What is a PMO? and Why Do Organisations Need One?
Project, Program, Portfolio. Product… Management Office – take your pick. The PMO is a function that is ultimately there to deliver two outcomes:
1) Improve the overall success of project and program delivery
2) Generate information for effective decision making
Organisations spend millions, sometimes billions, on projects and programs; these expensive investments are there for primarily three reasons:
– to create new outcomes and capability that drives the organisation forward in its strategic direction
– to put in place any new regulatory, compliance or legislative requirements across the organisation’s capability
– or to replace assets that are now ‘end of life and these assets are essential to the ongoing operations within the organisation
Depending on the types of projects and programs initiated by the organisation can rely on the type of PMO required. Is it a PMO designed for tracking individual projects, one that supports transformation programs, or one placed towards the organisation’s top looking across the portfolio of projects and programs.
These organisational investments are fraught with risk. The risk of going over budget, failing to deliver on time, and project implementation not generating the outcomes required to address the problem, purpose or opportunity.
This is why projects and programs are created as temporary organisation or teams within the organisation. They have their decision-making structures (governance), a team often made up of skills and resources from other business functions and suppliers, plus a segregated budget to be managed, all coordinated by a project or program manager.
The PMO is often a more stable function to support these temporary endeavours, offering expertise to help increase the success of a project or program delivery and generating information for effective decision-making.
Improving the Overall Success of Project and Program Delivery
Based on 60-plus years of project delivery knowledge, many methods, frameworks and methodologies are available to deliver projects and programs. The PMO starts with helping define the most appropriate delivery framework for the organisation and the type of projects to be delivered. Any method needs to be adapted to the organisation to ensure a ‘best fit’, whether language, terminology, financial processes, technology-enabled, organisational hierarchy or supplier arrangements.
The PMO collaborates with the project delivery community to create a framework and organisational capability across Planning, Controls, Governance, Information and Quality.
A capability is an outcome that the organisation can perform; it gives the business the power to do something. For this reason, the PMO’s primary driver is developing these organisational capabilities rather than services alone. That is not to say that PMOs don’t deliver services. However, it is the outcome that is more important than the act that is performed.
PMO Capabilities describe the functional building blocks that enable service delivery. These building blocks comprise processes, tools, skills, behaviours, people and assets. If any of these six capability areas are not fit for purpose, the desired outcomes are not achieved and the service will be sub-standard.
Once the five PMO Capabilities have been established and the services agreed upon, it is the PMO’s responsibility to ensure these capabilities are continually improved and evolve based on feedback, insight and analysis from the project/program delivery community. Identifying areas to improve is crucial to the ongoing development of improving overall project delivery.
Generate Information for Effective Decision Making
All PMOs must generate information for the ongoing project and program delivery progress. Taking various data points from the project’s performance, the PMOs aggregate and correlate this data to produce information for effective decision-making as the project progresses.
Such metrics and information should cover the scope of what is being delivered, including quality criteria, progress to the agreed plan, costs/budget including what has been spent and the remaining forecast, outcomes/benefits, resources, risks and issues to resolve.
Using the delivery framework, the PMO works with Project/Program Managers to establish a reporting cadence, aggregating multiple project/program reports into a dashboard. The PMO then offers insight and intelligent analysis to give others an understanding of what is happening across both individual projects and the broader delivery landscape. This information should be reviewed with options and recommendations, usually through some form of governance decision-making board attended by various stakeholders.