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So, Your Organization Wants to Establish a PMO?

Posted on 12/09/2011 at 08:00 am

My organization wants to establish a ‘PMO’ ... for starters, what exactly is a PMO? 
First of all, a Project Management Office (PMO) is an organizational body or entity assigned various responsibilities related to the centralized and coordinated management of those projects under its domain. [PMBOK 4^th Ed., 2008] 

So, what does that mean?
Well, the PMO is the department that establishes, monitors, and maintains project management policies, standards, processes and procedures within the organization.  

OK, but what does that really do for the organization?
Through standardization, the PMO introduces economies of repetition, produces a source of guidance to implement best practices, and establishes metrics to measure execution. 

It sounds like ‘motherhood and apple pie’ ... everything seems to be running smoothly ...

Why do we need a PMO anyway? 
According to a KPMG survey of 252 organizations, inadequate project management implementation constitutes 32% of project failures, lack of communication constitutes 20%, and unfamiliarity with scope and complexity constitutes 17%; accordingly, 69% of project failures are due to the lack or improper implementation of project management methodologies. [Wikipedia, 2008]  Furthermore, in an article by Megan Santosus for CIO Magazine, ‘Why You Need a Project Management Office (PMO),’ her research found that more than 50% of those organizations with a PMO claimed improved project success rates. 

So, what are the benefits of a PMO? 
There surely are many reasons; however, here are some of the most prevalent ones:

• As the empirical data suggests, PMOs boost efficiency, optimize cost, and deliver projects on time with acceptable performance. 
• PMO tools and techniques also allow us to track progress and results.
• PMO increases control, collaboration, and communication throughout the organization in the execution of projects.  
• A PMO is an important stepping-stone in organizational maturity. 

When projects are the life-blood of an organization, they are obviously of significant strategic importance to the organization’s future; they ordinarily cross multiple internal business units; and, in many cases, are executed over multiple years.  As such, the PMO does more than provide standards oversight.  A strategic PMO includes monitoring and reporting on active projects to top management for strategic decision making.  Ultimately, the PMO is a component of a long-term strategy and, when utilized correctly, becomes a strategic driver for organizational excellence and enhances the practices of program management, project portfolio governance, and strategic thought leadership.  

OK, OK, OK ... if we were to establish a PMO, how would we do it?

Stay tuned, in the next blog in this series, we will look at how to match the right PMO structure with your organization’s culture and goals.

- Jon Katz, Vice President

Tags: Program Management