While every project is different, having a standardized set of procedures and practices can help ease the process of managing multiple projects and maximize the chances for success. A project management office (PMO) typically creates and manages these standards for many businesses.
PMOs help organizations gain alignment across multiple project teams by providing excellent governance and better risk management.
This blog will provide valuable insights into:
What is a project management office?
The benefits of having a project management office
Primary roles and responsibilities of a PMO
How to set up a project management office
Trends and predictions for the project management office of the future
What Is a Project Management Office (PMO)
A project management office (PMO) is a group, agency, or department that defines, maintains, and oversees the implementation of project management standards across an organization.
A PMO can either be internal or external and acts as a centralized hub where you can access project documentation, strategy, and guidance. It’s tasked with ensuring projects are delivered on time and within budget.
Over the years, the role of PMO has evolved, and its popularity has grown. According to Statista, 80% of organizations have one or more PMOs.
Benefits of Having a Project Management Office
A modern project management office functions as a value center and can be vital to business profitability. These are some benefits you can expect after setting up a PMO.
The PMO enables organizations to begin new projects faster by providing templates and best practices. With proper guidelines, project teams quickly get started, allowing them to deliver projects faster.
Dedicated data analysis
One of the roles of the PMO is extensive documentation and data analysis. This helps the office gather insights to help the organization identify improvement points in its processes and practices.
When the PMO collects data from various sources, it makes it visible to different stakeholders per their specific roles. This enables real-time data visibility across the organization.
Centralized hub for education and training
The PMO provides standardized training for all project and program managers in an organization. The office also educates teams on the tools they need, such as templates and software, to meet their goals. Standardized training ensures that all your managers acquire the same skills and have a similar degree of proficiency. Further, having such a centralized training center makes it easier for project teams to know where to access training.
Projects are aligned with business objectives
A project management office helps senior executives to select and prioritize projects aligned with their strategic and tactical business objectives.
Reduced project resourcing cost
A PMO is proactive and plans ahead of time. It forecasts project resource needs and allocates the right resources for suitable projects at the right time. In addition, it tracks and improves your strategic resource utilization. As a result, resourcing costs reduce significantly while the value increases.
Project Management Office Roles and Responsibilities
Most project management offices share these common roles and responsibilities:
The PMO’s primary responsibility is to analyze an organization’s needs and set goals. It defines the project criteria, selects projects that align with business goals, and advises management on increasing ROI. The office also ensures that projects are chosen and prioritized according to business goals and that resources are allocated and utilized per the goals.
Modern PMOs establish a project governance framework that gives project managers a structured approach to govern their projects. They provide valuable insight and guidance to project teams to ensure that projects run smoothly, within the budget, and are delivered promptly.
The project management office is responsible for budgeting resources across the organization’s portfolio. It guides the organization on the allocation of resources for each initiative. The PMO examines the resources the company has at its disposal and where they’re most needed. Then it manages and allocates resources across projects based on priorities, schedules, budgets, and more.
Project management training
The PMO takes a leading role in training project managers in software tool use, project management basics, and leadership. Such training aims to have better overall project performance.
Defining the project management methodology
Prepare management reports
A core PMO role and responsibility is centralizing information and delivering it to the right project stakeholders. The office generates reports on:
- The overall progress and health of projects
- Status of milestones and deliverables across projects
- Project risks and progress on mitigating these risks
- Operational efficiency and project performance
- Resource utilization
These reports enable management to make informed and timely decisions for the project’s success.
Plan and schedule resources efficiently
Resource planning, allocation, and management are one of the most crucial duties of the project management office. The PMO ensures that projects have the right resources whenever they need them.
Resource capacity planning and forecasting
In addition to allocating resources to suitable projects, the PMO is also responsible for forecasting future project resource capacity needs and planning accordingly. The office looks at the current capacity and demand to identify shortfalls or excesses of the resources. It also forecasts resource management financials to determine the margin and profitability.
Streamline processes and facilitate communication
PMO is in charge of streamlining various project management processes and methodologies. By implementing an efficient framework, PMO promotes seamless team collaboration and communication among team members. Streamlined processes and workflows help align remote teams and bring everyone on the same page. Teams are also able to communicate faster with the right people without chaos. Additionally, project managers can address urgent issues quicker and more effectively.
