A Project Management Office is a centralized department that standardizes project management practices across an organization. Starting a PMO requires defining its scope, securing executive sponsorship, establishing governance frameworks, and selecting qualified staff. Success depends on clearly communicating the PMO value to stakeholders and aligning processes with business objectives. The following sections outline specific steps to launch your PMO effectively.

An emerging trend, especially in information technology, is to set up a project management office (PMO) to help companies deliver on strategic plans. Project management has been around for centuries in various forms. As a discipline, it gained in importance in 1968 when the Project Management Institute (PMI) was formed to provide guidelines and insights on proper project management. PMOs have become more commonplace in large companies as the need to formalize practices is necessary to improve the efficiency and effectiveness of project management.

The goal of this article is to discuss PMO: Getting Your Project Management Office Started. Insights will be reviewed that will help you prepare your organization for the implementation of your project management office.

Types of Project Management Office (PMO) Structure

The Project Management Institute (PMI) outlines three PMO structures typically found in organizations. They are described in the PMBOK Guide: A Guide to the Project Management Body of Knowledge: Sixth Edition.

Early on in your PMO efforts, you will want to decide the type of structure you want for your PMO: This is where management consulting support turns analysis into action.

• Supportive: In this structure, the PMOs role is to provide consultative services to internal project managers and departments. The PMO will provide templates, best practices, access to information, and lessons learned from other projects. The control wielded by the PMO on projects is low.
• Controlling: This PMO structure supports internal project managers and departments while requiring enough compliance for the PMO to exercise moderate control over consistency and standards.
• Directive: In some instances, you will want your PMO directly controlling projects. This level of structure results in ensuring all projects have the highest level of project management expertise available within the organization. However, it does result in departments losing some level of the direct control of projects and can result in the highest level of change management

Your decision on the structure will have varying effects on various stakeholders throughout the organization.

Project Management Office First Steps

The following stakeholders should be considered at the beginning of your efforts:

• Senior Leader Sponsorship: It is critical that your most senior leader understands and is supportive of a PMO structure. Your PMO will involve change management that other leaders in the organization will be looking to the most senior leader to support and emulate in their practices. A senior leader who says they want a PMO to help streamline and standardize efforts, but who does not follow the governance standards, will undermine the efforts of your PMO
• Senior Leadership Team Commitment: Your most senior leaders will carry the message of the PMO’s value in their day-to-day interactions. That includes their senior leader peers and their team members. Early on in the implementation, it is recommended that senior leaders be educated on the PMO, its purpose, and how it will function. This will be a time to answer the questions about the structure and changes that may be necessary to operate within a PMO structure.
• Project Managers: Anyone serving as a project manager will need full training on the changes the PMO structure brings. Those changes affect their work practices.
• Point Person: Regardless of the structure of PMO you choose (supportive, controlling, or directive) you will want to have one person who has responsibility for the PMO implementation. It is recommended that the PMO be the primary responsibility of the individual. Depending on the size of your organization and the structure you choose this person may have other roles supporting them with the PMO. It is recommended that this person be a certified Project Management Professional (PMP®) to help ensure the various practices outlined by the Project Management Institute (PMI®)
• Project Members: Any project is made up of various subject matter experts. Each of these individuals will be impacted by the implementation of a PMO. It is important to consider the types of communication, training, and support that these individuals may need as you implement your PMO.
• Human Resources: Human resources will be critical in helping to hire a point-person for running the PMO. Human resources will want to make sure any point person has specific skills and competencies. Examples include strong communication, business acumen, and project management skills. Human resources will also assess existing personnel to identify any skill gaps. Training or coaching can then close those gaps and spread an understanding of project management across the organization.
• Training Department: The training department should develop any required training programs or materials. Those programs raise the project management skill and competency levels of key individuals. Various programs may be necessary, depending on the need to train individuals on project management skills, team members on collaboration skills, and project sponsors on their roles.
• Communications Department: Since there is so much change-management that occurs with the implementation of a PMO you will want to engage with your internal experts on communication. Having these individuals involved from the beginning will help you in developing an effective communication plan.

Systems Support

A critical component of a successful project management office (PMO) structure is a Project Portfolio Management (PPM) platform which also contains the capability to manage projects. PPM platforms come in a variety of sizes and styles and can range from ~$100,000 to over $1,000,000 per year. Understanding the needs of your project managers and other stakeholders will help you select the right system that meets your needs at an optimal cost. It is recommended that a formalized request for proposal (RFP) be conducted which includes the following considerations for the platform.

