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Project Management Office

The PMO is generally regarded as the centre of excellence for project management. More mature organisations typically have a PMO at higher levels in the organisation and in centralised locations (Crawford 2006). The concept of the PMO has existed since the 1950s, but gained prominence in the 1990s because of the increasing number and complexity of projects (Aubry et al. 2007).

OBJECTIVES

There appears to be no universally accepted definition of PMOs, since they vary according to organisational characteristics and their evolution (Desouza and Evaristo 2006). However, common objectives can be identified. The PMO should take on the overall responsibility for the success of project management within the organisation. This requires the alignment of project objectives with the goals of the organisation. As a central entity, it should act independently and be provided with its own budget and resources. Staffing of the PMO should be a mix of business and technical personnel, interacting with each other. It should have the competence to develop standards and methodologies to guide the organisation's projects.

The PMO carries out specific roles and functions within the organisational context at three levels (Desouza and Evaristo 2006):

• At the strategic level. Projects that are undertaken are in line with the strategic objectives of the organisation. Business and project professionals within the PMO consider the organisation's strategic plans and use them to identify, evaluate, select and implement projects. To meet strategic objectives, projects are required to contribute to organisational growth and sustainability.

• At the tactical level. Project activities are tracked to ensure that organisational goals are met on time and within budget. The quality of project work is consistently assessed in comparison to industry standards and reputable methodologies.

• At the operational level. Best-practice project management approaches are applied during the execution of the project. Requests for increased budgets are subject to approval processes and 'lessons learned' from completed projects are made available to other projects.

Relationships of the project management office

Figure 5.2 Relationships of the project management office

Figure 5.2 shows the triangular relationship between the PMO, the steering committee/project sponsor and project manager. This includes strategic governance, tactical use of standards and operational adherence to procedures.

The expectation for the PMO to play a role in value-creation was considered by Unger et al. (2012). They advocated linking the PMO with project portfolio management in an entity they termed the Project Portfolio Management Office (PPMO), a subset of the PMO. This gives increased organisational attention to the complexity of implementing strategic objectives and managing multiple sets of projects simultaneously. The PPMO was seen as improving project portfolio management quality, regarded as a predictor of project portfolio success. Its recommended structure includes a project portfolio manager, selected from the organisation's first-tier senior management, and the project portfolio steering committee.

PERSONALITIES

Caution was expressed by Aubry et al. (2010) about the ability of the PMO to contribute to organisational value due to its gaining prominence only in the 1990s and the consequent lack of dear acceptance about its role in the organisation. In particular, political influences on PMOs should be recognised since they are not outside the political system of the organisation. The researchers concluded: 'The evolution of a PMO is not always under the control of individuals who believe in PMOs' (p. 775). PMOs appear to be in transition and better understanding of their dynamic evolution is required. PMOs are best understood according to their history and within the context of their organisation.

Mueller (2009) believed that successful PMOs grow organically and that the personalities of its members evolve over time. Strong PMOs make sure that there is a balance between the three profiles. He used the metaphor of an organisational 'jungle' to identify the personalities needed for a PMO:

• The 'brown bear'. A person that has bear-like characteristics of power, capacity and intelligence is best suited at the start of the PMO. Based on their long years of experience, patience and credibility within the organisation, they can build collaborative relationships with project managers and project sponsors. The PMO gains the reputation of a trusted and supportive unit.

• The 'lions'. During the growth stages, the PMO needs a 'lion' that can roar to get his/her message across. This personality communicates PMO expectations about the use of best practice in project management. They fulfil largely a tactical function and would suit mid-career project managers assigned to the PMO for a period of two to three years.

• The 'eagles'. They hover at high altitudes and constantly monitor what happens at ground level. Within an organisational context, persons are needed that have a broad strategic view of projects, programmes and portfolio management. They are able to drill downwards to establish details should this be required. They are hard to find as they combine both breadth and depth of project management, but are required for the long-term survival of the PMO.

Checklist: Responsibilities of the Project Management Office for Project Risk Governance

• Is the PMO regarded as a centre of excellence for project management?

• Does the PMO take overall responsibility for the success of projects?

• Does the PMO act as an independent organisational entity?

• Does the PMO have a strategic role in managing project activities?

• Does the PMO have a tactical role in managing project activities?

• Does the PMO have an operational role in managing project activities?

• Does the PMO have an active relationship with steering committees, project sponsors and project managers?

• Do the personalities within the PMO complement each other's strengths?

• Does the PMO play a role in organisational value-creation?

• Does the PMO monitor the performance of project risk strategies to protect and create value?

• Is the PMO an effective change agent during the implementation of PRG?

ROLE IN PROJECT RISK GOVERNANCE

As seen above, PMOs have undergone frequent changes and are evolving to play a more important role in organisational project management (Aubry et al. 2010). To achieve the objective of becoming an organisational PMO, Bredillett (2008) suggests that the 'governance school of thought' be adopted. For this to occur, two prerequisites have to be satisfied. First, PMOs are seen as being multi-project and not single-project oriented. With the increasing number and complexity of projects, the nature of PMOs should change. The traditional approach to projects is replaced by an innovative approach, emphasising a broad range of project functions such as integrating with business strategy, knowledge sharing across projects and developing project-based human resource management. PRG is similarly a multi-faceted concept since risks in projects take on many forms. PMOs will have to adopt a dynamic and flexible approach in supporting PRG.

Second, PMOs are treated as important change agents through implementing project management methods, standards and tools. When the PMO involves itself in PRG, the organisational culture also changes: there is a move to 'projectise' the organisation and to 'buy into' the concept of PRG. Change is linked to gaining acceptance in the wider organisational and environmental context for implementing PRG processes and structures. The topic of change management is covered in Chapter 7.

 
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