You might wonder what is PMO? Well, PMO is an acronym for Project Management Office. In any organization, a PMO is a department responsible for improving project management by improving efficiencies.
PMO creates and maintains documents, tracks progress, and offers education on matters about a project. Project management offices are also tasked with reporting project performance to the upper management and stakeholders, prioritizing activities, project planning, and ensuring all projects align with organizational objectives.
Organizations that invest in many projects depend on PMOs to manage work and strategies. In this case, PMOs device methods and processes for the practical completion of every project. In a nutshell;
- PMOs are part of the research and development department tasked with managing company projects.
- Almost every department has a PMO to ensure the successful completion of departmental projects.
- An organization may have a strategic PMO at the top management level. This PMO has wider-ranging responsibilities than any other PMO in the company.
What is the role of PMO?
A PMO can be described as an internal regulatory body used to standardize project execution to enhance efficiency and productivity within an organization. A project management office guides teams and develops performance metrics that can be used to evaluate the project. The role of a PMO in every organization may differ. However, the overall responsibilities include:
Resource Management: A project management office manages and allocates company resources across various activities and projects. This is usually done based on organizational priorities and budget.
Planning and Governance: A PMO can be tasked with choosing investment projects that support organizational objectives, outlining the criteria for every project, and advising the management on the project’s ROI. Accordingly, a PMO ensures the management makes the right decisions based on accurate information.
Organizational Culture: A PMO can be used to set project culture by communicating and training employees on methods and best practices. This enhances organizational culture.
Transparency: A PMO offers accurate and relevant information about projects to support organizational decision-making. By doing so, a PMO ensures transparency and accountability.
Support: PMOs are typically created to facilitate project execution. This is mainly done by helping project teams, facilitating effective implementation of strategies, training employees, and monitoring progress.
What does PMO mean?
As mentioned earlier, the literal definition of PMO – is the project management office. In any business organization, they are the department that handles all aspects of a formal project management process and ensures that a project’s life cycle is tracked from start to finish so that efficiencies can be best optimized. A PMO is crucial for the success of improving project cycles and helping businesses scale efficiently.
Understanding what a PMO means is important for enterprises and startups alike because what gets measured tends to get improved, whether that be developer sprints, marketing projects, or design phases measuring success outcomes and tracking KPIs through a wholesome PMO process. Maybe the map that helps one company reach the desired endpoint.
Types of PMOs
PMOs differ in every department and organization. Accordingly, they perform different tasks and perform their roles in unique ways. Typically, PMOs are categorized as:
1. Controlling PMO
This type of project management office works effectively by evaluating the application and use of various processes, methods, tools, and standards. The PMO may also control how strategies are applied by outlining a guideline for work completion.
2. Supportive PMO
This type of PMO supports development projects and company activities. This is done by collecting project information, outlining best practices, training employees, and advising the top management. A supportive PMO does not exercise control over projects and activities.
3. Directive PMO
This PMO controls the most significant part of projects within a company. The PMO offers directives on all aspects of the project and evaluates performance over time.
Why do you need a PMO?
Based on research and results, an organization may require a PMO for many purposes. Here are some reasons why your company may need a PMO:
- The organization wants to manage many projects and activities
- To coordinate and allocate resources accordingly
- To receive accurate information that helps to make sound decisions
- When the organization needs to invest in many projects in different departments
- When there is a need to make quick decisions in a rapidly changing business environment
- To streamline costs
- When the company has an extensive and overwhelming reporting system
- When there is the need to prioritize projects based on their return on investment (ROI)
A PMO is most effective when it is found at the organization’s top-most level. This means having a strategic PMO at the executive echelon for better decision-making. Such a setup ensures effective communication of organizational objectives to align projects with the demands of key decision-makers.
A strategic PMO at the executive level enables implementation processes, roles, and tools, as designed from above and communicated to every team. Every team member who works on a project must be brought to speed on what is required and the methods.
What makes an effective PMO?
An effective PMO is essential in ensuring the successful implementation and execution of projects. Top-performing PMOs often offer better guidelines for project completion. This means managing deadlines, meeting budgetary requirements and limits, and ensuring high-quality work upon completion. In other words, the most effective PMO performs its duty comprehensively to give better results at the end of the day.
