Setting Up and Implementing a Project/

Program Management Office (PMO)

Several organizations have implemented Project Management Offices (PMOs) to

ensure the successful management and support of projects. PMOs offer various
functions ranging from developing and maintaining project procedures to strategically
selecting and initiating projects aligned with organizational vision and objectives
(Kerzner, 2009; Project Management Institute [PMI], 2008). Currently, PMOs represent
well-established concepts in organizations.

Many organizations face challenges during implementation of change initiatives, including

portfolios, programs, and projects. An organizational office supporting the portfolio, program,
and projects can facilitate their better success. This presentation explains the process of setting
up and implementing a Project or Program Management Office (PMO).
Executive Summary

• Many organisations face challenges during implementation of change initiatives –

including portfolios/ programs and projects. An organisational office supporting the
portfolio/ program and projects can facilitate their better success

• At the portfolio level, such offices enable selection of right programs and projects to be
run, foster better alignment of selected projects and programs to the organisational
strategy and more robust resource management. They can also enable management
tracking of progress of multiple ongoing change initiatives in the organisation and facilitate
consistent application of processes and tools, etc.

• At the program level, the PMO can enable realization of outcomes and benefits, project
interdependency tracking, resource management , issue/risk management etc. At the
project level, such offices enable better coordination, resource management, configuration
management, etc.

• This presentation gets into depth of how to set up and run the PMOs supporting the
portfolio/ program and projects.
Are you seeing these symptoms in your organization?


 Linkage of projects/programs to the organizational strategic objectives is fuzzy


 Too many projects getting cancelled or abandoned mid-way

 Projects get started with bad planning and progressively get into issues


 Poor processes for scope change / schedule management/ resource allocation-
leading to pressures and slippages

 Top management comes to know of project slippages too late – mostly as a

 surprise or through a crisis.
‘Additional red flags’ – noted in project/ program execution


 No systematic institution of processes – every Project /Program Manager thinks
his or her initiative is ‘unique’ and starts ‘reinventing the wheel’ – prior
knowledge bases not used


 ‘Pet projects’ of ‘powerful‘ stakeholders get priority in resource allocation over
‘critical’ projects

 ‘Resource crunches’ and lack of advance planning- together with

 underutilization/ resources waiting for prior projects to get completed

 Some projects ‘go on forever’ – no one seems to be stopping them



A PMO can enable addressing these problems!

What is a PMO?

 PMO could relate to a Project Management Office (PjMO) or a Program

Management Office (PgMO), depending on which change initiative perspective it
supports

 PMOs facilitate effective project and program delivery support

 They could also provide assurance services to ensure that programs/ projects
are being executed as per corporate guidelines

Various definitions and implementations of PMO have been presented in the literature.
According to PMI (2008), a PMO is an organizational entity assigned with various
responsibilities related to the centralized and coordinated management of projects
within its domain. These responsibilities range from providing project management
support to directly managing projects. Kwak and Dai (2000) define PMO as an entity
comprising full-time employees offering managerial support, administrative, training,
consulting, and technical services.

Different terms have been used to refer to PMO, including project-support office,
project-management center of excellence, and project office. Authors have attempted
to align with PMI's definition, resulting in terms such as Project Office and Centre of
Excellence.
Types of Project Management Offices
Authors have categorized PMOs in various ways, with some defining them as broad functional
groups while others emphasize their role in developing organizational project management maturity
(Dai & Wells, 2004; Hill, 2004; Hobbs & Aubry, 2007). PMI (2013) identified five PMO frameworks
based on a survey where 53% of participants found the classifications relevant to their PMO's
functions and integration scope within the organization.

Organizational Unit PMO/Divisional PMO/Departmental PMO: This type offers project-related

services to support business units. It's the most prevalent type, with 54% of organizations having
such PMOs, commonly found in IT, consulting, and telecommunication sectors (PMI, 2013).

Project Support/Control Office PMO: These PMOs provide processes to support project
management throughout the organization. Forty-four percent of PMO practitioners reported having
this type, prevalent in IT, government, and manufacturing sectors (PMI, 2013).

Enterprise PMOs: The highest-level PMO in organizations, responsible for aligning projects and
programs with corporate strategy, ensuring appropriate enterprise governance, and performing
portfolio management functions. They are found in government, manufacturing, and energy sectors
(PMI, 2013).

Center of Excellence PMOs: These PMOs provide methodologies, standards, and tools for
successful project delivery. They ensure organizational success through good practices and serve
as the central point for project management. Thirty-five percent of PMO practitioners reported
having this type of PMO (PMI, 2013).

Project-Specific PMOs: These PMOs offer project-related services to temporary entities established
to support specific projects or programs. Thirty-one percent of PMO practitioners reported having
this type of PMO function in their organization (PMI, 2013).
What the PMO needs to support?

