Creating and maintaining an effective PMO. Key practices.

The PMO is a central hub of project support and management. It can be especially beneficial to you in the following situations:

• High project complexity – your company deals with projects of great complexity and scale, or projects that involve many stakeholders. The PMO may help you coordinate and manage these different aspects/areas/stakeholders;
• Multiple resources – the sheer number of projects and their scale mean you need to own and allocate a (proportionally) large amount of resources (people or other assets). The PMO may help you identify and allocate them; it will also improve planning, efficiency monitoring and resource use optimisation;
• Project process standardisation – if you want (or need) to standardise your project management processes, the PMO can play a key role in setting and enforcing such standards. It will help you improve project effectiveness and/or regulatory compliance;
• Risk and quality management – when you take on and conduct high-risk projects or projects that require rigorous quality management, you can rely on the PMO to deploy effective risk and quality management strategies;
• Cooperation and communication – if you need to improve communication and cooperation between project teams and stakeholders, the PMO will serve as a central communication hub, streamlining information flow;
• Strategic decision-making – the PMO may be an important tool in strategic decision-making around the project portfolio of your organisation. It will help identify and prioritise projects in line with your strategic goals;
• Project success assurance – the PMO can boost your odds of success in a project by better management, progress monitoring, data analysis, best practices and crisis response;
• Standardised reporting – if you need regular and standardised progress reports for your stakeholders, the PMO will help you organise and deliver such information.

PMO in the financial sector

A good example of an industry where PMOs prove particularly beneficial is the financial sector. Because of their elaborate and diverse projects and the strict regulations they must comply with, financial organisations may really benefit from setting up a PMO. The office will assist them by providing the structure, processes and tools necessary for effective project management and, on top of that, guarantee flexibility and compliance with all relevant regulations.

When is a PMO unnecessary?

A PMO can be beneficial for many organisations but for others, it’s not necessary at all and may even be ill-advised. Here are a few scenarios where a PMO will not be needed:

• Low project complexity – your organisation is involved in simple projects of low complexity that do not require complex management and coordination. In this case, a PMO can be too bulky and disproportionate to the needs (unnecessary costs and too much formalism that blocks flexibility);
• Small organisation size – in small companies, with only limited numbers of projects and resources, an extra management layer like a PMO is simply redundant;
• Lack of support for the PMO – if organisation leaders, both in management and operations, see no benefit in a PMO or are unconvinced of its added value, its implementation might come up against resistance and pose difficulties;
• Projects with a short lifecycle – in organisations where projects have a short lifecycle and a simple structure, a formal PMO may be too bureaucratic and needlessly delay decision-making;
• Flexible approach to project management — if an organisation prefers a flexible approach to project management, there is a risk a formal PMO may limit that flexibility.

For example, for a company that only provides one or two main services and rarely releases any new products, the PMO setup process will be too elaborate. A small team that is able to self-organise and work ad hoc will be able to “manage itself”. 

A decision to create a project management office should be dictated by the specific needs and context of your organisation. Before you make up your mind, analyse the situation and estimate whether the PMO is likely to bring any tangible management benefits. In some cases, alternative methods or a “light-handed” approach to project management might be better suited than a full-blooded PMO.

How to know if the PMO is malfunctioning. What are the tell-tale signs?

Creating a PMO is an important strategic step toward more effective project management. However, despite its many benefits, sometimes the office may malfunction and lose effectiveness or, in the worst-case scenario, become counterproductive.

In the contexts listed below, pay attention to the potential red flags and signs that might indicate the PMO is becoming less effective at delivering value for the organisation:

• Lack of alignment with strategic goals – if the objectives of the PMO are not fully aligned with the strategic goals of your organisation, its activities may deviate from the main strategy. As a result, it might no longer be able to deliver added value for the organisation;
• Low project team involvement – if project teams don’t see the benefits of cooperating with a PMO (or refuse to use the tools or standards it delivers), it’s a sign that the office fails to address their needs or expectations;
• Low project management quality – if the PMO doesn’t provide any effective tools, training courses, support or other resources to help improve project management quality, project efficiency will drop;
• Stakeholder dissatisfaction – if stakeholders, such as internal clients, project teams or company management are dissatisfied with the PMO, it’s a sign that it fails to meet their expectations or deliver added value;
• Lack of clear success metrics – if you have no easy way of telling how well the PMO contributes toward your company’s goals, this may mean you lack clear success metrics to assess PMO performance.

