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How to Build a PMO for Results

The PMO or project management office (sometimes also referred to as a program management office), is a business function that has become much more popular in recent years.  But it’s still a function that is commonly misunderstood.  What is it?  What does it do?  How does it add value?  And how do you create a PMO that delivers results?  We’re going to explore all those questions and more here.  Let’s start with the most basic of questions.

What is a project management office?

At the most basic level a project management office (PMO) is a support function that helps improve the delivery and execution of projects in enterprise organizations. PMOs usually exist at a departmental or domain level, though they don’t always exist in every business area.  IT PMOs are extremely common; HR PMOs, much less so.

Historically, project management offices sought to improve the quality of project delivery in many different ways, not all of which were seen as valuable for all stakeholders.  That could Historically, project management offices sought to improve the quality of project delivery in many different ways, not all of which were seen as valuable for all stakeholders.  That could include project related governance processes and oversight, methodology compliance, consolidated reporting and similar, fairly tactical functions.  This could cause tensions with project managers and teams who saw PMOs as ‘big brother’ like, and among departmental leadership who didn’t see a return on their investment in the PMO function.

Why are project management offices important?

There is increasing recognition today that projects only deliver value by enabling the business outcomes that they were approved to support.  On-time, on-scope and on-budget is irrelevant unless a project also delivers ‘on-benefit’.  The ability for program managers, project managers and their teams to do that consistently isn’t aided by traditional PMO models.

Instead, PMOs must align with business strategy.  They must help connect the strategic business planning, funding and portfolio execution approach of the organization with the execution of work to deliver the goals and objectives of that portfolio.  Put simply, they must demonstrate value by enabling value in work execution.

And today, that means delivering with the tri-modal reality that is inconsistent with attempting to apply a standardized oversight, compliance and reporting model.  Work is also consistently being delivered using structures other than projects – programs, products, and emerging approaches like capability based investments.  In this environment the PMO must evolve.

Understanding PMO vs EPMO

In a separate guide we look at the idea of enterprise PMOs, a concept that has become increasingly popular and important in the last few years. Domain or departmental PMOs aren’t an alternative to the EPMO concept, and the creation of an EPMO doesn’t render domain PMOs irrelevant. Rather they must operate as a partnership. To begin exploring that we need to understand another concept – adaptive project management.

The adaptive project management concept

Adaptive project management or APM is a term used by Gartner when referring to the execution aspect of strategy delivery.  It complements strategic portfolio management, which is the high level planning, funding, lean governance and related activities that occur to create and manage the portfolio of investments.

Adaptive project management encompasses the delivery of work through each of the tri-modal realities and all work structures. It encompasses everything from the capturing and prioritizing of demand through work planning, execution and closeout. In and of itself, adaptive project management lacks the strategic elements necessary for success, so must always be a partner set of activities for strategic portfolio management. That’s where the PMO comes in.

Adaptive Project Management for the PMO, Strategic Portfolio Management for the EPMO

The enterprise project management office or EPMO (occasionally referred to as a portfolio management office) is an important strategic function that supports the enterprise’s strategic portfolio management efforts.  Increasingly in recent years that strategic function has been recognized with a reimagining of the function as a transformation office or strategy execution office.

Whatever name is used, the EPMO does not have the reach, relationships, or time to also focus on the adaptive project management elements.  It is also not the best function to do so.  However, when the EPMO integrates with domain level or departmental project management offices, the integration of strategic portfolio management and adaptive project management delivers the level of effective portfolio execution – and strategic success, that Gartner envisaged with the concept.

Domain PMOs are able to leverage their existing relationships with delivery teams – across all delivery modalities, to help those teams understand the purpose and drivers for their work.  This context for the initiatives being undertaken increases engagement and motivation levels among delivery teams, while improving productivity and the likelihood of success.

It also ensures that those teams are focused on value delivery and the achievement of strategic objectives.  That’s a two-way process.  When changes are driven by the portfolio – because of emerging threats or opportunities for example, those changes are communicated from EPMO through PMOs to the work teams.  But when new opportunities, challenges or information are generated from within those work teams, they advise their project management office who can add strategic context, develop alternative courses of action and recommendations for the EPMO to facilitate the decision making process with strategy owners.

