your key to strategy execution and results delivery
President and CEO, BRISK Business Inc.
“Eight months ago we hired a couple of guys, promoted one of our Lead Engineers, and setup a PMO. It hasn't been delivering anything you know…” Here is a statement that is becoming increasingly familiar in many parts of the world, and across various industries.
While multiple stakeholders and decision makers are coming to realize the importance of the PMO, many are under the impression that the setup and running of a PMO is as easy as taking the decision and hiring the right resources—what we call the “Plug and Play” syndrome.
This paper provides a clear understanding of key best practices in contrast to common pitfalls, enabling application across various organizations and industries based on the latest editions of the Project Management Institute's (PMI) standards: The Standard for Portfolio Management – Third Edition, The Standard for Program Management – Third Edition, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) - Fifth Edition, and Organizational Change Management: A Practice Guide.
Introduction and Background
“Eight months ago we hired a couple of guys, promoted one of our lead engineers, and set up a PMO. It hasn't been delivering anything, you know…” Is a statement that is becoming increasingly familiar in many parts of the world, and across various industries. While multiple stakeholders and decision makers are coming to realize the importance of the PMO, despite its variant forms (Portfolio Management Office, Program Management Office, and Project Management Office), many are under the impression that the set up and running of a PMO is as easy as taking the decision and hiring the right resources – what we call the “Plug and Play” syndrome.
Throughout our interventions, we have also encountered multiple situations where PMOs are misunderstood, under-powered, or underestimated, yet on the other hand, executives usually suffer from their organizations’ lack of capability to deliver and execute strategy.
Misconceptions of the requirements of setting up PMOs, their roles, how they should integrate and interface with the rest of the organization, their governance, and working mechanics are commonplace in organizations that are striving to achieve Organizational Project, Program, and Portfolio Maturity (OPM).
This paper is an attempt to clarify all of the above, starting with different types and roles of the PMO, the requirements of designing and setting up a PMO, aligning and integrating the PMO within the organization, the required levels of responsibility, authority, empowerment, and governance, and best practices in the PMO's working mechanics. The Project Management Institute (PMI) elaborates on all the above in the latest editions of its standards: The Standard for Portfolio Management – Third Edition, The Standard for Program Management – Third Edition, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition, and Organizational Change Management: A Practice Guide.
The paper addresses best practices in contrast to common pitfalls and malpractice. The paper gives session attendees and readers a clear understanding of key points under every title, enabling them to create a list of actions that they can apply in their organizations.
The Types and Roles of the PMO
For the past fifteen years, the concept of PMO has been gaining popularity across multiple industries and types of organizations in different parts of the world. From 2000 to 2005, PMOs in the Middle East were only common to large, multinational firms. From 2005 onwards, the concept started spreading into local organizations, but was largely associated with the Construction, Information Technology, or Telecommunications industries. It is only over the last five years that the Middle East has come to grips with the importance of the PMO and its relevance to virtually all sectors, whether private or public, government, or not for profit organizations. Yet the disparities in understanding what a PMO is and what it can and should do for an organization are extensive. Although we have witnessed a growing interest in the concept and its applications, we have also witnessed significant struggles in evolving from lower to higher levels of maturity.
Exhibit 1 – Noted growth in awareness of the significance of the PMO in the Middle East.
Exhibit 2 – Adopters of PMO by sector in the Middle East.
In this section of the paper, we start by creating a common understanding of the correct types, roles, and taxonomy for the PMO by referencing the latest standards of the Project Management Institute (PMI®):
The Project Management Office:
In A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition, the Project Management Office (PMO) is defined as “a management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques” (PMI, 2013a, p. 10).
PMI mentions that “a primary function of a PMO is to support project managers in a variety of ways which may include, but are not limited to:
- Managing shared resources across all projects administered by the PMO;
- Identifying and developing project management methodology, best practices, and standards;
- Coaching, mentoring, training, and oversight;
- Monitoring compliance with project management standards, policies, procedures, and templates by means of project audits;
- Developing and managing project policies, procedures, templates, and other shared documentation
- Coordinating communication across projects.” (2013a, p. 11)
This form of PMO is common, often referred to as the Project Management Unit (PMU); incorrectly as the Project Management Team (PMT); or, if performed by an external organization, also called the Project Management Company/Contractor (PMC). Its role is to basically provide needed support to one or more projects. This type of PMO can be found within a specific department for the purpose of a single project, or it may be established as a separate entity within the organization, though not at senior/executive levels. This PMO would cease to exist once the project it supports ends. It is worth noting that although the PMO ceases to exist for the purpose of the project for which it was set up, its members and infrastructure may amalgamate to serve another project, as yet another PMO.
