What Is a PMO?
If you are just learning about project portfolio management, you may have heard the term PMO. PMO stands for Project Management Office. Now that you know what PMO stands for, you're probably still wondering: what is a PMO? While specific functions and responsibilities may vary by company, in general, a PMO is a group or department within an organization that is responsible for the centralized and coordinated management of all projects. In the past, it was common for a PMO to define and standardize project management processes. While many PMOs still take on that task, modern PMOs often own the project portfolio management process. This means they help management determine which projects should be done when and by whom.
In this first post of our four-part series about the Project Management Office, we will look at what a PMO actually does and what benefits it brings. Stay tuned for the following blog posts in the series where we will discuss how the PMO is anchored in the company, how you can best implement a PMO and how to measure its success.
What Exactly Does a PMO Do?
A successful PMO understands the company's strategy and maintains a clear overview of all current work and projects. They then ensure that current and future projects are aligned with the strategy. Ultimately, they work with senior management to make sure that the right work is being done as efficiently as possible to accelerate the business. PMOs are typically responsible for the following tasks:
- Managing the project portfolio by classifying and prioritizing projects based on corporate strategy
- Creating proposals or plan alternatives to facilitate decision-making for the portfolio board
- Planning and optimizing the use of resources at the portfolio-level and solving resource conflicts
- Maintaining current employee data as it relates to capacity, project allocations and skills
- Increasing transparency of current and planned projects through up-to-date, reliable project data
- Promoting information flow and communication
- Monitoring project progress and dependencies that affect resources, budgets, and schedules
- Standardizing project management methods and processes
- Providing administrative and operational support for project managers and project teams
Benefits of a PMO
If you are considering setting up a PMO, you may be wondering if your company really needs another department. It may be difficult to get buy-in and approval to set up a PMO. Some stakeholders worry that having a PMO will initiate too many processes and procedures that will slow things down. It doesn't have to be that complicated, and there are many benefits that you can share with your organization when making the decision to build a PMO.
These benefits include:
- A team dedicated to multi-project management and keeping track of all of the processes, changes, conflicts, risks and decisions
- A successful project portfolio that focuses on resource availability and corporate strategy
- The ability to adapt and offer plan alternatives when disruptions occur
- Freeing up time and energy, so project managers and project teams can concentrate on executing and delivering more projects
- Increased project efficiency and quality while reducing project risk
- Improved communication across projects and across the entire organization
- Effective transfer of knowledge, applying best practices and minimizing errors
A successful PMO ensures your company is working on the right things by prioritizing work based on corporate strategy. It also enables the transparency of important data including employing capacity and availability. This ensures the right projects are implemented within budget without overburdening employees. The cost per project then decreases and fewer projects fail, which, in turn, improves customer satisfaction. The value of high-functioning PMOs has been confirmed by organizations around the world. Setting up a PMO doesn't have to be complex. In fact, we offer multiple resources that give you the information you need to set up a lean PMO quickly.
A Tool For PMOs
You may be convinced of the value of a PMO, but don't forget that all successful PMOs need powerful tools. Meisterplan is a lean project portfolio management tool that makes a PMO's job easier. It provides real-time scenario planning, easy resource allocation, and clear visuals into your project portfolio. If you would like to learn for yourself why PMOs love Meisterplan, sign up for a free 30 day trial.