There are almost as many varieties of project management offices (PMOs) as there are companies. For example, some companies rely on the PMO to be responsible for all areas of project management and project execution. Others want the PMO to provide a consolidated reporting view of all the projects in the organization.
Before you can start a PMO, you must define how it will function within the organization. A recent client was facing this dilemma. In our first few conversations, we talked about common project management processes, a training curriculum, coaching services, and a staff of four people. After a subsequent meeting with the sponsor, however, it became clear that the funding level and the sponsor commitment would only support a much more modest PMO implementation of one person. This might be supplemented with consulting services to make sure the project starts off on the right track.
Start creating your PMO through a formal organizational definition. The value of defining a logical organization is twofold. First, you gain clarity and agreement on what you are doing and why. This information is communicated to clients, stakeholders, and your own staff so that everyone starts with a common set of expectations.
Second, this exercise provides a framework for the PMO to guide decision-making in the future. For example, you wouldn’t want to undertake any projects that didn’t help you achieve your organizational objectives. Likewise, major decisions can be evaluated based on whether they fit into your strategy.
Building a logical organization
The following major components define your logical PMO. Many companies have the expertise to perform this definition by themselves. However, defining missions and strategies is something that most of us don’t do every day. That’s why consultants are brought in to assist. Some consultants specialize in these organization assessments. They can facilitate the definition process and make sure that the resulting logical organization provides a firm foundation for the subsequent staffing and project execution.
Mission: The mission describes what the PMO does, how it is done, and for whom. It’s a very general statement, usually aligning the PMO to the value it provides to the business. An example of a PMO mission statement is "The Acme Project Management Office (PMO) implements and supports project management methodology to enable our organization to deliver projects faster, cheaper, with higher quality, and within estimates and expectations."
Strategy: There may be many ways to achieve your mission. A strategy is a high-level set of directions that articulate how the organization will achieve its mission. Defining a strategy also helps get the PMO aligned in the same direction as strategies in the rest of the company. Strategy defines how you’ll do things over the long term, say three years, and is used as an overall framework for the more detailed tactical decisions that are made on a month-to-month and day-to-day basis.
Sponsor: All organizations don’t have a sponsor, but a PMO typically does. In this respect, a PMO is similar to a project and, in fact, many PMOs are established with a project. The sponsor is the person responsible for the PMO funding, and in many cases, the sponsor is the manager that the PMO reports to. Sponsors are important for all initiatives, but they’re absolutely critical for a culture change initiative.
Stakeholders: The stakeholders are the specific people or groups who have an interest or a partial stake in the products and services your PMO provides. Internal stakeholders could include organizations you work with but which are not directly under the PMO umbrella. External stakeholders could include suppliers, investors, community groups, and government organizations.
Clients: Clients are the main individuals or groups that request and use the products and services your organization provides. (These people may also be referred to as customers.) While there may be many stakeholders, it is important to recognize who the clients are. They should be the ones the PMO should focus on, to help them meet their project and business objectives.
Objectives: Objectives are concrete statements describing what the PMO is trying to achieve in the short term, perhaps up to one year. The objective should be written at a lower level, so that it can be evaluated at the conclusion of the end of the year, or the end of a major project, to see whether it was achieved. A well-worded objective will be specific, measurable, attainable/achievable, realistic, and timebound (SMART).
Products/Services: Products describe tangible items that the PMO produces, and they are typically produced as the result of a project. Services refer to work done for clients or stakeholders that doesn’t result in the creation of tangible deliverables. Services provide value by fulfilling the needs of others through contact and interaction. The PMO achieves its objectives through the creation of products and the delivery of services.
Transitional activities: Transitional activities are the specific activities and projects that are required to implement the physical PMO. If the PMO is new, these activities describe the work required to build and staff the new organization. This doesn’t imply the creation of a full workplan, but it includes the immediate activities required to get you to the point that the PMO workplan can be put into place.
There are other aspects of the organization that can be defined as well, including the PMO vision, principles, goals, skills, roles, and responsibilities.
A PMO isn’t established by chance. It’s established based on a need to help the organization in project management and project execution. However, there are many ways that a PMO can be established. The correct way for your company can be determined with an exercise to create a logical organization definition. When you have a consensus on the definition, the PMO has a much better chance of success and of meeting sponsor, client, and stakeholder expectations. Once the logical organization is approved, the staff can be put into place to build the physical organization.