Setting up a Project

Management Office (PMO)

The ultimate reference
guide for your organization

by Hussain Bandukwala
Objectives
o What is a PMO?
o Why Would You Need a PMO?
o Components of a PMO
o Functional
o Structural
o Disciplinary
o Characteristics of PMO Maturity
o Where is Your PMO?
o Setup & Evolution of a PMO
o Key Takeaways & Considerations

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What is a PMO?
A Project Management Office (PMO) is an entity
within an organization that sets standards, provides
governance, enforces accountability, and establishes
discipline to manage (a collection of) projects in an
objective and consistent manner.

Its mandate typically includes serving as a partner to

other organizational units, and creating a
communication and decision-making platform that
results in organization-wide efficiencies and synergies.

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Why Would You Need a PMO?
The following are the key benefits of PMOs that their organizations have
experienced:
o Deliver projects with predictable consistency, efficiency and success
o Provide transparent status and financial reporting to executive leadership
o Establish foundation for managing organizational portfolio effectively
o Alignment of investment to organizational strategy
o Improve stakeholder satisfaction
o Improve employee productivity
o Implement standard practices
o Long-term cost savings through improved resource management, limited
project failures and effective execution of high return on investment (ROI)
initiatives

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Components of a PMO
1. Functional 2. Structural 3. Disciplinary

Standards
Communicate Resources

Governance
Execute Change

Delivery
Tools
Strategy

These components are different facets of the PMO;

they are inter-dependent and the effectiveness of the
PMO relies on them
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Components of a PMO – Functional
The first component of a PMO is its
function, role or scope within the
organization

1.
o The PMO could be a standards setting Standards
entity, a governance controlling body,
a delivery management unit, and a
strategic partner to other entities 2. Governance
within the organization
3. Delivery
o This progressive order is necessary;
governance cannot exist without 4. Strategy Business Strategy
standards, and efficient delivery
Portfolio Management
cannot be implemented without
diligent oversight Program Management

o The strategic component of the PMO

Project Management
entails the management of a
collection of projects (program or
portfolio), driven and prioritized by the
Work / Project Intake
organization’s overarching business Gating & Prioritization
strategy
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 Components of a PMO – Structural
The second component of a PMO is its structure or foundation – the
quality of this foundation forms the basis of a formidable PMO

o The people of the PMO are its leadership o The processes that govern the PMO are
and its own personnel (portfolio / based on the disciplines it engages (e.g.
program / project managers, project scope and risk management)
coordinators and in some cases, business o These processes should be practical,
analysts)
adaptable, and be based on buy-in from
o They need to be strategic thinkers, relevant business areas of the
nimble, driven, objective, well-versed in organization
project management methodologies
and tools, comfortable in chaos, and
confident in executive presence

Tools

o The PMO must tailor its tools based on the availability of technology and the knowledge of its users
o These tools should a) incorporate the disciplines that the PMO is working with, b) capture the
required information accurately and keep it current easily, and c) provide reporting mechanisms
for effective executive decision-making
o The tools can range from Microsoft Office templates to stand-alone task-management software to
state-of-the-art Project Portfolio Management (PPM) applications – process optimization should be
the primary focus, automation can follow
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Components of a PMO – Disciplinary
The third component of a PMO is the extensiveness of the project
management related disciplines it covers

Stakeholder Management Personnel / Staff Management

Asset (Hardware / Software)

Reporting & Metrics
Management

Vendor / Contract Management

360○ communication to relevant Resources are the drivers and the

Communication Resource
partners is the crux of strong project enablers for project execution
Management Management
management

On-time and on-budget are the Tackling issues, staying on track, and
primary indicators for measuring Execution Change
preparing stakeholders for change
Management Management
project success are all part of project realization

