A project management office (PMO) is a function in an organization that standardizes project management practices. These regulations determine budgets, staffing, what software and methodologies to use, and more. Think of it as a centralized command that individual project managers report to.
Unsurprisingly, this bureaucratic concept is better for larger businesses. But small entities can still benefit from the uniformity a PMO enforces.
Let’s explore if a PMO is right for you.
In this article...
Why do businesses use a project management office?
Businesses establish a project management office to tackle large amounts of projects in a uniform fashion. This predictability ensures quality standards are met, leaving customers happier. It also makes work more transparent and simple for project managers.
To put this in perspective, consider life without a PMO. If you have 10 project managers with 10 different approaches, things can quickly spiral out of control. One project may finish too quickly while another goes over budget and long past its deadline. And without any clearly established procedures and policies, it’s hard to ensure it doesn’t happen again.
Since smaller organizations usually have fewer projects, a PMO’s complexity may feel unnecessary. Still, there are other reasons businesses of any size use these offices:
- Resource management: By maintaining a centralized view of resource availability and requirements, the PMO can optimize resource allocation across projects. This bird’s eye view helps avoid bottlenecks, ensuring a learner and more efficient operation.
- Risk management: A PMO establishes risk management processes, conducts risk assessments, and develops mitigation strategies. This proactive service reduces mishaps and wasted resources.
- Mentoring and career development: When project managers seek career growth, the PMO can provide the necessary resources and knowledge. The office can provide training opportunities, career planning documents, and one-on-one mentoring, among other perks.
What are the downsides of a project management office?
As mentioned above, project management offices can feel bureaucratic. Many project managers may balk at the loss of autonomy and creativity. This unhappiness could result in lower morale and, ironically, less efficient operations.
What’s more, PMOs take time and money to initially set up. And even once they’re up and running, they take ongoing oversight to ensure a smooth operation. Essentially, the office providing checks and balances on projects also needs … well, checks and balances. You’ll need to decide if you can dedicate the required money, time, and personnel to maintain this function long term.
What are the types of project management offices?
There’s an array of PMO types. Organizations, such as the Project Management Institute and Gartner, spell out traits that define each option. Your perfect match depends on budget and how much autonomy and flexibility project managers need, among other factors.
Here are the three most common types of PMOs:
- Supportive: Provides support and guidance to project managers and teams. It shares best practices, provides templates and tools, and dishes out training and mentoring. Best for more relaxed environments.
- Controlling: Takes a more active and enforcing role in project governance and oversight. It establishes rigid project management standards, processes, and policies, and reports activities to stakeholders. Ideal for established, larger organizations needing uniformity, but with some flexibility.
- Directive: Delivers a high level of control and authority over projects. It both establishes procedures and also directly supervises projects and project managers. This PMO is most common in organizations that require strong, central control over projects due to regulatory or compliance requirements.
Other types are less common but still relevant to many industries. For example, consulting firm Gartner outlines four types of PMOs:
- Activist: Provides a strong, centralized office that analyzes projects to help advance project manager’s work. It’s suitable for progressive workplaces that are open-minded.
- Delivery: A hands-off office that grants managers more autonomy and less oversight but with a heavy focus on quality results.
- Compliance: Dictates standardized policies and procedures, and strong enforcement. It’s best if there are no existing policies or lengthy track records of managers.
- Centralized: A generalized PMO that oversees newer or less flexible project managers adhering to the best practices of more senior leaders. This is ideal for more junior workforces seeking maturity.
Many types of project management offices overlap. For example, a compliance one is similar to a directive PMO. Indeed, both boast positions of strength and enforcement.
These similarities mean you shouldn’t worry too much about understanding every type. Rather, focus on the principles at hand and the specific goals your project management team seeks to accomplish.
How do I set up a project management office?
Setting up a PMO requires careful planning and consideration. It also requires buy-in from both executives and project managers, both of which may find the concept novel and possibly unnecessary.
To succeed, view a project management office as an investment. The money and time spent building it pay off via higher-quality projects and efficient, transparent operations.
Here are six essential steps to walk you through the process:
- Define purpose and objectives: The first step is to articulate the purpose and objectives of the PMO. One such reason is to yield higher quality products via rigid policies. This mission statement will serve as the chief reason executives should approve the office, as sought next in step two.
- Obtain executive sponsorship: With a solid mission statement, you’re ready to make it official. In step two, you’ll secure support and approval from senior management. This step is especially crucial when a business is still growing and finding its footing.
- Determine the PMO’s structure: Decide on the PMO’s structure and reporting lines. Think about the types of offices, as outlined above. Consider the organization’s size, culture, and project management needs when determining the most suitable structure.
- Define roles, procedures, and policies: Flesh out the roles and responsibilities of the PMO team members, including the PMO manager, project managers, and support staff. Decide on specific day-to-day processes, such as authorized software titles and project management methodologies.
- Establish governance and reporting mechanisms: Determine how you’ll measure the success of the office and project managers. For example, you can define criteria and career plans for project managers. You can also determine a quota of projects per year and decide on appropriate budgets and timeframes.
- Continuously improve: Similar to the feedback cycles of project management methodologies. In this step, you’ll regularly assess the PMO’s effectiveness and seek feedback from stakeholders and project teams. Use this feedback to implement changes to enhance the PMO’s value and impact.
As you can see, policies are universal to a project management office. You’ll need to carefully decide whether this is necessary for your operations.
PMOs can be helpful
A project management office (PMO) is crucial for growing businesses seeking to standardize project management procedures. Without it, people may not feel on the same page, resulting in irregular products and wasted resources.
Small entities may not need the complexities of a PMO. But there are still benefits, such as better risk management, improved morale, and more efficient operations.
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