Platform Features and Functionality

• User Experience: Evaluate the simplicity for the users and does it have a web-based interface.
• Configuration/Flexibility: Is the interface configurable to meet the user’s needs and what are the product rules that must be adhered to.
• Data Management: All projects will involve the need for comments, attached documents, links, etc. This may be in addition to being able to import and export information. Support that the PPM meets your needs
• Document Management and Collaboration: Various projects entail the need to review materials related to the project. Does the system allow you to comment, edit, revise, etc. these documents.
• User Administration: The system needs one or more administrators who are familiar with it, and the PPM should be intuitive. Resources should also exist to support the admins, whether in the platform or as an outside support group.
• Displays and Reporting: Can the system create dashboards that are accessible by different user types and can dashboards be created to individual’s needs. It is also critical that the PPM provides overall views of project health for executive-level views.
• Communication and Collaboration: Any PPM should provide the means for seamless social communication within the platform and either a project-specific or general.
  Project Evaluation and Portfolio Management
• Issue/Risk Analysis and Management: A key management area for projects in Risk Identification. The PPM should have the ability to identify risks, outline preventative/corrective actions, and allow for tracking of progress against the risk mitigation
• Project Evaluation: A key reason for having a PMO is the ability to evaluate projects against your strategic plan. That lets you choose which projects to work on. Does the PPM give you the ability to do this?
• Project Valuation: The PPM should have the ability to capture the value of the project (financial and otherwise).
• Prioritization and Portfolio Optimization: Many PMOs use a “Greenlight Process” which is a systematic means to evaluate projects and you will want the PPM to manage this process.

Project Planning and Project Management

• Project Planning and Management: The user interface should have the ability to show planned versus actual performance, provide roadmaps of projects, allow for Gantt chart views, etc.
• Portfolio Management: It is important to be able to group projects into portfolios and the PPM should be able to provide useful functionality to all for this.
• Workflow Management: Many projects follow consistent workflows which should be able to be managed in the PPM.
• Project Data and Status Reporting: The PPM should allow project managers to capture, compute, and report on costs, hours, resource consumptions, etc. as it relates to the project.
• Financial Management and Budgeting: Your finance department will want to work to the PPM is able to provide them with the reporting they may need for financial updates. In some cases, a PPM may even be able to interface with your financial systems.
• Project Close-Out and Knowledge Management: Does the PPM support the verification of project deliverables and acceptance criteria and capturing of lessons learned.

Resource Management and Demand Planning

• Resource Assignment, Scheduling, and Management: Some PMOs will want to integrate their PPM with the time management of people resources and other assets/resources necessary for a successful project. If you choose a person to work on a project, can you see their availability (given other projects or day-to-day job commitments)? A common efficiency issue for projects is the bandwidth and availability of the people resources.
  •Demand Management: Your PPM should allow for an approval process that shows approvers the overall impact of project commitments (people, hours, resources, and so on). It should also show how those commitments relate to strategic goals so that project decisions rest on data.
  •Time Tracking: In some cases, you may even want the ability to track real-time work efforts against specific projects. For this capability, you would want to make sure that the PPM has the capability for individual users to capture their time in the system.

Other Steps

Additional steps will be critical to the implementation of your PMO

• Governance Plan: One of the key components of your PMO will be the governance process you put in place as they relate to project initiation. Project approval, resource approvals, communications expectations, etc. It will be important that the governance components you decide on are agreed to by key stakeholders.
• Communications Plan: The implementation of a PMO requires numerous changes to an organization. To ensure everyone is aware of the vision, purpose, and plans for your PMO you will want to partner with your communications department on the PMO implementation plan. This allows for a clear understanding by the impacted stakeholders and will work to questions are posed by those who will be engaged with the activities of the PMO.
• Training: It is critical that the PPM you choose is properly trained in with the various stakeholders within the organization. This training plan for your PPM will likely involve various user types that will need to be taken into consideration and be properly budgeted for.
• Books:
  • Project Management can be quite formalized and the implementation of a PMO adds additional structure to your overall project efforts. The following resources can provide helpful insights to project management for those team members who will be most closely involved in the implementation of your PMO.
  • Sprint: Solve Big Problems and Test New ideas in Just Five Days by Jake Knapp
  • PMP PMBOK: Project Management Professional Study Guide by Ralph Cybulski
  • Simple PMP: Exam Guide Updated for the PMBOK Guide Sixth Edition by Phil Martin
  • PMBOK Guide: A Guide to the Project Management Body of Knowledge: Sixth Edition by PMI

A Project Management Office (PMO) can be an effective way to improve how your projects and initiatives are executed in pursuit of your company’s strategic goals.