMO can be found in organizations where there is a desire to manage various aspects of the project management process. Having a controlling PMO would work if there is a clear need for compliance in project management activities and that having a controlling PMO would help bring greater improvements and efficiency to the organization’s project management structure.

Directive PMO

The Directive PMO goes beyond control and directly manages the project. This PMO is professional in nature, providing both the project management experience and the resources needed to manage the project. It also has dedicated project managers who would directly take control of the project and report back to the PMO. This PMO can be found in larger organizations, which require a great deal of expertise to handle their projects and a high level of consistency of practice across all projects.

When an Organization Needs a PMO

While the PMO plays an important role in the project management activities of an organization, not all organizations would require having such a department. There are certain criteria or situations that would make an organization consider having a PMO (Miller, 2017):

  • If the organization is handling two or more projects running at the same time
  • If the projects being worked on are not complex to require some form of oversight and management.
  • If the different segments of the organization are not coordinating with each other in the conduct of any project
  • If the organization is set to implement significant projects or strategy changes in relation to a project
  • If the project is not meeting the standards the organization has set for its project management work

Percentage of Enterprises with PMOs

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Toptal, 2019

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Measuring a PMO’s Success

Given the vital role of the PMO in the organization’s project management efforts, not to mention the amount of resources involved in such efforts, it is imperative for the organization to constantly ensure that its PMO is doing its job and that the projects it oversees are not only on par with the PMO’s standards but also with the organization’s expectations.

Because of this, the organization must first define and agree on what will be key performance indicators (KPIs) that will help determine the PMO’s success before any evaluation can be made. Different organizations may have their own KPIs in place in evaluating their PMOs. Regardless of the differences, a common set of criteria can be established from which the organization can base its KPIs (Theeboom, 2019):

  • The number of projects completed against those that were either abandoned or incomplete, focusing on the PMO’s involvement in these projects if applicable
  • Estimated project costs against the actual cost to the business
  • Return of investment (ROI) on projects coordinated by PMO against those that had no PMO involvement to validate the PMO framework, if applicable
  • Year-on-year analysis of the time spent to deliver projects of the same size or priority level
  • Resources appropriately allocated to projects

As part of the evaluation, surveys can be conducted with the project teams about the PMO process and how it impacted their projects.

It is recommended that an assessment of the PMO’s KPIs is conducted after each project delivery to ensure the PMO’s growth and sustainability. Thus, if there are possible shortcomings, they can be remedied in time for the next project to be rolled out. In some situations, a needs analysis may need to be conducted.

PMO benefit

The Challenges Facing PMOs

In recent years, there have been developments made in the overall project management process. These developments have redefined what is PMO in project management.

For one, the project management process has been upended by technological innovations, which has made work simple but more complex at the same time. Artificial intelligence for instance, has accelerated automation in the process while the data being gathered for projects has become more complex than before as new insights that were not being considered a factor before are now considered essential. Overall, the fast pace of these technological advancements is forcing organizations to respond faster and more effectively, especially in the way they manage projects that produce improvements in the work process or their products or services (KPMG NZ, 2017). This response has led to the rise of different project management methodologies such as Waterfall and, most especially, Agile which is fast becoming widely adopted by many organizations.

KPMG NZ, 2017

Complicating matters as of late is the fact that remote work environments are more prevalent now in the wake of the pandemic. While technology has made communication and coordination among project management teams much easier and more seamless, the lack of human-to-human interaction and visibility can be detrimental to the project’s overall progress (Stobierski, 2021).

Given these developments, it has become increasingly challenging for project managers to manage their projects across the organization. The challenge for the PMOs today and in the near future is how they would be able to address these changes in the most efficient manner possible.

An Evolving Future

The PMO’s role in the project management process remains as crucial as ever. As such, it is important for the PMO to continue evolving with the changes within the organization, as well as the changes in technologies and project management being practiced across organizations in different parts of the world. The PMO must be flexible to adapt to these changes, ready to take on new challenges and handle additional functions and responsibilities if necessary to meet these complexities and ensure its efficiency and effectiveness in handling more complex projects in the future.

 

References:

  1. Genius. (2015, July 5). The Importance of a Project Management Office (PMO) and Who Needs One. https://www.geniusproject.com/blog/about/the-importance-of-a-project-management-office-pmo-and-who-needs-one
  2. KPMG NZ. (2017). Driving Business Performance: Project Management Survey 2017. https://assets.kpmg/content/dam/kpmg/nz/pdf/July/projectmanagementsurvey-kpmg-nz.pdf
  3. Miller, J. A. (2017, October 19). What is a project management office (PMO) and do you need one? CIO. https://www.cio.com/article/2441862/what-is-a-project-management-office-pmo-and-do-you-need-one.html
  4. Nesco Resource. (n.d.). The Advantage of Using Project Office Management (PMO). Nesco Resource Careers. https://nescoresource.com/blogs/details/the-advantage-of-using-project-office-management-pmo-/153
  5. ProjectManager.com. (2021, May 7). The Ultimate Guide to…Project Management Office (PMO)
    https://www.projectmanager.com/pmo
  6. Reiling, J. (n.d.). The Three Different Types of Project Management Offices (PMO). Project Smart. https://www.projectsmart.co.uk/3-different-types-of-project-management-offices.php
  7. Stobierski, T. (2021, April 9). 6 Project Management Trends Emerging in 2021 | Northeastern University. Northeastern University Graduate Programs. https://www.northeastern.edu/graduate/blog/project-management-trends
  8. Theeboom, S. (2019, June 26). What Is PMO? A Guide to Project Management Office. Toptal Projects Blog. https://www.toptal.com/project-managers/project-management-consultant/project-management-office-guide
  9. Watts, S. (2019, October 24). The Project Management Office (PMO) & Its Role in IT Organizations. BMC Blogs. https://www.bmc.com/blogs/pmo-project-management-office
  10. Wrike. (n.d.). What Is PMO in Project Management?  https://www.wrike.com/project-management-guide/faq/what-is-pmo-in-project-management