Still don’t have a PMO (project management office)? Here’s why you should…

The term “PMO” (Project Management Office) has become pretty mainstream lately. More and more publications are writing about the topic.

But the crucial question is: Do you really need one?

Well, the easiest answer is “yes.”

The honest one is “it depends.”

But don’t worry, once you finish this guide, you’ll have a clear answer to that question.

In this 10-minute read, we’ll walk you through everything you need to know about project management offices and whether you should start your own.

You ready?

Let’s start with the basics.

What is a PMO exactly?

Generally speaking, a PMO (aka Project/Program Management Office) is an internal or external department that standardizes project management practices within an organization. It guides project managers and helps them make better decisions.

PMOs branch out in 3 main categories: directive, controlling, and supportive.

We’ll cover them in more detail a bit later, but first let’s back up a bit.

Back in the 1950s, the US army designed the underlying systems of traditional PMOs to help them develop complex missiles. A few years later, industries like construction and IT applied the same concept.

By the late 1990s, the whole PMO thing went “mainstream” and now we have PMOs in all shapes and sizes.

In 2020, 89% of organizations reported having 1 or more PMOs (50% with 2 or more).

Now, why have PMOs become so popular?

Here are some reasons:

Why most projects fail

Wellingtone’s State of Project Management 2020 reported the main challenges PMOs currently face are:

• Attempting to run too many projects
• Poorly trained project managers
• Poor resource management
• Inconsistency in approach
• Lack of planning skills

Additional research showcases the following stats:

• A lack of clear goals leads to a 37% project failure rate.
• 44% of projects fail due to a poor business-project match.
• Poor management of requirements causes roughly 47% of projects to fail.

If we pay attention, most projects don’t fail due to lack of resources. Nor time. Or even technology. They fail because of a weak management process.

There’s no goals, no KPIs, no quality standards.

And a well-planned project office can solve all these problems… if executed right. That’s one of the reasons many companies decided to start their own.

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The 3 types of PMOs

Now, there are different ways to set up a successful PMO.

Depending on your organization’s current goals, team’s size, budget, and level of PPM (Project Portfolio Management) maturity, you may choose one or another.

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Let’s discuss them in more detail.

1. Supportive PMO

As the name suggests, this PMO structure is more support-based. The PMO’s level of control within the organization is very low (can’t enforce anything on any project) and, usually, it’s a part-time or consultative role.

Supportive PMO’s main goal is to implement best practices, provide templates and guidance, and train the company’s project managers.

The project managers generally report to functional or departmental executives, not to anyone in the PMO.

2. Controlling PMO

Like supportive PMOs, the controlling structure provides support and guidance, but the job doesn’t end there.

It also promotes standardization within the organization, which may involve the adoption of a specific project methodology, software solution, and project frameworks.

This level of PMO also typically has the power to enforce compliance, if their frameworks, templates, and tools are not being used.

3. Directive PMO

Directive PMOs have the highest level of control within an organization. Project execution is fully managed by the PMO and project managers must report to it.

The activities of a directive PMO may include:

• Standardization of processes and operations
• Providing supporting tools and frameworks
• Improving levels of project success
• Overseeing all the projects in the organization
• Portfolio management
• Resource allocation

How to choose the right structure

Now that you know the different PMO structures and how they work, it’s time to decide which one (if any) is right for you.

To do it, we can follow a simple 3-step process: diagnose, design, and launch.

Let’s break it down:

Phase 1: Diagnose

Before even thinking about selecting a specific structure, you must have a complete understanding of the current state of your organization at different levels: talent, infrastructure, budget, priorities, and more.

These questions can help:

Do you have the right talent? 

You must qualify your team’s hard skills on project management standards and establish clearly-defined responsibilities.

To assess your team, some useful questions are:

• How many people do you need?
• Who will be leading the project?
• Have you defined the needed roles and duties?
• If so, does your current team make a good fit for them?

Your PMO structure will dictate the roles you need to fill and the general scale.

If you don’t have the right talent, is the investment worth it?

You see, starting a PMO is expensive.

The average yearly salary of a full-time project manager is well over $60,000. So you must analyze whether a PMO is worth the extra investment in your company.

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To figure it out, some useful questions are:

• Are your current projects large enough to justify a PMO?
• Is your team spending excessive time on project management duties?
• Is a PMO the best solution for you? Could you get the main benefits by upgrading tech?
• Do you have the needed infrastructure to support a PMO?

After this initial diagnosis, you need to decide if you want to move forward.

