Winter sale is now on - great savings on all courses!
See individual course page for details. Offer ends Monday.

Project Management Office – PMO

Project management office

PMO stands for Project Management Office. A PMO is a group or division within an organisation that supports project staff (usually project managers). A PMO may require that a project complies with project management standards and governance frameworks. It may even directly manage projects itself.

Standardisation

Over the years, the role of a PMO has evolved and continues to evolve. A modern PMO aims to standardise project management within an organisation. It acts like the ‘collective memory’ of the organisation, learning lessons from previous projects, and applying those lessons into a continuous improvement of the organisation’s project management processes and methodologies.

Increasingly a PMO is becoming integrated into programme management and/or portfolio management functions.

History of PMOs

PMOs have existed since the early days of project management within the construction and engineering industries. PMOs really started to become more widespread in the IT and technology departments in the 1990s.

Early PMOs

Originally PMOs were supportive. They provided support to project teams (usually the project manager) for things such as planning, risk management, change control, issue management and administration.

Projects more business focused

In the 1990s, project management became more business focused. After the launch of PRINCE2®, projects were expected to have a business case to justify their investment, and to weigh up the benefits against costs and risks.

PMOs more focused on governance

At this time, the role of PMOs often expanded. They became more standards-based and focused on assurance independent of the project manager. Additional reporting lines were introduced. The PMO staff responsible for standards and assurance often now report to more senior staff who are involved in project, programme and portfolio governance.

PMOs for the 21st century

In a rapidly changing business environment, it is sensible for organisations to adopt current best practices.

One trend is the adoption of permanent organisational structures which encompass not just the typical PMO functions in relation to projects, but also cover wider programme and portfolio planning, management and governance.

By doing so, PMOs are becoming a strategic tool for organisations to take better investment decisions at the strategic level.

No one-size fits all PMO definition

The PMBOK Guide definition

Although the latest edition of A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition [1] was published in 2017, its definition doesn’t fully capture the modern functions of a project management office.

In the PMBOK guide, a PMO is categorized as one of 3 types of project management office:

1. Supportive

These PMO exercise a low level of control by acting in a consultative role to projects. It supplies things such as templates, best practices, training, information, and lessons learned from other projects. The PMO serves as a project repository.

2. Controlling

These PMOs exercise a medium level of control by supporting projects and requiring that the projects are in compliance with the following:

  • Defined project management frameworks or methodologies;
  • Use of specific templates, forms and tools; and
  • Governance frameworks.

3. Directive

These PMOs exercise a high level of control by directly managing projects. Project managers are assigned by and report back to the PMO.

PMO structure

The PMBOK® Guide classification doesn’t fully explain how PMOs can exist at different levels within an organisation.

PMOs can exist at 4 levels as the diagram shows.

PMO levels

1. Enterprise PMO - EPMO

Often known as ‘Enterprise PMOs’ EPMOs create corporate standards, processes and methodologies to improve project performance across the organisation. They often allocate resources to projects. EPMOs share overlapping characteristics with a portfolio management office. An EPMO is the one type of PMO most likely to be successful and beneficial to the enterprise.

2. Division PMO

This provides support for multiple projects and portfolios in a division. They typically integrate related programmes and portfolios within the division. At this level, the PMO shares many overlapping characteristics of a portfolio management office and a programme management office. They have an influence at the enterprise level but less than an EPMO.

3. Business Unit PMO

Often known as a ‘Business Unit PMO’ this provides support for multiple projects in a business unit. They typically integrate related projects and programmes within the business unit (e.g. IT, Finance). At this level, the PMO shares many overlapping characteristics of a programme management office and a project management office. These PMOs are only effective within the business unit but lack the strategic or tactical aspects needed to have influence outside the business unit.

4. Project PMO

This is the classic ‘Project Management Office’. These exist to support a single complex project. It can be any of the 3 classifications above (i.e. supportive, controlling, directive). They are temporary and have little or no long-term influence on the enterprise.

What are PMO responsibilities?

The most primary responsibility of a PMO is to support projects, particularly project managers. It does this by:

  • Managing shared resources across projects;
  • Developing and maintaining a standard project management methodology based upon best practices;
  • Developing and maintaining project management standards, policies, procedures and templates;
  • Providing coaching, mentoring and training to project staff;
  • Providing oversight of project management functions;
  • Monitoring compliance with project management standards, policies, procedures, and templates via project audits;
  • Coordinating communication across projects.

This set of PMO responsibilities though does not fully capture the more complex realities of a modern PMO model or structure.

A modern PMO model

A modern PMO is a decision-making and delivery support structure for all business change within an organisation.

PMOs are continuously evolving as organisations try to ensure the PMO best meets its needs. It is not enough to see a PMO within the context of a supportive PMO for an individual project. It is far better to view a PMO as the total structure put in place to deliver projects across an entire organisation.

This may occur through one permanent PMO, or via multiple offices (Portfolio Offices, Programme Offices or Project Offices) which might be either permanent or temporary. The focus is on providing both central and local services.

