Very often you hear people talking of Project Management Office (PMO) and Project Support Offices (PSO) or even Project Office (PO). Some of them are using these terms without having a clear idea of what they encompass. From a shared experience in large multi-national companies, I discovered that in complex structures PMO co-exists with PSO. It is often confusing, for their roles are different. The PMO is an entity that is involved in the creation of the business strategy and portfolio of its organization, while the PSO is meant to support the project team members in their daily work on the site where they are operating. A site is characterized by its HW and SW infrastructure but also by the laws and regulations of the country where it is located.
The objectives of this presentation are to highlight the differences between the mission and activities of the Project Management Office and the ones of a Project Support Office. To make it short, the PMO aims at supporting the project managers to develop themselves and to meet the strategic and business objectives of their organization. The Project Support Office will facilitate the daily work of the project team members so that they comply with the local administrative, legal, quality and technical requirements of the environment they are working in.
Large Companies, a Special Case
It is obvious that for better efficiency and for financial reasons the infrastructure and number of entities in a firm should match its size. In small companies you will not find PMO and PSO. The same people play the different roles. On the other side, in large companies the structure is far more complex. Particularly when it is divided into Business Units that are subdivided into Business Lines or Product lines with design centres, research centres, competence centres and production plants located in several countries over several continents, the number of factors to take into account become very important. This complexity leads to partitioning the companies into entities that have defined roles and objectives that should finally complement each other.
Exhibit 1 shows how complex the organization of a multi-national firm can be, and this unveils the problems that have to be solved. The challenges when managing projects in such an intricate environment are to satisfy the customer, to meet the sponsor requirements, and to comply with the processes of the BL/PL while reporting project performances according to BU or corporate tools to ensure visibility and update the Business Balance Score-Card.
Besides the fact that multi-national companies are present in different countries, the businesses they address are multi-fold. To be present on these different markets, they are generally divided into several Business Units. Each Business Unit is normally split in Business Lines or Product Lines. At this level of organization, we see a convergence of all constraints and inputs that are necessary to build the market strategy:
- Corporate visions and objectives
- Technology and product roadmap
- Competence and research state of the art
- Corporate Marketing plans
- Benchmarking analysis
- BU marketing plans and roadmaps
- BL or PL market opportunity evaluation per country
- BL or PL key accounts and marketing and sales strategy
- Availability of partners, providers and sub-contractors.
Once a BL or PL has defined its strategy, it will be translated into a project portfolio.
Link between Business and Portfolio
This project portfolio will be confronted to reality and to resources issues to achieve it. Data that are essential to validate the portfolio are as follows:
- Current projects under development and their schedule and budget
- Skills and competencies needs, how many and when
- Feasibility studies integrating historical data (customers, technology, know-how, risks…)
- Priority for the business
- Technology availability and roadmap
- Potential partners and/or providers
- Budget plan
- Specific cultural or country issues for the development of the projects.
These data are typically under the control of the PMO. That is the reason why a Project Management Office should be linked to a business (BL or PL).
Decision-Making for the Portfolio
Let's go back to our example in Exhibit 1 and focus on Site W. This site is big enough to shelter four different groups reporting to four different Business Lines/Product Lines that are part of two different Business Units. Depending on the BUs and BLs/PLs that initiate them, we may have projects with different natures: hardware, software, firmware, service creation, R&D, technology migration, infrastructure, etc. Here are some questions that we can ask about these projects:
- Will the four projects of site W use the same PM methodology, the same tools?
- Do they need the same environment: HW, SW, network bandwidth?
- Will reporting be done in the same way, with similar indicators?
- Will configuration and document management be treated alike?
On top of that, Site W must comply with the country's law and local regulations, so contracts attached to the projects (with customer, sub-contractors and providers) governed by the country's law and time reporting for project team members will be controlled by the local Finance entity according to local and fiscal regulations.
Supporting the Project Team
Daily activities for the project team members should comply with the methodology that is used in the BU and generate expected quality results and data. However, several situations may occur, e.g., the project manager is not located on this site, the time zone of the customer or another part of the project team is different and contacts are difficult or necessitate a specific technical environment. The backup, archiving and/or security tools and processes are site specific; the local infrastructure necessitates adaptations to the use of databases or to corporate processes and tools. The project team members will definitively look for local support to cope with these issues.
PMO and PSO Exist Together
While the PMO takes care of the type of projects that are specific to the portfolio of the business organization, the PSO will ensure that corporate Project Management methodology, standards and tools are deployed and used, whatever the country and site.
The consistency role played by the PSO is to guarantee that the BU and corporate management team get full visibility on all projects in the cockpit to be able to make decisions and set priorities.
The project data should always be archived on the site where the Project Manager is located. When necessary it will facilitate retrieval and tracking of the history with the Project Manager or project team members. The PMO will populate the Knowledge Management database with all innovative project data that can bring lessons learned to the PL/BL.
- The PMO Manager should be an experienced Project Manager who is definitely PMI certified.
- Project Managers who are part of the PMO may report hierarchically to the Business or to the PMO manager themselves. They manage complex projects (e.g., over 5M€). These experienced PMs are recognized as experts.
- Data Managers with good experience with tools and database management will take care of Knowledge Management of the organization and may conduct the benchmarking analysis.
- A Manager, having required authority, will establish the link with other organizations (BU or BL/PL) for multi-portfolio projects. It can be the PMO Manager or a Business Manager who officially endorses the PMO authority.
- The PSO Manager should be an experienced Project Manager (senior project manager who should be PMP certified)
- Project Leaders report to the Business. They generally manage local projects (under 5 M€)
- Data administrators, knowing how to enter data in the tools, treat them and generate all necessary reports
- On a PMO site, the PMO manager can manage the PSO, particularly when the site is composed of only one business organization.
