Implementing A Project Management Office (PMO)

Prepared by: James Waln, PMP October 2007

Overview

The What and Why of PMOs Starting a PMO Types of PMOs PMO Roles and Responsibilities Executive Buy-In PMO Best Practices Sources and Suggested Reading Reference Material
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The What and Why of PMOs

What Is a PMO Exactly?

59% of respondents said PMO means project management office; 12% said it means program management office.
Study by Brian Hobbs PMP and Monique Aubry

An organizational unit to centralize and coordinate the management of projects under its domain. A PMO oversees the management of projects, programs or a combination of both.
A Guide to the Project Management Body of Knowledge (PMBOK guide), Third Edition 2004, p. 17

In each organization, the definition of a PMO may vary in name and by function, but it essentially centralizes, coordinates and oversees the management of projects and programs.
Article by Bud Baker, Ph.D. PMI Network, June 2007
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The Project Management Office (PMO)

A PMO is a centralized organization dedicated to improving the practice and results of project management.

Some PMO initiatives are minimal, involving part-time staff. Other initiatives involve huge infrastructure, with rigid centralized planning, control and methodology. An organizational entity created to assist project managers in achieving project goals. A PMO is a group of people with a mission to support project managers in the successful launch, implementation, and completion of projects. Provides an opportunity for project managers to develop professionally more quickly than most could ever hope, if they were working isolated from one another.

PMO Responsibilities

What Benefits Does a PMO Offer?

The most important service of a PMO is to provide qualified project managers to an organization

PMOs are/can

If a PMO is not used

With several projects under
way, project managers are probably not learning from one another PMs are probably not sharing best practices PMs are not challenged to continuously improve their skills Project managers can be overtly influenced by line managers Project managers scattered across an organization with no common bond are significantly handicapped

Making available qualified

project managers Provide support personnel to assist project managers Allow project managers to pool their skills and knowledge Help project managers to develop professionally Recommended for organizations with many project managers Provide consulting-type services and products to its constituency

Starting a PMO

Starting a PMO
FACTS
Executives must deliver in two key areas ongoing
operational results and improvement efforts.

Functional managers are continuously evaluated by senior

management, peers, and subordinates for their ability to make things happen quickly.

Many projects involve multiple departments and functional

areas.

Each organizational unit has its own language, its own

standards, its own project management techniques or lack thereof.

No wonder so many central project management

coordination units have sprung up in the last few years.

Today, there is estimated to be over 50,000 such

organizations in the U.S. alone.
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Starting a PMO
PMO Requirements:

PMO value must be measurable to become

sustainable.

If you cannot measure, you cannot control

and if you cannot control, you cannot manage.

The PMO must be aligned with the interests

and goals of the organization to sustain itself. A PMO has responsibility for educating
the organization it serves about its benefits it brings to projects A PMO must create and track metrics to show the results of its contributions A PMO should survey its customers routinely to verify it is adding value

The PMO should focus on portfolio management of:

Project investments
Resources Assets Strategic objectives
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Types of PMOs

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Current PMO and Advanced Models

Traditional PMO Focus mostly on tactical issues Science of project management Views organization as a "complex machine" Emphasis on monitoring and control Provides tools similar to a precise "map" to follow Internal process focused Process driven Standard (heavy) methods and practices Based on rules; follow rules Defined, repeatable, managed and optimized practices Focus on efficiency Process leadership Heavy management and governance Next Generation PMO Focus on strategic and cultural issues Art and craft of project management Views organization as a "complex ecology" Emphasis on collaboration Provides tools similar to a "compass" that show the direction Focus on end products, customers and outcomes Business driven Adaptable and flexible (agile) methods and practices Based on guiding principles; follow rules and improvise if needed Adaptive and innovative practices Focus on effectiveness and innovation Thought leadership Balanced management, governance and leadership
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Table courtesy of J. Duggal, Projectize Group, http://www.projectize.com.

What Does a PMO Look Like?

Typical starting point for a
PMO can be three project managers, a team leader, and five team members (also called PMO support personnel).

Reporting View of a Small Project Management Office

PMO Project Starter Services

Provide well-trained and competent project managers to run
key projects. Provide project management consulting. Review contract proposals from vendors. Sponsor project management education. Develop, document, and maintain project management best practices. Conduct project culture training. Perform project reviews. Perform post-project reviews. Ensure that new projects apply lessons learned.

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PMO Models
Early on in PMO history, the Gartner Group identified three PMO models as flourishing: "Project Repository Model "Project Coach Model" "Enterprise PMO Model"

There is a fourth model, called the "Deliver Value Now Model," that should not be ignored.

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PROJECT REPOSITORY MODEL

PROJECT REPOSITORY MODEL
PMO serves as a source of information on project methodology and standards. Assumes the enterprise has embraced a cohesive set of tools for project design, management, and reporting. Occurs most often in organizations that empower distributed, businesscentric project ownership or with weak central-governance.

