Project Management Institute

Surviving the rise and fall of a project management office

Ellen Busse, Senior Consultant, PM Solutions


This paper will trace the rise and fall of a Project Management Office (PMO) in the Information Systems (IS) area of a medium-sized organization. Attendees will follow the journey from initial beginnings, see how the cracks in the foundation began to surface, and then move into the complete fall of the project office. Participants will be given an enthusiastic picture of what went right, what went wrong and lessons learned on how to avoid some of the problems in their own organizations.

The Rise

The Creation of the Project Office

The Need

In the beginning there was confusion and chaos. Projects were not recognized as such, but as end user requests to be added to a long list of outstanding requests. Prioritization was non-existent, but pretty much a first in, first out order, unless there was a squeaky wheel that was determined to get oiled. Projects were over budget, late and under- or over-resourced. IS staff had multiple assignments with conflicting priorities and due dates. Functional units avoided contacting or involving IS until the problem was an emergency. There was minimal participation from the functional units in the completion of requests. Business analysis and justification wasn't expected as part of the normal course of business. The functional area would submit a request and usually not become involved again until the product was ready for testing. This usually led to unmet needs, disappointed requestors, and a waste of resources due to rework. When possible, functional units contracted their development outside of and without IS participation and then tossed the application to IS for support and maintenance.

Then along came Y2K! The existing, outdated hardware—mainframe and mid-range—would not survive Y2K. How was the organization going to be able to convert all mainframe applications into client server environment products while still conducting day-to-day business? The majority of applications were patched together, documentation was minimal and product knowledge had long since walked out the door.

Along with a new IS Director who hired additional staff, a major organizational restructuring took place. This Director was given carte blanche by upper management to move the organization to state of the art technology in preparation for Y2K.

The Solution

Planning for Y2K inspired the new IS Director to create a (PMO). These contributing factors found the basis for the establishment of a PMO:

  • Inspiration
  • A PMO Champion
  • Incentive—Y2K
  • Organizational Receptivity.

Establishment of the PMO

PMO Creation

Since the primary supporter for the PMO was the IS Director, this new unit was placed inside the IS organization, reporting to the IS Director. A PMO Director was selected based on project management knowledge, rather than IS knowledge. This later proved to be an issue for some if the IS staff. Internal project managers were transferred into this unit from other areas of IS. Additional staff was recruited and interviewed within the IS group. The recruitment efforts focused on project management skills and external hiring was undertaken. This approach created a problem as internal staff wanted first chance at these positions.


During the creation of this PMO, it was identified that a consistent methodology had to be created and adhered to by the PMO staff. As this was a new concept for this organization, it was important that they get used to seeing standard project documentation and presentation by the PMO staff. Functional representatives were also working with several projects and the consistency of approach assisted them in understanding the processes and buying into the solution. A project manual was the outcome of this venture, complete with a set of templates.


Due to the small IS staff, resources were frequently matrixed to several projects. Use of a standard methodology and one resource pool allowed them to work more efficiently on separate projects with different project managers.

Keeping It Simple

The decision to develop an internal methodology was made because “off-the-shelf” products were too complex, expensive, and overkill for the size of the projects at this organization. A minimum of external resources was used to create the in-house methodology.

The methodology was created within the organization and was more of a utilization focus. Based on a maturity model approach, the methodology focused on establishing a repeatable process. As project management matured in the organization, the methodology could expand to meet the more sophisticated use of project management techniques.


Microsoft Project was a tool already utilized within the organization. A standard presentation to upper management was developed and used at weekly update meetings. Topics focused on for these reports were: scope, priority, status, risk and its mitigation, and timeline projections. The Managing Director used these reports to brief the Board of Directors.

Microsoft Project report templates were developed to provide simple, easy-to-read reports to the functional areas. This allowed these areas to monitor progress and resource usage, and to understand the impact on future projects.

Consolidated reporting gave the organization, for the first time, the ability to view holistically where their budget dollars were being used and how resources were allocated.

Project Prioritization

A steering committee comprised of representation from upper management as well as key functional units developed a prioritization process. The first step in this process was to define existing projects and create an inventory of current and requested work. Each function then brought to the table their prioritized requests. At a subsequent working session, the prioritized requests were then reprioritized based on benefit to the organization. The result became the priorities for IS project work and the beginning of the need for portfolio management. This was the first time the organization prioritized projects across functional areas based on business needs. While this process was painful the first time, it became a way of doing business and was repeated on a quarterly basis. The other directors became converts as they saw the entire picture and began to understand some of the unique challenges facing IS.


