Project Management

What Role Should the PMO Play in Project Finance?

Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected]. Andy's new book Risk Management for Project Driven Organizations is now available.

I’ve worked with a lot of different PMOs over the years, and generally you can categorize them in a number of different ways based on the way that they are structured and operate. For example, there are a few different ways to handle project process rollout, audits, etc. However, there is one aspect of project management where I haven’t been able to find any consistency at all within PMOs: project financials.

I have seen PMOs that completely control the money; I have seen scenarios where the PMO has absolutely no control over the funding with the PM working directly with finance resources; and I have seen many, many variations in between. So let’s look at some of the different options and see if we can figure out some models that might work effectively.

The lack of consistency
The challenge starts from the fact that there are so many different ways that money is considered on projects. I know of a great many PMs who work on projects that are internal to their organizations where the money is seen as a complete irrelevance. They are using internal resources that are already factored into the costs of the organization, so all that they have to track is the effort that is expended on the project. While that is ultimately converted back to costs, it’s only at the very highest level within finance. That seems a little naïve to me as there …

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