BENEFITS
Data gap identification Incremental risk management control as projects initiate and mature in the development cycle Bottleneck identification for all projects "Raising the bar" for delivery "goodness"

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PROJECT COACHING MODEL

PROJECT COACHING MODEL
Assumes a willingness to share some project management practices across functions and uses the PMO to coordinate the communication. Best practices are documented and shared and project performance is monitored actively. Results are used to raise enterprise performance and train inefficient or new project managers.

BENEFITS
Acts as trainer Consultant or mentor Source of information on project processes Often helps in project setup and postproject reviews

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ENTERPRISE PMO MODEL

ENTERPRISE PMO MODEL
The most permanent, consolidated, organizational model and concentrates project management within the PMO. The mission of the EPMO implies direct management or oversight of projects. All project managers are staffed within the shared service and consigned to projects as needed. The EPMO acts as a contracted project manager, assessing scope, allocating resources and verifying time, budget, risk, and impact assumptions.

BENEFITS
Many firms have since learned that a consultative approach aimed at increasing project throughput and reducing project durations requires teamwork between the EPMO and the project teams. The idea of a PMO owning the project managers has some significant potential negative effects. The project management expertise and standards may not filter through to functional areas. When significant portions of the projects are part of one functional area, that functional area may not feel as committed.

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"DELIVER VALUE NOW" MODEL

"DELIVER VALUE NOW" MODEL
Puts organization goals first. Improvements in PM methodology are viewed as a means to an end, and not the end in itself. A holistic approach, embracing methods, skills and strategy that views project management as one piece of a bigger puzzle. Enables consistent motivation for the entire organization to seek out accelerated project deliveries. A stronger, more balanced project portfolio and better project performance.

BENEFITS
A strong, well-balanced project portfolio that identifies up-to-date project workload, sponsorship, tactical progress, health status and current data gaps. A monthly "plan and forecast" that identifies portfolio opportunities and threats, top issues and risks, projects over/under budget summary. A project prioritization model for all portfolio projects based on ability to form a Governance Board to direct model creation. Governance Board setup and/or modification enables the force-ranking of the portfolio of projects. Project management training, coaching, and mentoring based on need.
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DETERMINING THE PMO MODEL FOR YOUR ORGANIZATION

Questions you should ask
1. Who will initially be the main customers of the PMO? 2. What is the maturity level of the project management community? 3. How well does the Executive Team work together for the good of the enterprise? 4. Where is the greatest pain? 5. Will the PMO be able to deal with the intensity of missed delivery expectations from the executives and all of its implications? 6. Will the PMO be able to rescue troubled projects critical to the business? What if it cannot? 7. Will the PMO be funded sufficiently and supported by the executives to meet the value opportunities and threats?

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PMO Roles and Responsibilities

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PMO Roles and Responsibilities

PMO EXECUTIVE
PROJECT PORTFOLIO MANAGER PROJECT MANAGEMENT MENTOR PROJECT MANAGEMENT TOOL MENTOR RESOURCE PORTFOLIO MANAGER HELP DESK SPECIALISTS METHODOLOGY SPECIALIST DATA ADMINISTRATOR PROJECT MANAGEMENT TRAINER
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PMO Services Overview

As a PMO begins to define its objectives, it needs to consider what services it will provide to meet those objectives. It must also assess when in its implementation schedule it will provide these services. The services that are required dictate the various roles and responsibilities. Each service provided will require some level of staff support.

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PMO Services
PMO Services Portfolio Management
Project portfolio information Asset, strategic objectives and resource portfolios

Consulting & PMO Services

Project rescues Project acceleration, assessments, threats and opportunities, auditing, risk management Project management processes, tools, methodologies Mentoring Help Desk Web portal/information management Resource recruiting

Training
Methodology Tools

Admin./H.R.
Project accounting Operations planning and forecasting

Archives
Information repository Data integrity and security

Executive reporting and governance Prioritization techniques Staggering of projects Strategic resource management Analysis

Project management basics Certification Teamwork Advanced project management Scheduling software

Data collection and report distribution Asset tracking Materials and supplies Contract and change management Metrics, bonuses, career path, rewards and recognition Customer interface

Project document library/knowledge management Lessons learned Closed contracts

Customer interface

Customer interface

Customer interface

Customer interface

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Executive Buy-In

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Executive Buy-in of The PMO

Executives will embrace a PMO that dramatically increases the probability of meeting their goals. A PMO must deliver on its promise through four major processes:

Choosing the right project mix a new way of strategic planning Linking the executive team's strategies to current and planned projects Managing the project portfolio correctly Measuring the PMO to tangibly improve project performance relative to
the executives' strategic goals

A PMO must be able to help executives with execution of strategy, as determined by the project mix and flow, or the PMO will not achieve sufficient level of value to sustain itself.

