An effective approach to establish a program management office (PMO)

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The concept of a Program Management Office (PMO) is getting much attention in today's business environment. Many projects occurring in organizations are in support of strategic business initiatives. In the past, organizations may have grouped these types of projects into a category called a “program”. Typically, a project management component to support project success was not provided.

Many organizations applied the PMO concept to oversee and coordinate their Y2K initiatives. Through using a PMO approach for Y2K initiatives, companies were able to appreciate the value in the concept, and as a result, many companies have adopted PMO principles for their current strategic initiatives. Some of today's initiatives that might be candidates for a PMO are regulatory compliance, new product introduction, quality assurance, process improvement, and community service functions.

Although PMOs are a good idea for program success, if a PMO is not established correctly, it will not produce the desired results. The PMO must be established in a manner that will make it effective in providing the expected business benefits. The success of a PMO is closely linked to the success of its projects. If a PMO can be constructed in a manner that will support the success of each project then the PMO has taken a major step in achieving success of the program, yet project success is still elusive in many organizations.

There are many studies that document the staggering number of projects that fail. Project success is usually measured on a project-by-project basis. However, there is little correlation to the program or organizational environment where the project work was performed. Individual projects might be successful within a program environment, however, without overall program coordination, projects might not integrate properly to the best advantage of the program. A properly constructed PMO will provide the needed levels of evaluation and coordination to bring about program success.

When considering the establishment of a PMO, the organization should think about the necessary ingredients to make the PMO viable. A PMO is usually comprised of experienced senior level project managers that have a strong business focus, a project management framework that can be consistently and effectively applied to all projects, and access to training and subject matter expertise. In some cases project administration support might also be needed to help with data collection, analysis, report creation and report distribution.

Certain questions might arise when an organization is considering establishing a PMO:

  • Where do we find these proven industry standard approaches?
  • What are the specific benefits of a PMO to the organization and to project success?
  • Are there different types of PMOs?
  • Can a PMO actually lower costs for the organization?
  • What are the specific steps that will establish an effective PMO in my organization?

Finding proven industry standard approaches

Industry standard approaches are readily available for organizations to use to their advantage. Good sources are contained in A Guide to the Project Management Body of Knowledge (PMBOK®) that is supported by the Project Management Institute. Process maturity and ongoing process improvement models are available from several process improvement models such as the Capability Maturity Model (CMM®) as defined by the Software Engineering Institute of Carnegie Melon University.

The PMBOK defines project management activities that have been proven to be beneficial to maximize the chance of project success. The process improvement models suggest processes and structures that, when in place, allow for the opportunity of repeated successes. The application of process improvement approaches ensures that the PMO remains effective over the long term and will be able to benefit from experiences of the past as well as respond to changing business climates.

The problem that many organizations face is how to properly employ the principles of the PMBOK and process improvement approaches in an effective and efficient manner. Included in this problem is the issue of how to train key personal to incorporate these principles into their work. While many approaches have tried to accomplish this, using a PMO has shown the most promise.

Specific benefits of a PMO to the organization and to project success

A PMO has the responsibility to oversee a group of projects and keep a focus on a strategic objective. For the program to be successful the projects that comprise the program must be successful. Project success is a worthy objective that any organization that is project based should embrace. An effective PMO can help bring project success in an efficient and predictable manner. Additionally, the PMO coordinates the project efforts for the best overall success of the program. This is accomplished by providing expert level project management principles to individual projects, providing project oversight and quality assurance, and serve as a source of proven processes and methods for each project.

Project success is only one benefit that a PMO can provide. The following are some additional benefits:

  • Provide an overall program focus that can be used to coordinate projects and other activities to best benefit the program's objectives.
  • Serve as a mentor for Project Managers (PMs). In this role, the PMO can serve to enhance the skills of any one Project Manager as needs arise. This will minimize the level of required skills and upfront training that each PM will need to be effective as a project manager.
  • Provide a project management framework that includes templates, checklists, tools and sample procedures as required by the Project Managers. This way, the PMO can prevent the “reinventing the wheel” syndrome that often exists in many organizations. The project management framework will also promote and ensure a level of quality and consistency.
  • Provide overall program status by collecting progress data from each project, analyzing, and consolidating information, as appropriate. The results can be reported to upper management.
  • Resource allocation can be a valuable product of the PMO’s analysis. The PMO can help get the most effective use of resources available across projects. An example would be end-user trainers who might be needed for a small portion of the life cycle by different projects at different times.
  • The PMO can collect and analyze project metrics. This can help refine processes, improve methods, report overall achievements, improve future estimation efforts, and serve as a repository for future use.

Initially, the establishment of a PMO may seem to be an inefficient approach since the organization is adding an additional organizational layer. However, the PMO is a way of performing project work more efficiently and can reduce overall costs.

Types of PMO

There are various types, or structures, of PMOs that an organization can adopt:


Repository/reporting PMO

This type of PMO serves as a data collector, information producer, and repository. This PMO can have PM frameworks available for PMs to use to manage their projects. It will also collect data at certain periods, consolidate and summarize, and create program level reports for upper management.