One of the early signs of trouble was the reluctance of the IS Director to educate the areas outside of IS on the techniques and benefits of project management. This Director felt the IS Department needed to become experts before reaching out to other areas. This approach fostered an “us vs. them” attitude by several business users. They expressed concern that standards and a methodology were being imposed on them from the IS group without the benefit of any input or training. The PMO Manager attempted to provide some insight into the benefits of project management; however, this was met with firm resistance.

The IS Applications Manager had several reservations about implementing project management let alone a project office. As a member of the leadership team and a peer to the PMO Manager, this created dissension and mistrust in the leadership team. These reservations caused staff conflict and an incomplete PMO foundation. The IS Director was insistent on the benefits of project management, resulting in some staff turnover.

Staffing the Project Office

Developing Skills Necessary to Move Forward and Gain Credibility

At the same time, the lack of PMO staff project management skills was recognized and addressed by providing the staff with an external, online skill assessment and subsequent individual development plans. The results of this assessment were returned to the individual. Results were also provided to the PMO Manager collectively, not individually, to assure staff of its confidentiality and to ensure their participation. This was the first step in developing an IS project management skills inventory.

Professional Affiliation

To introduce the IS area to the project management world, a corporate membership to the Project Management Institute (PMI) was initiated for the entire PMO staff as well as some key players within the department. At the same time, participation in chapter meetings was encouraged via e-mail distributions of the local chapter's website. Participation in PMI's annual Symposium was also encouraged and offered to the PMO staff as a benefit to them and the organization. PMP certification was encouraged by IS and PMO management. Project managers were encouraged to take advantage of the PMP preparation course offered by the local PMI chapter. Often topics from the dinner presentations were discussed during staff meetings. This provided information sharing for those who could not attend the dinner meetings.

Members of the project office, partnering with local organizations, initiated the formation of a Microsoft Project User Group (MPUG). This group has since grown to 200 members with quarterly meetings. This was a professional affiliation that was offered to PMO staff.

In an effort to encourage a quality product, attendance at the Chicago Professional Quality Managers Association (CPQMA) was strongly encouraged and promoted.

Cracks in the Foundation


• Y2K Survival: while being a relief, it also took away the incentive for moving forward with an enterprisewide PMO.

• Y2K Backlash: functional groups resented the budget dollars spent for Y2K and felt IS had dominated the budget process and now it was their turn for their initiatives.

• Project Managers: the PMO lost some impetus due to the existing project managers failure to take advantage of professional affiliations and training opportunities while budget dollars were available.

The groundwork had been laid for staff and management participation for an organized approach to project management. Then came disruption to the champions' participation in this initiative—the PMO Manager left the organization. On the heels of this departure, the PMO was dealt a heavy blow by the departure of the only upper management champion this cause ever had—the IS Director. Along with the arrival of a new IS Director came a new set of initiatives, which was to become the final blow for this PMO.

The Fall

Management Changes

This management change of a new IS Director who found little value in a PMO was a major cause for its dissolution as this position had previously been the champion for this effort. The PMO Manager position was filled by a resource with little PMO experience. This new PMO Manager's hands were also tied in that the new IS Director was not embracing the PMO and providing support for this effort.

The director of a major functional area also left the organization at the same time. Several major initiatives, for which this director was the sponsor, were put on hold until a replacement was named. This added to staff unrest.

Staff Shifting and Final Dissolution of PMO

One of the first acts of the new IS Director was a reorganization. Staff were shifted into various inappropriate roles in a newly created group, yet were still expected to function as project managers. This was an unrealistic expectation for the staff to attain. There was no solid future direction provided to the project managers. The impact of these organizational changes was:

  • Low morale
  • Increased use of sick and vacation time
  • Staff turnover
  • Impact to productivity.

The IS reorganization was the final blow to the PMO; in effect, the organization came full circle back to the chaos that existed prior to the establishment of the PMO.

Surviving the Fall

Lessons Learned

Now that you're wallowing in the rubble of the crumbled PMO after the Fall, what could have made the difference? If we had it to do over—how would we improve the project office creation and continuation?

Exhibit 1. Rise and Fall Cycle

Rise and Fall Cycle

Organization Unit

In order for the organization to benefit from a PMO, it is critical that the PMO be placed at the highest operational level or reporting to a steering committee at the highest operational level. The benefits of organizational placement at the top include:

  • The ability to manage projects by life cycle
  • The PMO speaks with one voice for project management
  • The PMO sets project management standards
  • The PMO conducts project assessments
  • The PMO facilitates portfolio management.