The latter situation is especially tricky and risky, whereby the ‘new’ PMO may shift projects without the adequate changes done to the PMO's constituents enabling it to cater to the new project, and rendering it an attempt at ‘one-size-fits-all’ project management.
The Program Management Office:
In the most recent edition of The Standard for Program Management – Third Edition, PMI views the Program Management Office as, “The organization responsible for defining and managing the program-related governance process, procedures, templates, etc. supporting individual program management teams by handling administrative functions centrally, or providing dedicated assistance to the program manager” (2013d, p. 48). It also clearly identifies that the “role of the program Management Office is to support the program manager by:
- Defining the program management processes and procedures that will be followed,
- Supporting the management of the schedule and budget at the program level,
- Defining the quality standards for the program and for the program's components,
- Supporting effective resource management across the program,
- Providing document and configuration management (knowledge management), and
- Providing centralized support for managing changes and tracking risks and issues
In addition, for large and intricate programs, the program management office may provide additional management support for personnel and other resources, contracts and procurements, and legal or legislative issues.” (2013d, p. 13).
As evident, this type of PMO would serve multiple projects under the same program. It is typically incorporated within the organizational structure of a program. Its placement and ‘seniority’ within the organization is contingent on the seniority and significance of the program it supports, possibly also at the level of the organization to which its manager reports (Director, VP, CEO, etc). In practicality, the seniority, influence, and control can be apportioned to the size of the portion of the balance sheet of the organization that the PMO is addressing. Nevertheless, the span of influence and control of this type of PMO is limited to the scope of the program it supports, and although some programs can span many of years, the PMO ceases to exist once the program it supports is closed, either for delivering its expected benefits, or is terminated.
Again, one common pitfall we have witnessed in our engagements is that the Program Management Office serving one program is simply ‘transferred’ to serve another program within the organization, bringing with it the same threats of lack of suitability as those of the amalgamated Project Management Office listed above. In the case of a Program Management Office, the size of the investment in human resources and infrastructure is by nature greater than that of a Project Management Office due to the magnitude, complexity, and longevity in a program compared to a project. One simple problem is that much of this investment may not be needed in the second program, while other investments may be required to see that the program successfully delivers its anticipated benefits. Moreover, the ‘transferred’ Program Management Office tends to sit on its laurels when coming from a successful program, one key reason for failure as the members of the PMO tend to become less diligent in their practices.
In practice, though not stated in the standards examined, it is very difficult if not impossible for a program to exist and deliver its anticipated benefits without the existence of a program management office to support and serve it. We advocate that the success of the program is highly dependent on the maturity, effectiveness, and performance of the PMO, based on previous experience and research.
The Portfolio Management Office
PMI elaborates the role of the Portfolio Management Office in The Standard for Portfolio Management – Third Edition. It is noticeable that in this publication, the description of the role of the PMO is the most extensive of all three. The standard delineates the role of the PMO to be one that: “coordinates the management of its assigned portfolio components. The responsibilities of a management office can include the following:
- Provide project or program support functions
- Manage day-to-day operations of the system or systems that support portfolio management, and
- Resource and directly manage a portfolio component or category of portfolio components” (2013c, p. 18))
PMI advocates that it is the PMO's responsibility to centrally manage and coordinate “the portfolios that lie in its domain,” and that ‘the responsibilities of this office may range from providing portfolio support functions to actually managing the portfolio” (2013c, p. 18). It is also part of the PMO's role to “recommend the selection, termination, or initiation of actions necessary to ensure the portfolio remains aligned with the organization strategic objectives” (2013c p. 18).