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Executives Embrace a PMO If

CHARACTERISTICS OF A PMO THAT EXECUTIVES WILL EMBRACE:

Executives will perceive value if the PMO helps the

executives meet the goals on which they are measured It must drive more projects through completion, without correspondingly increasing resources Projects must be completed in drastically shorter times The impact of the PMO is clearly felt on both the top and bottom lines of the organization (even in not-for-profit organizations) Executives and managers throughout the organization feel that they are getting benefit out of the PMO

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PMO Best Practices

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Elements of An Effective PMO

The Right People The Right Tools The Right Data

AVOIDS: The Wrong Result

The Right People
Include people from

The Right Tools

PMOs may purchase

The Right Data To improve, project

delivery must be measureable. This process is often accomplished with project status reports.

the supply side and market side of the organization. A PMO requires skills in marketing and communications. The PMO should cover multiple disciplines.

Enterprise Project Management (EPM) tools With low project management maturity, sophisticated tools meet heavy resistance. PMOs without a marketing plan to gain strong buy-in on tool usage are doomed.

The PMO must diagnose system problems to help solve them.

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THE "WRONG" RESULT WHY PMO IMPLEMENTATIONS FAIL

The PMO did not define its value proposition.

The PMO is not perceived as impacting project delivery abilities.

The PMO is seen as a threat most often too authoritative. The PMO does not have buy-in from the senior management.

The PMO is too low in the management reporting.

Project Management Overhead the bad PMO acronym. The PMO is micromanaging trying to control every project directly.

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Some Final Thoughts on starting a PMO

In today's economy, more value is needed now. Establishing a PMO that brings recognized value in the first six months of its existence is critical. Recommend you go beyond the original models. As you plan the PMO implementation, seriously consider establishing visible value to senior management from the get-go. Go after the low-hanging fruit that helps everyone win and the PMO will be on its way. Avoid being perceived as sitting in the "Ivory Tower of Project Management Excellence". Build a PMO that will "Deliver Value Now."

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Sources & Recommended Reading

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Sources and Recommended Reading

Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed by Gerald I. Kendall and Steven C. Rollins, J. Ross Publishing 2003 The Enter Prize Organization: Organizing Software Projects for Accountability and Success by Neal Whitten, Project Management Institute 2000 Improving Your Project Management Skills by Larry Richman, AMACOM 2006 Building Project Management Centers of Excellence by Dennis Bolles, AMACOM 2002 Introduction To Project Management by Kathy Schwalbe, Thomson Course Technology 2006 In Common by Bud Baker, Ph.D., PM Network magazine, September 2007 Definition Impossible by Bud Baker, Ph.D., PM Network magazine, June 2007
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Reference Material

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Next Steps Overview

I.
I. II. III. IV. V. VI.

Executive Summary/Proposal Letter with these sections:

Business Case Scope Approach Risk Cost and Benefits Timeline

II. III.
I. II. III. IV. V. VI. VII.

To successfully gain executive buy-in spend an hour with each functional executive to assess the current environment Executive Presentation (3 hour time slot)
The problems in managing projects The cost of the problems The connections between the root problem and the executive problems Simulate one of the problems to show the executives the impact The PMO Solution Discussion Conclusion

IV.

This proposal becomes the formal written document for chartering the implementation of the PMO as a project.
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PMO Roles and Responsibilities

PMO EXECUTIVE
Required Skills
Executive oriented Project management professional Has the ability to work well with all levels of the organization Crossfunctional experience with project portfolio management Consulting background

Role
Leads the development of the PMO value proposition Leads the PMO strategically Key to gaining organizationwide support.

Responsibilities
PMO charter development and implementation Ensuring all PMO activities are driving bottom line value Buy-in and involvement of executives PMO staffing Approval of monthly forecast and work plan report PMO staff retention Approval authority on project mgmt. contracts

Value
Measured by how much documented value is brought to the organization

When
This is the first person hired into the PMO.

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PMO Roles and Responsibilities

PROJECT PORTFOLIO MANAGER
Required Skills
Ability to report bad news Ability to work well with all levels of the business Portfolio management experience for project portfolios > $25 million.

Role
Leads and maintains the development of the project, resource, asset and strategic objective portfolios Reports to the PMO executive Financial and what-if analysis.

Responsibilities
Analyzes the project portfolio and makes recommendations to decision makers Balances the portfolio Evaluates and helps to implement processes to improve project flow Publishes the monthly forecast and work plan report Manages the development and definition of the prioritization model Can be backup to the PMO executive

Value
Same measurement as PMO executive improvement in ROI in project portfolio.

