The Importance of Purpose in Envisioning and Designing Your PMO

As it is important to define the purpose and objectives of a project, so it goes with a PMO.  This brief article touches on two key dimensions that should be considered when envisioning and designing a PMO for your organization.  These are certainly not the only two dimensions that need to be considered, but do provide a good start.  The order that the dimensions are listed below is not a prescribed order.  These dimensions can be considered in conjunction with each other as the PMO is designed and developed.

Project or Portfolio Management? 

The “P” in PMO can stand for project or portfolio, depending on the mission of the PMO.  If the purpose of putting the PMO in place is to provide governance and support for a defined set of projects, then the PMO should be designed and implemented as a Project Management Office.  Example functions of a Project Management Office may include:

  • Defining and ensuring the proper use of a standard project management methodology.
  • Providing a monitoring and control function at the projects level to help projects keep within scope and on schedule while staying within budget (i.e., managing what is called the “triple constraint”).
  • Managing dependencies and risks across the project portfolio.  One example being, if Project B is dependent upon a deliverable or milestone from Project A at and Project A is behind schedule (an issue that presents a risk for Project B), the PMO may intervene and work with the project managers of both projects to explore alternative options for getting Project B what it needs from Project A in a timely manner or working with Project B to accommodate Project A’s inevitable delay.
  •  Managing resource engagement across projects.  An example of this may be that a particular resource with a key skillset is freeing up from Project A and Project B has a need for that skillset.  The PMO may intervene to facilitate a smooth transition of that resource between the two projects.

Now, what if the mission of the PMO is not project governance specific?  What if the mission of the PMO is to help decide between competing projects (which to fund, which to eliminate or hold for further review, etc.) and ultimately help determine which of those projects moves forward into execution mode?  These decisions would be heavily based on each respective project’s alignment to identified strategic objectives among other criteria, for example ROI.  In this scenario, the PMO would have a portfolio management focus and the proper nomenclature would be a Portfolio Management Office.  Once the funded projects are kicked off, the Portfolio Management Office helps to ensure that the projects are executed such that the outputs and outcomes of the projects meet the stated benefits of the project.  And ultimately the Portfolio Management Office helps to ensure the projects meet the organizational strategic objectives  (be they business or technical) to which each respective project was aligned.

Example functions of a Portfolio Management Office include:

  • Evaluation of potential projects for the portfolio,
  • Ensuring clear project sponsorship/governance,
  • Onboarding projects into the portfolio,
  • Project prioritization and sequencing,
  • Portfolio level performance reporting and analysis, including portfolio level alignment to business and IT objectives, and
  • Portfolio level management of project status, risks, dependencies, conflicts, etc.

Business or IT Focus? 

I worked for a client organization recently that had a formal and clearly IT focused Project Management Office.  The project management methodology and associated functioning of the Project Management Office worked well for IT projects.  Based on the success of the existing PMO and project management delivery successes, the organization wanted to also take on business specific projects which were purely business driven and business oriented (specifically productivity and quality enhancement type projects).  We found that the general project management framework and certain elements of the standard IT project management methodology could be successfully applied to these business projects.  However, there were other elements that only worked well with IT projects.  Custom methodology elements were developed to better serve these business projects.

Besides the project specific methodology, we also found that trying to force fit the business projects into the same IT project reporting and project review (part of the IT Project Management Office) just didn’t seem to work well.  And hence we ultimately developed and orchestrated a unique (business tailored) review process for the business projects.

The lesson here for envisioning and designing your PMOs is one size does not fit all.  It is important to understand the specific objectives that the PMO needs to fulfill and the type of projects it will govern.  Once these two dimensions have been thought through, this will provide useful foundational knowledge for the PMO’s design.  It will be clear as to what the “P” in PMO means.  The project methodology and PMO governance approach can be tailored to the type of projects (business or IT or both) that are in focus.  The appropriate PMO support staff can be put in place and the targeted stakeholder audience can be defined and provide useful and audience specific communications.

About the Author: Impact Makers’ PM Practice Lead Jeff KeelingJeff Head Shot2

Mr. Keeling leads our PM practice. He has over 20 years’ experience successfully leading numerous client engagements for private and public sector organizations, including international client implementation expertise. His experience before joining Impact Makers includes program/project management and consulting services with various notable firms including IBM, Ernst & Young, Coopers & Lybrand and Anderson Consulting (Accenture). Mr. Keeling is PMP certified and was Sr. PM certified during his tenure at IBM.