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A Brief Introduction to Project Management Offices (PMO)

by the Freshminds team May 19, 2022
Brief Intro Pmo

Nike manages multiple collaborations with famous athletes every season, and AstraZeneca has fully integrated tech stacks, like Planisware, into its operations. 

But how do companies successfully execute these projects?

These projects have lots of moving parts, but a key element to their success is organisation. Essentially, these brands pull it off because they have dedicated Project Management Offices (PMOs) that act as the beating heart of their project pipeline, overseeing essential elements from collating reports to creating approval processes and managing entire portfolios.

They're not alone. 89% of companies now have at least one PMO, and 50% have more than one to help them juggle projects. 

Yet there is still some mystery about PMOs and their role in a company. If you're at a point where the project workload is getting a little too much for your PM, then it's time to look at why so many successful companies invest in PMOs to improve their operations. 

This piece will look at: 

  • What is PMO, and why is it important?

  • Understanding the different types of PMOs

  • 3 expert tips for setting your PMO up for success

What is PMO, and why is it important?

Project Management Offices (PMO) is a group of people in charge of maintaining and managing the standards and strategy of a project within a business. 

PMOs keep documents and processes organised and on track and ensure that projects are completed within scope, timeframes and budget. It can become a company's hub where expertise and guidance are provided for a project, and best practices are adhered to so every project delivered is done to the best of the team's ability. 

Apart from managing multiple projects at once, PMOs usually focus on project status reporting, maintaining portfolios, project management methodology and templates, facilitating project approval processes, providing expertise and helping teams learn from lessons so they can improve. 

screenshot of an image showing the activities carried out by PMOs

According to Wellingtone’s State of Project Management Report 2020, PMOs are involved in everything from approval processes to mentoring and resource management.

For many companies, especially smaller ones with restrictive budgets, PMOs may be looked at as an unnecessary expense. However, PMOs can become an invaluable investment when teams are juggling multiple projects, experiencing a period of growth or even onboarding new staff unfamiliar with processes and expectations. 

That's because a PMO: 

  • Lives and breathes project management processes.Ensuring goals and processes are aligned and adhered to is essential to successfully delivering a project. A PMO assists your team in communicating, following guidelines, and executing work using uniform practices. They're also in charge of choosing project management tools and software to help the team work efficiently. 

  • Picks projects that are a good fit.Not every project that comes into an organisation's pipeline is a good fit. It's a PMOs job to sift through them to ensure every project the team works on aligns with the company's processes, abilities and workload. 

  • Keeps projects on track.PMOs do more than tell teams to follow processes and guidelines. They also maintain budgets, train new employees and communicate with clients to keep projects on track and quality consistent. Ensures (and prioritises) transparency. Effective PMOs connect c-suite management with project managers. Keeping this line of communication open is key for alignment, collaboration and, most importantly—project success.

While these tasks sound similar to the role of a project manager, there are some important differences. 

Is a PMO and a PM the same thing?

A PM—project manager—is an individual that looks after and is responsible for, often singular, projects.

A PMO tackles many of the same tasks but on a much larger scale. PMOs control processes to ensure consistency across multiple projects and create internal documentation, so teams are working at the same level, even when there are dozens of people to manage. 

For this reason, PMOs are rarely managing single projects or even small project portfolios. Their job is to create and standardise project management workflows and processes to empower teams to work successfully without being micromanaged at every step. 

Understanding the different types of PMOs

No team or project is the same, so PMOs need to be flexible. 

While many organisations have adopted different theoretical frameworks for PMO types, a common way to differentiate them is by the degree of control, such as: 

  • Supportive: In this instance, the PMO offers more consultative support through resources, guidelines, lessons learnt and training. They typically don’t enforce any best practices and have a low level of control. 

  • Controlling: For companies that want to maintain a level of consistency across projects may opt for mid-level control. Here, support across documentation, processes, and procedures will be readily enforced, and the PMO will work directly with PMs, monitoring progress and offering reviews. 

  • Directive: Larger organisations may implement a directive PMO. This may involve professional project managers from within the office steering a particular project, which means projects remain highly uniform. 

It's easy to see how beneficial a PMO can be for any company, from smaller startups to well-established companies with existing processes. Before you start or even transform a PMO, it's best to think about what you want it to achieve and how that will fit into your existing organisation. 

Here are three top tips we recommend following.

