Project management is a critical process in any business, and setting up a project management office helps to build consistency leading to successful outcomes. In order to ensure projects are completed on time and within budget, many businesses set up a project management office (PMO). But what does that entail?
This guide will provide you with everything you need to know about setting up a PMO, from the basics of what a PMO is, to choosing the right tools and processes for your business.
What is a PMO?
A PMO is a department or group within an organization that is responsible for the planning, execution, and monitoring of projects. The PMO is typically responsible for standardizing project management practices across the organization, and can provide guidance and support to project managers. The PMO usually has a staff of project managers who are responsible for planning, executing, and monitoring projects.
What does a PMO do?
While every PMO is uniquely built to the needs and requirements of the business, there are some common components found across most PMOs. Most PMOs provide a set of services to the organization related to Project Delivery. Some of the most common services provided by a PMO include:
- Portfolio Management: Portfolio management is the process of organizing and managing a group of projects. These The goal of portfolio management is to maximize the return on investment while minimizing the risk. This is done by creating a balanced portfolio that includes a variety of different investments
- Project Planning: The PMO is responsible for creating and maintaining the processes to assist in building sound project plans, which includes the project schedule, budget, and risk register.
- Project Execution: The PMO is responsible for ensuring that the portfolio of projects is executed according to expectations. This includes tasks such as monitoring the progress of the project, tracking budget and expenses, and ensuring that the project meets all quality requirements.
- Project Monitoring and Reporting: The PMO is responsible for ensuring that all stakeholders are kept up to date on the progress of the project portfolio.
- Project Management Training: The PMO is responsible for providing training to project managers and team members throughout the organization.
What Roles exist in a PMO?
As in any department within an organization there are some standard roles to be found. Since PMOs vary from company to company there can be variation in the roles with some positions available which aren't so common. The standard roles to be found in a PMO include:
- PMO Leader
- Project and Program Managers
- Project Coordinators
Additional roles which can be found in PMOs but which are less common include:
- Business Analyst
- System Administrators
- Quality Assurance
To learn more about these roles we've provided a brief description below.
- A PMO Leader is responsible for the overall success of the PMO. They are responsible for creating and implementing the strategy for the PMO, ensuring that all projects are delivered on time, within budget, and to the required quality standards. They also need to ensure that the PMO is meeting its objectives and providing value to the organization.
- A Project Manager is responsible for the successful initiation, planning, execution, monitoring and closure of a project. They work with the project team, stakeholders and sponsors to ensure that the project meets its objectives.
- A Program Manager is responsible for ensuring that a program, or collection of projects, is completed on time, within budget, and to the customer's specifications. They manage the team and other staff who are working on the projects and program, and they typically also work with the customer to ensure that they are happy with the end result.
- A Project Coordinator is responsible for the day-to-day coordination of a project. They work with the project team to ensure that tasks are completed on time and that communication is effective.
What tools are found in a PMO?
The tools and resources found in a PMO vary depending on the type of PMO and the organization's needs. However, some of the most common tools and resources include:
- Project management software - Project management software is a type of software that helps project managers to plan, organize, and manage their projects. It can help them to track the progress of the project, assign tasks to team members, track expenses, and generate reports. There are many different types of project management software available, and each one has its own set of features. It is important to choose the software that fits the needs of the individual project manager and the team.
- Resource management software - Resource management software is a type of software that helps organizations manage their resources. This can include things like people, money, equipment, and other assets. The software can help track what resources are available and how they are being used. This can help organizations make better decisions about how to use their resources.
- Communication tools - Email, chat, and video conferencing are all communication tools that allow people to communicate with each other. Email is a way to send messages to people, chat is a way to talk to people in real time, and video conferencing is a way to see and talk to people. These tools are all useful for different reasons, and they all have their own benefits and drawbacks.
- Document management software - Document management software is a type of software that helps organizations manage their documents. It can help organizations keep track of their documents, find documents, and share documents. There are many different types of document management software, and each one is designed to meet the needs of different organizations. Some document management software is cloud-based, which means that it can be accessed from any computer or device with an internet connection. Other document management software is installed on a computer or server and can only be accessed by people who have the appropriate permissions.
- Tracking and reporting tools - Tracking and reporting tools help organizations keep track of their project, program and portfolio progress and performance. They allow managers to see how their team is doing and identify areas where they need to make improvements. Additionally, these tools can help track customer satisfaction and engagement.
- Process templates and guidance - Process Templates and Guidance is a great way to improve the quality of your work. It helps you to be more efficient and organized. Having a process template also helps to ensure that everyone is doing things the same way and that the work is being done correctly.
How to set up a project management office?
There is no one-size-fits-all answer to this question, as the approach to building a PMO will vary depending on the organization's needs and culture. The PMO Squad has developed the Purpose Driven PMO to bring consistency to the challenging task of setting up a PMO. All PMOs that we help clients build start with Purpose. Your unique PMO will have it's own unique Purpose. Once you've defined and documented your Purpose, you'll want to be able to Measure your performance. Next you'll analyze your performance and Optimize your people, processes and tools.
Collectively, Purpose, Measure and Optimize become the approach to follow for building, maintaining and improving your PMO.
Here are some key steps in setting up a PMO include:
- Define the PMO's purpose and scope.
An example for a PMO Purpose: The PMO's goal is to help all projects in the organization run smoothly by providing standard project management services, guidance, and support to project managers. The PMO also makes sure that all projects are executed efficiently and effectively, and that project deliverables are of high quality.
- Assess the organization's needs and resources.
The organization's needs and resources should be assessed in order to determine the most effective way to allocate resources and deliver projects. The organization's needs may include areas such as marketing, human resources, information technology, and research and development. The PMO delivers projects across the organization and will need to understand how best to work with the various organizational departments.
- Develop a plan for staffing and governance.
The staffing and governance of a PMO should be planned carefully to ensure that the PMO is able to effectively and efficiently deliver its services. The staffing plan should include the roles and responsibilities of the PMO team members, as well as their qualifications and experience. The governance plan should specify the PMO's authority and how it will be managed. It should also outline the decision-making process and how conflicts will be resolved.
- Create and implement PMO processes and procedures.
A PMO can help organizations create and follow processes for managing projects. The PMO can also provide support and guidance to project managers, making sure projects are completed on time and within budget. The PMO may also develop and maintain project management tools and templates. A PMO can develop templates and tools to help project managers plan, manage, and report on their projects. This can make it easier for project managers to follow standardized processes and procedures. .
- Deliver projects, programs and portfolios.
PMOs are the backbone of organizations, and they help to ensure that projects are completed efficiently and on time. PMOs also help to make sure that projects are aligned with the organization's goals and objectives. By successfully delivering on the projects and programs the PMO will establish trust with Organizational Leaders. Building the PMO for long-term success will greatly depend upon the ability to provide value to the organization from successful project delivery.
- Evaluate and report on PMO performance.
The PMO can use performance metrics to track the progress of projects and identify areas where improvements can be made. This information can be used to help improve the overall performance of the organization's projects. This can include project level reporting, executive dashboards, and metrics to demonstrate the value the PMO is providing to the organization.
Setting up a PMO can be daunting, but it’s important for the success of your business. By following the steps above, you can create a PMO that is perfect for your business.