October 30, 2019 • Henry Thedieck

Does Your Company Need a Project Management Office?

Project management offices (PMOs) have a long history in the IT industry, and today play an important role in the success of many technology projects large and small. But did you know that PMOs were actually invented by the U.S. military? The first recorded use of a project office was by the U.S. Air Corps in the 1930s to oversee aircraft development. The foundations of a traditional PMO were later refined by large-scale military projects which required coordinated efforts, such as the development of missile systems in the 1950s.

The project office concept was eventually exported to other sectors, including IT, where it found a place during the Digital Revolution starting in the 1980s. With rapid technological changes and an increasing number of projects, companies began to search for ways to coordinate and standardize their project approach. This led to what we now call Project Management Offices.

But what is the purpose of a PMO today? And does your company need one? Let’s examine the functions of a project management office, the kinds of PMOs that exist today, and what they can do for your business.

What is a PMO?

In the early days of IT project management, a project manager might be given just a few instructions regarding budget constraints and deadlines. Ensuring the IT project was completed on time was then left up to the individual manager who worked mostly on their own. As project management grew, however, standardized procedures were created, such as the project management process of initiation, planning, execution, control, and closure. Eventually, with the recognition of project management as a specific field, structures were built to guarantee consistency across projects. This led to the creation of Project Management Offices.

According to the Project Management Institute’s handbook, a PMO is officially defined as a group that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools and techniques. PMOs can be located within or be external to an organization, and they can vary widely in name and function.

In general, the responsibilities of a PMO fall into three major categories. The first is strategic planning. This could include work on topics like aligning projects with corporate strategy and culture or developing project management methodologies and best practices. The next area, delivery support, focuses on how projects are achieved, including capacity planning, integrating data, and resource sharing. The final area of PMO responsibility is standards development. Effective standards provide long term benefits to the business while ensuring a PMO remains agile and adaptable to strategy changes.

While a PMO is usually created to deal with a specific project or challenge, PMOs often evolve to perform a wider range of activities. This shift, from simple project oversight and control to business integration and strategic alignment, indicates a maturity of project management that separates organizations with successful PMOs from those that are just getting started.

The 4 Types of PMOs

According to findings by Gartner, while there is no one-size-fits-all approach to project management offices, PMOs tend to fall into four general types.

The Delivery PMO

Considered the most common type of PMO, delivery PMOs are focused on planning and controlling the execution of projects. Led by a project manager who makes decisions and coordinates when problems arise, the goal of this PMO is to build processes that are repeatable and focused on results. Delivery PMOs are most reflective of the early stages of PMO development and evolution.

The Compliance PMO

Also representing earlier stages in the PMO development process, compliance PMOs are most common in organizations that have not yet developed consistent procedures, methods or documentation around project management. As a result, compliance PMOs are often responsible for establishing standards and benchmarks for measuring project performance.

The Activist PMO

More commonly associated with organizations that value distributed project ownership, activist PMOs take a broad view of project management, preferring to vet projects and proposals for strategic alignment and risk. Unlike other PMOs, activist PMOs work to enable projects, not control them, and provide suggestions when issues arise.

The Centralized PMO

While early stage PMOs rely on key employees to complete crucial project work, more developed PMOs can fall back on established processes and operate with more efficiency. In these organizations, the result is a centralized PMO where best practices are shared and new project staff can be integrated quickly, ensuring projects remain on track.

Does Your Business Need a PMO?

To answer this question, it’s best to start by reviewing how your organization currently operates. Do your teams work together effectively across systems and projects? Or do they function within their own silos and structures? If your teams aren’t connecting or collaborating well internally, establishing a PMO to address these issues could help. Similarly, if you have a big project coming up or are implementing larger strategic changes, a PMO could be a great option.

If your business already has a PMO, take a step back and evaluate how your project management office is working. Is your PMO caught in a cycle of continually justifying its existence and proving ROI? Does your PMO revolve around project managers and ensuring consistent reporting? If so, your PMO might be stuck in the early stages of development and could benefit from a review of its operations. Ultimately, the goal is to help your project management office develop into a center of continuous improvement and cross-department collaboration designed to achieve strategic goals for your business.