Your team is always working through different projects and your average day feels like a juggling act. The work eventually gets checked off the to-do list, but you can admit that the process isn’t streamlined.
You don’t have a predictable, repeatable way of getting projects across the finish line. Communication between different teams is often scattered. Important messages get missed and deadlines get pushed. You start each project from scratch and make up the rules as you go along. It’s inefficient, ineffective, and causing loads of confusion.
Sound familiar? If so, rest assured that you aren’t alone in this willy-nilly approach. According to Project Management Institute’s 2018 Pulse of the Profession survey, 42% of organizations don’t understand the value of project management.
Unfortunately, failing to prioritize effective project management practices can lead to a waste in time, effort, and money. That same survey from the Project Management Institute found that organizations that undervalue project management report that a whopping 50% of their projects fail outright. That’s half of their projects that aren’t satisfying the goals that were originally established.
Put simply, companies who fail to invest in appropriate project management are filling up a bucket with a hole in the bottom. The good news is that there’s a solution: a project management office (PMO).
What Exactly Is a Project Management Office (PMO)?
A Project Management Office can be internal (made up of some of your own team members) or external (such as a hired agency or consulting firm that steps in and advises on project management matters).
“It’s a function that helps businesses understand the change that is going on across various teams, and ensures that the right projects are done at the right time, by the right people, to get the best results for the company,” explains Elizabeth Harrin, Director of GirlsGuidetoPM.com.
A PMO can take different forms, depending on what your organization needs. “[There are PMOs] that are responsible for [everything from] building project management organizations to leading strategic initiatives to providing project governance and investment management for the enterprise,” says Alan Zucker, Founding Principal of Project Management Essentials, LLC.
As an article for CIO explains, PMOs can be separated into three general types: Supportive, Controlling, and Directive.
- Supportive PMO: Offers guidance and assistance as needed. Doesn’t take a dominant approach by inserting themselves into projects or offering unsolicited advice. Instead, this type of PMO serves as a resource and partner that people can lean on when they want.
- Controlling PMO: Exercises a certain level of control in overseeing projects by providing things like templates, procedures, and reports. While the PMO does have a finger in the pie, it doesn’t grab the reins and assert total control over the project. This is the most common type of PMO.
- Directive PMO: Quite literally directs and controls the project. There isn’t any flexibility about following procedures and other requirements that the PMO has outlined. Think of this as the “my way or the highway” type of PMO.
Exactly what type of PMO a company uses will vary based on their projects and the level of support and consistency they require. A government agency or other highly-regulated organization, for example, will probably lean more toward a Directive PMO that can ensure all of the right boxes are being checked.
What Are the Main Responsibilities of a PMO?
While a PMO’s responsibility set can vary, there are a few nuts and bolts responsibilities that usually remain consistent across different types of PMOs. As Project Management Institute explains in their 2012 paper on PMOs, a strategic PMO has the authority to:
- Align a portfolio of programs and projects to business strategy
- Customize program and project management practices
- Enhance governance and accountability
- Optimize the investment of the portfolio of programs and projects
- Manage talent
- Ensure stakeholder buy-in
- Drive needed change
- Proactively navigate risk
Essentially, picture a PMO as the driver of your company’s projects. They take care of all of the groundwork and management—from sharing resources across teams to establishing best practices and standards—so that the rest of your team can focus on what really matters: doing the work.
“PMOs allow project management experts to manage projects, and that allows the people within the business to focus on their own areas of responsibility within each project,” says Marcos Clowes, Chartered Fellow of the Institute of Logistics and Transport and a project management expert.
“Many businesses try and manage projects with the people or team that will actually do the work within the project. This is a recipe for long and drawn-out projects, project failures, disruption, disagreements, and more,” he adds.
What Are the Upsides and Downsides of PMOs?
Before deciding to set up a PMO for your company, be aware of these pros and cons:
The Upsides of PMOs
Fortunately, there’s more good news than bad news. PMOs can be a huge asset to your organization when it comes to keeping your projects on track, as the following benefits prove.
1. Ensure Project Success
Because PMOs are experts who know what it takes to get projects across the finish line, organizations who utilize a PMO have more successful projects. Another Project Management Institute survey shows that companies who align their PMO to the business strategy find that 38% more of their projects meet original goals. Even better? They have 33% fewer projects fail.