When
Part of the first group of people hired into the PMO

PMO Career Path

PMO Executive

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PMO Roles and Responsibilities

PROJECT MANAGEMENT MENTOR
Required Skills
Ability to work well with all levels of business Consultative in nature and duties Certified Project Management Professional (PMP) Complete grasp of PMI PMBOK fundamentals Ability to work in high stress situations

Role
Supports project rescues Works in the field assisting project teams Trains project managers Conducts project assessments Reports to the PMO executive.

Responsibilities
Provides coaching and mentoring services to the project management community on top portfolio-related components Works with project sponsors and project managers to identify project delivery opportunities and threats.

Value
Same measurement as PMO executive Monetarily identified in overcoming project team threats and opportunities

When
Part of the first group of people hired into the PMO

PMO Career Path

PMO Executive Project Portfolio Manager

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PMO Roles and Responsibilities

PROJECT MANAGEMENT TOOL MENTOR
Required Skills
Expert in scheduling tools Quick learner on software packages Ability to work well with all levels of the business Complete grasp of PMI PMBOK fundamentals Ability to work in high stress situations

Role
Provides technical leadership, coaching and mentoring on all PMO tool utilization Reports to the Project Management Mentors

Responsibilities
Ensures the integrity of all data captured through the supported PMO tools Responsible for the competence of all project managers, resource managers and team members in PMO tools and applications Helps with project rescues in rescheduling work loads in the scheduling tool.

Value
Same measurement as PMO executive Data integrity and completeness

When
Part of the first group of people hired into the PMO

PMO Career Path

Project Management Trainer Project Management Mentor

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PMO Roles and Responsibilities

HELP DESK SPECIALISTS
Role
Customer service Supports the project management community service requests for assistance

Responsibilities
Answers and tracks field requests for assistance from project management community

Value
Same measurement as PMO executive Responsiveness to customer help desk calls.

Required Skills
Ability to work well with all levels of the business A complete grasp of PMI PMBOK fundamentals Trained in all PMO standard tools and methodologies Excellent communication skills Ability to translate technical jargon into simple concepts

When
Part of the first group of people hired into the PMO No later than early in second six months of PMO implemen tation schedule

PMO Career Path

Project Management tool Mentor Trainer Project Management Mentor

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PMO Roles and Responsibilities

RESOURCE PORTFOLIO MANAGER
Required Skills
Ability to work in high stress situations with project team partners Strong negotiation skills.

Role
Oversees resource portfolio, including strategic resources Works with Project Portfolio Manager to help balance the portfolios Seeks to implement resource portability

Responsibilities
Full and correct utilization of the organization's strategic resources Tracks resource utilization trends in alignment with portfolio objectives Assists project management community in locating just-in-time resources.

Value
Same measurement as PMO executive Utilization and throughput per week of the organization's strategic resources Primary PMO executive measurement: to reduce delays caused by unavailable nonstrategic resources.

When
Part of the second group of people hired into the PMO

PMO Career Path

Project Portfolio Manager

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PMO Roles and Responsibilities

METHODOLOGY SPECIALIST
Required Skills
Strong background in PMI/PMBOK concepts and their application Ability to teach concepts to work teams Certified as a Project Management Professional (PMP) Able to work with business sponsors and their project teams in project startups.

Role
Works with project teams in the application of the project management methodology

Responsibilities
Assesses team's methodology usage for method compliance and associative risk management for all key projects Works with Project Management Mentor to identify and overcome obstacles and resistance

Value
Same measurement as PMO executive Percentage of project management community claiming that methodology is worthwhile

When
Part of the second group of people hired into the PMO Brought in early if the work environm ent has very low project managem ent maturity

PMO Career Path

Project Management Mentor Trainer Resource Portfolio Manager

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PMO Roles and Responsibilities

PROJECT MANAGEMENT TRAINER
Required Skills
Professional training experience

Role
Works with project teams, functional units and other organizations to provide and arrange project management training

Responsibilities
Teach project management basic and advanced concepts

Value
Same measurement as PMO executive Agreed upon financial impact of the training, signed off by sponsors or functional executives.

When
Part of the second group of people hired into the PMO Brought in earlier if the work environme nt has low project managem ent maturity

PMO Career Path

Methodology Specialist Project Management Mentor

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PMO Roles and Responsibilities

DATA ADMINISTRATOR
Required Skills
Ability to work in high stress situations with project team partners

Role
Constructs the monthly forecast and work plan report Document librarian Supports all PMO role players Provides primary support for the portfolio manager

Responsibilities
Ad hoc reporting; PMO data repository processing and integrity Review of portfolio project status reports and schedules for data completion

Value
Same measurement as PMO executive Customer satisfaction with information (not data) provided.

When
Should be part of the first group of people hired into the PMO

PMO Career Path

Help Desk Specialist Methodology Specialist

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