PMOs operate across 3 functional areas

According to the Portfolio, Programme and Project Offices [2], the P3O® model explains 3 functional areas for a PMO. These are:

1. Strategic planning

This requires the provision of functions and services at the portfolio management level. It requires a focus on management decisions to enable the following:

  • alignment with organisational strategy;
  • prioritisation of portfolios, programmes and projects;
  • benefits realization and management;
  • reporting using organisational reporting mechanisms such as balanced scorecard.

2. Delivery support

This requires the provision of functions and services which focus on supporting the delivery of change. This might be via the provision of a central pool of resources (staff), with capacity planning ad HR management processes to support them.

3. Centre of Excellence

This focuses on developing standards, methodologies, processes, procedures, templates, and checking their compliance across all projects which are within the organisation’s portfolios and programmes.

Positioning the PMO

For the PMO to be the most effective from the business perspective, it must operate as an independent business unit at the highest level of the organisation. This is what’s known as an Enterprise PMO, or EPMO – see above.

The EPMO is assigned an executive manager with the authority and autonomy to establish, monitor and control the allocation of resources needed to successfully utilise portfolio, programme and project management (PPM) best practices across the organisation. That’s why the lower that a PMO is positioned within the organisation, the lower will be the beneficial impact across the organisation.

Sustaining the PMO

Like any other business unit, a PMO must prove its benefit and value to the enterprise. There are several things a PMO can do prove its worth:

  • Select, prioritise and initiate only projects which support strategic initiatives and business objectives;
  • Allocate the organisation’s resources and assure that those resources are effectively being utilised to achieve strategic objectives;
  • Identify risks and implement control strategies for high-value risks;
  • Identify and close non-performing projects;
  • Identify changes in strategy and analyse the impact on projects, then re-prioritise projects and close projects if necessary;
  • Develop and measure KPIs for each portfolio, programme and major project;
  • Report on, and take action on, any KPI as necessary;
  • Routinely communicate the quantitative value and benefits of the PMO to the organisation.

PMO maturity

Over time a PMO evolves. At any point during its development, the organisation which has set up the PMO can be assessed against a 5-point scale of maturity. This can be done using industry models such as P3M3®. Use of such a maturity model is useful to help an organisation understand where ‘it currently is’, against where ‘it hopes to be’ in the future.

P3m3 maturity model

The diagram shows a brief summary of the levels of maturity an organisation might go through. For a much more detailed understanding of how maturity models can help organisation’s set up a new PMO or improve an existing PMO, see the P3M3 summary [3].

When it is initially set up, a PMO is designed to meet a specific goal. This might be to provide a Project Office to support a single project.

Over time however, a PMO typically evolves as the organisation undertakes more projects, or it begins to manage its projects through programme management or portfolio management frameworks.

There are very few organisations which have managed to reach level 5 on the P3M3 maturity model. In fact, most organisations are still at level 1. Level 5 maturity remains an aspiration. A vision to work towards, rather than a short-term realistic goal.

However, if your organisation does reach level 5, it will provide a centre of excellence which manages ongoing PMO improvements and collaboration across functional business areas to enable strategic goals to be met.

PMO FAQs

What are the objectives of a PMO?

It depends. PMOs are setup for widely different reasons. Some are set up as temporary structures to support a single project. Others are permanent, and exist to support, control or direct multiple projects. These can be integrated into programme management and portfolio management functions.

What are the benefits of a PMO?

There are numerous benefits of having a PMO, including:

  • Ensuring a standardised project management approach to enable projects to be delivered on time, within budget, and to scope;
  • Ensuring projects are aligned with the organisation’s strategy;
  • Ensuring a return on investment for each project in the portfolio;
  • Prioritising the investments in projects to ensure that those promising the greatest value are delivered first;
  • Improved management insight into the true cost and benefits of each project;
  • The ability to continuously improve the project management performance and capability over time.

Why do we need PMO?

A PMO adds value to an organisation in many ways by:

  • Helping it to understand the ‘big picture’ of its business change portfolio;
  • Providing the decision-making framework so that the right projects and programmes are launched;
  • Providing standardised processes to ensure consistency of project delivery;
  • Providing independent oversight to get things done ‘right first time’;
  • Providing assurance, coaching and mentoring of staff to enable first-class delivery of projects and programmes;
  • Providing information to enable informed decisions by senior management;
  • Reducing the risk of project failure;
  • Improving organisational accountability, decision-making and transparency;
  • Improving the management of risks and issues across projects;
  • Prioritising the investment of resources across projects;
  • Enhancing the organisation’s delivery capability;
  • Delivering change more effectively;
  • Ensuring stakeholder confidence and reputation.

References

[1] Project Management Institute (2017). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition. Newtown Square, PA: Project Management Institute. pp48-49.

[2] AXELOS (2013). Portfolio, Programme and Project Offices. Norwich: TSO. pp41-42.

[3] AXELOS (2013). Portfolio, Programme and Project Offices. Norwich: TSO. pp165-178.

 

PRINCE2®, P3O® and P3M3® are registered trademarks of AXELOS Limited, used under permission of AXELOS Limited. All rights reserved.

This site uses cookies to enhance your user experience. Please read our cookie policy for more information

I understand