Want to Start a PMO? Make Sure You Answer These Questions First

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by Mario Trentim

 

In my previous post, I discussed “Frequently Avoided Questions About PMOs.” Now it’s time to successfully define a PMO using the Business Model Generation.

To do this, your organization must ask a number of questions before the PMO is created so that it can achieve its planned benefits. To help you get started, below are questions in nine categories, plus example answers for most.

Figure 1 – Business Model Canvas (Osterwalder, 2010)

1. Value proposition

What differentiates the PMO from existing organizational structures? How will the PMO create value for its customers? What products and services should the PMO offer, and how should they be offered?

The answer to these questions can be in the form of a mission statement, such as: “The Strategic PMO will be responsible for selecting, prioritizing and authorizing strategic projects, coordinating funds from functional areas and suppliers, negotiating with internal and external customer projects, and centralizing information to senior management.”

2. Customers

Who will the PMO’s customers be, and what are their needs and preferences?

Example answers: Functional managers will need information and reports about ongoing projects, plus a centralized system of planning and resource availability.

Project managers will need support in processes, methodology and templates. They’ll also need mentoring and coaching, historical information, lessons learned and documentation.

Project team members will need training, information, infrastructure and help with resource allocation.

Suppliers and contractors will need contracts and procurement management. They’ll also need project information and change request control.

Senior management will need consolidated information, metrics, dashboards and decision-making support.

3. Channels

How can PMO customers access the PMO’s functions? Where and how are the PMO's products and services going to be available?

Example answer: The PMO will offer its functions through in-person and online support, meetings and training sessions, coaching and mentoring, administrative support, enterprise project management, a contract management system, and phone or e-mail support.

4. Relationship

What type of relationship do customers expect to have with the PMO? How will the PMO interact with customers?

Example answer: The PMO will interact via feedback (meetings, suggestion box or email), an ombudsman, workshops and seminars, benchmarking, and monitoring the use of tools and infrastructure.

5. Revenue streams

What are the PMO’s potential sources of income? Will business units pay for PMO services? Does your PMO have an impact report or benefits realization plan to justify the resources needed to keep it running? What are the key success indicators of the PMO?

6. Partnerships

Which people or groups can help the PMO fulfill its mission? Should any functional area, such as human resources, partner with the PMO? Are there external organizations that may help your PMO?

Example answer: Consulting companies will provide training, the HR department will help define career paths, the IT department will help with infrastructure like computers and the network, and associations such as PMI or PMI chapters will promote joint workshops and seminars.

7. Key activities

What processes, procedures and activities must be performed within the PMO so that it materializes its value proposition and delivers it to customers?

Example answer: The PMO will select and prioritize projects, provide training, develop policies, methodology and templates, and provide IT software and infrastructure.

8. Key resources

What resources (people, equipment, infrastructure, money) are necessary for the functioning of the PMO and the realization of its activities?

9. Cost structure

What is the operating cost of the PMO, considering its activities, necessary resources and partnerships?

Example answer: The PMO will require funds for wages, infrastructure, software, books and publications, and consulting and training services.

Do you have any ideas on how to better define a PMO? Is there any way we could improve PMO implementation (or reshape existing PMOs) by using the Business Model Canvas? Please comment below!

And by the way: Visit PMI’s Knowledge Shelf to learn more about PMOs.

Posted by Mario Trentim on: January 06, 2016 07:54 AM | Permalink

Comments (14)

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Network:239



Mario, good take on using the Business Model Canvas for setting up of the PMO. However, one of the key topics in this is the revenue stream and how to provide the right statements so as to ensure the management has a clear idea. Calculating the ROI of PMO is not so easy, which is mostly intangibles. How would you address this aspect in the Canvas?

Network:757



Hello Kiran, thanks for your message. I use BMG since 2014 in PMO implementation with great results. It all starts with PMO's mission and vision. The next step is to link PMO's Client Segments and Value Proposition. After that, we manage to integrate all the other pieces together. Revenue, as you mentioned, is always a challenge. In one of my clients, the PMO receives a fee for managing projects and portfolios based on KPIs and performance goals. They understand that the PMO is a BU (Business Unit) to deliver internal services somewhat like the IT Department. On the other hand, I have clients that measure benefits realisation and other performance indicators which indirectly translate into revenue. How about you, do you have any other suggestion or ideas?

Network:21051



Hi Mario, thanks for your post. BM Cancas is a great model. Can you just please elaborate how do you introduce risk assessment in this model ? Is it introduced via each of the items ?

Network:757



Hi Rami. Do you mean risk management related to the PMO implementation? If that's the case, it is not part of the BMG, which describes how the PMO is going to operate (as a business unit or other organizational structure). Risk management is included in the PMO implementation project management plan, as it happens in other projects. The BMG helps in defining PMO functions and structure, enabling the project team to define the implementation scope. In case you are referring to project and portfolio risk management as a PMO function, it should be described in Key Activities and Key Resources (if necessary). Regards, Mario.

Network:21051



Hi Mario,

Thanks for the clarification. I meant Risks related starting a PMO, they could be opportunities or threats.

Network:757



Thanks, Rami. In that case, we would manage them using the risk management plan. The Business Model Generation helps in business analysis, processes definition, structure and operational aspects of a PMO. We could say that the BMG helps in defining the "PMO (as a service) scope" and the "PMO project implementation scope" as well.

Network:21051



Got it Mario, appreciate your explanation. Now I do have a better understanding.

Network:121



I really like this BM canvas aproach and in the 3 Item Chanel , sounds really good to me the option about coaching.




Network:43



Nice application of Business Model Canvas. I remember learning about this as part of a Coursera MOOC on innovation a year or so ago. But this is the first time i am coming across applying this from a PMO perspective. The canvas nicely cover all the various aspects of project control and planning. It offers a nice addition to the tools portfolio for any project planner. Great stuff.

Network:757



Thanks for your comment, Sathya. BMG is very useful and I like it a lot. It helps in defining the PMO (clients, functions / activities, structure, resources) very clearly.

Network:20



Thanks for the guide. The PMO model that is displayed should be overlayed with the need for practitioners, skilled in process, and the ability to weave the use of technology into the enterprise and PMO.

Network:757



Thanks, Larry. I totally agree with you!

Network:71



Great share Mario!
As a new practitioner and member of a PMO I really appreciate your collection of tips (incluind the previous post).

I guess that I've faced a double challenge. In my first year as PM I received the mission to settle up a PMO along with 2 other colleagues, starting from scratch. For sure that a little more of experience would have saved us a lot of headaches, but it has been a great learning experience.

Please keep up the good work on this subject sharing your valuable insights.

Network:757



Thanks, Rafael. Starting up a PMO is a great challenge, for sure!

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