What is PMO?
In today’s complex business environment, there is a growing need to choose the right projects to deliver and complete them successfully in a short time with the limited resources. The main purpose behind establishing a Project management office (PMO) is to improve the efficiency of the projects, reduce costs and improve the deliverables in terms of budget & time by ensuring that projects are in sync with the organization strategy. To stay ahead of competition, to decrease high delivery costs, to avoid from project failure are some of the primary reasons of creating PMOs.
Project Management Office (PMO) is the department or group responsible for determining and implementing the Project Management disciplines and standards in an organization.
PMO not only determines the resources, procedures, performance criteria and tools to be used to provide an effective project management but also drives broad use of project management disciplines throughout the organization.
PMO’s roles and responsibilities
- Develop a standard project management methodology
- Apply and integrate project management disciplines into all core business processes and systems
- Build development and learning programs to mature project management skills
- Develop a project management career path
- Create a clearly defined strategic vision
- Monitor and control the performance of projects
- Report project status to upper management
- Benchmark themselves against other organizations
- Provide mentoring for project managers
- Select and prioritize the new projects
- Allocate resources between projects
- Participate in strategic planning
- Manage and archive the project documents including lessons learned
Benefits of Project Management Office (PMO)
Setting up a PMO has multiple benefits. First of all, it makes sure that the projects align with the company’s objectives and strategies. The PMO’s push for strategic alignment ensures projects help the company achieve its business goals.
In Today’s competitive landscape, priorities rapidly change as the customer demands change. When such change occurs and the priorities shift, the PMO helps executives decide which projects to launch, accelerate, delay or cancel.
PMO ensures that projects are carried out with a standard methodology. These standard methodology provides guidance to the project managers on how to use existing resources, workflows and tools in an effective way by avoiding conflicts among projects and eliminating unnecessary and excessive effort.
PMO helps teams understand the organization’s strategic goals and equipping them with the tools to deliver projects and programs aligned with those goals.
How to set up a Project Management Office (PMO)
Establishing the PMO requires an organizational change and the resistance at this stage is one of the biggest obstacles to the failure of PMO. To overcome this obstacle, it is crucial of getting senior management support. A PMO without executive support probably won’t get very far.
The next step is to determine the PMO structure and set up a team. If an organization decides to establish a PMO, there’s no one-size-fits-all solution. Each company should establish its own PMO structure and team, based on their culture, management style, projects’ sizes and complexity, organizational structure and resource availability.
The following step is to document PMO standards, applications and methodologies. These processes should be evaluated regularly for the improvement.
After the implementation of the PMO processes, performance monitoring and reporting should be performed and the missing points should be improved in accordance with standardized tools, templates and the methodology. The project team should know the metrics (such as ROI, gross profit margin, earned value, customer satisfaction index, schedule variance etc…) used to assess the effectiveness of the project. It’s important to tailor metrics to your organization’s unique needs.
To-do List: Building a Project Management Office
In order to create a successful PMO structure, you should answer following questions:
Have you correctly identified PMO’s vision?
- Have you determined the scope of work of your PMO is supposed to provide?
- Have you identified PMO’s goal and objectives and are these objectives in align with the company’s strategies?
- Have top management and key stakeholders approved your PMO objectives?
- Is the PMO’s vision consistent with your organizational culture?
Can you track metrics (KPIs) ?
- What metrics and measurements do you use to evaluate PMO’s success? (For example quality, customer satisfaction, productivity, cost, gross margin etc…)
- Did you determine how project management metrics will be measured?
- Who will collect these metrics?
- With whom will you share these metrics?
- How often will you share these metrics?
Are the standards and procedures you set for the PMO clear enough?
- Are the PMO procedures and methodologies simple enough so that your team can easily follow?
Which certification is better for you: PMP or CAPM? In order to read the article, click here>