Is your MO a PMO?

Abstract

As a project manager, you have wanted to establish and sustain project management standards and practices throughout the organization. You have concluded that establishing a Project Management Office (PMO) will establish a positive impact by creating a “project-centric” organization within the enterprise. This presentation will suggest approaches to establishing a PMO and once established, the way forward. Also, if a PMO has been established but is not performing to expectations, what kind of analysis and strategy are needed to correct it?

Introduction

There is a movement afoot within the organization to make sure processes and procedures are put in place to make sure future projects are efficient and effective. What could be more logical than taking the next step and creating a Project Management Office or PMO?

“A well-implemented PMO can resolve the most challenging project management issues by capturing and transferring knowledge, maximizing the power of cross-functional teams, regulating the demand of integrated technologies, and providing ownership and accountability for key efforts. Moreover, it can fully assess the impact and risk of change and provide projects with guidance on best practices and standards.” (DeSouza & Evaristo, 2006, p. 415)

But wait: there are different types of PMOs and different reasons to establish them within the framework of an existing organization. A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) – Fifth Edition defines a PMO as: “An organizational structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.” (PMI, 2013, p. 554)

The creation of the PMO makes perfect sense to any project or program manager with regard to centralizing control over the numerous projects that are underway or are being considered. With a PMO all project managers will be guided and supervised by a program manager. All procedures and templates will be standardized.

In other words, a department or entity that centrally locates project management information. However, especially in an established firm, a PMO may look like a threat to authority instead of a new innovative way to pick, plan, and execute company projects.

“The PMO can be the battle ground between empowerments and control, between people and processes, and between political factions.” (Pellegrinelli, 2011, p. 652)

But throughout the established literature on the subject there are other many reasons to establish or re-establish a project management office, and those reasons are (See Exhibit 1):

• Centrally Locating Project Management Efforts
• Adding Administrative Overhead to Project Management Operations
• As an Organizational Change Agent or Leads Innovation
• Mature Project Management and Business Processes

Exhibit 1 – The reasons for a PMO to be established

And much like a standard project life cycle, there are instances where PMOs go into business to go out of business. This is because once the changes have been made the organization starts to question why the PMO exists or, like a project, the effort has been completed. Or the PMO has established the changes and along the way has matured the business and project management processes so that instead of a change agent, the PMO acts as a standard-bearer for the organization

However, the outcomes of creating and running a PMO may fall short of expectations. In other words, the organization goes into the PMO creation effort with good intentions but unintended consequences may cut the lifespan short. To some degree the literature as well as the practice is schizophrenic where a well-intentioned “Center of Excellence” turns into “Why Do We Have This?”

“A benchmark study by PM Solutions, “State of the PMO 2010,” indicates that PMOs have entered a remarkable breakout phase in terms of maturity and influence. More than half of these organizations now report to the highest levels of management; and, even more gratifying, their value to the organization is unquestioned.” (Crawford, 2011, p. 31)

“The absence of patterns and the fact that each individual [PMO] transformation is driven by a complex mix of drivers leads to the conclusion that each transformation is driven by the particular dynamics of its organizational context.” (Aubry et al., 2010, p. 39)

So there are examples at both ends of the spectrum in which PMOs have been a value-added experience and have become a bulwark of project management practices for the organization or it fails to meet expectations and goes out of business. As one can see there are many issues and ideas that will influence the creation of a PMO. This discussion will look at the various ways of approaching this opportunity and what the final outcome should or could be.

Is Your MO a PMO?

So the initial question is the title of this paper. Is your MO (Mode of Operation) a PMO? In other words, has the organization, in one form or another, been able to justify the creation of a PMO? And the other question is: Will it be a disruptive or calming influence on running projects? Will there be a positive outcome by creating this new entity within the framework of an organization? (See Exhibit 2)

Exhibit 2 – Inputs to Creating a Project Management Office

Even if establishing a PMO has been given a green light by senior management, it would still be wise to conduct a needs analysis to establish the PMO as part of the organization. Or if the needs analysis is not an option at this time, then a review with senior management on their expectations on this new entity within the organization may shed light on what the mission and goals of the PMO will be.

