In the mid‐2000s, there was a major push in corporations to establish Project Management Offices with the goal of instilling much‐needed project management discipline in every department across the enterprise, but especially in IT groups. This trend was partly driven by the Sarbanes‐Oxley Act, but more often by the desire to define and standardize project management practices and facilitate project portfolio management, as well as determine methodologies for repeatable processes.
From an organizational perspective, a Project, Program, and Portfolio Management Office can be one of three types:
- Enterprise PMO (ePMO) – Spans multiple departments; integrates processes across business units.
- Departmental PMO – Typically established in Information Technology (IT) departments, but also found in marketing, R&D, and other department‐level organizations.
- Special–purpose PMO – Created for a single major project, or set of projects.
There is also a variety of governance and organizational structures. Some enterprises have PMOs that operate as a unique entity within their organizations, while other enterprises have some combination of multiple PMOs that are operating independently, are organizationally aligned, or are based on the division of PMO functional responsibilities.
What is the purpose of the PMO?
The basic definition of the PMO in a business or professional enterprise is a permanent organization tasked with one or more of the following objectives:
- Define and maintain the guidelines, policies, processes, and standard documentation around projects;
- Encourage and sustain repeatability related to project management;
- Provide central, coordinated management/oversight into the initiation and strategic planning of projects;
- Coordinate and develop project management training for continuous organizational improvement;
- Offer a broad range of services from budgeting, to product management, to direct project leadership, to support functions such as coaching, consulting, and marketing;
- Support the prioritization of strategic projects to ensure that the organization is working on initiatives aligned with strategic business goals; and,
- Provide oversight across the resource pool to support the assignment of resources to the highest prioritized initiatives.
Enterprise PMOs can have an even wider scope of responsibilities that includes all planned work and comprehensive resource management, including operations.
What are the challenges of the PMO?
Each of the business management services listed above is aimed at one goal: delivering the highest priority projects on time, on budget, and within scope. This is the first and most important challenge of the PMO, and the best measure of a PMO’s effectiveness. If projects are being delivered late or over budget or do not meet objectives, then the PMO has room for improvement.
Unfortunately, this is the case at most companies. According to the Standish Group’s most recent report, CHAOS Summary 2009, 32% of all IT projects succeed, which mean they were delivered on time, on budget, with required features and functions; 44% were challenged, which means they were late, over budget, and/or with less than the required features and functions; and 24% failed, which means they were cancelled prior to completion or delivered and never used.
One of the biggest determining factors in the success of a PMO is its relative level in accepted process maturity models (see below). As the PMO matures, its general effectiveness increases accordingly.
- Level 1 – Most business processes are informal or undefined;
- Level 2 – Most business processes are defined, but not well adopted;
- Level 3 – Most business processes are defined, repeatable, and followed;
- Level 4 – Most business processes are aligned and performance is measured; and,
- Level 5 – Most business processes are optimized and continually improved.
Maturity comes not only with time, but also with the ability to overcome a host of other challenges, which include but are not limited to:
- Insight into ongoing operations
- Ability to support methodologies
- Departmental silos
- Alignment with enterprise strategy and priorities
- Effective/on‐demand tools
- Determining requirements
- Financial management
MAKING THE PMO SUCCESSFUL
The PMO can successfully deliver on strategic initiatives, see the whole picture – and achieve more strategic results. For most companies, it begins with the realization that in addition to managing projects and methodology, the PMO must also manage resources that are shared across projects and sustaining operations.
In order to clarify demand on available resources and define and enable
prioritization, the PMO needs to be able to see the impact of sustaining
operations, as well as strategic projects, to understand total demands on resources, budgets, etc. This is impossible to achieve using a point tool like Microsoft Project Server®.
Key missing elements include resource management, which provides a full view into overall capacity for staffing projects and applications, even at the earliest planning stages. Also absent is request management to help the PMO prioritize and align with enterprise goals when projects are coming from all directions. Finally, time and financial management tools are needed to ensure that budgets are met and projects delivered on schedule.