The standard lists the following activities as part of the role of the PMO:
- “Aggregate and provide performance results to the portfolio components
- Define portfolio management methodology, best practices, and standards, for use as guidelines while formulating the methodology and standards for project and program management
- Forecast supply and demand for a portfolio that can be further broken down into supply and demand for projects and programs
- Define a portfolio management strategy
- Provide portfolio oversight and manage the overall portfolio value, and
- Identify risks, analyze risks, and plan risk responses at a portfolio level” (2013c, p. 18).
- “Managing portfolio components, supporting component proposals and evaluations, facilitating prioritization and authorization, and allocating resources in alignment with organizational strategy and objectives
- Developing and maintaining portfolio, program, and project frameworks and methodologies, – Providing project and program progress information and metrics reporting to the portfolio governance process
- Negotiating and coordinating resources between various portfolio components or between portfolios
- Assisting with risk identification and risk strategy development and communicating risks and issues relate to portfolio components
- Coordinating communication across portfolio components
- Developing and improving templates and checklists
- Monitoring compliance to policies
- Providing knowledge management including lessons learned
- Developing and conducting training and mentoring human resources in portfolio management skills, tools, and techniques.” (2013c, p. 17-18)
This is the type of PMO that is closest to best-fitting the purpose of strategy execution and delivering results. The Portfolio Management Office exists as long as the portfolio exists, and a portfolio exists as long as the organization exists, in the sense that it does not have a specific start and end as does a program or a project.
This type of PMO is normally equipped with the staffing, processes, methodology, governance and infrastructure that is capable of supporting multiple programs and projects simultaneously. Not only that but the Portfolio Management Office serves a greater purpose: it can easily bring programs and projects back into alignment with the organization's strategy, and even terminate those that appear not to serve the strategy.
One common pitfall that we have witnessed across multiple organizations is the set up and deployment of a Portfolio Management Office followed by the set up and deployment of a number of project and program management offices throughout the organization. This leads to the immediate fragmentation of program and project management responsibility and a turf-war around ownership. Think of it this way: the Portfolio Management Office wants to instill governance, and shutdown and initiate/authorize programs and projects, while the program management office wants autonomy, because they believe they have a better understanding of their program and its contribution to strategy. As a best practice, the Portfolio Management Office is most effective when setup as a Tier-Four PMO (see below).
Exhibit 3 – Different types, levels, and spans of control of management offices.
In conclusion, though the term PMO applies to more than one organizational setup, it can be derived that the role of the PMO is evolutionary in that it operates at multiple levels, depending on the maturity of the organization. We examine such evolution below:
Tier-One PMO: The supportive PMO “Provides assistance, support, tools, templates, and guidelines of project management to project management teams, provides status reporting and configuration management” (PMI, 2013a, p. 11). It does not manage or control the project and has a purely consultative role.
Tier-Two PMO: A Tier-Two PMO performs the functions of a Tier-One PMO, as well as coordinates project resources; develops methodology, practices, standards; supports a centralized repository; coordinates project communications; mentors and coaches project managers; centralizes monitoring and project control; and centralizes project operations. It also provides assurance to senior management that projects are compliant to standards and procedures and acts as a formal and structured governance body. It may allocate project and program managers to projects and programs respectively. It consolidates performance information and reports to senior management.
Tier-Three PMO: A Tier-Three PMO performs the functions of tiers one and two, is usually enterprise-wide and is situated in the organization at a senior level, independent of individual projects/programs/departments. It functions at the portfolio level and directs and manages projects and programs ensuring they are aligned to the organizational strategy and will deliver anticipated benefits. It has the freedom and autonomy to make decisions on projects, programs, and even portfolios, all in favor of strategy execution and delivery of change. In performing its duties, the PMO may advise senior management at the business strategy level.
Exhibit 4 – Comparison among the 3 tiers of PMO.
Portfolio and Program Governance through the PMO
One core function in a Tier-Three PMO is the performance of portfolio and program governance. According to The Standard for Program Management – Third Edition, “Effective governance helps ensure that the promised value is achieved as benefits are delivered” (2013d p. 41). The PMO may or may not incorporate the Governance Board, based on the requirements of the organization. While the role of the Governance Board is to steer and direct the portfolio and its constituent programs and projects, the role of the PMO is to fully support that process through the creation of decision-making mechanisms and assigning decision-making authority and accountability, as well as to ensure governance tools, techniques, and processes are in place and users are well trained and capable of using them.
