Performing tasks and completing projects – this is the day-to-day business of every company. Individual departments develop their own processes to record, plan and implement the ever-growing number of items on their to-do list.
The problem, however, is that each department ends up doing its own thing – with no one keeping an eye on the big picture. Instead of working together in a coordinated manner towards a major company goal:
Individual projects steal resources from each other internally
There’s no overview of how the respective projects fit together in terms of logic and timing
Priorities in interdepartmental collaboration are not clearly set
No one knows which strategic approach is definitive and who has the final say in project planning.
The result? Missed deadlines, overstretched budgets, and a lack of accountability – all of which cripple business performance and severely disrupt employee experience.
The solution? Introduce a project management office (PMO) as the central coordination point for projects.
What is a project management office (PMO)?
A project management office (PMO) is an internal department or an external body that is responsible for, monitors and supports, all of a company’s projects. A PMO standardises internal project management and implements best practices.
A PMO acts as a central support team across all functions and acts as a helpful service provider for stakeholders, with a common goal of making work easier and completing projects in a quicker and more cost-effective manner through planned coordination.
Internal vs. external PMO
PMOs can be located both within the corporate structure and outside with an external provider.
Internal PMO: You establish another department in your company and staff it with both existing and newly recruited employees. In the organisational chart, a PMO is often placed very high up as a staff position. The benefit for you is that you control the PMO yourself and can ensure it provides long-term support. This of course takes time, but an internal PMO is also available for small-scale execution of specifications
External PMO: You commission an external entity, such as a management consultancy or a PMO agency, to carry out basic standardisation and coordination. The advantage for you is the PMO is ready to go immediately and without any further investment. On the other hand, support is often only temporary.
What are the tasks of a PMO manager?
In a PMO, project managers work as cross-functional partners and strategic advisors to project managers. Their remit is divided into two parts – establishing project processes in the back office and setting guidelines that apply to all departments. In other words, they create the necessary structure within which projects are implemented.
In day-to-day operations, PMO managers ensure the defined guidelines are implemented. They are always on site when a new project is scheduled, sensitive project steps are pending, or a crisis looms on the horizon. The PMO is where all the threads come together – those responsible coordinate the individual projects, embed them in the overall strategy and allocate resources.
What’s more, they are also responsible for offering ongoing support and ensuring project standards are upheld. Specifications must be updated on an ongoing basis, while tried-and-tested procedures must be further standardised. Training sessions for employees are also held on a regular basis.
What a PMO specialist does at a glance:
Coordinate individual projects
Develop project standards and PM strategies
Plan project portfolio and available resources
Prioritise and allocate resources
Train project employees.
What a PMO manager does:
Project coordination to reduce duplication and unnecessary effort
Devise efficient project standards and PM strategies to ensure project success and compliance
Develop multi-year portfolio plans to improve strategic direction and financial planning
Support project prioritisation and resource allocation to maximise impact and ROI
Develop PMO capabilities, including service catalogue, roadmap, and tools
Train project employees on processes and best practices to boost project team efficiency
Promote the PMO, its services and best PM practices.
Why do you need a PMO?
It’s clear that not every company needs a PMO. In smaller companies, for example, coordination is so seamless that having too many specifications tends to inhibit flow rather than promote it. The benefits of a PMO are also limited in areas where there is less pressure and minor discrepancies are less significant.
You should examine the cost-benefit analysis very closely! The following benefits of a PMO are especially noticeable in mid-sized and large companies that manage a multitude of projects on a daily basis.
Greater efficiency and flow in project work
Are things not moving forward in your projects? It could be that the productivity of your team is fizzling out somewhere amidst a lack of standards and tedious processes. PMOs establish project management standards, project management methodologies and guidelines that help to orient teams. Well-defined standard processes, frameworks and tools leave less room for interpretation, resulting in higher efficiency as well as more seamless workflows.
Better alignment thanks to the strategic direction
The PMO bridges the gap between the individual departments and sets a common strategic direction. It creates a collective understanding of the strategies, processes, and tasks, while aligning all measures with the overarching corporate goals.
As a central point of coordination and communication, the PMO relays decisions on projects to the stakeholders and brings business units together at strategic points. This way, it creates favourable conditions for interdepartmental collaboration.
Optimised time management
Timing is everything when it comes to project management! With a PMO, you are far more likely to stick to your schedule and not miss any deadlines.
The PMO keeps track of all ongoing projects, sets deadlines, and schedules important dates within the process
The PMO manager determines how long should be spent on individual project steps
If deadlines are missed or projects are re-prioritised, the PMO is responsible for rescheduling the calendar and coordinating deadlines across departments.
Optimal resource management
Budget, personnel, and materials – these are usually the (scarce) resources that make up successful projects. With a PMO, you raise your capacity and resource planning to a professional level, ensuring that the respective resources are available at just the right moment.
How to set up a PMO in 5 steps
Are you convinced of the benefits of a PMO and want to set one up in your company? You should keep in mind the following things:
Accompany every phase of the project with change management. PMOs often have to deal with acceptance problems. However, they can be prevented if relevant employees are involved in the who, what and why from the very outset.
The Next Level PMO study conducted by Deloitte2 demonstrated that a PMO should be bespoke in order to provide effective support. That’s why you should take the time to design a PMO specifically tailored to your needs and adapt it on an ongoing basis. If you have any doubts, we recommend you seek advice from our PMO experts.
Integrate the PMO with existing enterprise software to achieve full data integration.
Ensure that the PMO is actively endorsed and promoted by your senior management team.
Step by step to a PMO
1. Evaluate the status quo of project management:
How are the teams currently working?
What processes already exist in the individual teams? Which ones work, and which ones don’t?
Which projects are currently running, and which will be added soon? Compile as complete as project list as possible.
2. Set individual goals for your PMO and develop a concept:
Perform a stakeholder analysis: what do stakeholders want and expect?
Carry out a target-performance comparison with the results from step 1 and the stakeholder analysis: what is lacking, and what does the PMO need to do?
Integrate the PMO into the company’s organisational framework in such a way that it has active rights of intervention.
3. Make the necessary preparations
Communicate the PMO’s goals throughout the organisation
Address any questions and doubts
Train your PMO employees.
4. Implement the PMO
Get the ball rolling with a few initial tasks
Assess the results and make appropriate improvements.
5. Transition the PMO into regular operations
Now gradually expand the areas of responsibility and authority
Commence ongoing optimisation at an early stage.
At Experis, our Project Management as a Service (PMaaS) has been designed by portfolio owners, for portfolio owners, to specifically address these challenges. Not only does it provide the benefits outlined above, but we provide our customers with value-adds such as PPM thought leadership, employment and technology insights, workforce innovation and impact reporting (how our service has added value to your organisation).
We also pride ourselves in our knowledge transfer process, which ensures that all knowledge and understanding of your organisation and projects is retained in the service and is transferred to our clients in a planned and controlled manner.
PMaaS offers a range of key skills across the PPM and Product disciplines covering Project, Programme, PMO, SCRUM, Product and Agile Delivery Management. We are also able to provide all other major project and technical skills too. We are aligned with industry skills frameworks, such as SFIA and DDAT, and offer a variety of flexible commercial models to meet your needs. For more information contact us.
Chris Allison is Experis’s PPM and Product Practice Lead – he has over 20 years of experience in project and product delivery across a variety of sectors and industries. He has spent the last 10 years in senior management establishing and managing large-scale portfolios in support of digital and business transformation.