Much of that success rate is owed to the fact that good PMOs do more than just push paper and check boxes—they continuously monitor progress and course-correct when necessary.
2. Reduce Project Risk
PMOs don’t just want to ensure project success, they want to repeat it. That’s why they work hard to establish best practices and templatize processes.
By standardizing the approaches for everything from communication to project handoffs, they’re able to proactively navigate around pitfalls and bottlenecks. If your project is run by a PMO, there shouldn’t be any last-minute realizations that you don’t have the resources you need or that the timeline is too tight.
In short, the structure that a PMO puts in place eliminates a lot of potential risks, which means that organizations can have more confidence that things will run smoothly, appropriate parties will be kept in the loop, and goals will be met.
3. Manage Resources Effectively
Appropriately allocating project resources like time, team members, and budget involves a lot of moving parts; the Project Management Institute’s 2018 survey found that 21% of projects fail due to limited or taxed resources.
This is another area that PMOs can help with. Their refined processes allow them to plan for any dependencies and ensure that teams are using their available resources as efficiently and effectively as possible.
4. Provide More Consistent Reporting
Sometimes you need to report on project progress or completion, whether that’s part of your contract with a client or an agenda item for a check-in with your board of directors.
Without a single source of truth, your reporting will be haphazard. People might not use the same methods for pulling data, which makes it tough to know what’s accurate and what’s just a guess.
Reporting is another key responsibility of PMOs (it’s how they increase accountability!), and they’ll establish a procedure for how the information you need is retrieved and compiled. So you’ll be able to rest easy, knowing you have the right data and project updates in your back pocket.
The Downside of PMOs
For as many perks as PMOs offer, they aren’t without their downsides. Most of the drawbacks lead back to a single point: PMOs tend to lack the flexibility that’s often needed in organizations that are constantly evolving.
“Sometimes PMOs can be too rigid in their thinking and not allow project teams to flex processes to best fit the business needs of the project,” explains Harrin. “PMOs can also struggle to embrace both predictive and agile ways of working, where the business has teams doing both.”
However, as the working world continues to change, rest assured that this is an area that many forward-thinking PMOs are working on addressing.
“At the PMO Conference last year, there was a lot of talk about tailoring and making sure your PMO was solving business problems instead of being a hinderance to people wanting to get things done,” Harrin adds.
What Types of Companies Can Benefit From a PMO?
PMOs can be a great partner in project management for organizations, but that doesn’t mean that every company has to have one in place.
“My experience is that a PMO is only necessary if you have a really large company with lots of employees and different teams working on separate projects,” says Olga Mykhoparkina, Chief Marketing Officer at Chanty.
However, even if you aren’t a huge company, it might still be worth bringing a PMO into the fold if you’ve noticed that your projects haven’t been running as smoothly as you think they could. “A PMO [is needed when] you notice that you have an issue with your project management workflows, metrics, and deadlines,” Mykhoparkina adds.
But, if you’re happy with the way things have been operating? There’s no need to unnecessarily rock the boat by implementing a PMO right now.
“For the agency that I worked with, the PMO consisted of three members that barely had anything to do because we kept our workflow simple, followed deadlines, and maintained excellent communication,” Mykhoparkina explains.
PMOs Can Give Your Projects a Boost
There’s been some industry chatter that PMOs are on the decline, but it appears that the opposite is true, thanks to the structure and success they can bring to important projects.
Today, a majority of large organizations make use of a PMO. Research shows that in the year 2000, only 47% of surveyed businesses had a PMO in place. By the year 2012, that rate had nearly doubled to 87%.
However, the misconception that they’re disappearing altogether is likely due to the fact that they have a notoriously short lifecycle. “It’s a well-known truism that a PMO has a lifespan of seven years, and businesses stop and then start them up again over time,” says Harrin. In fact, a surprising 50% of PMOs close within just three years.
This eventual disbandment could be attributed to a number of causes, including a change in management, company restructuring, or even a perceived lack of value.
But, lack of longevity aside, they’re still a valuable asset to big businesses or even smaller companies who are running into roadblocks with their projects. Harrin sums up a PMO’s value: “Businesses are realizing that standardizing without creating bureaucracy is the best way to deliver efficient, repeatable change at speed.”