Governance decisions may include new project proposals and the processes for their evaluation, approval, prioritization, and rejection; decisions on changes to current projects, programs, or even portfolios; and suspension or termination of current projects and/or programs if the goals and objectives for which they have been undertaken cease to exist, or if the strategy or its priorities change. Resource planning and allocation to meet strategic objectives is also a function of governance.
Ineffective Forms of PMOs
While ineffective cases have been addressed above, in this section we further provide a review of the different types of organizational setups we have examined and worked with and the extent to which each of them had contributed to the delivery of results and realization of strategic benefits. While some of the examples below may be effective in performing other roles, our conclusions are derived solely based on each model's ability to execute strategy and deliver results:
(a) The multi-PMO organization: In some organizations, multiple PMOs are formed. One of the most common cases where such practice is undertaken is when an organization would be performing a number of large, complex programs all at once and each one would require a Program Management Office of its own to support it. Other cases adopting this model is when an organization decides to build a PMO within each of its departments performing projects.
The advantages: Each large, complex program—or each department—will have its own “center of excellence” dedicated to serving it. It will apply the standards, tools, techniques, and practices highlighted in PMI's standards to the programs and projects, and will provide much needed support to the program managers or project managers encompassing all management processes and areas of knowledge.
The Disadvantages: Because of the number of PMOs, the organization may struggle with consistency across the different programs, projects, or departments. In this setup there would not be one single entity accountable for delivering change and executing strategy. Responsibility would be fragmented among the multiple PMOs and in extreme cases this may go as far as creating unnecessary rivalry and conflict amongst the PMOs, in addition to the power struggle mentioned earlier, which in turn becomes prohibitive to execution of strategy and delivery of results.
(b) The Supportive PMO: This, by definition, performs the role of an internal consultant to projects “by supplying templates, best practices, training, access to information, and lessons learned” (2013a, p. 11). Supportive PMOs have a low degree of influence and control over projects.
The advantages: While obvious from the definition of their role, the advantages of these types of PMOs are limited to having an in-house, dedicated consultant (or consulting organization) that basically provides information, global best practices, and artefacts to projects. When well equipped, the PMO will diligently research, identify, adopt, and apply all such artefacts, providing a continuous improvement platform for the practices and practitioners in the organization, when, if applied thoroughly (note that this is not within the control of the PMO), will increase the competitiveness of the organization.
The disadvantages: Such PMOs lack the empowerment to deliver. They also lack the ability to influence or control projects, let alone the organization. This setup will not be able to deliver change or strategic benefits due to the inherent limitations in authority. Once they have stopped curating best practices, their roles become redundant. Many organizations cannot justify the cost of such a PMO after they have provided the initial setup of methodologies and processes.
(c) The Controlling PMO: As described by PMI in the PMBOK® Guide – Fifth Edition, the Controlling PMO provides support and requires compliance, “by adopting project management frameworks or methodologies, using specific templates, forms and tools, or conformance to governance”(2013a, p. 11). This gives it a policing role in the organization.
The advantages: In addition to those of the supportive PMO, this setup provides the organization with assurances of consistency, telling senior management whether or not the organization is performing their projects the right way. It also provides consistency and visibility across all projects and programs. The disadvantages: The drawbacks are still the same as the supportive PMO: it simply does not have the power, authority, resources, or ability to deliver change or execute strategy. Moreover, because of the nature of its role, this type of PMO will struggle with resistance from project managers as well as teams performing the work on the projects. When projects fail, the blame is usually bounced between the PMO and the project teams, each accusing the other of the reasons for failure.
(d) Departmental PMO: As opposed to the Multi-PMO organization, this is a case where a PMO is set up within a specific department, delivering projects and programs that are within the domain of its host department, for instance, an “IT-PMO” or a “Design-PMO.”
The advantages: Combined advantages expressed elsewhere, in addition to building the capabilities of the department to deliver projects.
The disadvantages: This type of PMO is influenced and tightly constrained by the work of its host department and the leadership of that department. It does not typically have the authority or ability to influence the organization or perform duties as required outside of the department, even if it possesses a very high level of maturity. While this PMO will deliver the projects of the department, it will not have the ability or influence to deliver the strategy of the organization at large. Once matured and performing, the departmental PMO struggles to integrate with the rest of the organization, as its maturity surpasses its peers.