PMO Missions and Functions
Methods and Standards
The PMO verifies that standards are deployed:
- Common approaches over their business organizations
- Methodology and Processes are aligned with other corporate groups, particularly for cross-PLs or cross-BUs projects.
The PMO is composed of experienced Project Managers of the business portfolio organization who can customize when necessary the procedures, forms, checklists and templates to better meet their specific business requirements. They provide their Project Manager expertise for improving predictability and performance.
The PMO represents its business portfolio in the corporate improvement program boards to improve Project Manager methodology and processes.
Training and Promotion
The PMO supports the training and development of Project Managers:
- Promotes the skills training and sustains the Project Manager competencies curriculum program;
- Provides courses on processes such as Project execution, Project Pipeline and Resource Management and Portfolio Management;
- Coaches the PMs on the projects they are managing;
- Is the connection to PMI chapters for certification questions, conferences and Project Management events.
The PMO promotes Project Management at all group levels:
- Presenting to stakeholders how their Business portfolios manage projects
- Supporting Marketing and Sales in promoting capabilities in Project Management
- Advocating PMs and their way of working when necessary.
The PMO advises when hiring new Project Managers. They will interview the candidates because they are professional people who are the best to evaluate the experience and detect their potentialities. They should play a key role in the selection of their future colleagues.
The PMO acts as the Project Portfolio Analysis Team:
- To gather and analyze all projects data
- To forecast nature and schedule of resources needs (skills and competences)
- To propose preferred prioritization to the Project Portfolio Review Board.
The PMO publicizes the project management methodology outside the company. It can help to reassure prospective customers but also to select sub-contractors.
The PMO supports portfolio strategy for decisions based on history of projects in the group, for its specific market, technology, customers, competitors and subcontractors.
Consulting, Mentoring and Contract Administration
The PMO will conduct the project feasibility studies to submit potential projects to the executive board for approval. This will help the business management to choose the right projects for the portfolio and set their priorities.
Together with legal services, the PMO will help the Management Team and the Project Managers with legal issues:
- Writing development contract with customers
- Handling project changes and their impact on contracts
- Verifying suppliers contracts before approving them
- Writing Statement of Work for subcontractors' selection
- Evaluating suppliers and sub-contractors efficiency
- Centralizing all contracts and providing support for invoice approvals.
PMO coaches Project Managers in their job of estimating, planning, executing, and conducting project reviews, leading their project team and, of course, in reporting the project performances if necessary.
Knowledge Sharing, Quality and Continuous Improvement
The PMO controls that projects are audited versus processes and standards to ensure that the quality of projects is kept under control. It will also evaluate the project management maturity and propose improvement plans to the Management Team and quality organization. This can be, for instance, to update the checklists used on all projects.
The PMO will also conduct project debrief reviews (often called post-mortem) to gather lessons learned and guaranty independency between Project Management, project team and customer.
The PMO owns and populates the Knowledge Management database to classify and share all lessons learned from audits and project debriefs. It will promote the sharing of best practices in organizing forum and conferences on business topics. The PMO should become a centre of excellence for project management.
The PMO analyzes benchmarking results, measures performance against Key Performance Indicators, participates in research on best practices and creates a core competency for project management in the company.
PSO Missions and Functions
Project Support and Tools
The PSO is composed of data administrators and tools experts who will act as project management tool facilitators. These administrators will support end-users on tools (Project Management, financial control, and benchmarking, manufacturing and supply chain management). In case any issue occurs with the tool, the PSO administrator will escalate it to the tool change control board.
Time writing is a process that is essential to control the resource expenses of the project and compare them with the budget. The PSO will help in preparing financial reporting and monitoring time-writing to provide all management levels with consistent representations of project status. This is sometimes complicated when local regulations modify the implementation of corporate directives.
The PSO also drives project-related documentation control and help for maintaining the project library according to configuration management rules.
The PSO supports the Project Managers in the following:
- Entering the project WBS, costs and schedule data
- Generating the reports and distributing project information according to corporate standards.
The PSO follows up on all the steps of Project Change Management to support the Project Manager with documenting them and having them approved.
With our approach of multi-national companies, the PSO will provide project support to a specific site, or to sites, that are located in a similar environment (same country, same culture, identical infrastructure). As seen in Exhibit 1 with Site W, in this stable environment the PSO can spread different best practices (BU, PL, IC) that are present on the site. This can create an opportunity to harmonize ways of working to gain time and enforce improvements.
The PSO is embedded in operational teams and is aware of site-specific requirements (laws and regulations, IT and Network infrastructure). With this wide view, it can balance requirements for tailored processes that would be too specific.
The PSO is, of course, the front-line support available on demand, cutting down any delays. This is particularly important when we deal with different time zones.
The PSO supports Quality Assurance in preparing the reviews and audits with the quality organization. The PSO members will also take part in peer reviews with QAOs (Quality Assurance Officers). They will gather data for performance measurement of all the projects managed on the site.
The PSO can also help the project leaders on site to prepare the gate passing by organizing peer reviews and assessments by colleagues who are not involved in the project.
In complex organisations, such as multi-national companies, we see a need to clearly differentiate the mission and function of the PMO versus the PSO.
The PMO is an entity that assists the executive management of a business organization to translate the strategy into the portfolio. It helps in selecting or rejecting the projects, thanks to the knowledge management of this organisation. The PMO also plays the role of excellence-centre to develop the competences of the project managers.
The PSO is a local structure close to the project team members and stakeholders. It facilitates the monitoring of the project using the available infrastructure and coping with site-specific constraints. The PSO will provide support for managing project documentation and archiving. It is also an active player for the quality assurance processes.