4 expert tips for setting your PMO up for success

1. Pick methodologies and KPIs that align with your organisation.

Every project and company is different—your project management processes and Key Performance Indicators (KPIs) must match your organisation's goals. 

There are many more KPIs associated with the work PMOs undertake, so you need to choose the ones that will benefit your projects the most. Otherwise, you'll waste time and resources tracking redundant KPIs.

Some common KPIs to track are: 

  • Cost reduction: How the PMO has overseen the project's cost and managed to reduce costs by increasing efficiency, overhauling processes or onboarding new team members faster. For example, if a company wants to overhaul its technology infrastructure, PMOs can measure their success by how much they spend compared to how much productivity has improved.

  • Project successes:Not every project that enters a pipeline will be delivered on time—or at all. PMOs can track the number of projects they complete so the organisation can compare it to previous figures. Project success rates can be measured against periods (e.g. quarters or years) to see how much impact the PMO is having on overall completion rates.

  • Stakeholder satisfaction:This tracks how happy an organisation's stakeholders are with the PMO's progress. By surveying stakeholders, a company can get an accurate picture of whether or not they believe the PMO is having a positive impact on processes and workflows.

KPIs are also important for PMOs to communicate their value to an organisation. Tracking project completion rates, productivity, compliance and overall impact help PMOs show—with hard evidence—the impact they're making in the team. 

2. Ensure everyone is on the same page with project scope and processes

According to a report by PM Solutions, implementing new processes is the top challenge that PMOs face.

When an organisation hires a PMO, many report a resistance to change, which hurts their ability to improve or implement processes.

Overcoming these challenges isn't easy, but getting everyone on the same page is a great first step. PMOs should clearly communicate their expectations around scope, management processes and budgets before a team starts every new project. 

If everyone is working towards the same goal and understands what is expected of them during the project, PMOs can overcome resistance to change and demonstrate that new processes are better for productivity. 

3. Create clear processes for remote employees

With more organisations going remote (16% of companies globally are now fully-remote), PMOs must find ways to communicate expectations without in-person meetings. 

Companies have been steadily moving towards digital processes, and Gartner warned that PMOs would have to adjust their tools, staff competencies, processes and metrics to make the transformation successfully. These changes have been accelerated due to the COVID-19 pandemic, and PMOs must now grapple with potentially remote or hybrid teams and how to manage them. 

There may be good news for PMOs. With clear processes and frequent communication, some studies show that remote work can be more productive than office work. If managers check in with their team a couple of times a week—both fully-remote employees and hybrid staff—it has the potential to greatly impact engagement levels. 

A study by Gallup found that remote workers can be highly engaged with their work if managers give frequent communication and feedback.

PMOs can make the most of these opportunities to ensure that their teams are aligned with processes, goals and expectations to ensure that projects stay on track. 

4. Hire external support and get access to experts

Choosing to implement a PMO office can be a huge process; equally, adjusting a preexisting one requires gentle handling. 

There are ways to employ external support, like working with PMO consultants, to make the leap less daunting. If your PMO is in its infancy, PMO consultants are an ideal way to bring much-needed expertise in-house to help upskill existing team members without blowing your budget. 

PMO consultants give expert advice to help:

  • Set up new workflows or tools.Whether you are changing PPM software/tools or implementing project tracking or programme, portfolio and project management, a consultant can guide you through the process. 

  • Upskill and train. Whether it's training your team on new frameworks or upskilling them to use updated software like AI and machine learning, consultants help PMOs learn the foundations they need to manage modern workplaces. 

  • Align and prioritise goals. Successful projects happen when leaders and team members are on the same page. A PMO consultant can align your team and prioritise tasks and projects to ensure you hit your goals. 

Freshminds' expert team of PMO consultants can upskill existing team members and provide cross-organisational support and leadership to your business. Find out more about how Freshminds' PMO consultants can help grow your business here.  

PMOs can help organisations grow and consistently deliver

PMOs can be a critical part of any business that wants to deliver projects successfully; however, knowing when to implement one is crucial. 

Additionally, they are no longer a luxury used by Enterprise companies. They're becoming an essential part of any organisation looking to tighten up their processes, innovate employee engagement or develop project management frameworks that can scale. 

When companies invest in a PMO, they support sustainable growth, implement consistent processes, and successfully deliver more projects.
Explore how external expertise can be used by your team to support PMO functioning and creation.

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