(e) The Halo PMO: The Halo PMO may also be identified or labeled as the “Technical PMO.” This setup occurs when senior management ‘promotes’ its best technical expert into a PMO management role, and staffs and sets up the PMO accordingly. This also applies when the organization chooses a member of senior management who is not knowledgeable, certified, and well-versed in Portfolio, Program, and Project Management to lead their PMO. This is a very common—though very dangerous scenario, as explained below.
The advantages: None except for the motivational impact on the resources promoted/selected.
The disadvantages: The PMO is staffed and operated based on strong technical knowledge in one or more areas of application or in general management skills, but in many cases the importance of project/program/portfolio management knowledge, experience, standards, and methodology is undermined or seen as of secondary or lower significance and importance. This leads to the PMO transforming itself into a technical office (and eventually entering into conflict and power struggles with the technical office where one originally exists) as opposed to being a project management center of excellence. Any change initiatives, or strategic objectives that do not resonate with the technical background of the PMO are likely to be side-tracked, ignored, or not delivered entirely. In short, this is a clear manifestation of the Halo effect, whereby the organization would lose one or more of its highly-skilled technical resources and gain an incompetent PMO.
Exhibit 5 – Most common causes of PMO failure.
What type of PMO can Deliver Strategy and Results?
The PMBOK® Guide – Fifth Edition states that “The specific form, function, and structure of a PMO are dependent upon the needs of the organization that it supports” (2013 a, p. 11) For the purpose of this paper, we identify such needs of the organization are (a) Execution of Strategy and (b) Delivering Results and Change, both seeking to take the organization from an ‘As-is’ status quo to a desired ‘To-be’ state.
PMI's, Managing Change in Organizations: A Practice Guide states that strategic planning “can no longer be an annual, top-down process, [and that] organizations need to embrace and adopt change in their strategy to compete and to ensure long term success” (2013b, p. 9). The practice guide further specifies that “Organizations need to react to change internally with the same intensity as they react to changes in their external environments” (2013b p.9). Put in context, this presents organizations with significant levels of complexity.
In the past, organizations would conduct their strategic planning once and strive to deliver the constituents of that plan for the rest of the year while maintaining focus on business as usual. The new (or rather current) approach to strategic planning requires organizations to be more flexible and agile in their formulation and delivery of strategy. Influencers from outside or inside the organization can emerge at any time, requiring attentive response and immediate action. The challenges associated with strategy formulation are not part of the scope of this paper, but the challenges associated with the responsiveness to such changes and the ability to create, terminate, suspend, or change projects and programs are, and we advocate that they are best addressed through a centralized, accountable, and authorized PMO.
Exhibit 6 – Traditional approach to strategic planning.
Exhibit 7 – Contemporary approach to strategic planning
The following exhibit is excerpted from Managing Change in Organizations: A Practice Guide, demonstrating the relationship between strategy, change, and projects (whereby the boxes labeled XXX represent projects and programs) in taking organizations from As-is to To-be (2013b, p. 45):
Exhibit 8 – Strategy execution and change management moving towards the future state.
All forms of PMO examined thus far will contribute in varying ways to the execution of strategy and delivery of results and change, but will not act as the vehicle for doing so. For that purpose, we are of the belief that yet another type of PMO is needed. One that builds on the logic of Tier-One through Tier-Three, and is not handicapped by the disadvantages listed in the previous sections of this paper:
Tier-Four PMO: The combination of all the above roles in a Portfolio, Program, and Project Management Office, PPPMO or P3MO, we will continue to label ‘PMO’ for convenience. This model has been deployed in various organizations and has performed effectively in being a vehicle for the execution of strategy and delivery of change. It must possess a highly advanced level of maturity. It needs to perform multiple roles effectively and in an integrative manner, thereby creating vertical synergies between the organization's strategy, portfolio, programs, projects, as well as interface with any and all corporate systems.
Exhibit 9 – The role of the Tier-Four Portfolio, Program, and Project Management Office.
