Building a Project Management Office
In today's complex business environment new projects are constantly being developed as organisations seek new ways to reduce costs, improve processes, increase productivity, and build their bottom line. Managing these diverse projects along with their people, resources, technology, and communication is a difficult endeavour for which the risk of failure is often far too high. An effective solution, created to establish a more centralised management structure for large groups of projects, is the Project Management Office (PMO). The PMO provides organisations with an infrastructure of people, procedures, and tools to achieve effective project management by leveraging project management standards, allocating resources, establishing consistent performance measures, and reducing duplication of efforts.
There are many benefits to establishing an effective PMO. First, the PMO provides a framework for consistently managing projects through a standard methodology while ensuring the projects are aligned with corporate goals and strategies. Project managers have clear lines of responsibility while co-ordinating people, processes, and tools with one another and by doing so, avoid both gaps and overlaps between projects and reduce or eliminate duplication of effort. Standardisation and repeatability afford an organisation better communication, reduced project cost, improved resource management, more accountability, improved quality, better forecasting, and less overhead associated with project managers.
1. Enlist Executive and Management Support
The first step in establishing a PMO is gaining executive and management support. This step relies heavily on organisational change management (OCM) as it requires a potentially significant shift in organisational culture as well as roles and responsibilities. Regardless of the difficulties and resistance to change, this step is the foundation upon which a successful PMO must be built. As with any shift in organisational structure, policy, or procedure, favour must be gained through justification for the changes in terms of cost benefit and return on investment (ROI).
2. Determine the Structure and Build the Team
The next step in building a PMO is to determine the structure and develop the team. There is no defined template for PMO structure as every organisation brings its own variables to consider. Some manage all aspects of the projects assigned under them like scheduling, budgets, resourcing, human capital, oversight, and communication. Others may strictly co-ordinate these functions with most of the support coming from adjacent departments. The keys to determining the right structure and team members for the PMO are understanding the most effective way they can co-exist within the organisation and finding the right balance between the PMO, organisational culture, roles and responsibilities, and management style. Some things to consider in establishing the structure and building the PMO team include:
- Availability of resources.
- Existing project management standards and methodologies.
- Current roles and responsibilities.
- The politics of the organisation.
- Project size and volume.
- Current project management problems.
3. Develop and Document Standards
Once the structure and team members have been determined, it is time to develop and document the PMO standards, practices, and methodologies for project management. These standards will allow for consistency across the organisation and its portfolio of projects. They will also comprise a large portion of the training that projects managers and staff will receive in the next step. Standardisation is also an important part of allowing an organisation to compare various projects and allocate resources where and when they are necessary.
4. Identify Skills and Train the Staff
Once the development of project management standards and methodologies is complete, the PMO must identify the proficiency levels and skill sets of it project managers and staff in order to determine what training is necessary. Some of this information will be evident as a result of reviewing the statuses of current projects. Much of the training content can also be based on the standards, practices, and methodologies that were defined in step #3. The PMO should also establish an ongoing training programme. In a PMO it is inevitable that staff members will come and go and organisational standards will change and evolve. A training program will ensure that all new employees receive training on those standards and existing employees remain aware of any changes.
5. Measure Success and Continuously Improve
Now that the PMO structure is finalised, project management standards are established and communicated, and personnel are trained, the focus of the PMO must shift to assessing and measuring success. This point in time marks the initiation of progress and performance reporting based on standardised tools, templates, and methodologies. However, it also marks the beginning of a continuous process improvement cycle and a transition from PMO deployment to operational sustainment. As the PMO evolves, project team members must maintain an awareness of the metrics by which their projects are measured as well as how process effectiveness is determined. There must be a concerted effort to identify processes which require improvement. Once identified, improvement measures must be developed and implemented.
The establishment of an effective PMO is beneficial to any organisation which manages a portfolio of projects. When planning and building a PMO it is imperative that it is done in a manner which compliments the existing structure of the organisation. This will allow the company to gain maximum benefit and to do otherwise would be counter-productive. Since every organisation is different, the optimal structure for the PMO must be designed based on many considerations and variables. The ability of a PMO to manage projects through consistent and repeatable standards and methodologies brings many benefits. It provides the organisation with accountability, continuity, simplified oversight, and the ability to measure project success more effectively. An effective PMO is a catalyst for greater efficiency as it allows an organisation to do more quality work with fewer resources and less risk. The result of these benefits is an organisation that will significantly improve its project success rate.
Mark Piscopo is the founder of ProjectManagementDocs.com, a website dedicated to advancing project management through the distribution of free project management tools, templates and educational material. Visit www.ProjectManagementDocs.com to download free PMBOK based project management templates, tools and educational articles.
Key Steps to Implement a Project Management Office
Launching a PMO is just like any other organisational change project and should be approached as such using the 5 key steps outlined in this article.
Managing Change Successfully: Six Layers of Resistance
Why is there resistance to change? Are people just naturally perverse, or are there concerns which if understood and correctly dealt with will create the buy-in required.
The Successful Project Management Office
The varieties of Project Management Office (PMO) models seem endless and there is no guarantee of success with any of them. So what makes a PMO successful?
Project Portfolio Management: Managing the Project Pipeline
For most organisations the demand for new projects will occasionally outweigh the capacity to do them. So how do you decide when faced with too many projects, which stay and which go?
Common Cost Management Mistakes:
- Not understanding what is involved to complete an item of work.
- Starting with an amount of money and making the project cost fit it.
- Assigning people at more than 80% utilisation.
- Failing to build in contingency.
- Providing estimates under pressure in project meetings.
Discover our forum where you can ask questions, get advice from other people and share your experience.