This allows the organization to manage projects at an enterprise level, rather than by function.

Build Deep Roots

The importance of building coalitions, enterprise level placement of the PMO, and recurring staff education all contribute to building deep organizational roots that cannot be pulled out by a change in personnel, no matter the level. Obtain and expand sponsorship throughout your organization. This is how to build something that will last beyond the priorities of the person who initiated it. If your organization is considering a PMO and does not have this type of support, this is a major risk for which a mitigation strategy must be developed.


Communicate. Communicate. Communicate. Establish a communication plan to the entire organization regarding the benefits of a PMO. Identification of communication needs and audiences should be developed early in the PMO's life. Messages should be tailored to meet the needs of the audience. Vehicles for this could be:

Exhibit 2. Rise and Growth Cycle

Rise and Growth Cycle
  • Regularly scheduled upper management briefings
  • Informational postings on an intranet
  • Brown bag lunch sessions
  • Creation of periodic open house presentations
  • Attendance at functional unit staff meetings.

The PMO needs to speak with one voice, consistently communicating the same goals.

A PMO internal communication plan needs to be addressed as we do when we vote in Chicago—early and often. Internal communications include:

  • Regular, mandatory team meetings
  • Off-site planning sessions
  • One-on-one status meetings with the PMO Director
  • Standard project status reports.

With the advent of a virtual workforce and technology advances, centrally stored project plans and all associated documentation is a must.

Demonstrate Value Added

A consistent process and product leads to greater capacity without staff increases due to a reduced learning curve. This structure also allows for more effective use of external and temporary resources, allowing organizational consulting dollars to go further.

Implement easy to read reports distributed to the entire enterprise via a company intranet or e-mail. This allows disparate functional units to understand where budget dollars and resources are used. Provide feedback on successes. Demonstrate the benefits of learning from failures.

Lessons Learned Sessions

Part of the completion of a project should include a session to which all levels of participants are required to attend in order to successfully close a project. These “lessons” should be shared with the organization as well as categorized and captured in a database for use on future projects. This will lead to a knowledge management repository.

Build Project Manager Professionalism

Selection Process

The role of a project manager should be treated as a professional role within the organization, not just specific to IS or a special assignment. Work with Human Resources to recognize project management as a discipline by developing a position description, skill identification, competencies, career path, and salary structure. The applicant interview process should include peer reviews for team suitability. The recruitment of professional project managers should be solicited at professional meetings and events; i.e., PMI Symposium, PMI Chapter Meetings, and other industry events.


• Develop a formal staff training program. Ensure all vendors use the same project management approach.

• Develop a resource library.

• Encourage professional affiliations.

• Encourage project managers to present or teach within the organization as well as at local organizations or institutions.

Continued Growth

• Project Manager's provide education sessions to familiarize business staff with this discipline and structure.

• Mentoring: establish a program that fosters the development of project management in all functional units of an organization as well as creating opportunities for existing staff.

• Encourage staff to obtain PMP Certification. Provide materials, prep class support, and recognition when successfully obtained.

• Consistent use of methodology.

• Implement project audits, including:

• Staff self-assessment.

• 360-degree evaluations whereby staff feedback is requested up, down, and sideways on the food chain.

• A project assessment from an external entity, such as a metrics function. Audit results should be used to improve the project and not for individual performance evaluations. Sanitized results could be used to modify the existing methodology or provide lessons learned for the future.

• Partner with external organizations. It provides peer support outside of the organization and promotes objectivity. This approach could feed into a benchmarking process. This also allows for new ideas to flow into the PMO.


Finally, don't wait to attain a perfect PMO before rolling it out to functional groups outside of the PMO. Our goal in sharing these lessons learned and providing insight into the establishment, rise, and fall of a project office is so that others can learn from our experience and, hopefully, have a different outcome.


Project Management Institute Standards Committee. 1996. A Guide to the Project Management Body of Knowledge. Newtown, PA: Project Management Institute.

Block, Thomas R., & Frame, J. Davidson. 1998. The Project Office. Crisp Publications Inc.

Frame, J. Davidson. 1994. The New Project Management: Tools for an Age of Rapid Change, Corporate Reengineering, and Other Business Realities. San Francisco: Jossey-Bass.

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

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



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