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 downside

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.

The downside

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.

Wrapping up

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.