“When setting up a PMO, the first priority is to understand how the PMO will fit into the corporate culture, and to choose a complementary administrative or knowledge-intensive archetype when starting the PMO planning process.” (Desouza & Evaristo, 2006, p. 418)

“A universal definition of a PMO is not possible, because developing a PMO that works for an organization is an exercise in both customization and sustained effort.” (DeSouza & Evaristo, 2006, p. 415)

Beyond senior management a review of stakeholders at various levels of the enterprise and how this new entity will serve to improve or sustain project management in the organization should be considered. This can serve two purposes, to get feedback on the creation of the PMO and to raise awareness that a PMO (A change in project governance) will be coming online and how projects are to be managed in the future.

Following are some potential questions that may need to be answered in order to determine the role of the PMO.

Leadership

• What does the organization want to achieve by creating a PMO?
• Why was senior management convinced that this was the path to follow?
• What are senior management's expectations of the PMO with regard to the rest of the organization?
• What authority will be vested in the PMO?
  • PMO Program and/or Project Manager?
  • Choose projects?
  • Project clearinghouse?
  • Determine approach?
  • Hire personnel?

Best Practices

• Define Best Practices?
• Are there Best Practices to collect?
• Determine which practices to document?
• Investigate/create new ones?
• Will failure be acknowledged and learned from?

Standards

• Determine Business Process Frameworks to Use?
• Implement Industry Standards?
• Become Certified in Project Management?
  • Personnel?
  • Organization?

Innovation

• Define Innovation?
• Determine types of innovation?
• Determine areas of innovation?
  • Project Management Processes?
  • Within Departments?
  • Within Organization/Enterprise?

Some of these questions may seem obvious or perhaps mired in establishing common definitions (“Define Innovation”). Having been employed by organizations that claim they are “innovative,” this author has found that they are hard-pressed to explain why their organization is “innovative.” For example, just looking up the Merriam-Webster (www.m-w.com) innovation definition gives one:

1. the introduction of something new
2. a new idea, method, or device: NOVELTY

So, the innovation could be a wide variety or ideas, processes, or inventions. The question is, will the PMO be given the leverage to seek new ways of doing things or is it being established to reign in excess and waste? What are the “New Things” the PMO should be doing? Or are we talking about things that are simply new to the organization? In his book, Things Your PMO Is Doing Wrong, Michael Hatfield states that a PMO has much less leverage (actually none) than, say, the firm's accounting department. Whereas an accounting department has the authority to cut off funds, a PMO rarely if ever has this option.

In addition, this is not intended as an exhaustive list of inquiries because there are many directions the questioning can take. Also there may be questions specific to the organization as well as ones germane to the industry or location and, of course, these are broad questions since it is problematic to create a “One-Size-Fits-All” approach to this issue.

“PMOs represent a complex phenomenon not only by the variety of their expressions, but also by the number of entities to which they relate to a single organization.” (Hobbs & Aubrey, 2010, p. 11)

DeSouza and Evaristo (2006) also state that there are only two types of PMOs with regard to IT project management. One type would be administrative-centric, which would be a collection of “best practices” and “lessons learned” and the other type would be knowledge-centric, which would instantiate a “community of project managers”; however, they also suggest that there can be a hybrid type between these two types.

With this much variety in the mix it will certainly assist those who are given the assignment of building a PMO within an organization. Clearly, many questions need to be asked and answered before moving forward.

Establishing a PMO and Governance

What things should a PMO be doing beyond the PMBOK^® Guide's definition? What should your expectations on what this entity should be able to do be? How have other organizations used this concept? Here are some ideas that may assist in the PMO establishing process.

Kropf (2008) states that a PMO should be created for healthcare organizations with a Project Management Professional (PMP)^® credential holder certified project manager, have a mission of consulting and educating on project management methodology, and agree on who makes the final decision on spending resources on IT.

Dai and Wells (2004) found the following main charges for a PMO:

1. Developing and maintaining project management standards and methods
2. Developing and maintaining project historical archives
3. Providing project administrative support
4. Providing human resource/staffing assistance
5. Providing project management consulting and mentoring
6. Providing or arranging project management training

Notice that, within the Dai and Wells description, there are some subtleties that need to be highlighted. For example, the PMO needs to “assist” in staffing projects and clarifying the role of project management within the organization. This can be thought of as a non-threatening approach to the leaders in the organization.

