Project Management Institute

A project office – where and what type

J. Kent Crawford, PMP, President, PM Solutions, Inc.


As project management has become the way to improve time to market in the 1990s, organizations have realized that effective project management is more than just planning and scheduling. Project Offices (POs) have arisen out of organizational needs to provide the infrastructure and support necessary to run a “projectized” enterprise.

The question for most organizations is not “if” they should establish a PO, but rather where and what type. This paper provides a logical foundation for incorporating a PO in your company. You will understand where best to establish the office and what role it should play in the beginning and the future. The logic is based on the results of successfully implemented POs within organizations and has been refined based on consulting experiences and industry research.

Understanding where to establish your PO, and the level and authority that it should have will be critical to success. Additionally, it is important to understand the cultural impact that a PO will have on the organization, and consider the type of PO that would work well given an organization's current maturity and goals. For insight into these critical areas, we can look to industry “norms” with respect to authority level and cultural make-up of POs.

Project Office Levels and Authority

What is a Project Office (PO)? Basically, a PO is an “office”—either physical or virtual—staffed by professionals knowledgeable in project management who serve the organization's project management needs. A PO may exist at various levels of an organization, and in larger organizations POs may exist in a coordinated fashion at several levels. Where you locate your PO is determined based on your goals for the office.

Level 1 Project Office

A Level 1 PO is located at the deployment or project level of an organization. This office typically handles large, complex single projects and programs. At this level, the organization needs a group of people to directly manage a project management activity focused on one common goal (such as the design and implementation of a new ERP system). It may support a singular project (such as a warehouse management system) or it may support a program (a grouping of projects with a common goal such as Y2K remediation problems across diverse corporate systems). The general PO functions at this level are the day-to-day operations of individual projects/programs to include scope, time, cost, quality, human resource, communications, risk, procurement, and integration management. These activities typically include project schedule development and tracking, project estimating/budgeting, project status reports, project performance analysis and reporting, project reviews, and deliverable management.

The PO office at this level will normally need individuals with hands-on project management skills. At this level the individuals build the project schedule, develop the project estimate, create the status reports, prepare the project performance analysis, conduct project reviews, and basically manage the project/program. Standard staffing roles include project managers, planner(s), and project support administrators. The project managers are responsible for the cost, schedule and technical management of the project or program. Planners are recognized experts in all areas of project planning (project planning documents, project schedule, project cost). Project support administrators provide general assistance focusing on internal operations and data entry. All in all, the PO at this level works day-to-day project/program activities and ensures the project team meets its milestones, deliverables, and budget.

Level 2 Project Office

A Level 2 PO is often located at the department or division level and is generally responsible for the coordination of cross project and resource management issues and providing assistance to the Level 1 office(s). A Level 2 office supports a group of related projects that support the overall department or division objectives. Example: A PO for the Supply Chain Operating Division may include projects such as a new purchasing system, a new warehouse management system, warehouse automation projects, and an upgrade to the inventory planning system. (Note that each project has an individual unique goal; but all projects are part of the supply chain division that has a macro goal of efficient supply chain operations at a reduced cost.) A PO at this level may also be required to directly support individual projects, especially if direct resources are not available.

It is key to note that at this level, the organization needs to integrate and coordinate resource management requirements, reporting, budgets, and consistency of process across projects. Resource control begins to play a more valuable role. At Level 1—the individual project level—applying the discipline of project management creates significant value to the project because it begins to ensure projects are delivered on time and within established budgets. At Level 2 and higher, the PO serves that function but it also provides a much higher level of efficiency in managing resources across projects and time/budget integration among those projects. Resources are limited and multiple projects compete for the same resources. The Level 2 PO has a project management system to deconflict competing needs for common resources and identify the relative priorities of projects so the right resources can be applied to the right projects. A Level 2 PO allows an organization to forecast when they may be short on resources and need to hire additional staff.

The general PO functions at this level are planning for the department/division, integrated resource planning and management, department/division budgeting, department schedule tracking and monitoring, the establishment of department/division project management practices, overall project performance monitoring and reporting, and on-call advice/assistance to the Level 1 POs. In addition, offices at this level may manage the department/division training plan and provide overall PM administrative assistance.

