Project Management Office (PMO) is an evolving concept around the globe. It is responsible for guiding and handling the implementation of projects in an organization. The concept has grown and shifted from the administrative role to the strategic one. In this case, PMOs perform more activities to support projects and programs, including supporting integrations post-mergers, product launches and ensuring the organization invests in the right projects/programs that generate maximum returns (Miller, 2017). In addition, the PMO practitioner roles have also expanded from execution to accountability on resources. Organizations that run large projects with significant costs or impact can benefit greatly from PMO. This paper discusses the foundations of PMO and the PMO competency continuum.
PMO Definition
PMO is a team, department, or group that helps set the project management standards in an organization. The PMO develops, enforces, and monitors project management procedures to ensure organizations implement best practices in the process of running projects (Miller, 2017). The purpose of the PMO is mainly to ensure project managers and the project management team execute the appropriate guidelines to ensure projects are delivered on time and within budget. In addition, the PMO provides direction and implements metrics to track project execution to ensure the organization achieves maximum return on investment while adding value to its stakeholders. Besides focusing on project management standards, the PMO also plays a strategic role by facilitating or owning the project portfolio management process ( Lucca et al., 2020). In this case, a PMO must ensure the right projects that align with organizational goals are chosen and policies and procedures are implemented to manage these projects. This means PMOs can foster strategic decision-making by monitoring and reporting active projects/portfolios to the top management.
PMO can be can be compared to a regulatory body that standardizes the process of executing projects to ensure maximum value and benefits. One of the key roles and responsibilities of the PMO is to support project governance and strategic planning (PMI, 2017). In this case, a PMO must ensure the right projects that align with organizational goals are chosen and policies and procedures are implemented to manage these projects. In addition, the PMI communicates and trains employees regularly to keep them updated and capable. This sets a common corporate culture on project management methodology, techniques, and best practices used on projects. In addition, PMOs are responsible for allocating resources, including the budget, schedules, and employees, based on project priorities. Lastly, the PMO provides administrative support in projects by investing in tools that promote effective project maangement.
Project Management Environment
PMO Distinction from Portfolio, Program, and Project Management
A PMO can also be referred to as a program or portfolio management office. However, each of them performs different roles. It is crucial to understand that project, program, and portfolio management are key to achieving an organization’s strategic goal. In this case, they should stay separate and complement each other. The project management office plays a crucial role in project management since it provides the standards for managing project-related processes in an organization (Yesodharan & Moan, 2021). This ensures that the organization maintains best practices. On the other hand, program management is the process of controlling and coordinating different groups of projects (PMI, 2017). Program management assumes that managing projects together has more benefits than managing individual projects. In this case, program managers are more strategic. The project manager is also focused on the benefits the program brings to the organization. In this case, program managers, unlike project managers and the PMO, look at the benefits the program could have and ensure the benefits are realized by ensuring the right projects are included in the program. The program manager also creates program plans based on dependencies between projects to ensure the projects run smoothly to meet the organization’s strategic goals.
In addition, portfolio management is the method of managing a collection of projects and programs by grouping them into portfolios with the aim of achieving the firm’s strategic objectives (PMI, 2017). Based on the organizational strategy of an organization, several projects/programs could be proposed (Joubert, 2020). The portfolio manager evaluates the contribution of each project/program to the company’s overall objectives and ensures the right ones with the lowest risk, high-risk tolerance, or highest benefit (return on investment) are selected, included in the portfolio, and implemented. This ensures resources are directed to the right programs/projects. In this case, project portfolio management is a continuous process where project priority is evaluated, high priority projects are considered first, and low priority projects are moved lower or out of the portfolio. The project, program, and portfolio managers must thus work together to ensure the successful completion of projects and the achievement of the organization’s strategic goals.
Key PMO stakeholders
The PMO must work effectively with people involved in the project to promote project success. In this case, building strong stakeholder relationships with those working on the projects is crucial since this adds value to the project. One of the most important PMO stakeholders is the PMO director or manager. The PMO director provides overall leadership and leadership in PMO activities by overseeing all the projects across the organization. The PMO director also ensures the project management standards and methodologies are maintained. The other key stakeholder is the project/program managers who performs the various program management tasks. Project managers report to the PMO. Lastly, the PMO trainers and coaches are important stakeholders in PMO since they train and coach their staff or project members/team to develop their professional skills. For instance, they provide training in project management, PM software tools, leadership, and agile project management approaches, among others.
Common PMO Types and Structures
As described above, PMOs can vary in type and responsibilities. For instance, PMO types can be categorized as supportive, controlling, and directive. The supportive PMO has the lowest level of control as the PMO’s consultative services by supplying project management standards templates, training, and best practices. This type of PMO also provides information on lessons learned from previous projects (Miller, 2020). The other type is the controlling PMO. This is the type where the project management office offers support and requires compliance with some project management standards, processes, tools, and templates during project implementation (Project Manager, 2022). Controlling PMO exert moderate control since it is not in full control of the project. Lastly, the directive PMO type directly manages all organization project management processes. This includes the work, procedures, templates, and methodologies. The PMO type is most common in high-risk environments to the strong level of control it has.