Although not explicitly labeled a Tier-Four PMO, the description given by Paul Jones, head of PMO, Fujitsu UK & I on “The Work of the PMO,” as part of the New York Times interviews series on the PMI YouTube Channel, is aligned with our conclusion:
A PMO will give you the ability to look across all your projects and programs and give a common language and a common way of reporting and…judging success or failure. And that enables senior management to make decisions of whether to stop a project, to continue and spend more money on a project, [or] to implement change to that project or program. PMOs are sitting at the center of project delivery; they are the heartbeat of projects and programs.
He added that: “The PMI Pulse of the Profession™ clearly identified investments in project methodology and standards and investment in the people that deliver them as key differentiators between high-performing and low performing organizations in terms of project delivery.” This highlights the role of the PMO as the core manifestation of such investments whereby they would materialize in the form, proceedings, and role of the PMO. This must be separated from the investments made in individual portfolios, projects, or programs. Investments in the PMO and its constituents are allocated to project and program budgets as overheads.
Paul Jones further explains that “PMOs can help in taking the risk out of deliveries by giving the executive board a view of exactly what is going on across your projects and programs, across your portfolio and also helping to support project managers in their delivery,” which is again another role that we believe is key for the execution of strategy: that the PMO supports and takes over delivery of the projects and programs.
So far we have only addressed one side of the equation: the PMO. The second component that needs to be addressed is strategy. The body of knowledge around strategy formulation and strategic management is extensive, encompassing different approaches, different schools, and different ways of addressing the matter. However, our research and practical experience reveal that strategy can only be implemented through initiatives that are temporary and deliver a unique set of outcomes. Hence, such initiatives qualify as projects. Furthermore, sometimes it is better to manage a group of strategic initiatives together, and hence increase benefits and/or control (and hence programs). All initiatives have an inherent level of risk. Therefore, project and program management are essential to the execution of strategy, and hence, the only means of delivering strategic objectives, results, and change is through projects and programs.
Establishment of a PMO will instill a structured and formal governance process in organizations that did not previously have them, as well as enhance governance in organizations that did. This, in turn, generates higher benefits, higher degrees of discipline, understanding, and professionalism within the organization. These are all key ingredients to the successful execution of strategy. This form of PMO should be directive. It should be able to control the programs and projects by directly managing them. The structure of the PMO should be that individual functions compose: Delivery, Control, and Governance. The following Exhibit provides a conceptual explanation of the proposed structure:
Exhibit 10 – Tier-four PMO proposed functional structure.
The degree of control provided by the PMO should be high, and it requires the capability and authority to perform the following activities, all in the best interest of the organization:
Exhibit 11 – The role and functions of a tier-four PMO
Requirements of designing, setting up, aligning, and integrating a PMO
Building a successful PMO must start with a clear understanding and definition of what a PMO can and should do for the organization. Yes, the PMO will execute strategy and deliver results, taking the organization from the As-is state to the To-be state, but that is what you understand and believe in, not the rest of the organization.
Before starting to design and set up the PMO, you need to ensure that all stakeholders are cognitive of (a) the importance of the PMO (b) the role of the PMO and (c) what to expect from the PMO – what it will and will not do.
(1) This means that your first and foremost requirement is to manage the expectations of all stakeholders 360°, including senior management, decision makers, project managers, project team members, functional heads, and anyone who will have positive or negative influence on the PMO, or who will benefit or be adversely impacted by its setup, even if such impact is merely an expectation. One of the most useful tools is establishing the vision and strategy for the PMO. The vision should be flexible, concise, and thoroughly describe what the final result will be. Involving as many stakeholders as possible in formulating the vision will warrant buy-in, commitment, and support. The strategy of the PMO must address the organization's key success factors. It must ensure the PMO is defined and structured to support and enhance the organization's current direction, while being agile enough to accommodate to future changes. Many practitioners fall into the trap of wanting to set up a PMO that has a high degree of maturity, and then force the entire organization to change to accommodate it—a guaranteed path to failure.
(2) Prepare a plan for the PMO establishment to guide its execution: This is best done in alignment with the processes, addressed in The Standard for Program Management – Third Edition, to ensure the plan includes things like: Transition plan, benefits (of the PMO) management, stakeholder engagement, power shifts, definitions of roles and responsibilities, and definitions of how implementation will be monitored and controlled. In short, treat the setup of a PMO as you would a project, using the PMBOK® Guide – Fifth Edition and the Managing Change in Organizations: A Practice Guide as references. The use of a steering committee composed of representatives from various areas of the organization would help provide further alignment of the PMO with the organization's strategy, and ensure that it has the needed support at the highest levels from the onset.