How far should a PMO go with regard to authority or control over various projects within the organization? How integrated should the PMO be with the organization? Should it be autonomous with its own budget and personnel? Should it be part of the senior management structure? Or does it need to be somewhere in between? As with any organizational governance, the main point is to make sure everyone knows its authority.

“We then created a project management office (PMO) and a governance committee, because one cannot succeed without the other.” (PM Network, 2007, p. 21)

Having a separate group to oversee and consider the projects that may have the most benefit for the organization is suggested; however, it can take many forms. Throughout the literature, many authors have found through qualitative and quantitative research that a big part of defining PMO governance is by making sure its employees have clear responsibilities and roles.

As we'll see later, especially concerning the sustainability of a PMO, that it needs a champion within the executive ranks. However, all three of these options (including hybrid variations.) are possibilities. The aforementioned “needs analysis” should also point towards which one of these options are viable to instantiate the first iteration of a PMO.

Kerzner (2003) counsels:

• Start with s clear organizational model. Stick with it in spite of concerns and contentions that, “It won't work for us.” Small anomalies will present themselves but don't be deterred. Stay with a sound, overall concept;
• Change must be driven from the top. The organization must see constancy of purpose from a united leadership;
• Communication meetings must occur with all the impacted parties;
• Position descriptions within the project office must be written. Roles and responsibilities must be clear;
• The project management systems, reviews and accountability must mirror the new organization.

Again the project management pundits agree that it is not an easy task to establish a PMO in an organization (Exhibit 3).

Exhibit 3 – Some possible PMOs within the organization

Singh et al. (2009) found three barriers to creating a successful PMO:

1. Rigid corporate culture and failure to manage organizational resistance to change
2. Lack of experienced project managers and PMO leadership
3. Lack of appropriate change management strategy

Notice that these same barriers can apply to individual projects as well. In fact, looking over the background of a PMO it can be viewed as a project within the practice of the organization's project management regimen. Their solutions to these barriers are:

“In order to overcome these challenges, organizations need to have a strong PMO champion, start small and demonstrate the value of the PMO, obtain support from opinion leaders, hire an experienced program manager who understands the organization, bring the most talented PMs into the PMO implementation team, adopt a flexible change management strategy, and standardize PM processes prior to PMO implementation.” (Singh et al, 2009, p. 421)

Beyond being a strong champion, demonstrating value, being flexible, and having seasoned professionals running the PMO, it may be necessary to socialize the PMO concept to the organization. Again, this has two main purposes: to be transparent about what is about to occur and how a PMO benefits the organization, which subsequently helps the bottom line.

“This cultural shift became evident in the development of the organization's Project Management Office (PMO), which was critical to the transition to a truly global organization. One of the first approaches to spread the importance of a project management competency was a series of road shows, many of which were led by a highly energizing (as was apparent in her network diagram) individual whose passion was contagious. The project management methodologies and best practices she championed spread rapidly, yielding measurable improvements in on-time and on-budget performance.” (Cross et al., 2012, p. 204)

Envisioning and creating a PMO is no small matter. It will be helpful to know why it was approved, what the performance expectations are, how it impacts on managing projects, and how it will gain acceptance in the enterprise.

An Established Project Management Office

The second part of this paper has to do with PMOs that are perceived as failing their organizational mandate and what could be done to establish the PMO as viable and sustainable. In many instances the reason the PMO is shut down has nothing to do with its project management performance but with the Culture, Politics, and Leadership of the organization (Exhibit 4).

Reasons for failure from an overarching or macro viewpoint:

“An analysis of the eleven transformations revealed that the organisational tensions contribute the most to making sense of the transformations. Five categories of tensions have been identified: economic, political, customer relationship, standardisation versus flexibility and controlling the project machine…In ten of the eleven transformations under study, changes in the PMO coincide with changes in senior management.” (Hobbs, 2008, p. 551)

On a more project management culture or micro-level scale the reasons can be:

“If the costs associated with central control, which may include the loss of autonomy, creativity, entrepreneurship and ownership, are too much to bear, then the PMO is likely to be disbanded.” (Pellegrinelli, 2011, p. 652)

“It is therefore recommended that the PMO takes into account the knowledge behaviours of PMs and is consultative and supporting. Furthermore, analysis also revealed that PMs were protective and preferred to rely on experiences instead of engaging in knowledge sharing activities. Accordingly, it is suggested that more commanding or law making knowledge governance strategies might be required and suitable to change current behaviours.” (Pemsel & Wiewiora, 2013, p. 40)

Exhibit 4 – PMO Failure at the Macro and Micro Levels

Here are some ideas on how to avoid having the PMO put on ice and making it an integral part of any organization's project portfolio.