How to create a PMO for results

Understanding this model of a strategy focused PMO that owns the adaptive project management elements of portfolio delivery is the foundation for creating an effective PMO.  Or more accurately, an effective network of PMOs across the various business areas in an organization.  PMO creation cannot be considered in isolation.

Some business areas, such as information technology, have a greater need for an effective PMO function than others because more projects and related work occur in that part of the organization.  But there are many other departments that would benefit from a domain level PMO and ensuring alignment of purpose and similarity of function is important.

It is also important to align domain PMOs with an EPMO or similar function.  While often the enterprise project management office is created after departmental PMOs, when organizations commit to the strategic function that an EPMO enables, there must be tight integration of the functions.  Today, creating PMOs without an EPMO also being in place serves little purpose. So with those considerations in mind, how do you build the PMO?

The right skills, the right focus

PMOs should not be headed up by a project manager.  That simply reinforces their function as outdated, tactical entities.  Instead, they must be headed up by an individual with a balance of business and project management skills.  The business acumen supports the ability to understand how goals and objectives are delivered and ensures that strategy execution management remains front and center in the PMO’s activities.  The understanding of project environments supports the ability to implement the solutions that will help to consistently deliver those goals and objectives.

Other staff within the PMO must support that APM concept and the support of SPM.  That may mean analysts who can assist a project manager in understanding issues and opportunities, or experts capable of optimizing project management effectiveness across each of the modalities being used to deliver work.

The PMO should also act as a relationship builder across the network of domain PMOs and within the business area they are directly accountable for.  An effective project management office is one that is able to help project and program managers create the best possible environment for delivering results across multiple projects.  That may include assisting in resource management, change management, dealing with unreasonable stakeholder expectations, etc.

The right approach

Whether a PMO already exists and is being reimagined, or whether it is being created as a new function, it is critical to ensure that it is established and mandated in a way that ensures not only success, but also optimized value.  That must be built on the dual foundation of support for the EPMO and effective adaptive project management delivery.

Processes must be lean and focused on top-down, strategic execution.  They must prioritize effectiveness and empowerment of project teams over the use of arbitrary standard practices or project management methodologies.  And they must enable all work types (program, project, product, capability) and each of the tri-modal realities.

Modern, value-producing PMOs are not concerned with the mechanics of project delivery, instead they are focused on ensuring that all the projects under their guidance are delivering successful outcomes and thereby contributing to the strategic success of the organization.  Any process or approach that fails to focus on that will hurt the ability to create a successful PMO.

The right tools

PMOs have long been associated with project management software, and in recent years that has included those PPM solutions that organizations have relied on to support their portfolio delivery.  UMT360 can help you optimize your project execution and PPM functionality through our partnership with Microsoft.

PMOs must also be capable of supporting delivery tools that aid in the delivery of work using other methods – Azure DevOps and Azure Boards for example.  This has historically been a challenge for many PMOs but unless there is effective support for all delivery structures and modalities the performance of the PMO will be compromised.

However, these tools, whether alone or in combination, still only support the APM elements of effective portfolio execution.  Complete success requires those tools to integrate with an effective Strategic Portfolio Management tool, an area where UMT360’s solution has recently been recognized by inclusion in Gartner’s magic quadrant for Strategic Portfolio Management.  Organizations must invest in strategic portfolio management platforms, traditional PPM tools, and frontline work and team management solutions, and must ensure all of those investments are integrated to provide a single, complete and accurate picture of all investments.

Getting started

For your organization to successfully create a PMO, or a series of connected departmental PMOs, you need to begin by developing a plan for effective portfolio delivery.  UMT360’s VIC framework can assist you with that, and it is critically important to ensure that top-down, strategic approach is in place if you are to optimize the value from your investment in one or more PMOs.

If instead you simply create a PMO and task it with improving project delivery in its own area of focus, you may find some small, early wins, but within a short period of time stakeholders will be questioning the purpose and value of the function and the reputation will be damaged, making it harder to do the PMO right the next time.

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