By Ted Stephens
Among corporate IT executives, there is a growing consciousness of the need for a project management office (PMO) to provide project management guidance to the organization. Too often, IT organizations tend to choose between the extremes of two PMO models: one emphasizing a support role and one emphasizing a supervisory role. In fact, the two functions are not mutually exclusive, and the ideal model combines the best of both.
Company X added a PMO to its IT organization and gave it a support role. Creativity flourished as PMO staff helped stimulate the development of many new projects. However, there was little control; projects sprang up everywhere, each developing a life of its own. When the company's overall business objectives changed, the projects continued regardless of whether or not they were in line with the company's new directions. Millions of dollars were spent on projects that were obsolete or marginal to the company's evolving needs.
Company Y took a different approach. To ensure that the project portfolio aligned with overall goals, the PMO was tied to the CIO's office and empowered to supervise and coordinate projects across the organization. All projects costing more than $1,000 had to go through an approval process. As a result, projects were slow to start with many small projects taking longer to approve than carry out. The organization's staff felt their creativity stifled by bureaucratic hurdles.
Company X and Company Y's approaches represent two attempts to employ PMOs. Each model has its strengths and weaknesses, but once a PMO develops along one line or the other, there is a tendency to resist change. Company X's model is often adopted by organizations as the initial step in developing a PMO because it costs less to implement and tends not to rock the boat.
How it works
According to this model, the PMO functions primarily in a support role instilling project-management skills into the organization. PMO staff are cast in a mentor relationships vis à vis existing project managers (PMs). For example, they might train PMs in the organization in a common methodology or process. Another role for the PMO is to provide the tools, templates & training PMs need to do their work. The PMO might develop software tools for specific tasks, as well as standard documents such as a project charter or project plan that is uniform across the organization. In addition, the PMO staff can be a backup source for groups in need of help with project management, particularly in cases where there is trouble in the PM ranks.
The PMO as a support group really plays a distributive role within the IT organization. It's not a governance force, since it has little or no control over which projects are funded, and no authority to ensure projects align with business needs.
PMO staff typically cannot compel project managers to accept their guidance. For example, they cannot force user groups to adopt a common methodology; they can only encourage them to do so. A particular PM or department can ignore the PMO's advice—especially if the group has been successful in the past—and continue its existing operations without change.
The centralized model: The PMO in a supervisory role
Company Y's model is sometimes adopted after projects and budgets have gotten out of hand. PMO staff are given a supervisory role, with budgetary authority to determine which projects get funded and which do not. Project managers, instead of being attached to operational divisions, may be directly on the staff of the PMO and lent out to working groups on a project-specific basis. The PMO may even control who gets assigned to which projects. This centralized PMO compensates for some of the problems inherent in a strictly supportive role. The PMO can impose greater discipline on the choice of projects and how they are carried out. Use of standard methodologies, processes, templates, and tools can be enforced. The PMO can decide when to terminate a project that isn't delivering. In short, the PMO plays a strong role in project governance.
Tighter alignment with goals
Such a strong role enables the PMO to ensure that projects are tied to business goals. For example, if the company's goal is to increase sales by ten percent, then the PMO can decide that only projects aimed at developing enhanced sales tools will be supported. Company X's managers might be able to ignore the implications of such a policy because they control the funding for their teams' projects, but Company Y's managers have no choice but to adjust to the PMO's demands.
Company Y's centralized PMO model works only within a highly structured environment, and to superimpose it upon a decentralized organization is to invite trouble. Taking away managers' authority and imposing decisions from above will produce culture clash and provoke resistance. Red tape in the approval process can throttle innovation throughout the firm since people accustomed to a degree of autonomy don't want the hassle of filling out forms and waiting for approval.
The facilitating model: PMO in a consulting role
How can a project management office encourage innovation and still make it possible to recognize and shut down failing projects? We believe the best model is one in which the PMO takes a facilitating role, working to bring business planners and IT together for joint decisions governing project investments. Project managers need to be given a shared sense of ownership and encouraged to see the need for prioritization in terms of overall business goals. The PMO can serve to facilitate this process. The PMO might also become a change agent, identifying opportunities for change within the organization, determining the best approaches, and introducing the changes to the community. One PMO task should be to look outside the organization and identify other companies' ideas and best practices that can be applied. The PMO can communicate new ways of thinking, introduce new tools and processes, refine evaluative metrics, and work to constantly establish a new baseline of performance.
The PMO should also play a crucial role in knowledge management (KM), effectively becoming the organization's memory by keeping records of projects, i.e., what works and what doesn't, the steps through which certain processes must pass, and so on. Too often, different parts of an organization are unaware of what has been done by others, and new staff have no knowledge of what has gone before. Effective KM ensures that valuable lessons are retained and passed on to others.
The PMO's role should entail both mentoring and supervising. The PMO should be a trusted adviser, a function that the company can call on to define goals or affect change. It should be able to serve as an interface between a company's business units and its IT department—there to soothe the sometimes antagonistic relations between them.
The PMO must be able to supervise processes without dictating them. Ideally, the PMO puts controls in place and monitors them in a consultative fashion. Such a task requires considerable people skills. Reason and persuasion, rather than carrots and sticks, are the tools most needed by PMO staff.
Ted Stephens is an Associate Principal at Intellilink Solutions, Inc.—a boutique consulting firm specializing in knowledge worker automation.