Hurt and Thomas (2009) suggests the following main points for a value-added, sustainable project management office:

• Build a core ideology for the long term.
• Pick the right PMO leadership.
• Staff the PMO carefully.
• Create a culture of discipline.
• Confront the brutal facts, but keep the faith.

Julian (2008), based on interviews with 20 PMO leaders across various industries, suggests the following recommendations for PMO leaders:

Recommendation 1: Focus on accumulating social capital across multiple communities by establishing a network of strong relationships built on trust, professional development, and mutual understanding.

Recommendation 2: Focus equal emphasis on learning from successful projects as those that appear to have failed or run off-course.

Recommendation 3: Reflect over the course of the project rather than only at project closure.

Recommendation 4: Establish conditions more conducive to productive reflection in lessons-learned sessions by utilizing a skilled, “neutral” facilitator.

The PMO leadership must recognize that the existence of the PMO is dependent on many things beyond the excellent practice of project management. The PMO must be flexible enough to align with organizational changes in order to be sustainable.

Conclusions

Clearly PMOs are here to stay, although whether they survive in the organization is dependent on many factors beyond the practice of project management. In many organizations they are a hub for standardization, innovation, and a catalyst for doing work in new ways.

Overall there seems to be confusion with regard to the way a PMO should operate and where it exists within an organization. It seems to be a volatile entity in many organizations because of shifting trends in the organization; change in top leadership or simply the mission of the PMO has been completed or for that matter, not realized.

In order to handle this conundrum in a straightforward manner this author suggests that a PMO, if deemed necessary, should be looked upon from two viewpoints. The services it will perform to the host organization and the continuous improvement within the PMO of project management personnel, practices, and documentation.

The most flux will come with the services it performs with the host organization. It will have to go through a continuous reinvention cycle in order to meet the needs of the organization, continue to be relevant, and sustain itself. (See Exhibit 5) As Hobbs et al, (2008) show, the average life of a PMO is approximately two years. Keeping abreast of change within the organization should be a top priority for the PMO leadership.

“We think effective PMOs continue to add value specifically by changing and reinventing themselves—as long as they stay focused on the principle of improving project management in the organization.” (Hurt & Thomas, 2008, pp. 69–70)

The continuous improvement of project management “best practices,” tools, and processes cannot be ignored either. A PMO like any part of an organization can create a culture that may not mesh with management or customers. An eye must be kept on how the project management culture should complement and not exacerbate the relationship with the organization as a whole.

And, finally, here are some additional ideas from the literature that you may find helpful in your quest to create or sustain your own organization's PMO.

Exhibit 5 – Continuous PMO Reinvention Tied to a Shifting Organization

“Well-constructed and well-managed programs should provide confidence that the right projects are being sponsored and that the desired benefits will be achieved.” (Ritson et al, 2012, p. 23)

“In summary, the findings encourage senior management to assume their role as strategic managers by adopting and cultivating a pro-active project portfolio culture in which termination of projects is not considered a failure, but a valid option. Their focus should also be on effective communication, which will encourage other stakeholders of the project portfolio to openly and truthfully report on project proposals and progress.” (Unger et al, 2012, p. 682)

Suggested Further Readings

I have found that I am only skimming the surface in this paper and to give the subject due diligence I feel the reader should look at a couple more sources in order to get some deeper background before taking the plunge into PMO Land.

A vast amount of research on the topic has been done by Aubry and Hobbs. I would heartily suggest the reader take a look at the book, The Project Management Office (PMO): A Quest for Understanding, which is available free from the PMI.org website if you are a PMI member.

Also, on an anecdotal or practical level, I would also suggest Michael Hatfield's book, Things Your PMO Is Doing Wrong, which is also free from the PMI.org website if you are a PMI member.