(3) Establish implementation priorities: the PMO will need time to grow and mature its processes and strategic position in the organization. The PMO's initial focus should be on the programs and projects that contribute the most to organizational strategic directives.
(4) Conduct a pilot roll-out: select strategic objectives that can be used to help develop and test-drive PMO methodologies and processes, and invoke the processes to select, prioritize, manage, and deliver projects that contribute to the achievement of the selected objectives. Remember this is a pilot, so the goal is to make sure everything is working properly and make changes as needed.
(5) Conduct the full-fledged roll-out of the PMO, migrating programs and projects, and articulating strategic objectives to identify, and start performing the roles described above.
(6) Allow for a period of performance by the PMO, typically three months, and then perform a performance audit to examine whether what was developed worked or not.
The Exhibit below describes our suggested process:
Exhibit 12 – PMO design, deployment, integration, and transition process.
For a PMO to operate effectively, it requires that certain operational elements are in place. Of the most controversial are the Project/Program/Portfolio Management Informations Systems (PMIS) and their components. The PMO must be equipped with a comprehensive end-to-end solution that improves data collection, storage, access, analysis, and dissemination with sufficient roll-up as well as drilldown abilities while upholding project management rigor, methodology, governance, and discipline. The PMO should have the ability to analyze and select software packages that best fit its requirements and those of the organization at large. The tool(s) need to deliver value to all users and not just the PMO, otherwise, only the PMO will end up using them. Yet, the dilemma remains that the PMIS should serve the PMO and not the other way around—many PMOs have limited their ability to deliver to the capabilities of their software packages, falling into the common trap of being controlled by their PMIS and not the other way around. Remember that a successful PMO can exist with basic software capabilities, but sophisticated PMIS do not necessarily mean a competitive or successful PMO.
A PMO of the nature, form, and role this paper is advocating is a significant change to any organization and its culture. There is a crucial need to ensure that the PMO and its operations are supported throughout the organization, not only at the management level. In his interview with the New York Times, Paul Jones states that “sitting in the center means it's not just about reporting up, it's not just about telling the C-Suite about projects that are going well or that there are issues, it has to add value down to the project managers and to the delivery teams. If they do not see the value in a PMO they are not going to support it, they (PMOs) need to get support from all directions, top-down and bottom-up, and really successful PMOs do both, they will look at how projects are reported and how it can influence decisions and the benefits realization to the organization and also how it can support project delivery, reducing the cost of project delivery, helping consistency of project delivery, and also taking the risk out of project delivery.”
PMOs cannot be effective without this direct and regular involvement of senior management; unfortunately, many of them suffer the lack of executive involvement, especially in the Middle East. Before exploring the reasons why senior management engagement and support is crucial, it is important to highlight that the responsibility to secure such support lies with the PMO and not the other way around. The leadership of the PMO must be able to demonstrate value to the executive level of the organization. Executive support is crucial to the success of the PMO because: (a) Executives are at the heart of the multi-project dilemma, their supportive engagement is key to resolving resource and priority conflicts. (b) Cross functional executive support is important in that they provide functional resources, expertise, and support management of issues, risks, and dependencies. (c) There can be no meaningful governance without top executive participation
Jones, P. (2013, September 20). The work of the PMO: New York Times series interviews. Retrieved on 1 February 2014 from: http://www.youtube.com/watch?v=zNGqidbgKn8
Project Management Institute. (2013a). A guide to the project management body of knowledge (PMBOK® guide) – Fifth edition. Newtown Square, PA: Author.
Project Management Institute. (2013b). Managing change in organizations: A practice guide. Newtown Square, PA: Author.
Project Management Institute. (2013 c). The standard for portfolio management – Third edition. Newtown Square, PA: Author.
Project Management Institute. (2013d). The standard for program management – Third edition. Newtown Square, PA: Author.
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.
© 2014, Emad E. Aziz, PgMP, PMP, PRINCE2P, CSSGB
Originally published as a part of the 2014 PMI Global Congress Proceedings – Dubai, UAE