 The PMO (at program and the project initiative levels) needs to support:

1– The processes by which the initiative is run

–
2 The skill-sets and resourcing the initiative requires
– The tools (including Project Management Information System tools) – the initiative
3
requires

– The dashboards and information required to depict the initiative progress

4
Why Have a Project Management Office?

The increasing number and complexity of projects in the business world have led to a
corresponding need for centralized project coordination. This has resulted in the popularity and
expansion of Project Management Offices (PMOs) among organizations (Dai & Wells, 2004).
Research by the Standish Group in 1994 revealed that only 16% of projects were successful in
terms of time, budget, and technical specifications. However, by 1998, the success rate increased to
26%, attributed partly to the implementation of PMOs and improved project management practices
(Crawford, 2001).

According to the State of the PMO 2010 survey, 84% of organizations are currently implementing
PMOs, marking a significant increase from 2000 (PMI, 2012). PMOs contribute to more projects
being completed on time, within budget, and meeting business goals. They help reduce the number
of failed projects, improve productivity, and deliver projects on or ahead of schedule, thus
increasing cost savings (PMI, 2012). PMOs also monitor project performance, provide training, and
establish standards, adding value to organizations (PMI, 2004).

As companies recognize that their strategies are achieved through projects, PMOs have become
increasingly popular. They coordinate multiple projects, serve as centers of best practices, and
enhance project management capabilities within organizations (Hobbs & Aubry, 2007).
PMO functions and services
PMO functions and services can vary based on an organization's size and objectives, but many
researchers have outlined major responsibilities consistently (Kwak & Dai, 2000). These include
providing project-management support and direct project management (PMI, 2004). Bates (1998) and
Frame and Block (1998) summarized PMO functions around project support, standards and methods
development and enforcement, and project management training and mentoring.

According to the PMI Pulse of the Profession (2013), a PMO offers a wide range of functions tailored to
its type and scope:

Standards, Methodologies, and Processes: Defining project-management methodologies, metrics, and

process improvement.
Project/Program Delivery Management: Managing project resources, schedules, costs, risks,
stakeholders, communications, and integration.
Portfolio Management: Prioritizing projects, aligning them with strategy, resource allocation, risk
management, and benefits realization.
Talent Management: Training, career development, capability building, and certifications.
Governance and Performance Management: Reporting performance, issue escalation, compliance,
financial management, and PMO performance management.
Organizational Change Management: Addressing stakeholder satisfaction, managing resistance,
readiness assessment, and communications.
Administration and Support: Providing tools, implementation, support, and consulting services related
to IT and information systems.
Knowledge Management: Defining policies, managing intellectual property, lessons learned, content,
and collaboration.
Strategic Planning: Confirming priorities, defining business goals, aligning initiatives, environmental
scanning, and opportunity analysis.
PMO services in Risk Management & Issue Management

 PMO can assist the project Manager in handling risk and issue management

 Services herein would include monitoring the risk and issue registers/
communicating with key stakeholders to ensure agreed upon risk /issue
responses plans are actioned upon

 PMO can also advise the project Manager in risk response planning and in
devising how much contingency to be added

 Change control management facilitation (within issue management) is another

key service which can be provided by the PMO
PMO services in Resource Management

 Especially for financial resources concerning the projects, the PMO can monitor
and report on the project spending

 It can assist in administering the costed resource management plan

 The master database of resources/skill sets can be maintained by the PMO

 If the internal skills are not available, PMO can assist the project Manager in
contracts management
Other services the PMO can provide

 PMO can also assist the project Manager in the following:


– Managing the information repository (master copies of documents)

– Ensuring compliance with organisational good practices


– Coordinating the quality reviews of concerned program and project related
 documents

– Assisting the project Manager in providing the quality control for

 management deliverables
– Tailoring the standard organizational processes and templates

– Undertaking project kick-start workshops, project and program awareness related
 seminars etc.
Specific services provided by the Project Management Office (PMO)

 In the project context, the following are the specific services provided by the
PMO:


– Facilitating project kick-start meetings

– Resource/ Budget allocation across teams in the project/ Procurement and vendor
 management

– Assisting the Project Manager in stakeholder engagement


– Facilitating risk and issue management

– Ensuring application of appropriate governance mechanisms, quality standards and
 configuration management procedures for the project
– Customizing tool and information support and providing secretarial support

– Facilitating project closure (including Lessons Learned) meetings

Specialist functions provided by the PMO

 These functions can include:

– Maintaining the knowledge databases

– Providing best practice trainings to the Program and Project Managers

– Provide specialist workshops for project or program start-up, guidance on risk and
issue management, scoping and estimating etc.
Major stakeholders involved in PMO setup

 Key stakeholders include:


– The Sponsor for setting up the PMO

– Program and Project Managers


– Top Management and the functional managers

– Operational departments

– External vendors (for consultancy/tool management)

Who are all the members of PMO?