In terms of structure, PMOs can be categorized as an individual, departmental, and corporate PMOs (See Appendix A). Individual PMOs are responsible for overseeing activities and providing support and standards for a one project. In addition, the department PMO offers support and oversight for more than one project at a business unit or department level. It could involve IT PMO, finance PMO, etc. Lastly, corporate PMO, also called enterprise PMO, develops standards, procedures, and methods to improve project management and performance.
PMO Value
How PMO Adds Value
The best way to determine whether your organization needs a PMO is to identify how the company operates to determine whether various organization segments work smoothly together or in silos and don’t communicate. For the latter, PMO can help streamline processes leading to significant strategic changes. In addition, the projects with high cost and level of impact benefit significantly from PMOs. PMO adds value to project management by creating standards, procedures, and best practices that ensure project management operations run smoothly to ensure smooth running and delivery of projects on time and within budget. In addition, PMOs provide governance by ensuring the right people make decisions using the right information to promote accountability and transparency (Project Manager, 2022). Besides defining standards of project management process, PMO creates a centralized hub for coordinating projects within an organization to improve teamwork, communication, and information flow and prevent inefficiencies between projects. This ensures everyone takes responsibility for the quality and value of every project under their care.
PMO Competency Continuum Framework
This is a model for describing PMO evolution and maturity stages in an organization. In this case, each of the stages represents a given level of functional capability that the PMO can achieve (See Appendix B). In this case, the different stages show progressing competency levels and advancing functionality (Giraudo & Monaldi, 2015).
The first PMO stage is the project office. This is the smallest fundamental unit the PMO can sustain in the organization that is mainly formed to sustain or to be served by one project manager managing one or more projects at a time. The PM ensures the deliverables, cost, resource utilization, and schedule objectives are achieved (Giraudo & Monaldi, 2015). However, an organization can have more than one project office. The project office implements and oversights the application of the common PMO functions (standards, policies, and practices) but is not required to achieve advanced functionality beyond the supported project(s). The next stage is Basic PMO. This is the stage where the PMO can oversight and control multiple projects without problems (Perugino, 2019). However, the office staff is small and could include a program manager, multiple project managers, and a few support staff. They work to standardize project management processes across all teams in the company. At this point, the PMO provides standard methodology and tools with repeatable processes in multiple projects. Although it cannot extend its influence beyond the business unit or department, the PMO has taken shape is functioning as intended at this stage.
The third stage is called the Standard PMO. This is a crucial stage since it represents a complete/comprehensive PMO capability whose influence has grown beyond business units since it has the infrastructure to support project management best practices in the general business environment (Perugino, 2019). The PMO at this stage has the capability to manage multiple projects and project managers and one program manager. Firms focusing on establishing competency in project management should strive to achieve standard PMO. This stage has some level of sophistication in PMO planning, estimating, scheduling, and reporting based on historical data and industry best practices.
The stage four is advanced PMO. Advanced PMO is an evolution of a complete PMO capability (a next-level stage 3) that is focused on integrating business interests in project management to ensure common practices are applied on both (Perugino, 2019). At this stage, the PMO is developed into a separate unit that manage its own budget. It also has increased staffing who provide exceptional project management practices and procedures.
The fifth and last stage is the center for excellence. This is the highest PMO competency continuum level and a separate business unit that handles project and business management operations across the enterprise. At this stage, PMO focuses on continuous improvements and collaborations to achieve strategic alignment of business goals and interests. In this case, the center for excellence plays a strategic alignment role in an organization. A C-suite level executive with access to the CEO or other top executives overseas at the center for excellence
In conclusion, PMO is developed to support the implementation of the basic project management process. In this case, it introduces standards, tools, and procedures for helping in the growth of skilled and competent project managers. It also helps in governance by supporting project control and providing the information needed to effectively make decisions. In this case, establishing a PMO is crucial for a firm that seeks to improve its project management competencies since it provides tangible and long-term benefits to the business by aligning project management interests to the organizational strategic goals.
References
Project Management Institute (PMI). (2017). A guide to project management body of knowledge (PMBOK guide) (6th ed.).
Miller, J. A. (2017). What is a project management office (PMO), and do you need one? CIO. https://www.cio.com/article/267012/what-is-a-project-management-office-pmo-and-do-you-need-one.html
Perugino, J. (2019). PMO Maturity Models and What They Mean for Your Organization. https://www.linkedin.com/pulse/pmo-maturity-models-what-mean-your-organization-joey-perugino-/
Giraudo, L. & Monaldi, E. (2015). PMO evolution: From the origin to the future. Paper presented at PMI® Global Congress 2015, Project Management Institute.
Project Manager. (2022). Project Management Office (PMO). https://www.projectmanager.com/guides/pmo
Joubert, S. (2020). What’s the Difference Between Project, Portfolio, and Program Management? https://www.northeastern.edu/graduate/blog/project-management-vs-portfolio-management-vs-program-management/
Bakkah. (2022). The Differences between Project, Program, and Portfolio Management. https://bakkah.net.sa/consulting-insights/project-program-portfolio-management
Lucca, T. A., Hinning, M. P., Santos, N. (2020). PMO as a tool for the organizational knowledge management: a case study in a project-based company of the sanitation service sector. International Journal of Project Management, 4(1), 10-35.
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