Setting up a Project
Management Office (PMO)
The reference guide for your
organization
by Hussain Bandukwala
May 2014
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
by Hussain Bandukwala 2
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 Structural Disciplinary
o PMO is non-existent or its role is o Processes across disciplines are ad- o Standard project management
unclear and/or limited within the hoc and cross-department synergies disciplines are not defined or not
organization are uncommon practiced comprehensively
Nascent
o Basic project scheduling in place in o Large initiatives are sourced to
conjunction with stakeholder vendors
reporting o Project costs are approximated and
o Limited or no cohesiveness exists benefits reporting are intermittent and
amongst managers; actions are inconsistent
based on individual priorities
o PMO is established and its role is o Projects are recognized as formal o Project management disciplines are
defined, at least at the responsibility entities and similar projects are defined and executed per industry
of a delivery management body collectively managed as programs standards
(which also encompasses its function o Schedule tracking and reporting o The disciplines are leveraged for
Established
as a standards setting and dashboard software is in place delivering projects on-time and on-
governance controlling unit) o PMO resources are formally trained in budget
tools and methodologies; they o Vendors are involved with execution
function and report collaboratively 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 The impact of the PMO includes both o Processes are managed in real-time o Project costs and benefits are
IT and Business and is a recognized and departments work managed at a portfolio level
Optimized
partner for the establishment, collaboratively o Annual budgets are created based
prioritization and management of the o Single, integrated PPM tool is used on organizational goals and priorities
organization’s portfolio across the organization
o PMO resources are encouraged to
continuously improve their skills and
resources with varying experience
and visibility exist within the PMO
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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
Approach
Phase III: Phase IV:
Phase I: Phase II:
I II III Define Roadmap & IV Strive for Continuous
Assess Maturity Establish Target State
Implement Improvement
o Understand the current o Define target state for o Prioritize the structural o Evaluate the PMO’s
state of the PMO and the PMO based on and disciplinary setup performance metrics
the organization within executive sponsorship of the PMO and solicit qualitative
which it resides and organization feedback from key
o Create 30-60-90-180-
adaptability – the stakeholders
o Determine strengths, 360 day targets
PMO evolvement is periodically
weaknesses, gaps and
directly proportional to o Identify and
consequently place o Launch action to
that of its organization implement PMO
the PMO within the include feedback and
pilot(s)
appropriate maturity o Carve out the scope facilitate PMO
level (nascent, of the PMO in terms of o Incorporate lessons evolution
established, optimized) its role, target business learned from pilot(s)
o Generate and share
areas and geographic into full PMO roll-out
o Put the organization PMO progress report to
locations, and the o Conduct road-show
under the lens and key stakeholders
nature of projects it across the
assess its focus on
must address o Make business case to
processes, cross- organization to
motivate organization
department synergies, o Specify metrics and demonstrate the
to achieve the next
decision-making qualitative indicators PMO’s processes and
level of PMO maturity,
maturity, and to gauge the benefits
focus, or area of
technology orientation performance of the
impact
PMO
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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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Thank You
o Consulting inquiries?
o Suggestions?
o Contact Hussain Bandukwala
o [email protected]
o +1.647.707.9841
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