 PMOs are usually staffed by Senior Managers having PM experience

– Having business focus and alignment with organizational business strategy

– Having ‘hands on’ experience of executing concurrent projects/programs

– Having process orientation and empowerment

– Having alignment to Corporate Culture

– Technical resources can be co-opted as needed

How to set up the PMO?

 Before starting up – it is essential to understand where the organisation is

currently in terms of PM competency

 Interviews with stakeholders can also reveal issues such as:

– Dissatisfied clients, dissatisfied top management


– Improper resource utilizations

– Strategic objectives not being met/benefits being not realised

– Inconsistent project and program delivery

– Past lessons not leveraged

– Low staff morale

Getting the investments

 Understanding of the problems being faced by the organisation, which can

possibly include the following:

– Right change initiatives are not being selected

– The change initiatives are inconsistently managed

– Not getting the stated benefits from the change initiatives

 Whereas the permanent Portfolio office is usually funded out of organisational

budget, PgMOs and the PjMOs are usually funded out of corresponding program
and project budgets
Prerequisites for successful PMO implementation

 Ensure Top Management Commitment

 Ensure process ownership by the Project / Program Managers all along
 Have tact in selling PMO benefits to PM community

 Target the ‘low hanging’ fruits first

 Manage Communications effectively and successfully


Success measures of the PMO

 Depending on the context, there could be couple of metrics to measure PMO

effectiveness

 These can include:

– Number of projects and programs delivered to schedule and cost

– Deviation between forecasted and realised benefits

– Extent of conformance to processes- as assessed through audits/ health-checks etc

– Competency enhancement/ reduction in staff turnover

– Stakeholder/ client satisfaction surveys

– Enhancement in the program and project management maturity

Issues PMOs are likely to face

 Lack of sustained Top Management support

 PMO Value proposition not defined properly

 Insufficient authority for PMO team members

 Need to combat ‘turf wars’ from Project / Program Managers

 ‘Control’ orientation – leading to bureaucracy and conflicts

 Diminishing to a progress reporting office

How these issues to be addressed?

 Having a top manager as the PMO sponsor to get easier funding and sustained
commitment

 Appropriate skill set development for the PMO – providing trainings and career
paths

 Highlighting the value addition of the PMOs to the Program and Project
Managers

 Gaining support from the functional managers

Pointers for setting up a PMO

 The support provided by the PgMOs and the PjMOs can vary with the lifecycle
adopted for the implementation for the project and program

 These offices are temporary in nature, coinciding with the lifecycle of the
corresponding project or the program

 Whenever the permanent office exists at the portfolio level, the temporary offices
can be resourced flexibly or these offices can draw resources from operational
departments
Value drivers for setting up the PMO

 Increase consistency and quality of delivery in projects and programs

 Realising the rate of return from minimizing cost and effort overruns and
increased client satisfaction

 Capability enhancement , benchmarking, and enhancement of PM maturity in the

organisation
 Framework of 12 steps
Establishing a Project Management Office (PMO) involves several key steps, treating the process as
a project in itself. The process includes planning, execution, monitoring, and control processes. It's
crucial to identify the objectives, goals, stakeholders, scope, and timeline of the PMO. Early
alliances, a PMO charter, communication plan, and transition and execution plans are essential for
embedding the new PMO in the existing organization.

A framework of 12 steps necessary to establish a successful PMO is proposed, each ensuring the
achievement of specific requirements and deliverables acknowledged through best practices:

Understand Organization Definition of Success: Focus on understanding the organization's vision,

strategic goals, business objectives, culture, and departmental relationships before defining
methodology and processes.

Define the Mission, Objectives, and Strategy of the PMO: The PMO mission aligns with the value it
provides to the organization, while the strategy outlines the process and roadmap to achieve the
mission. Both must align with and support the organization's overall mission and strategy.

Further steps involve aligning with organizational goals, engaging stakeholders, defining PMO
functions and services, establishing governance and support structures, developing processes and
methodologies, defining roles and responsibilities, implementing tools and systems, providing
training and support, monitoring and evaluating performance, and continuously improving the PMO.

Each step is crucial for establishing a PMO that effectively supports organizational project
management practices and strategic objectives.
Proposed PMO framework
1-In establishing a Project Management Office (PMO), it's crucial for the PMO's mission, vision, and
strategy to align with the organization's overall objectives. For example, setting PMO success
criteria around budget may not be appropriate if the organization's focus is on innovation, as seen
at companies like Google (PMI, 2012).

2-The PMO should define both short-term tactical objectives and long-term strategic objectives.
Short-term objectives should be achievable within relatively short periods to demonstrate quick
wins and increase PMO support. Long-term objectives should address project or portfolio
governance, change, and talent management.

