Setting up a Project

Management Office (PMO)

The reference guide for yourorganization

by Hussain Bandukwala

May 2014

Objectives

o What is a PMO?

o Why Would You Need a PMO?

o Components of a PMO

o Functional

o Structural

o Disciplinary

o Characteristics of PMO Maturity

o Where is Your PMO?

o Setup & Evolution of a PMO

o Key Takeaways & Considerations

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What is a PMO?

A Project Management Office (PMO) is an entity

within an organization that sets standards, provides

governance, enforces accountability, and establishes

discipline to manage (a collection of) projects in an

objective and consistent manner.

Its mandate typically includes serving as a partner to

other organizational units, and creating a

communication and decision-making platform that

results in organization-wide efficiencies and synergies.

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Why Would You Need a PMO?

o Deliver projects with predictable consistency, efficiency and success

o Provide transparent status and financial reporting to executive leadership

o Establish foundation for managing organizational portfolio effectively

o Alignment of investment to organizational strategy

o Improve stakeholder satisfaction

o Improve employee productivity

o Implement standard practices

o Long-term cost savings through improved resource management, limited project failures and effective execution of high return on investment (ROI)

initiatives

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The following are the key benefits of PMOs that their organizations have

experienced:

Components of a PMO

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Standards

Governance

Strategy

Delivery

Tools

Communicate Resources

Execute Change

1. Functional 2. Structural 3. Disciplinary

These components are different facets of the PMO;

they are inter-dependent and the effectiveness of the

PMO relies on them

Components of a PMO – Functional

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The first component of a PMO is its

function, role or scope within the

organization

o The PMO could be a standards setting

entity, a governance controlling body,

a delivery management unit, and a

strategic partner to other entities within the organization

o This progressive order is necessary;

governance cannot exist without

standards, and efficient delivery

cannot be implemented without

diligent oversight

o The strategic component of the PMO

entails the management of a

collection of projects (program or

portfolio), driven and prioritized by the

organization’s overarching business

strategy

Business Strategy

Portfolio Management

Program Management

Project Management

1.

Standards

2. Governance

4. Strategy

3. Delivery

Work / Project Intake Gating & Prioritization

Components of a PMO – Structural

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Tools

o The PMO must tailor its tools based on the availability of technology and the knowledge of its users

o These tools should a) incorporate the disciplines that the PMO is working with, b) capture the

required information accurately and keep it current easily, and c) provide reporting mechanisms

for effective executive decision-making

o The tools can range from Microsoft Office templates to stand-alone task-management software to

state-of-the-art Project Portfolio Management (PPM) applications – process optimization should be

the primary focus, automation can follow

o The processes that govern the PMO are

based on the disciplines it engages (e.g.

scope and risk management)

o These processes should be practical,

adaptable, and be based on buy-in from

relevant business areas of the

organization

o The people of the PMO are its leadership

and its own personnel (portfolio /

program / project managers, project

coordinators and in some cases, business

analysts)

o They need to be strategic thinkers,

nimble, driven, objective, well-versed in

project management methodologies

and tools, comfortable in chaos, and

confident in executive presence

The second component of a PMO is its structure or foundation – the

quality of this foundation forms the basis of a formidable PMO

Components of a PMO – Disciplinary

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The third component of a PMO is the extensiveness of the project

management related disciplines it covers

Tackling issues, staying on track, and

preparing stakeholders for change

are all part of project realization

Resources are the drivers and the

enablers for project execution

Reporting & Metrics

On-time and on-budget are the

primary indicators for measuring

project success

360○ communication to relevant

partners is the crux of strong project

management

Communication Management

Resource Management

ExecutionManagement

Change Management

Stakeholder Management

Asset (Hardware / Software) Management

Personnel / Staff Management

Vendor / Contract Management

Deliverables Management

Financial Management

Critical Path Management

Scope Management

Risks / Issues Management

Training / Knowledge Management

Characteristics of PMO Maturity

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Functional Structural Disciplinary