An effective PMO must:
- Define the projects scope and objectives clearly
- Estimate project cost
- Constitute qualified team members
- Work effortlessly with suppliers
- Evaluate projects before, during, and after execution
- Prioritize high-return projects
- Collaborate with relevant departments
An effective PMO is a vital cog in organizational success.
Setting up a PMO
Knowing what a PMO is may not be sufficient if you do not know how to set it up properly. Setting up a PMO should be based on tactful decisions and treated as another organizational project. With that in mind, the process flow should pass through three phases; situation analysis, responding to the situation, and implementation.
You need a team with experience in change management. Additionally, the process requires an individual with a comprehensive understanding of the organization, the culture, and its objectives. Alternatively, you may have to work with departmental leaders when setting up a PMO. This inclusion helps in managing resistance and enhancing collaboration.
Situation Analysis
The first step involves analyzing the existing situation at the organization and the entire business environment. You may want to evaluate processes, methods, tools, and activities to determine shortcomings. Don’t just think about whether or not something’s working. Consider if there are better options or better tools that will cut down the workload or make things more efficient than they are. Additionally, you may also have to evaluate projects within the organization.
With the information from the analysis, you can devise a project management strategy that will improve the system. However, you need to be detailed in your analysis to ensure you capture every idea.
A complete situation analysis will help set project goals in line with company objectives. This is possible if you include all stakeholders in your evaluation.
Responding To The Situation – What does PMO Mean?
After analyzing the situation, you need to generate a plan that responds to your findings. The first step here is to define the objective and responsibilities. What role do you want the PMO to serve? How can it respond to the shortcomings you have identified?
Here is how you can tweak the PMO to serve its purpose:
- Training employees for the identified project
- Supporting activities and processes associated with the project
- Prioritizing best practices based on cost-benefit analysis
- Integrating PMO tools
The best idea is to start small and avoid overloading the PMO from the onset. You may want to stick to a single responsibility for improved productivity. Additionally, you should communicate with stakeholders to limit their requirements and align them with ongoing projects and objectives.
A PMO may be viewed as new development within the organization. This means it needs time to become commonplace. Additionally, expect a steep learning curve and help employees adapt accordingly.
Implementation of a PMO
Every project requires thoughtful project implementation. You need to take a step at a time while bringing in the infrastructure required to see it through. During this stage, your focus should be on change management and helping employees adapt to the new normal.
This stage requires effective communication at all levels to get everyone up to speed. Consider platforms that maximize participation and help disseminate information effectively. For instance, communicate to the employees about the project, the project team to see it through, the team leader, and its benefits.
Once the implementation phase is on all systems go, you need a performance metric to evaluate success. For instance, you will need ways to determine progress after every stage. How do you intend to measure performance? What would be the key performance indicators?
This is where you need to set standards and timeframes. Every deadline met or missed must be accounted for and explained to help improve overall execution.
Improving Your PMO’s Efficacy
We’ve covered how an organization’s PMO defines the standards by which projects are planned, executed, and measured, common themes and outcomes of your projects can be drawn and related to your PMO methodology.
For example, if one of your projects end up over budget, a fact-finding evaluation of that project should be executed at its conclusion to attempt to determine why. If _every_ project ends up dramatically over budget, this might indicate that the methodology used to predict a project’s cost is fundamentally flawed, thus requiring your PMO to evaluate their predictive tools and calculations at the source.
Part of the role of a PMO is to offer standardization so that variables are controlled across all projects. If issues on individual projects can be (accurately) attributed to the recommendations or guidelines of the PMO, then rectifying these issues at the source will remedy them on future projects across your organization.
Final thoughts on how to successfully set up a PMO
Now you know more about PMO in project management and how you can use it to improve project performance. Additionally, you have better knowledge of the importance of PMO in every organization and what makes an effective PMO.
This information should help you improve your organization by understanding clearly what does a PMO mean, how does one go about setting up a PMO and how does an organization successfully implement a PMO in a scaled and healthy fashion.
