PMO – Development, Definition and Integration into the Company
An adequate and increasingly used solution for efficient coordination of projects is the establishment of a Project Management Office. But what exactly is a Project Management Office? The Project Management Institute (PMI) defines the PMO as “an organizational structure that standardizes project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques. The responsibilities of a project management office can range from providing project management support functions to actually being responsible for the direct management of one or more projects.” Simply put, the PMO always pursues one goal: to achieve savings through more efficient and successful project handling.
Integration of the PMO into the Company (Figure according to TPG The Project Group)
Upon closer examination, it can be seen that three types of PMO can be distinguished. First, there is the Project Office (PO) or operational PMO. This primarily serves to manage a very large and comprehensive project. Then there is the (project-monitoring) PMO. This takes care of the multitude of projects, coordinates across departments and divisions, and sets standards. The third is the Strategic Project Portfolio Management (SPMO). This intervenes in the management and contributes to prioritization and strategy.
The PMO should be positioned as high as possible in the company organization, as it ensures, among other things, that the right information from the projects reaches the management and important decision-makers, and conversely, that their project specifications reach all those affected and involved.
Task Areas of an (Operational) PMO
The Project Management Office is the central focal point of a project. It ensures that the needs, wishes, and requirements of all parties involved in the project are met and that all framework conditions regarding time, project content, and budget are adhered to. Typical stakeholders of a project are, for example, project managers, controlling, management, and other high-ranking executives of a company.
To meet the various needs of these stakeholders, the PMO must take on a variety of tasks. For example, to ensure that the company’s decision-makers are best informed about events and progress in the projects, steering boards must be prepared and moderated with well-prepared data. This involves showing the current project status, budget and resource conflicts with appropriate decisions, and possible risks. For project managers, it is important to receive a clear project assignment with corresponding goals and milestones. The PMO supports them with “best practices” and standards from past projects. In addition, project changes must be approved and communicated by the PMO. Controlling needs accurate information about the project budget as well as current project progress and way forward. On this basis, the medium and long-term budget of the company is then managed.
The tasks of a PMO can be summarized in six categories:
- Ensuring uniform PM standards and quality
– Establishing guidelines and standards - Strategic project management
– Project selection and prioritization for sub-projects of a program - Operational support
– Moderation of workshops and meetings
– Project controlling
– Collection and documentation of project progress for stakeholders - Coordination of projects and resources
– Coordination between individual (sub-)projects
– Coordination of project resources - Increasing effectiveness and efficiency
– Opportunity and risk management - Project coaching training
– Professional development of employees
– Project handbook
Advantages and Benefits of a PMO
To successfully implement a project, the PMO therefore takes on a variety of supporting tasks. In critical situations where directional decisions need to be made for the project, the PMO takes over the preparation of the decision-making basis. For this purpose, all relevant factors are analyzed and prioritized to enable the respective decision-makers to make a well-founded, targeted, and quick decision. This significantly contributes to efficient budget and cost control.
By fulfilling administrative tasks, project managers are relieved, and individual sub-projects can thus be achieved in a targeted and efficient manner. Furthermore, the PMO takes care of creating favorable framework conditions by organizing regular meetings. This ensures smooth, clear, and structured communication. All important project members are involved for a specific topic and are thus well informed about all relevant details. In this context, possible risks and problems are also clearly communicated, addressed, and appropriate measures are initiated early on. Better transparency about the project across all levels is the result. By taking over resource planning, more efficient use of project staff and key resources is also enabled, and the balancing act between project work and daily business is thus facilitated.
In summary, the added values of a Project Management Office result from the fact that project risks can be better controlled with the help of a PMO, efficiency can be increased, and the outcome quality of a project can be maximized. This is also confirmed by the figures from a study on the effects of the PMO on project management. According to this, a PMO is firmly anchored especially in companies that have a project-oriented organizational structure. For over 40% of the companies surveyed, the PMO plays a significant role in the strategic planning and implementation of projects or programs. For about 30%, the PMO contributes decisively to projects being completed with the desired success. Another 27% see the benefit of a PMO in data preparation and analysis as well as in its communication to decision-makers within the organization. Only a small proportion of the respondents see the PMO with little to no influence on the success of projects.
Project Management Offices in Practice
In the function of the Project Management Office, we have already supported numerous clients in achieving their defined project goals and implementing them successfully and sustainably. The scope of responsibility ranged from the initial setup of a PMO at the start of a project, through the creation of a project manual, the definition and establishment of project management standards, the organization of regular meetings, to risk management and project controlling.
How exactly a PMO can be set up or how newly created meeting and communication structures can be implemented in practice is described, for example, in our customer references of the Diocese of Würzburg and at Linde Engineering.
