To achieve strategic goals, business leaders constantly seek to close the gap between strategy and performance. Driving execution capabilities through the establishment of a project management office helps streamline the way organisations manage their business and, as a result, deliver better project outcomes. In this article, we explore the benefits of project management office (PMO) and the different types.
Benefits of a PMO
Standardisation: Standardisation can help project managers by establishing rules for how they should complete a task. At the same time, it can help management compare performance among project managers.
Increased project success rate: When the project office is well implemented, success rates in projects grow accordingly, as it begins to be conducted in a more organized way and with better resource management. According to a PM Solutions research, 85 percent of companies had a PMO in 2016, which was 5% more compared to 2014 results. They also found that 30% of companies without a PMO plan to create one. This is because the creation of the PMO has proven to improve project success.
Knowledge management: Centralising data within the organisation can make it easier for teams to find the information they need. Knowledge management also maintains visibility into project details.
This visibility can be useful for communicating issues between project teams and management, as it allows them to work together to resolve issues based on hard data.
Provides support to project managers: It is the responsibility of the project office to follow the progress of activities, control resources, and monitor information. Without a PMO, these responsibilities end up falling on the project manager himself, which spurs errors.
Having a PMO is of great help to project managers, as they can focus on more specific issues about the progress of the project and increase their dedication to activities that add value to the final product.
Effective resource management: A PMO centralizes the best practices in projects within the same management so that everything is more organised and efficient. With efficient processes becoming the standard, there is increased productivity and better targeting of resources.
Better products: When projects are executed inefficiently, disorganized, and with an overloaded manager, the chances of the final product not going as planned are much higher. A PMO helps to avoid this scenario, acting as an aid and control Centre that checks disorganisation and inefficient processes.
Some of the other benefits of having a PMO are but not limited to:
· Improved customer satisfaction and employee productivity to increase business results
· Promoting transparency and effective financial reporting with a view to promoting leadership
· Align business strategy with the investment so that the level of success is measured
· Apply standard practices in line with best practices followed worldwide
· Ensuring long-term savings and return on investment (ROI) for all training and mentoring
· The PMO provides project management throughout the organisation
· The PMO bridges the gap between senior management and other teams to improve project communication
· The PMO manages project interdependencies and can be useful in training project managers and team leaders by promoting improved skill sets.
It is obvious that PMO is a very important structure within companies. In addition to all of the above, a PMO can make recommendations, review, and document projects, thereby creating a foundation for your company’s initiatives and simultaneously managing organizational portfolio.
3 types of PMO – John Reiling
There are three basic types of PMO organisations, varying in the degree of control and influence they have on projects within the organisation. You will need to determine which type you need to establish in order to have an effective project office. The three types of PMOs include:
The Supportive PMO generally provides support in the form of on-demand expertise, templates, best practices, access to information and expertise on other projects, and the like. This can work in an organization where projects are done successfully in a loosely controlled manner and where additional control is deemed unnecessary.
Also, if the objective is to have a sort of “clearing-house” of project management information across the enterprise to be used freely by project managers, then the Supportive PMO is the right type.
In organisations where there is a desire to “rein in” the activities, processes, procedures, documentation, and more – a controlling PMO can accomplish that. Not only does the organisation provide support, but it also requires that the support is used.
Requirements might include the adoption of specific methodologies, templates, forms, conformance to governance, and application of other PMO controlled sets of rules. In addition, project offices might need to pass regular reviews by the controlling PMO, and this may represent a risk factor for the project.
This works if a) there is a clear case that compliance with project management organization offerings will bring improvements in the organization and how it executes on projects, and b) the PMO has sufficient executive support to stand behind the controls the PMO puts in place.
This type goes beyond control and actually “takes over” the projects by providing the project management experience and resources to manage the project. As organisations undertake projects, professional project managers from the PMO are assigned to the projects.
This injects a great deal of professionalism into the projects, and, since each of the project managers originates and reports back to the directive PMO, it guarantees a high level of consistency of practice across all projects. This is effective in larger organizations that often matrix out support in various areas, and where this set-up would fit the culture.