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It depends on the scope of services or the mandate for the PMO. If it is an EPMO providing a governance function for the overall enterprise portfolio, then it should report into the top-level leadership - ideally via a Chief Project/Portfolio/Program Officer.
On the other hand, if it is a PMO focused on the technology portfolio for the organization, it could report into the CIO.
In general, it should report to the highest level of authority based on the scope of its services such that it won't come under undue influence or bias from any sub-division of that as might happen if it reports at a lower level.
It will fully depends on your company strategy which determines your company enterprise architecture. I am belonging to EPMOs in different companies from long time ago. In some of them the EPMO belongs to an area called "Strategy, Process and Innovation" which depends directly from the CEO. In other you have one EPMO and one PMO for each key component layer inside the enteprise architecture (business, application, technology). So, "taxonomy" will vary depending on your company strategy.
Ultimately it depends on who 'owns' the project, who is responsible for the funding, who is to benefit from project delivery. Corporate may set some standards and have reporting requirements with regards to project management but project ownership should be delegated to lowest possible management level.
To the person or role that sponsors it and expects the most benefits out of the PMO. Efficiency/productivity might be an expected benefit from a PMO, but there may be many others (e.g. enhanced insights, reduce escalations, check & balance). Find out what these are for the sponsor.
Sometimes PMOs are founded to solve a problem and once it is solved, the sponsor looses interest. In this case moving from an individual sponsor to a role (Management Board) can be prolonging the lifetime. Also individuals may leave, be promoted, roles tend to stay longer.
Also consider, if a PMO solved the problem it was created for, it is OK to end it (or find new problems and sponsors). The average PMO lifetime is about 2 years.
In order for a project manager and the PMO to get the job done delivering the project that meet stakeholders requirements, the PMO must be Apolitical. By this I mean they should have everybody's interest considered for the project but not strategical aligned themselves with one department, functional manager, board of director or even owner over another. This will only lead to internal division, create conflict and pitch one set of people against another.
Some workplaces may have thrived on this kind of animosity but steer clear of it as it is not a constructive work environment.
As a result the stakeholder registry will be the most important aspect of the project with regards who has the final say on aspects of the project.
In some way managing a project is like building a boat. You always need to maintain a balance, make sure the project is sea worthy, that you know your going in the right direction, that a hierarchy exist and its known throughout on who can give orders and who's jobs it is to execute those orders, A person who has overall responsibility for the project and assumes all the risk in the event of project failure and being able to manage and monitor the project and be able to make course adjustments when necessary.
So a project manager could be seen as a modern day captain of a ship.
Also most of them have no formal authority over their "crews" and as such they can't give orders to anybody.
The ultimate responsibility for the project rests with its sponsor and organization management and not with the PM.
PMs may have a lot of influence over the management and sponsor and other key stakeholders and may get the project, to some extent, where they want but they are not the ultimate decision makers.
The party that funds the project sets the objective - in my mind that is the project Owner and ultimate authority. That project authority should be delegated to the Owner's Project Manager (OPM). The OPM is accountable only to the Owner.
Modern management theory allows for authority to be delegated as far down the line as possible - to someone who is directly involved in the work at hand. For the management of projects that would be the project manager.
I like the ship's captain analogy. The captain knows how to run a ship but does not necessarily have expertise in maintaining the engines, operating the radio or cooking the meals - but he has the ultimate decision in the management of the ship. However, the captain is accountable to a higher authority as to where to deliver the ship (and its cargo).
Dear Adrian, Peter,
You both present different views as to how you see the role of the project manager.
One is a "gun for hire" who seem has no formal authority, then probably no respect from his "crew" and can only manage by favors and kowtowing to his superiors.
The other view is a project manager who does not know how the ship works but got the job because his father owns the company.
A captain must know and understand every aspect of his ship before he/she can move up through the ranks. That includes how the engine works, how to repair the propellers and how to steer the ship.
There are no shortcuts to being a captain just like the example of the Costa Concordia and how lack of knowledge led to the deaths of innocent people.
So a distinct and understood chain of command that can be implemented is what is required.
Also project sponsors and owners are sometimes so far removed from the project they have very little if any interest in the project.
It is the project managers responsibility and job to know what project success is and to ensure that it is delivered.
Functional manager and the hierarchy of the organisation will hire an outside project manager to mitigate the risk to themselves in the event of project failure and sometimes will contribute very little as a result.
Also if the project requires change management then this will further distant the functional mangers from the project managers.
Ultimately the project manager devises the project plan that all the stakeholders agree and sign up to and so should be self sufficient that requires little overall guidance and management but to adhere to the project plan and any change requests that come in.
A good book to grasp the influence and power of a capable project manager is ‚the discovery of slowness‘.
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