Standard staffing roles include the PO director, project managers, planner(s), project support administrators, and perhaps a quality manager. The PO director provides PM leadership and is the focal point for integration, communications, training, and sets the priorities of the PO. Regardless of the level (Level 1 or 2), the project managers are responsible for the cost, schedule and technical management of the project or program and may be matrixed from the office to directly support projects. The planners are a combination of hands-on project planners and individuals with the responsibility of department-level strategic planning. The project support administrators continue to support internal operations and data entry, placing more emphasis on report consolidation and integration. Depending upon the size of the division, the PO may have a quality manager whose responsibility is to ensure the projects conduct proper planning for quality and follow corporate quality assurance practices.

Level 3 Project Office

A Level 3 PO operates at the corporate level, coordinating and setting policy for projects across the organization, managing the corporate portfolio of projects, managing resources across the divisions, and overseeing the Level 1 and/or Level 2 POs. At this level the PO is generally regarded as a center of excellence for project management, guiding and helping the project managers and staff within the departments and divisions.

At the corporate level the typical organizational needs are the standardization of project management; understanding the integrated picture of project activity across the enterprise; the identification, prioritization, and selection of projects; the management of resources across the departments/divisions; the continuing education and training of project management resources; and the establishment and maintenance of a project management information system. The Level 3 PO is responsible for developing and deploying the profession of project management through professional development programs, career path development, training and education, and professional growth opportunities.

The Level 3 PO functions simply mirror the corporate needs and provide a corporate support structure for project management activities. The Level 3 PO provides:

• Standard PM methods, processes, and procedures

• A PM library for best practices and lessons learned

• An integrated, corporate strategic plan

• Management of the project portfolio across the company

• Enterprise resource management

• Mentoring and education programs

• Administration and management of a project management information system.

Standard staffing roles may include the PO director, program managers, project managers, project mentors, process manager(s), methodology experts, project controllers, planner(s), librarian/documentation specialists, issue resolutions coordinator, change control coordinator, risk management coordinator, project support administrators, and a systems administrator. The individuals who belong to the PO should be experienced and trained in advanced project management and leadership. As stated before, the PO at this level is generally considered a center of excellence and sets the standard and mentors project teams throughout the organization. The PO director provides PM leadership and sets the priorities of the project office. The process manager and methodology experts are recognized experts in project management and develop/improve standard methods and processes. The Project Controllers and Planners are experts at strategic planning, portfolio management, and integration planning. The librarian/documentation specialists will, among other things, establish a PM library for best practices and lessons learned. The issues resolutions coordinator and change control coordinator, and risk management coordinator will support the POs at all levels to establish processes and procedures to manage issues, change control and risk. The project support administrators continue to support internal operations and data entry, placing additional emphasis on report consolidation and integration. If a PO exists at this level, organizations normally have a project management information system that needs administration. The systems administrator typically fulfills this responsibility.

Project Office Types/Cultural Considerations

As you decide to reorganize and adopt a PO structure, it is important to understand the cultural impact a PO will have and how you can introduce the change. So many times people will sign up for a PO seminar thinking, Just tell me how I can set up this administrative structure and I will go deploy a PO. They appear to believe PO is a clerical function, or that they can bring a small staff to bear to do administrative functions and—voila!—they have project management. Or, if their thinking is a bit more advanced, they perceive it as a project controls function—controlling cost, time and resources within the individual projects. Unfortunately it isn't that simple, because you are dealing with people, you are dealing with culture, you are dealing with new processes, new approaches, with integration across business units and personalities, and with group teams, project teams, and so on. It's a worthwhile goal but by no means a simple one to achieves (Crawford 2001).

Culture change of this magnitude, however, is a tall order. Realistically, most companies begin by sharing project management ideas and processes already practiced by segments of the organization. Organizations work from there toward the ideal of an enterprise-level PO within an organization where projects and teams—rather than functional departments—are the central organizational units. In a team- and project-based organization, project delivery is enhanced. It is no surprise that most, if not all, of these changes can be initiated as part of the implementation of a PO —and then effectively managed by that PO once they are in place. The PO becomes the facilitating body for cross-functional team management (Crawford 2001)

Using the project or program as the basic structure of the organization has been a key to success at companies such as Microsoft, Intel, Texas Instruments, ATandT, EDS, Toyota, Ford, and others (Bridges 1994; Davis 1993; Katzenback & Smith 1993; Peters 1993; Gifford & Pinchot 1993). Motorola's team-based satellite communications division realized a revenue-to-employee ratio of $2 million to 1 as opposed to a ratio of $150K to 1 for other divisions in the company (Kinni 1994). These companies often use projects to drive change in the organization and add core capabilities to deliver the products.

