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What is a PMO and do you need it?

PostsProject management
Georgina Guthrie

Georgina Guthrie

April 01, 2021

Being able to deliver a project on time, to budget, and to spec is the project manager’s dream. But as budgets are squeezed and markets become increasingly competitive, projects are increasingly at risk of coming up short – or worse – failing completely. Even with a team of dedicated managers working their magic, things like miscommunication, poor training, or lack of standardization across an organization can cast a shadow over a project’s success. This is where a PMO comes in.

What does PMO mean?

PMO stands for Project Management Office. It’s a group of experts (either internal or external) that supports standardization and best practice across a project, to make sure everything runs as smoothly as possible.

Think of the project managers within an organization as the football players, and the PMO as the football manager. It’s their job to look at the bigger picture and understand how every project (or player) fits into the wider strategy – and then do everything they can to help reduce risk of failure.

The PMO’s remit includes some or all of the following:

  • Develops project management methodologies, enables the sharing of resources and tools, and maintains best practices
  • Looks after project documentation, tracks metrics, and integrates data
  • Aligns projects with corporate strategy and culture and adapts as necessary
  • Reports on project progress to upper-level execs and stakeholders
  • Helps with project prioritization
  • Coaches, mentors, and trains project managers and staff

The last point on that list – coaching and mentoring – is particularly useful because it means your team not only benefits from expert management, but they gain valuable skills they can bring to future projects. It also gives the project managers in your organization career progression; a PMO role can be a great next step.

What are the benefits of a PMO?

Sure, a PMO is an extra cost. But it does offer a huge amount of value. Not only can it help your organization save time and better manage resources, but it also improves client and stakeholder relations. After all, who wouldn’t be impressed with a project that’s delivered on time and on (or under) budget, time and time again?

Here are a few of the key benefits:

  • Deliver projects on time and on/under budget
  • Improve customer/stakeholder satisfaction
  • Create alignment between projects and overall company goals
  • Improve productivity through standardization
  • Decrease project risk
  • Cut costs per project

PMOs can also be internal or external-facing. Internal-facing PMOs help different teams within an organization collaborate – something that’s particularly useful when teams are running large, iterative projects. External PMOs do much the same job as their internal counterpart, but they also communicate with customers and stakeholders, which helps transparency between the two parties.

Who needs a PMO?

PMOs are a permanent fixture in large businesses with big turnovers, but they’re becoming increasingly popular in smaller organizations too. That said, not everyone needs one. A general rule of thumb is, if any of the following things keep happening within your organization, then it’s time to get a PMO involved – pronto!

  • Your projects keep finishing later than planned
  • Your projects often run over budget
  • Everything’s a bit chaotic, with very little in the way of standardization
  • Your stakeholders have no idea what’s going on
  • You struggle to track progress and projects

What are the different types of PMO?

Choosing a PMO (or PMO team) isn’t a one-size-fits-all situation. There are three different types of PMO, each offering a different level of support.

A Supportive PMO is there if you need it. The supportive PMO will offer ideas for best practices, including project prioritization tips or training for project management tools to help managers collaborate with their teams more effectively. You don’t have to use the advice, but it’s there if you need it. Think of this as an optional hand-holding service.

A Controlling PMO is a little more hands-on than a supportive PMO. It doesn’t control everything, but it does offer support and helps standardize work with templates and monitoring procedures. It’s a kind of halfway point and is currently the most popular type of PMO.

A Directive PMO has full control over the project. What it says, goes, whether that’s following a certain procedure, or using a specific kind of tool. This PMO is most common in highly regulated organizations.

What challenges does a PMO face?

The biggest and most common challenge in the PMO’s working day is change resistance, which is when an individual or a group of individuals is reluctant to adopt new processes and techniques. This could continue even after a large amount of pressure has been applied. People can be very stubborn!

To overcome this challenge, PMOs need to first demonstrate added value. They do this by reporting benefits and showing measurable improvements across cost, customer satisfaction, productivity, and any other KPI the organization has. They then need to effectively share this information with the wider organization.

Setting up a PMO

It may be even simpler than you think! Get started adding a PMO to your business the same way you would go about analyzing and solving any other problem.

  1. Identify/analyze the issue. Look at the reasons we’ve listed above and figure what problems you’re trying to solve by adding a PMO. Maybe you fall perfectly into these examples, maybe you have a completely different problem a PMO could help with. Then, do some research,
  2. Create a plan. Once you’ve identified your problem and done some research, you can start to put together your plan. What exactly do you need your PMO to do? What previous experience do you need them to have? Write a thorough description and put together a hierarchy of where you see them falling in your business. What tools and processes will they need to use?
  3. Get to work. You know what you need, start looking for that person and put your plan into action. Assign one or a few key people to be your PMO’s go-to(s) while they’re getting full integrated into the process and carving out their own space.

What does the future hold for PMOs?

PMOs are a crucial part of any organization, but their role will undoubtedly evolve over time. According to a 2018 Gartner report, emerging technologies such as Artificial Intelligence (AI) could take over some of their day-to-day functions over the next few years. This means PMOs will need to adapt their role and provide value in new ways. This could include becoming more agile, so they’re constantly aligned with business goals, showing businesses how to execute strategy, or offering guidance on how to use AI systems and project management software.

Whatever the future holds, PMOs have been keeping projects on-track for years, and we’re certain they’ll be a key part of the project management ecosystem for many years to come. Albeit in a slightly different, evolved iteration. PMO 2.0? Watch this space!

This post was originally published on May 8, 2019, and updated most recently on April 1, 2021.



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