Phase 2: Design

With the answer to those questions in mind, it’s time to pick and design the structure of your PMO.

We do this in 4 steps:

Step 1: Establish strategic goals and KPIs

You must be clear about the specific problems your PMO team will solve. Generalities won’t do you any good.

Everybody in your organization must understand the role your PMO will be playing and how it affects the overall picture.

Some helpful questions are:

• Do you have a project vision statement in place?
• Have you developed a plan to solve a specific problem for the organization?
• What happens if something changes? Is there a contingency plan in place?
• Is your vision aligned with the top stakeholders’ goals?

Additionally, you need to set KPIs (key performance indicators) for your new PMO. Without them, you can’t measure progress.

Some KPI examples are:

• On-time completion rate
• Planned hours vs. time spent
• Budget variance
• Number of errors
• Milestones completed on time

Note: For further reading, check out this guide on effective ways to set up project objectives.

Step 2: Define your PMO structure:

Once you’ve clear goals and KPIs in place, it’s time to define your PMO structure. Project governance will support decision-making and, to succeed, you must have solid foundations.

First, you need to pick 1 of the 3 structures we covered earlier:

• Supportive
• Controlling
• Directive

You should choose it based on the diagnosis you made in phase one.

In short, a supportive PMO might work well for organizations where project performance is good without additional control.

Controlling PMOs work better for companies that want to standardize project management practices and operations and ensure adoption across the organization.

And directive PMOs go beyond control and fully take over projects, which might be a good idea for large organizations.

Whatever your case, make sure the structure aligns with the main goal of your company.

Step 3: Select your PMO’s position

Basically, we can break PMOs down into 3 main roles or positions:

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1. Corporate or enterprise PMO (aka EPMO): This position focuses on aligning the business strategy with the company’s projects and goals.
2. Department-specific PMO: This position focuses on overall management of projects in specific departments, which can also involve training and guidance to project managers.
3. Individual PMO: This position provides guidance to individual projects. Often, this can be a temporary position.

Step 4: Develop an action roadmap

Finally, you should define the steps and activities to meet your PMO’s goals and create a timeline for them. This way, you can measure the benefits of those activities as you go.

Phase 3: Launch

Now that you’ve selected a specific structure and position, and developed a specific action roadmap, it’s time to launch your PMO.

We do this in 3 stages:

1. Pilot: Start your PMO based on the activities described in your action roadmap.
2. Evaluation: Qualify the results and compare them against your goals and KPIs.
3. Iteration: Based on the feedback you collect, your PMO can evolve and, as it evolves, it’ll be able to perform a broader range of functions.

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The future of PMOs

The digital revolution changed everything about PMOs.

Now businesses move at lightspeed and market conditions are constantly changing. Traditional practices are becoming less and less effective.

According to Wellingtone, the future PMO will likely have increased scope of work, but a proportionally smaller team.

To adapt to these changes, PMOs need to become more efficient through automation. Without the right tools, PMOs will face huge challenges.

That’s where staging-mondaycomblog.kinsta.cloud can help.

What ‘s staging-mondaycomblog.kinsta.cloud?

staging-mondaycomblog.kinsta.cloud is a Work OS (Work Operating System) trusted by companies like Walmart, Uber, and Ebay, that helps organizations develop interconnected PMOs.

We help you centralize all your work in one place, improve team collaboration, and tackle single or multiple projects from start to finish.

We do it through AI, templates, real-time communication features, and proven project management systems.

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How staging-mondaycomblog.kinsta.cloud can support your PMO

Here’s a quick breakdown of some of the features we offer:

• Full-scale automation: Let our “robots” do the heavy-lifting for you and automate up to 250,000 human actions in minutes.
• Collaboration across departments: Align all departments in your organization to work together in one place.
• Protection and admin control: Share and monitor data with enterprise-level security.
• Enterprise-level analytics: Visualize data from over 50 projects on a single dashboard.
• Tailored onboarding: Get high-level support from start to finish
• Portfolio management: See a quick overview of the money invested across projects.

And, honestly, that’s just scratching the surface.

If you think staging-mondaycomblog.kinsta.cloud may be a good fit for your team or future PMO, make sure to read our product overview page.

Conclusion

A well-designed project management office requires a mix of the right talent and the right technology.

It might be hard at first. But once you’ve set it up the right way, it’ll pay off.

staging-mondaycomblog.kinsta.cloud provides you with all the simplicity and speed you need to get started with no training, and all the power to manage even the most audacious of projects.

So, whether you want to start your own PMO or simply want to improve your project management efforts, why don’t you try our project planning template?

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