The PO is a function to facilitate the management of projects on one level and the better management of the entire enterprise at another level. More than establishing an office and creating reports, it is infusing a cultural change throughout the organization. A PO may have different ways of soliciting or mandating change, and it can be a combination of the following types, or evolve from one type to the other as the organization's project capabilities mature.

Passive Project Office

A Passive PO is often implemented when a department or organization is trying to prove the effectiveness of project management but has not yet received buy-in for its effectiveness. In this case, there is no mandate for PO—it is an internal sales effort. Natural human tendencies to reject change often doom these organizations to failure. However, with the correct people, services and promotion, a Passive PO can demonstrate the value of project management and move a project management initiative forward. Typically, a Passive PO is initiated within the rank-and-file of the organization with little or no executive support.

A Passive PO needs a politically savvy manager with access to other managers who can support their project management initiatives. Services must be provided to project groups that add immediate value and relieve drudgery, such as mentoring programs, planning and scheduling services, and reporting capabilities. Pilot projects must be carefully selected and well publicized.

The key here, again, is to show immediate value to the organization. The best way to do this is to target different levels within the organization and (1) determine where the greatest opportunity exists to provide value, (2) develop a strategy to optimize the benefits gained in deploying project management for this initiative, (3) provide a solution as soon as possible, and (4) offer to help and counsel to fix other areas of concern. For example, you should involve the executive level as well as the working project level. At the executive level, a critical need exists to provide guidance and oversight should be resolved by including the executive team on initial budget/planning approval, periodic oversight of project progress, and change control authorization. Perhaps something as simple as an initial inventory of all the projects will help them see what is being “bought.” This can be done relatively quickly and helps the executives see what is being accomplished. An example at the operating level is to help a fledging project and project team. Offer to help them think through what must be done on the project, by when, and by whom. Without their knowing you will help them organize and plan a project—one of the keys to project success. Stay away from confusing them with sophisticated project management terminology or processes. Focus on what you are trying to accomplish (e.g., identify what must be done, by when, and by whom) vs. overwhelming them with rigid structure and practices. Once they see the benefits of thinking ahead and planning, people will embrace reasonable structure and discipline.

Other examples of immediate value include: summary reports and metrics for executives; brown-bag training lunches or workshops to help project teams; support for new projects and projects in need; the development of templates. Again, the focus of the PO at this point is to provide support and help. The focus is not to dictate standards or enforce practices. The objective is to show the value of project management and the benefit of reasonable project discipline.

At this stage in the evolution of a PO, there is typically an informal PO organization that is interested in improving the way things are done. There is no formal Level 1, Level 2, or Level 3 PO—there may be just one, singular, ad hoc, informal entity that provides a mixture of services for all levels.

Service Project Office

A Service PO is a hybrid between a passive and an empowered organization. A Service PO has some mandate to create standards, but may not have the authority to mandate their widespread use—in particular the widespread use across the corporation. Normally at this stage, individual departments or divisions take on the initiative to establish a PO structure both at the department level and the operating level. Since much of this activity may be viewed by corporate as unnecessary “overhead,” the Service PO needs a set of experts to (1) create and deliver effective project services (e.g., reduce time to market and overall project costs) and (2) have the political and internal marketing savvy to promote successes to gain corporate understanding and trust.

A Service PO can be seen as confusing or a threat both within the department as well as between departments. Like the Passive PO, the Service PO will continue to be challenged on its necessity to the organization. To counteract this, the PO must have clear objectives and goals. Example include: (1) establish a uniform and consistent project management process across the organization, (2) create measurable reductions in project delivery timing and costs, (3) enable effective forecasting and management of organizational resources, and (4) fully integrate corporate leadership into establishment of project direction, oversight, and change control, etc.

