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"Another department? Is that really necessary?“ is what most colleagues and decision makers ask when it comes to the introduction of a Project Management Office (PMO). In many organizations, PMOs first fight for their raison d’être, and then for acceptance. Stakeholders often consider the PMO to be “unnecessary effort” and “a waste of resources” or are unsure about yet another party getting mixed up in projects. Bottom line: the benefits of a PMO often go unrecognized. We, however, have a completely different opinion!
In larger organizations with an increasing number of projects and increasing project complexity, there are many good reasons for the introduction of a PMO. Ultimately, there needs to be someone in the organization that has an overview of all processes, changes, conflicts and risks, and can prepare decisions. So who is taking care of the big picture? A well-situated PMO ultimately makes sure that an organization is in the position to make decisions – regardless of how complex or dynamic everything is. A PMO has the bird’s eye view: they have the right data, tool and processes to efficiently prepare decisions around projects and capacities.
In this blogpost about the concept of “Project Management Office”, we’ll look at exactly what a PMO does and what benefits it can bring based on how it is anchored in an organization and how you can best introduce a PMO. Now to start, let’s ask the question: “What is a PMO – and why do I need it?”
There is not one overarching definition of the term “PMO”. Every PMO is different, and has totally different powers, responsibilities and focuses – all dependent on the organization. Generally, a PMO is a permanent organizational unit that is responsible for the centralized and coordinated management of all projects. This sounds pretty abstract at first, but should be clarified when we take a look at possible tasks a PMO could perform. These can be many-fold, just like a PMO itself. Very often the tasks include the planning of a project portfolio, resource planning on the portfolio level, the development of project standards and project management strategies, training people on projects and the supervision and support of single projects.
Generally, a PMO has an overview of projects, know the business strategy and makes sure that these two go hand in hand. The specific applications of a PMO can vary greatly from company to company. “Classic” PMO tasks don’t really exist, but many possibilities are listed here:
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Provided that your project management office is run by the right people, has a sufficient budget and recognition and is aware of its concrete tasks and powers, the introduction of a PMO can only have a positive effect on your project landscape. We consider the following to number among the upsides (among others):
In summary, this means that with a PMO, you can bring projects to fruition that truly align with your organization's goals. You can implement these projects under cost and with the available resource capacity with the help of a PMO. This means that the cost per project sinks, and fewer projects flounder. Sounds good, right?
The first part of this blog post familiarized you with the possible activities and positives of a PMO. Now, you may be asking yourself where the PMO is best situated in an organizational hierarchy, and how could it fit into your situation? Read on to find out!
In the past, many PMOs have supported themselves with rigid structures and complex processes. However, now we understand that there is no one-size-fits-all approach, and simplicity wins. In order to be able to react to influencing factors in an agile manner, PMOs have to adapt to the company's needs. Although no two PMOs are exactly the same, they all have the same purpose: the realization of business strategy through planning- the prioritization and management of projects. This is done, in most cases quite traditionally, through the process of project portfolio management, or PPM.
As the strategic tasks of a PMO increase in the project management landscape, PMOs usually situate themselves on the same level as operational planning, and directly below management. The proximity to management makes sense – the PMO ultimately primately implements the company's strategies and goals as derived from the vision and mission, thus building the central hub between company management and everyone else. (Source: PMI)
Good PMOs understand that it's not about implementing as many projects as possible. It's about implementing the projects that will move the organization forward. In order to be able to deliver results now, we cannot avoid a process. Our experience has shown that this process doesn't need to be complicated. Finally, so that PMOs can implement corporate strategy in dynamic times, they must be able to act quickly and efficiently. These are two things that cannot be achieved with lengthy processes. For this reason, we've developed Lean Project Portfolio Management (Lean PPM) for PMOs.
Lean PPM is a framework to deliver reliable results and to help you achieve more agility, speed and success with your decisions. Yet, Lean PPM is limited to just the essentials. It's always about the big picture. The goal is the ability to keep up with dynamic changes to the market, and not to create abstract annual plans that suddenly don't make sense by Q2. The PMO process is divided into four continuously running phases in Lean PPM:
In the four phases of Lean PPM, employees on all levels of an organization, both in and outside of the PMO, participate. While Lean PPM makes use of a host of roles, some are central to operations:
Although a PMO can't function without processes, this doesn't mean that more processes are automatically better. The ability to make decisions faster with Lean PPM allows organizations to take advantage of new opportunities, and avoid pitfalls when adapting to changing market conditions before it's too late. Regardless of if your PMO is well-established, or if you're only thinking about introducing a PMO in your business now, hopefully, this has given you a good overview of how a PMO and its roles in an organization can function. If you would like to learn more about Lean PPM, we recommend our Lean PPM Templates.
We've helped countless businesses introduce a PMO or Lean PPM. Our consultants are ready to discuss your use case.
Maybe you've been convinced by the first two parts of this blogpost that a PMO has its advantages. Maybe your PMO is already staffed, tasked, and has even had its first eventful weeks of work.
However, how can you establish your PMO for the long term in your organization? How can you ensure that everyone accepts your PMO?
If your PMO is able to achieve a few quick wins at the beginning, you can generate enthusiasm. Employees and stakeholders are open to the PMO and now firmly believe that, from now on, everything will be better. This is because someone is finally thinking about long-overlooked tasks. Quick wins help immensely in the initial phases so that the PMO is not met with skepticism, or worse - rejection.
Quick Wins for PMOs Can Be:
However, don't focus solely on the goal of scoring some quick wins. A PMO should try to achieve a sustainable value for the organization, which requires extensive change management.
PMOs have the reputation of being a department for micromanagement. Additionally, the idea that PMOs tell employees what to do and how to do it has become more and more entrenched. Of course, that is totally unfounded. In reality, successful PMOs only have one goal: to help employees. Of course, PMOs have many other jobs and responsibilities. However, at its core, a PMO is supposed to ensure the success of the company by supporting projects and employees. When the PMO is viewed in this light, employees won't be distrustful of the PMO, and will instead actually ask for its help and support. So, stay strong and clearly communicate the goal of your PMO.
Many organizations make the mistake of building a large PMO from the start. Our experience has shown us that succesful PMOs that become permanent usually start out small - for example in a department or at a specific branch. When you start small, the PMO can more flexibly adapt to the demands of the organization. Maybe your company first needs help with resource planning and needs less of a focus on the project intake process? Or maybe your teams complete projects successfully, but these projects aren't aligned with the organizational strategy? When you can adapt the PMO at your organization, you yield better results.
Now you can see that it's not possible to successfully introduce PMO overnight. However, keeping things lean and as simple as possible in the beginning will enable you to overcome hurdles. There is no question that the upcoming changes are worth the improvement of your project management landscape in the long run.
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