The meaning of PMO: what PM offices are all about

A PMO provides structure and support for projects while ensuring they are aligned with the organization's strategy. Here's what you need to know.

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In recent years, the project management office (PMO) has become a staple in organizations across industries. From small nonprofits to large corporations, more and more organizations are establishing PMOs.

Why? Because they've realized the value a well-run PMO can bring to an organization. A PMO provides structure and support for projects while ensuring they are aligned with the organization's strategy.

In other words, a PMO is responsible for making sure that projects are delivered on time, within budget, and according to the required quality standards. While the PMO meaning sounds simple enough, there's a bit more to it than that.

In this post, we'll explore the true meaning of PMO and what goes on inside one. By the end, you should have a better understanding of how a PMO can help your business reach its goals.

So let's get started!

What is a project management office?

The project management office definition is “a department or group that sets, maintains, and governs standards for project management within the organizational environment.” Its central purpose is to promote knowledge exchange, better decision-making, and ensure the successful delivery of projects through the use of standard processes and tools.

The PMO streamlines company project management activity by bringing together the people, processes, and resources required to create organized plans of action. A PMO can help an organization:

  • Establish consistency
  • Ensure better quality control
  • Reduce risks
  • Improve communication
  • Encourage coordination among departments while avoiding duplication of effort
  • Increase efficiency and productivity so projects can be executed quickly and accurately

Having a project management office can be enormously beneficial to an organization, particularly when it comes to managing multiple projects efficiently and effectively.

PMOs provide valuable leadership, guidance, and general project planning advice. Most significantly, a project management office establishes frameworks and guidelines for your organization to tackle its most important challenges.

Having a PMO is an invaluable asset for any business seeking to optimize its operations and set itself up for success.

The project management office roles and responsibilities

The PMO is a specially empowered group that fits into almost any organizational structure.

According to the Project Management Institute (PMI), there are three types of PMOs based on their level of control over projects in the PMBOK (6th edition):

  • The supportive PMO. Supportive PMOs are consultants to the project manager by “supplying templates, best practices, training, access to information, and lessons learned from other projects.” This type of PMO is a project repository with low control over projects and project teams.
  • The controlling PMO. Controlling PMOs provide support but demand compliance on frameworks and methodologies, forms, and more. This PMO has a moderate degree of control.
  • The directive PMO. Directive PMOs have complete control of the projects. Each project manager reports to the PMO.

Depending on the scope of responsibilities, the PMO can exist at various hierarchical levels within the organization. The PMO and its members typically work cross-functionally around the organization with few specific guardrails in the organizational structure.

At smaller companies, the role may be closely aligned with top leadership, reporting to a senior leader. In larger organizations, the PMO may lie at some intermediate level between executives and line managers. This allows it to coordinate across departments or units for effective project management and ensuring project success.

Regardless of how a project office is placed in the organization chart, its purpose is to guide teams and facilitate collaboration to complete projects aligned with organizational goals and project objectives successfully.

What’s the standard project management office structure?

The project management office team works together to ensure the successful completion of projects and objectives. This team typically consists of a PMO manager, project managers, business analysts, and other associated roles such as support staff or contracts managers.

Each role has its own set of responsibilities tailored to the project:

  • The PMO manager is responsible for managing the PMO staff, setting standards for process control and quality assurance within the PMO, preparing budget overviews, and overseeing operations within their assigned projects.
  • The project managers are responsible for actively leading high-level project planning and management activities throughout the entire project lifecycle, such as risk mitigation and resource allocation, to ensure successful project delivery.
  • The business analyst (or analysts) supports critical analysis of business processes to improve them through discovery, requirements gathering, and process architecture.
  • Support staff provides administrative assistance to all members of the PMO, aiding in data gathering, report drafting, communication, and distribution tasks.

Overall, each role contributes in its own unique way towards the successful completion of projects by working together in concert as a well-oiled machine.

Do you actually need a PMO?

Knowing whether you need a project management office depends on the size of the business, the nature of projects, and the existing processes within the organization.

Suppose you are struggling to execute projects effectively and the number of projects within the organization is beginning to increase. Or you may have a lot of projects that are disjointed and managed in very different ways, and could benefit from some standardization. In those cases, it may be time to look into implementing efficient project management practices through a PMO.

Notably, managing resources, people, and budgets requires tools and techniques to ensure successful project outcomes. Establishing a PMO can provide these essential resources to each project team.

If there are high-value or particularly complex long-term projects planned, consider if these require a more structured advisory role from an experienced PMO leader and team.

Ultimately, the decision to set up or outsource a PMO needs to be made with business objectives in mind. It only makes sense if multiple project leaders agree that standardizing the way they work will be beneficial to achieving the business’ top strategic goals.

Challenges to be aware of with PMOs

Despite its benefits, setting up a project management office shouldn’t be taken lightly.

It can be a daunting task, especially for organizations just getting the hang of executing multiple projects concurrently. While the goal of a PMO is to create cohesion amongst various departments and streamline processes, there can still be significant challenges.

Here are two of the most important ones:

  • It takes effort and investment. For instance, if a team has little experience in project management, new hires might need extra coaching and guidance from PMO managers to have the best impact. I have found success in hiring for character and training for skill, but this takes significant investment as a leader and works best in in-person collaborative environments (yes, that means going to the office).
  • You need to have leadership buy-in. Another challenge is the work required to ensure leaders across the company understand how to leverage the PMO. Oftentimes, leaders will come in hoping something magical will happen and their project outcomes will be achieved with minimal effort from them. This is not the case, and it can be avoided by setting proper expectations about what the PMO does and how it works.

While these challenges can be tricky, they do not ruin the value of a PMO. With perseverance and dedication, businesses can overcome them, and leverage the new PMO to reach their strategic goals.

How to set up a PMO for success

Establishing a successful PMO can help organizations in a variety of ways, from advancing project management best practices and processes to providing more efficient support to project teams.Here are some key considerations to set your PMO up for success:

1. Recognize the value of the PMO

Make sure every stakeholder understands the true PMO meaning, especially its ability to bring positive change to your organization by driving teams towards desired outcomes. A PMO’s job is not to do projects, it’s to facilitate them—don’t confuse this!

2. Take the right approach to staffing

A PMO is not an internal staffing agency. When staffing a PMO, select personnel with good problem-solving skills and the capacity to foster collaborative relationships between the stakeholders involved in the project management process. You can train most project management functions, but facilitation, collaboration, and successful communication is the trickiest part to teach, so hire for these skills.

3. Make sure communication is a priority

Piggybacking on the previous point, focus on communication and collaboration to run an effective PMO. One of the most crucial project management office functions is to ensure that each project has clear deliverables, is well-defined from the outset, and is communicated to stakeholders. This will help avoid confusion or misunderstanding about expectations throughout the project.

4. Define key performance indicators that matter

KPIs should measure success over time so that you can track progress and continually identify opportunities for improvement. With these measures in place, organizations are assured of an effective PMO that leads projects with agility and precision.

Any metrics implemented must align with top-level business goals. One thing to be aware of when creating metrics is to keep the culture in mind—especially if your organization takes a people-first approach.

For example, I never measure the number of projects completed because projects can vary so greatly in size. One people-focused metric I use is a score similar to NPS where each project manager selects people they work closely with in project delivery to evaluate their performance.

As the PMO leader, it’s not my opinion of their performance that matters; it’s that of the people they serve!