Na

sce

nt

o PMO is non-existent or its role is

unclear and/or limited within the

organization

o Processes across disciplines are ad-

hoc and cross-department synergies

are uncommon

o Basic project scheduling in place in

conjunction with stakeholder

reporting

o Limited or no cohesiveness exists

amongst managers; actions are

based on individual priorities

o Standard project management

disciplines are not defined or not

practiced comprehensively

o Large initiatives are sourced to

vendors

o Project costs are approximated and

benefits reporting are intermittent and

inconsistent

Est

ab

lish

ed

o PMO is established and its role is

defined, at least at the responsibility

of a delivery management body

(which also encompasses its function

as a standards setting and

governance controlling unit)

o Projects are recognized as formal

entities and similar projects are

collectively managed as programs

o Schedule tracking and reporting

dashboard software is in place

o PMO resources are formally trained in

tools and methodologies; they

function and report collaboratively

o Project management disciplines are

defined and executed per industry

standards

o The disciplines are leveraged for

delivering projects on-time and on-

budget

o Vendors are involved with execution

and more accountability is placed on

PMO resources

o Project costs and benefits are viewed

at both the project and program

level; they are captured and

forecasted within prescribed degrees

of confidence

Op

tim

ize

d

o The impact of the PMO includes both

IT and Business and is a recognized

partner for the establishment,

prioritization and management of the

organization’s portfolio

o Processes are managed in real-time

and departments work

collaboratively

o Single, integrated PPM tool is used

across the organization

o PMO resources are encouraged to

continuously improve their skills and

resources with varying experience

and visibility exist within the PMO

o Project costs and benefits are

managed at a portfolio level

o Annual budgets are created based

on organizational goals and priorities

Where is Your PMO?

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Nascent Optimized

Co

mp

reh

en

sive

Lim

ite

d

Imp

ac

t o

n O

rga

niz

atio

n

PMO Maturity

Is it here?

Can you identify where your PMO resides on its evolution graph?

Setup & Evolution of a PMO

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Key phases and steps to establish and evolve a PMO are outlined below

o Prioritize the structural

and disciplinary setup

of the PMO

o Create 30-60-90-180-

360 day targets

o Identify and

implement PMO

pilot(s)

o Incorporate lessons

learned from pilot(s)

into full PMO roll-out

o Conduct road-show

across the

organization to

demonstrate the

PMO’s processes and

benefits

o Evaluate the PMO’s

performance metrics

and solicit qualitative

feedback from key

stakeholders

periodically

o Launch action to

include feedback and

facilitate PMO

evolution

o Generate and share

PMO progress report to

key stakeholders

o Make business case to

motivate organization

to achieve the next

level of PMO maturity,

focus, or area of

impact

o Understand the current

state of the PMO and

the organization within

which it resides

o Determine strengths,

weaknesses, gaps and

consequently place

the PMO within the

appropriate maturity

level (nascent,

established, optimized)

o Put the organization

under the lens and

assess its focus on

processes, cross-

department synergies,

decision-making

maturity, and

technology orientation

o Define target state for

the PMO based on

executive sponsorship

and organization

adaptability – the

PMO evolvement is

directly proportional to

that of its organization

o Carve out the scope

of the PMO in terms of

its role, target business

areas and geographic

locations, and the

nature of projects it

must address

o Specify metrics and

qualitative indicators

to gauge the

performance of the

PMO

Phase IV:

Strive for Continuous

Improvement

Phase III:

Define Roadmap &

Implement

Phase II:

Establish Target State

Phase I:

Assess Maturity

Approach

I II III IV

Key Takeaways & Considerations

o The PMO must align itself to the key drivers of the organization, and update this alignment as the organization shifts its strategies

o The PMO can grow and evolve to the extent of its organization’s acceptance; this is something that the PMO leadership must actively work on and continuously showcase the PMO’s value to the organization

o The true success of a PMO cannot be measured quantitatively alone – key qualitative

assessment is imperative in demonstrating the benefits of the PMO to its organization

o There is no “one size fits all” or “silver bullet recipe” in the setup of a PMO; the guidelines and principles exist for reference however, each PMO will have its own journey

o Think big, start small – begin with a focus on pilots and communities of practice

o Differentiate and pay attention to two key areas separately: “doing things right” and

“doing the right things” – the former is about creating standards and applying the proper governance while the latter entails setting priorities based on the needs and benefits of the organization

o The PMO is as good as its personnel; the focus on people and processes must be paramount – encourage your people to improve their skills, and recognize their needs to be mentored and challenged

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Thank You

o Consulting inquiries?

o Suggestions?

o Contact Hussain Bandukwala

o bandukwala@gmail.com

o +1.647.707.9841

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