Mentoring PMO

This category of PMO includes the aspects of the repository/reporting model and also includes experienced PMs and subject matter experts to provide project oversight and critical interfaces with the project managers. Many times this type of PMO will provide more proactive support to complicated projects and troubled projects.

Project Office PMO

This category of PMO will directly manage projects within its program scope.

A PMO actually lowers cost for the organization

A well-constructed PMO will reduce cost. This has been the majority opinion of recent surveys. While it has been difficult to quantify the exact cost savings, CIOs surveyed have been experiencing cost saving in the following areas:

  • Higher percentage of successful projects has reduced the cost of project overruns.
  • Better resource allocations have created a more efficient environment where valuable resources are better utilized and exhibit higher morale.
  • Better leveraging of highly skilled project managers can result in a general requirement for less skilled Project Mangers and lower training costs.

Setting Up an Effective PMO

Management support

The establishment of a PMO is not as daunting as it might appear. A PMO can be established quickly and provide business value even while it is being established. The real issue is not merely establishing the PMO but achieving the most critical success factor of all, upper management support. While this term has become a cliché for many large initiatives it is crucial to the success of the PMO. Support does not mean a passive involvement that provides funding and concurrence. For best results, proactive support is required by upper management when communicating their understanding of what the PMO is, conveying the benefits that will be derived from the PMO, defining their expectations of the enthusiastic participation of all personnel, and by helping to resolve any high-level organizational issues and conflicts that may arise. Upper managements full commitment to the PMO is essential to provide a consistent perspective and positive energy that will be needed for a successful PMO.

Steps To Establish a PMO:

Confirm the Goals, Objectives, Scope and Constraints of the Program.

A documented statement of the program's goals, objectives, scope, constraints, and assumptions is the first critical step to a program's success. The statement should contain both qualitative and quantitative aspirations for the program, wherever possible. The constraints will help set limits for the projects that will be part of the PMO. The assumption will document the facts that are known to be true regarding the PMO. Their documentation will help to have a consistent understanding of these truths. This information will be critical in preparing the charter for the program and for the PMO.

Determining the Current Organizational Status

The current status of the organization can be determined by performing a short-term assessment. The purpose of this assessment is to determine the skills and knowledge of the Project Management staff regarding industry standards and proven project management approaches. This assessment should help determine the staff's current ability to apply generally accepted PM principles to their project management responsibilities. The assessment will also determine the organization's culture and maturity regarding how well it can support PM processes and methodologies.

The use of a project management maturity assessment will allow an organization to create a baseline, or starting point, against which improvement can be judged. This type of assessment will compare the organization's project management processes and its organizational structure against proven and accepted industry standards. This approach helps determine the organization's ability to have and repeat project successes. For the purpose of establishing a PMO, a PM maturity assessment will help perform a gap analysis. The maturity assessment approach will also help determine the maturity level of the organization in a rating scale format that will be a useful metric to track the effectiveness of improvement measures.

The project management maturity assessment will include the following types of activities and investigations:

  • Performing an organizational level assessment will examine and analyze the current methods, policies, processes, standards and organizational structures currently used by the organization. This can be accomplished by inspection and by survey questionnaires.
  • A Project Management level component will examine the PM practices that the Project Managers currently employ in performing their project management tasks. The goal is to determine the PM practices that are actually used to perform project management activities and compare them to industry standards. This can be accomplished by interviewing, inspection of artifacts, and survey questionnaires.

After the data is gathered, an analysis can be performed to determine the approximate project management maturity of the organization. A gap analysis can then be performed to determine in which project areas the organization falls below the generally accepted industry standards.

If improvement measures are indicated, then a roadmap for improvement can be created. This roadmap will contain actions that can be categorized as follows:

  • Training for the Project Managers and management to bring their knowledge more in line to current industry standards.
  • Process improvement actions that will enhance current processes so that they can be more effective and measurable to help ongoing process enhancement.
  • Organizational changes that will help the organization support project initiatives in a more effective manner.

As a result of this analysis, training strategies and process improvement approaches can be developed. Additionally, change management strategies can be employed to help manage the required organizational changes Typically, this type of assessment can be performed in one to six weeks.

Architect the PMO

The structure and characteristics of the PMO should be defined based on the previous steps. The PMO’s charter should be documented, the organizational structure should be defined, the initial processes and procedures should be established, and the metrics defined. These metrics will be used to measure success and serve as part of the ongoing process improvement measures.

Establish a Project Management Framework

In most instances, a PMO will include various types and sizes of projects. In some instances, projects might be IT based, however, other projects in the same program might not have an IT component. To best benefit from the analysis and the metrics provided, it is recommended that a project management framework be used that will provide a consistent project management approach to all projects within the program.

A good project management framework will include sample templates, processes, checklists and guidelines that are available to the PMs. They can be used to provide an effective project management environment. The PM can select from the available repository of PM tools and techniques so that the framework can be used on any project. The PM framework should not inhibit the PM from adding individual approaches that might be required for a particular project. Also, it should not add unnecessary overhead to any project. The framework should only add enough structure and process to properly manage the project. It should also provide a consistent PM environment that will supply the data necessary to benefit the entire program.

