Categories: Benefits Realization, Best Practices, Calculating Project Value, Leadership, PMOs, Portfolio Management
by Jen Skrabak, PfMP, PMP
Project management offices (PMOs) have gained wide acceptance thanks to their ability to ensure the success of projects and programs. More than 80 percent of organizations have PMOs.
But, there is still some confusion with PMOs, as the “P” in PMO can refer to project, program or portfolio. At the same time, PMOs have been thought of as one of three categories:
- Supportive: Low-level of control with a focus on status reporting and passive monitoring. This type of PMO has low authority, low visibility within the organization and performs primarily administrative functions. Project managers are usually part-time resources and report into functional areas.
- Controlling: Moderate level of control and oversight over programs and projects. In this PMO, an overall project management framework, plus templates and tools, are in place. Project managers and other support staff (business analysts, project coordinators) report directly or matrixed into the PMO.
- Directive: High-level of control over programs and projects. This PMO has a lot of authority and visibility within the organization to drive overall execution of programs and projects. Project managers, business/IT leads and other support staff report directly into and are accountable to the PMO.
The Next-Gen PMO, however, is disrupting these traditional categories. In the Next-Gen PMO, the focus is on ensuring the successful delivery of organization-wide strategic initiatives. In addition to traditional PMO functions, such as providing project management tools, templates and training, the Next-Gen PMO is responsible for organizational results. They also report directly to a C-suite executive within the organization.
I see the four critical functions of the Next-Gen PMO as:
- Strategic Focus: Align, prioritize and focus the organization on the top critical initiatives based on organizational capabilities as well as constraints, such as resources or culture. The PMO should operate at the strategic level with executives, and align supply and demand of resources. That may include financial (such as budget), human (not on just number of people available, but skill and capability), or organizational culture (such as the capacity to absorb change, particularly sustaining change over time).
- Governance: Implement the appropriate executive governing board with authority to make hard decisions. Decisions may involve escalated issues/risks, resolving resource contentions, as well as which projects/programs to start, stop and sustain. Often, governance is engaged in starting new projects — particularly low or underperforming ones — without appropriately counterbalancing which projects may have to be stopped in order to free up resources
- End-to-End Delivery: This takes a dedicated, seasoned project manager with authority and accountability to the PMO to define, plan and deliver the project, along with identifying appropriate resources and ensuring sponsor support and engagement. The PMO should create a culture where project management is valued and seen as a business enabler to successfully delivering projects. They should develop a roadmap of key initiatives, dependencies and resources that provide value to the organization. That cohesively brings together projects and cross-functional departments that are aligned to strategy.
- Benefits Realization: Achieving the promises of project proposals starts with a robust business-case review process, as well as ongoing monitoring for performance and its impacts on the benefits. The PMO should establish success criteria and KPIs to monitor project and portfolio health, and take corrective actions as needed to ensure that the original ROI is met.
Is your organization embracing the Next-Gen PMO?