How Do You Set up a Project Management Office and Review Its Success?
As with any project, you need to be strategic when setting up a PMO. Follow these six steps for a successful implementation:
Step 1: Analyze the current state of project management in your organization
First, you need to understand your organization’s current state of project management. Check the project management methodologies, processes, and tools teams use and analyze weaknesses. Analyze ongoing projects, too, to determine who is working on what.
This first step will help you better understand how project management works—or doesn’t—in your organization and guide you on improvements your PMO will implement.
Step 2: Define the purpose of your PMO
Now that you know the project management challenges you’d like to overcome in your organization, begin defining your PMO’s purpose, areas of responsibility, hierarchical position, and competencies. What are its mandate and services?
Decide whether your PMO will be a supportive office providing tactical advice and guidance at the departmental level. Or it will be a strategic enterprise office that directs all projects from a senior position in the company structure.
When defining the purpose of your PMO, stick to just one or two areas of responsibility to avoid overloading your project management office from the start.
Step 3: Secure the right people and skills
After defining the purpose of your PMO and the services, you’ll offer, start thinking about the people and skills you’ll require. Depending on the size of your PMO, you’ll need a range of job roles, including the PMO manager, administrators, data specialists, training professionals, and more.
You need people with the right skills, so recruit carefully. Besides technical skills, look for relevant soft skills like emotional intelligence, leadership, and customer focus.
Step 4: Establish a work plan and KPIs
The PMO must have its KPIs. In addition to improving KPIs from project teams, the best-performing PMOs measure and monitor their performance.
Tracking performance against KPIs will help keep the PMO accountable and aligned with strategic objectives. This is also one of the best ways to review the success or failure of your PMO and reinforce its value to the organization.
Step 5: Define project governance, methodologies and best practices
Remember you analyzed the state of the project management in your organization? Now it’s time to make improvements. In this step, establish how projects will be managed, match the approach to current best practices, and cascade this throughout the organization.
You may also introduce new tools to improve project planning and management, such as project management software.
Step 6: Review regularly and make improvements
Your project management office will evolve as the project manager’s skills and knowledge grow and with enhancements to systems and tools. It’s, therefore, vital that you regularly review data to monitor performance and drive improvements. Also, update your KPIs over time as the PMO matures.
Doing so allows you to check that your initiatives still align with the overall business goals and continue to create value for the business.
What Are the Trends and Predictions for the Project Management Office of the Future?
The project management office is evolving, and the PMO of the future is expected to be quite different to meet the changing demands of project management.
Here are a few trends that you can expect to see in PMOs of the future:
Adoption of agile project management methodologies
Agile project frameworks will be a common feature in the PMO of the future to enhance project delivery. PMOs must prioritize iterative development, collaboration, and flexibility to keep up with the ever-changing business environment. This will require PMOs to leverage agile project management tools and techniques.
Strategically aligned project management and business objectives
Project management offices will become strategic partners in aligning project portfolios with organizational objectives. They’ll be actively involved in helping top management prioritize projects, allocate resources, and ensure that projects continue to contribute to the organization’s strategic goals.
Prioritizing innovation and continuous improvement
Value-driven PMOs will give priority to the culture of innovation and continuous improvement. Teams will be encouraged to experiment, exercise creative thinking and share knowledge to drive innovation in project delivery. Innovation labs, cross-functional collaboration platforms, and idea management systems will be common feature in PMOs to capture and implement these innovative ideas.
Digital transformation and automation
PMOs are gradually embracing digital transformation and automation to streamline project management processes. Organizations are automating project documentation, reporting, and administrative tasks using project management software. By implementing automation tools, PMO staff can focus more on value-added activities.
Final Thoughts on Project Management Office
A well-executed PMO offers many benefits, including standardized methods and procedures, projects aligned with business objectives, and better-trained staff.
But, to have a successful PMO, you must have the right strategy, hire the right people, and give them the best tools for the job.
Mission Control is a powerful project management software with a suite of tools to transform your project management office into a profit center. These tools enable you to manage your resources efficiently, automate your professional services, and track and report your projects’ progress.
One of the many features that can help track your project status in Mission Control includes our PMO Dashboard feature which provides high-level insight into how each one of your projects are performing to it’s set budget and schedule.
Ready to start a PMO at your business? Request a demo today to see how Mission Control can help make the process easier.