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I have wrote papers, I have performed conferences around the world on this topic inside the PMI World Tour. Answer is simple and is beyond (not belongs to) project/program/portfolio management field because it belongs to strategy field. Strategy is the way an organization answer to environmental stimuli to achieve its basic objectives: survive, growth and develop. Answers are thought the defined functions/process. So, first thing to determine is: portfolip/program/project management functions will help add value to our goals (survive, growth and develpt)? If the answer is yes then next step is to define if those functions deserve to be located into an special business unit called PMO or as you want or those functions can be splitted along the actual buisness unit. That´s all you need to know to decide.
It depends on the scope and mandate for the PMO. A departmental PMO (e.g. IT) would live within the appropriate department, whereas an enterprise PMO might report to the COO or CEO directly.
A manufacturing company is predominantly process-driven, so the focus of project work would be in back office functions (e.g. changes in technology, HR) or in changes to the product manufacturing process. Figure out where the changes are which need to be managed through project work and that's where the PMO might live.
As Sergio points out a PMO is usually strategic in nature, helping an organization achieve its goals. Given this nature, it makes sense that the PMO should report into the C-suite.
I would see that a PMO would fit in the Operations Area of the business as I agree with Kiron that most of the projects would likely be process driven.
Wow Sergio thanks for the information. can you send the link to your article? I would love to goo through it.
Thank you all for your responses!
To clarify further...what if these were the current constraints/situations:
Assuming IT introduced this discipline to the organization and PM's report to the VP of IT, and if the organization was not ready for a re-org, but other Business Units are eager to adopt the practice, who would future PM's report to? Also, isn't it ideal to have PM discipline report to one individual and fall within the same department to keep the process consistent and have oversight? Or are there other ways to achieve cohesiveness with PM's reporting to different managers in different departments? Sorry if you all already answered this.
What is the interim step prior to a re-org and implementing a "Strategic Department" like what Sergio stated?
In such cases, unless it is a very large organization, the department (IT) PMO might migrate up to become an enterprise one. How you get there really depends on where the need is the greatest - if it is a staffing gap (i.e. providing PMs to help manage projects in other departments), that'd be a different transition than one where a PMO is taking on more strategic services (e.g. facilitating portfolio management decision making).
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