Why Have a PMO?

Why Have a PMO?
By Barry Otterholt

The day of the Project Management Office (PMO) is upon us. Our customers are less tolerant of the delay from the point of investment to the point of value. They are also becoming more impatient with all the issues that seem to crop up. More and more organizations are forming a PMO as a solution.

The potential benefits of a PMO are many:

• You retain your experience. A project manager needs to know how to be persuasive and resourceful, which they can only be if they learn how to work within the culture of your organization. Letting a project manager move back into the business-as-usual environment is throwing away a significant investment.

• Continuity. Though each project is unique by definition, most projects share common attributes and can be approached from a common project management framework. Indeed, this belief is what gave rise to the PMBOK as a standard. To the extent you can carry methods or relational models from one project into another, the stakeholders around you will be better able to predict your moves, as well as anticipate your needs from them.

• Tailored techniques. The PMBOK outlines a wide variety of tools and techniques, many of which can be adapted to the specific needs of each environment. Once adapted, they can be quite useful in future projects within that same environment This can include requirements gathering techniques, estimating techniques, performance tracking and reporting techniques.

• Visibility. Projects often get lost in the noise of all the other pressing day-to-day priorities of the organization. PMOs are generally instituted when projects are acknowledged as an ongoing strategic need of the organization, and consequently they tend to get a chair at the leadership table. This allows the IT manager to keep sponsors’ expectations aligned with project managers’ capabilities, and share responsibility for any gaps.

• Aggregation. Organizations often have more than one project going on at the same time. Each project can provide status information that looks good within the silo of their environment. Yet when presented in the aggregate, impending risk is often revealed. One client coined the consolidated schedule the train wreck report, because of all the collisions they saw when each “on schedule” project was lined up with the other “on schedule” projects.

• Cost minimization. Most administrative support can be leveraged across projects. Cost accounting, SharePoint administration, quality assurance, meeting or conference room scheduling are some examples. These “back room” activities can be done with greater proficiency and coordination if centralized, saving costs.

• Reporting. It is very hard on a common set of executives to understand projects that report using different formats. A PMO can drive a common reporting format that proves to work in the executive steering committee meetings, as well as other venues. Dashboard style reports are an example, where red, yellow, or green indicators offer quick messaging for important project attributes like scope management, and schedule and cost performance.

• Recruiting. A PMO can establish a single-point relationship with a number of different recruiting firms, who then better understand the culture and better anticipate the needs of the organization. A PMO can also craft a recruiting process that digs deeper into a candidate’s experience, by asking more probing questions, even tailoring exercises to reveal fit with the project circumstances.

A number of challenges exist in forming a viable PMO. Above all else, the person in charge of the PMO must be insightful, and understand that the most important part of his or her charter comes from the value they can add to the environment, not the regulatory or enforcement authority implicit in their charter. The PMO must be seen as an important partner in the implementation of the organization’s strategies, not a threat or an obstruction.

Barry Otterholt has been in project management for 30 years. He is a Certified Management Consultant (CMC) and a Project Management Professional (PMP). He works with public and private sector companies in the USA, the UK and Scandinavia. Mr. Otterholt was a Director with Microsoft, a senior consultant with Deloitte Consulting, and a COO with a nationwide consumer electronics enterprise. He enjoys teaching project management at Northwest University and writing his essays on project management which have been published in PMI and IMC newsletters. He lives near Seattle in the beautiful Pacific Northwest.