PMO assessment

If you notice any of these signs, it is a good idea to conduct a PMO analysis and assessment (an audit). This will involve a series of steps and actions meant to identify possible areas for improvement and adapt the PMO strategy to your current requirements.

1. First of all, take a moment to determine whether the PMO is focusing on projects and initiatives that really contribute toward your strategic business goals.
2. Next, interview key stakeholders, such as the management board, project leaders, project teams and other PMO users in order to get feedback on, e.g. the perception of the office, its benefits and areas for improvement.
3. Next, analyse available data and documents. Going through PMO documents, project reports, metrics and other data may help you assess process effectiveness, project management quality and the degree to which your goals are being achieved.
4. Lastly, analyse your available resources (HR, tools, budgets, technologies), compliance with the best practices and the projects in progress; you will also have to assess whether the PMO is flexible enough to adapt to changes within the organisation. Also remember to evaluate external client satisfaction.

After the audit, you can draft a remediation plan focused on the areas that need to be improved. Regularly monitor its progress and re-evaluate the PMO in terms of the goals and expectations of your organisation. 

How to make sure the PMO works effectively?

Take several measures to make sure your PMO is able to adapt to the changing needs of the organisation and manage projects effectively:

1. Define clear objectives and make sure they align with the strategy of the organization. Review the goals regularly so as to adjust them to the changing needs of your organisation;
2. Provide active support at management level. The PMO should be able to count on robust and active support of your organisation’s leaders. This means participation in strategic decision-making in matters concerning the office and the allocation of necessary resources, such as staff and budget;
3. The PMO should be flexible and easily adaptable to changing business conditions. To this end, it needs to continually monitor the business environment, identify new trends and adjust its processes and tools to current needs;
4. Effective resource management is an important step. Effective HR and financial management is key. Make sure your PMO personnel are well trained, adequately skilled and highly involved in their projects. Regular staff training courses will help maintain staff skills at the highest level;
5. Continually enhance processes, perform regular checks and analyse project results to identify areas for improvement and make any necessary changes.

Introduce these practices and you will be able to keep a high-performing PMO that can effectively support your business goals and adapt to your changing business environment. 

How can Altkom Software help you?

Thanks to more than 20 years of project experience, Altkom Software is well-placed to support organisations that already have an active PMO, as well as those that are planning to set one up. Our rich project portfolio and experience in running an efficient project management office makes us a reliable and trusted partner for any organisation wishing to streamline their PMO activities and processes.

PMO audit

PMO activities should be tracked and monitored, and monitoring results should be collected for analysis. This can be done through a PMO audit.

The audit focuses on testing several fundamental aspects such as processes, people, tools and strategy.

During the audit, the following aspects are checked, for example:

• process management (from start to finish);
• team involvement in different functions;
• communication between teams;
• barriers to decision-making and information;
• tools to enable effective work;
• organisational structure; status quo and objectives.

Based on this information, a detailed report is drawn up. It includes any detected irregularities, along with a list of suggested remediation measures. A PMO audit boosts team competence and provides an actual action plan you can begin to follow immediately.

External experts

Altkom Software also offers you the possibility of hiring/using the services of its experienced experts. Depending on your needs, our experts may collaborate with your team or build a new PMO team from scratch. 

External experts with ample experience and domain knowledge in project management can assist a PMO by, e.g. solving project problems or taking over routine management tasks, such as strategy and project progress monitoring. They can also bring in their experience to help identity and address issues encountered when building a PMO from scratch. 

The most important benefits of hiring external expert assistance: 

• higher operational efficiency;
• high focus on project completion, owing to a concentration on specific tasks;
• lower operational risk, e.g. eliminating the risks involved in finding and recruiting PMO staff with appropriate qualifications;
• faster PMO setup, for example, in situations where the PMO needs to be created at a pace that current solutions cannot keep up with.

Conclusion

A Project Management Office is more than a project management office; it is a strategic partner with a key role in ensuring that project management is effective and aligned with the goals of the organisation. The PMO assists companies in process standardisation, managing and ensuring the high quality of their services. Its exact role may vary depending on the needs of the organisation. 

A regular audit of the PMO, which allows issues to be identified and remediation measures implemented, will be a key factor allowing you to tap all the benefits of your project management office.