It is important to continue providing immediate value and the services identified for the Passive PO. At this point, though, things are becoming more structured within departments and divisions. The more advanced PO will also provide a project management methodology, structured project reviews, structured planning and tracking, the identification and deployment of one or more pilot project initiatives (to help a project and demonstrate success), and more formal training and mentoring. You must use caution, though, when implementing new policies and processes for the way people work. This can be very controversial. The PO needs a good communications plan and a manager/director that is on a par politically with other directors who must be convinced this new culture provides significant value to the organization.

Service POs operate on a carrot and stick philosophy. While implementing new policies and practices, they need to provide training, mentoring and other support functions to assist organizations through the transition process to a new way of working.

At this stage in the evolution of a PO, there are typically Level 1 POs supporting large, complex projects and Level 2 POs working on improving and standardizing practices for the departments and divisions. Some departments are more advanced than others and recognize the need to have some semblance of structure for managing projects. Within certain parts of the organization, there are formal Level 1 and Level 2 POs setting the example and demonstrating the benefit of project management. The PO is still operating in a provider role.

Empowered Project Office

An Empowered PO has the full backing of the corporate organization; and, as such, the POs set the direction and tone for project management in an organization. At this point, the PO concept is accepted and the focus is more on improving practices and guiding the staff and less energy is expended on proving the concept of a PO. The PO continues to provide support and help, but at this point the office is also formally managing and directing. The focus of management and direction depends upon which level the PO is operating within—-at the operating level (Level 1), the department/division level (Level 2), or the corporate level (Level 3).

At the operating level, an empowered PO has complete responsibility to manage individual projects/programs. These activities include project schedule development and tracking, project estimating/budgeting, project status reports, project performance analysis and reporting, project reviews, and deliverable management. Additional duties of the Empowered PO begin to integrate corporate strategy into measuring the portfolio of projects, working with Human Resources to develop project management career progression and career development programs, coordination with the Training Department to build and deliver project management training curricula, database architecture and integration of project controls systems with financial, procurement, labor reporting, skills database, and contracting systems. Most importantly, the PO is responsible for day-to-day project/program activities and ensures the project team meets its milestones, deliverables, and budget. As an empowered PO, the PO has the responsibility and authority to carry this through.

At the department/division level, an empowered PO has responsibility for department/division strategic planning, integrated resource planning and management, department/division budgeting, department schedule tracking and monitoring, the establishment of department/division project management practices, overall project performance monitoring and reporting, and on-call advice/assistance to the Level 1 POs. Offices at this level may also manage the department/division training plan and provide overall PM administrative assistance. Again, the PO has responsibility and authority to accomplish these activities.

At the corporate level, an empowered PO has the support to establish standard PM methods, processes, and procedures; develop an integrated, corporate strategic plan; establish and manage the project portfolio across the company; effectively manage resources across the enterprise; invest in mentoring and education programs; and has the support to implement and maintain a project management information system. It takes time to evolve to this point.

Final Words for Success

POs vary from organization to organization as much as corporate cultures. Although each company will structure its PO charter and priorities differently to meet its organization's goals there are still several things that should remain constant in all deployments.

• Treat implementing a PO as a project

• If you are new to project management, or your project management talent is weak, seek expert help to help plan, execute and control your project

• Recognize that project management changes the way you work and plan for cultural change and impact

• Recognize that project management is a team sport, and involve all stakeholders early on—especially organizational leadership

• Recognize that change poses an organizational threat. Continually add value, and communicate, communicate, communicate.


Crawford, J. Kent. 2001. Deploying Your Project Office (working title).

Cited in William Bridges, The end of the job, Fortune, Sept. 19, 1994. See also Tim Davis, Reengineering in action, Planning Review, July 1993, Katzenbach and Smith's book The Wisdom of Teams: Creating the High Performance Organization, Harpercollins 1993, Tom Peters in Liberation Management, Knopf 1992, and Gifford and Elizabeth Pinchot, The End of Bureaucracy and the Rise of the Intelligent Organization, Berrett-Kohler, 1993.

Kinni, Theodore B. 1994. Boundary-busting teamwork: Motorola leaps organizational borders to create the infrastructure of Iridium. Industry Week (March 21).

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA



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