3-Specifying PMO functions and types is vital, considering organizational context, structural
characteristics, and roles or functions. PMO types vary based on their scope and services, ranging
from simple project-specific PMOs to more sophisticated Enterprise or Center of Excellence PMOs.
As project management practices mature within the organization, PMOs can evolve to meet higher
levels of sophistication.

4-PMO functions are defined based on the PMO's scope and services, with the Enterprise PMO
focusing on strategic alignment and prioritization of project portfolios. The PMI Pulse of the
Profession survey in November 2013 provides insights into the expected functions of different
PMO types, guiding PMO professionals in their decision-making process.
5-Define PMO Success Criteria and Metrics:
PMOs must establish metrics aligned with their mission and strategic objectives, involving top executives and
sponsors. Metrics may include project delivery, customer feedback, financial goals, project cost versus budget
evaluations, and stakeholder feedback. These metrics provide insights into PMO performance and effectiveness.
Define PMO Organizational Structure:

6-The PMO's organizational structure should align with the organization's integration approach, defining roles,
responsibilities, communication channels, and conflict resolution methods. The structure depends on PMO types
and the level of authority delegated by top management. PMOs report to various levels of management based on
their objectives and mission.
Determine the Number of PMO Staff:

7-PMO staff requirements depend on the PMO type and project complexity. Staff may include project managers,
managers, project staff, and administrative assistants. As PMO functions expand, the number of staff increases.
Different PMO types require varying levels of staffing to fulfill their objectives effectively.
Define PMO Charter:

8-Establishing a PMO involves creating a charter documenting its objectives, vision, success criteria, scope, budget,
timeline, and integration processes. The charter should gain formal approval from the PMO executive sponsor and
key stakeholders, ensuring clarity and alignment with organizational goals.
Ensure Commitment and Top-Management Support:

9-Successful PMOs require alignment and collaboration among organizational teams and functions. Collaboration
fosters support and longevity. Top management commitment is crucial, ensuring alignment with organizational
norms and understanding project management methodologies' practical application.
Build the Project-Management Methodology and Processes:

10- PMOs define project-management methodologies, processes, templates, best practices, standards, and
guidelines. Processes for project requests, evaluation, and funding ensure alignment with business goals. The
methodology should be adaptable and integrate with existing processes and methods, continuously updated to fit
organizational needs and culture. Implementation involves serving projects for practice and evaluation, allowing for
continuous enhancements and adaptation.
11-Training:
Training is crucial for all members of the organization to understand the PMO mission, objectives,
processes, templates, and framework. Stakeholders at all levels, including executives, project
managers, staff, and functional managers, should receive training tailored to the organization's
specific project-management methodology and culture. PMO managers should promote project-
management professionalism through mentorship, training, and guidance, tying feedback to
employee appraisals and career advancement.

12-Track PMO Metrics and Ensure Continuous Status Update:

Continuous monitoring, reporting, and enhancement of PMO performance are essential to prevent
project failures and maintain stakeholder support. PMOs should provide common reporting on
project and portfolio status, ensuring all stakeholders and top management are informed about
progress and challenges. Reporting frequency varies based on PMO type and stakeholder needs.
Continuous improvement involves monitoring, collecting metrics, and refining PMO processes,
objectives, and strategy to foster a culture of best project-management practices and potentially
evolve the PMO to a more influential role within the organization.
Developing the Business Case for PMO

 The PMO business case can be developed including the following elements:

1– Likely costs of running the PMO. This can include the PMO staffing cost,
infrastructure, tools, consultancy support and communications related costs
during the initiative lifecycle.

2– Likely benefits of implementing the PMO can include:

• Improvements in benefits delivered

• Lower capital and support costs

• Better prioritization of change initiatives

The conclusion on the Project Management Office (PMO) framework emphasizes the
alignment of PMO functions with an organization's strategic objectives and business needs. It
underscores the importance of defining PMO functions, types, success criteria, and metrics to
ensure effectiveness.

The outlines steps necessary to establish a PMO and emphasizes best practices to enhance
its effectiveness.

Key points highlighted in the conclusion include:

PMO functions should align with the organization's strategic objectives.

The type of PMO established should match its intended functions and success criteria.
Establishing executive support and fostering collaboration across organizational divisions are
critical for success.

Continuous monitoring, reporting, and improvement of PMO processes are essential.

Flexibility, adaptability, and openness to feedback contribute to PMO effectiveness.
The references cited in the research provide additional insights and perspectives on PMOs,
project management, and organizational change.

This comprehensive overview guides PMO managers in optimizing services and support to
effectively manage an organization's portfolio of projects and strategic initiatives.
Thank
Thank you!
you!