A project management framework can be customized from other existing methodologies, created by the PMs within the program, or be purchased from an outside source. A good framework describes the typical phases of project management life cycle and provides the templates, processes, checklists, tools and techniques that are used in each project phase. Specifically, the components of the framework should contain recommendations of PM principles and their application during project initiation, planning, execution and completion phases.

Project Management Training

One result of a project management assessment will be an indication of the level of training required by the project management staff to increase the level of awareness of generally accepted principles, processes, and techniques. The objective is to make PMs aware of industry standards that will be available to them through the PMO. It will also teach them how to apply these standards to their projects.

Recommended training includes an overview of generally accepted project management approaches as described in the PMBOK. Sometimes, training in a particular scheduling tool is provided. A process improvement overview usually proves beneficial.

The goal of the training is to provide an awareness of approaches to project planning and key processes such as scope management, issue resolution, project communication, and status reporting. In some cases, more advanced training might be needed in estimation techniques, risk management, resources planning and leveling, earned value analysis, and conflict management. Training can be performed in parallel to establishing a project management framework or launching a PMO pilot project.

Launch a Pilot Project

The organization should initiate a pilot project that will use the newly formed PMO and the Project Management Framework. Ideally, this project should have a relatively short duration, not already started, and be non-critical to the organization's success. This will provide an opportunity to experience the new processes and frameworks and make adjustments as necessary. Commonly, an organization will have difficulty finding an ideal pilot project. Therefore, alternate strategies might have to be developed depending on the characteristics of the projects available.

It is not uncommon that parts of several projects, with various characteristics, be used to pilot particular aspects of the PMO’s structure and methods. These situations must be architected and carefully planned to ensure that the results are what would be expected from a valid pilot.

The last part of the pilot phase is the evaluation of the pilot results. Any modifications that need to be made to the PM framework, processes, or other structures within the PMO should be made prior to the official PMO launch.

Launch the PMO

The PMO should be launched after applying any appropriate modifications resulting from the pilot project's lessons learned. The launch should be a highly publicized event with executive involvement, show of support and commitment. A presentation should be included to explain what the PMO is and how it will interact with the organization. In some cases, change management approaches should be employed to help the organization move to the new processes and structures that the PMO will provide.

Evaluate the PMO

On a regular basis, the PMO should be evaluated for the value that it is providing the organization and for any modifications that can be made to increase its effectiveness. This is typically done annually. Part of this evaluation should include an analysis of the metric data collected from the projects that were in support of the PMO’s charter. Over time, this will help the PMO mature to a point where the probability for project success will be even higher. This will also have a direct effect of minimizing the expense of failed projects.

How Does a PMO Interact with an individual project?

Project Start

At the start of a project the PM and the PMO should meet and agree on how the project will be managed. This means determining how the project management framework will be applied to this specific project. The PM and the PMO should agree on which processes, templates, or modified templates will be employed, and which tools will be used. These agreements are included in a project management plan, created by the PM, explaining in detail how the project will be managed. A high level schedule of certain key project events will also be agreed upon. The PM and the PMO will agree on a schedule of when progress and metrics will be supplied to the PMO. An additional agreement defines when project reviews, or health checks, and quality assurance audits will be scheduled. Also, any special support that is needed by the PM should be discussed and documented.

Progress Data Collection

As prescribed in the agreed upon project plan, the PMO may require progress and metric information from the PM to be made available on a regularly scheduled basis. This will be used to determine the progress status of the project. It is also used to determine whether changes to the project plan should be considered. This data should also be combined with data from other projects to determine status among various project initiatives.

Project health checks

The PM and the PMO should meet at various scheduled times throughout the project to review compliance regarding the agreed upon processes. They should also determine if they are working effectively. Adjustments can be made to improve or correct certain situations that might be uncovered.

PM special requests

On certain occasions the PM might request support from the PMO regarding specialized training, brainstorming certain situations, tool recommendation or evaluation, or even information from the data repository. The PMO should be available and willing to support each PM as required.

Project Completion

Project metrics and other interesting project artifacts, such as lessons learned, should become part of the PMO repository and be available to the PMO and other individuals as needed. This data, combined with other project information collected throughout the project, can be used to analyze and refine processes and the project management framework. This should provide better processes for the organization to use in the future.


A well-constructed PMO can bring real benefits an organization. It can reduce overall project cost by providing better project coordination, instill best practices to maximize project successes and help leverage expensive project expertise resources. By making this expertise available to each PM throughout critical points in each project and by providing support on an as needed basis, each PM will feel more secure with their ability to provide a high level of quality project management to their assigned projects. The PMO will also serve the entire organization by providing ongoing process improvement approaches that, over time, will provide an even greater chance for successful projects.

Proceedings of PMI® Global Congress 2003 – North America
Baltimore, Maryland, USA • 20-23 September 2003



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