Financial Management Risks / Issues Management

Deliverables Management Scope Management

Critical Path Management Training / Knowledge Management

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 Characteristics of PMO Maturity
Functional
o PMO is non-existent or its role is
unclear and/or limited within the
organization
Nascent
o PMO is established and its role is
defined, at least at the responsibility
of a delivery management body
(which also encompasses its function
Established
as a standards setting and
governance controlling unit)
o The impact of the PMO includes both
IT and Business and is a recognized
Optimized
partner for the establishment,
prioritization and management of the
organization’s portfolio
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Structural
o Processes across disciplines are ad-
hoc and cross-department synergies
are uncommon
o Basic project scheduling in place in
conjunction with stakeholder
reporting
o Limited or no cohesiveness exists
amongst managers; actions are
based on individual priorities
o Projects are recognized as formal
entities and similar projects are
collectively managed as programs
o Schedule tracking and reporting
dashboard software is in place
o PMO resources are formally trained in
tools and methodologies; they
function and report collaboratively
o Processes are managed in real-time
and departments work
collaboratively
o Single, integrated PPM tool is used
across the organization
o PMO resources are encouraged to
continuously improve their skills and
resources with varying experience
and visibility exist within the PMO
Disciplinary
o Standard project management
disciplines are not defined or not
practiced comprehensively
o Large initiatives are sourced to
vendors
o Project costs are approximated and
benefits reporting are intermittent and
inconsistent
o Project management disciplines are
defined and executed per industry
standards
o The disciplines are leveraged for
delivering projects on-time and on-
budget
o Vendors are involved with execution
and more accountability is placed on
PMO resources
o Project costs and benefits are viewed
at both the project and program
level; they are captured and
forecasted within prescribed degrees
of confidence
o Project costs and benefits are
managed at a portfolio level
o Annual budgets are created based
on organizational goals and priorities
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 Where is Your PMO?
Comprehensive

Is it here?
Impact on Organization

Limited

Nascent Optimized
PMO Maturity

Can you identify where your PMO resides on its evolution graph?

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Setup & Evolution of a PMO
Key phases and steps to establish and evolve a PMO are outlined below
Phase I:
I II
Assess Maturity
o Understand the current
state of the PMO and
the organization within
which it resides
o Determine strengths,
weaknesses, gaps and
consequently place
the PMO within the
appropriate maturity
level (nascent,
established, optimized)
o Put the organization
under the lens and
assess its focus on
processes, cross-
department synergies,
decision-making
maturity, and
technology orientation
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Approach
Phase II:
Establish Target State
o Define target state for
the PMO based on
executive sponsorship
and organization
adaptability – the
PMO evolvement is
directly proportional to
that of its organization
o Carve out the scope
of the PMO in terms of
its role, target business
areas and geographic
locations, and the
nature of projects it
must address
o Specify metrics and
qualitative indicators
to gauge the
performance of the
PMO
Phase III: Phase IV:
III Define Roadmap & IV Strive for Continuous
Implement Improvement
o Prioritize the structural o Evaluate the PMO’s
and disciplinary setup performance metrics
of the PMO and solicit qualitative
feedback from key
o Create 30-60-90-180-
stakeholders
360 day targets
periodically
o Identify and
o Launch action to
implement PMO
include feedback and
pilot(s)
facilitate PMO
o Incorporate lessons evolution
learned from pilot(s)
o Generate and share
into full PMO roll-out
PMO progress report to
o Conduct road-show
key stakeholders
across the
o Make business case to
organization to
motivate organization
demonstrate the
to achieve the next
PMO’s processes and
level of PMO maturity,
benefits
focus, or area of
impact
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Key Takeaways & Considerations
o The PMO must align itself to the key drivers of the organization, and update this alignment
as the organization shifts its strategies

o The PMO can grow and evolve to the extent of its organization’s acceptance; this is
something that the PMO leadership must actively work on and continuously showcase the
PMO’s value to the organization

o The true success of a PMO cannot be measured quantitatively alone – key qualitative
assessment is imperative in demonstrating the benefits of the PMO to its organization

o There is no “one size fits all” or “silver bullet recipe” in the setup of a PMO; the guidelines
and principles exist for reference however, each PMO will have its own journey

o Think big, start small – begin with a focus on pilots and communities of practice

o Differentiate and pay attention to two key areas separately: “doing things right” and
“doing the right things” – the former is about creating standards and applying the proper
governance while the latter entails setting priorities based on the needs and benefits of the
organization

o The PMO is as good as its personnel; the focus on people and processes must be
paramount – encourage your people to improve their skills, and recognize their needs to
be mentored and challenged

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