Here’s everything you need to know to set up a project management group in your organization.  I have included links to several free tools–spreadsheet, sample business case document, and PowerPoint slides–to help you.


So here’s the interesting thing about good project management: Things get done, on time, within budget, and meet or exceed the expectations of the business. Project management is a key skill any CIO needs. But you can’t manage all projects and run the IT organization at the same time. As a CIO in a Small or Medium-Sized Business (SMB), you will likely have to manage some, but your best bet is to create a project management group.But this project management group does more than just manage projects. This group is responsible for the company’s IT Project Portfolio Management process. A company’s portfolio of projects should reflect the goals of the company. This is a key process for ensuring that IT is aligned with the business. There are a ton of definitions on project portfolio management out there, but this practice serves two main purposes.

  1. Aligning IT with the business
  2. Demonstrating the value of IT in the enterprise

Aside from the two main benefits, there are a ton of other minor benefits you get. But by focusing on these two, you are approaching things from the root cause/benefit perspective and the rest will just come.

I developed my own methodology taking bits and pieces from various trade magazine articles and books on the subject and then hybrid-ized it for SMBs. That said, specific attribution cannot be recalled, but a lot of the basics came from CIO Magazine.

There are several steps to creating the PMO:

  1. Project Management needs to be viewed as essential. A simple math exercise demonstrating the benefits of Project Management should satisfy the management team. If project management is not employed at your company, then I would bet that the number of failed projects is very high. (Failed project functional definition: Project was behind schedule, over budget and/or did not meet expectations) How much has this cost the company? Missed revenue because of delays or cost overruns or delivering a project that is never used…
  2. Centralize all of your IT projects. For a description of why you should do this, see the piece called “Why you should centralize your IT projects.”
  3. Project alignment is the next step. Many companies break things down between operational “keep the lights on” projects and strategic projects. I actually use four classifications: infrastructure, transactional, informational, and strategic. For an indepth look at these classifications and how the exercise works, see Use these four classifications to align projects in your company.
  4. Project prioritization is the next step. You now have all your projects in a central repository. You have the estimated cost, the estimated benefit, the resource requirements, time frame for delivery, time frame for business case realization, etc. Now you have to sit down with management to prioritize the projects. For how to do this and what elements you should include in the process, see How to prioritize your organization’s projects.
  5. Over Communicate: Come up with an easy-to-read dashboard spreadsheet denoting all of the active projects with their status and any changes to scope, schedule or budget. In the next section, have the on-deck projects in order of priority. Finally, have all of the new projects to be reviewed. There should be hyperlinks to business case documents (here’s a sample of a business case document.) so everyone can review the projects. If there are a lot of projects that have to be reviewed, weekly meetings/conference calls should be conducted for the VP/director team until the list is prioritized with reasons for the prioritization.

A word on business case documentation

The level of detail required varies by company. Some will get funded because the idea sounds too good to pass up. Others may require a 5-year pro forma.

The frequency of meetings should be established upfront. Both management teams need to understand that come budget time, attention and time will need to be given to this process. After the initial rush of new projects, monthly or even quarterly update meetings should be held with both teams. I suggest having the VP/director meetings at least two weeks prior to the executive team meeting to allow for distribution of prioritization artifacts to be reviewed by the executive team prior to the meeting.

So what do you know?

You have visibility into the entire portfolio of projects. Even better, the entire management team has that same visibility. They know that one off requests to absorb a project resource will cause project delays and carry with it, inherent accountability. IT is fully aligned with the strategic goals of the company. You have an efficient vehicle for capital budgeting. At one company, this process became THE capital budgeting process. You have justification for project resources and general agreement that good project management will help the company and not hinder it.

One side effect of this process is that it may turn out to be not just an IT process. This is a very good thing. Now IT is taken into account with every other capital budget item. These departments will all have to go through the prioritization exercises and everyone will understand how their individual department or even their individual job will contribute to driving the company forward. Bottom line… if this happens, let it. Embrace it. It’s a good thing.