How to introduce a Project Management Office (PMO)?
A few steps to a successful PMO
If the number of projects in a company increases and they become more complex, it can make sense to establish a Project Management Office (PMO). The reasons for which a PMO can be the right step are manifold, as are the tasks that the PMO might take on. Therefore, this new department should be adapted to the respective company and its requirements. To ensure that this is done as well as possible right from the start and that the new department is well received by all stakeholders, you can use this guide as an orientation.
What is a PMO? What tasks can it fulfil?
The Project Management Office (PMO) is a central office in the company that serves to support projects, project leaders and multi-project management. In particular, it helps with tasks related to project preparation, planning, control, documentation and follow-up, and maintains an overview of all projects. Therefore, it can take on different tasks:
- Strategic tasks: A PMO has a good overview of the project portfolio and at the same time knows the corporate strategy. Therefore, it can select and prioritise the projects that will help your company fulfil its strategy. In addition, a PMO can take over the central opportunity and risk management for all projects.
Furthermore, the PMO can be responsible for setting guidelines, developing standards or introducing new tools and methods. This ensures consistent PM standards and quality.
- Supporting tasks: Advising on the implementation of projects and providing information, technical support or templates, as well as coaching and training employees in project management methods can also be part of the tasks of a PMO. A PMO can also assist with booking meeting rooms, organising work equipment, preparing for and following up on meetings, as well as recording and maintaining project data.
- Monitoring tasks: Project controlling with regard to time, achievement of objectives, costs and quality can also be a task of the PMO, as well as checking whether specified standards are being met.
- Controlling tasks: Operational PMOs also intervene directly in projects. They coordinate, for example, the use of resources between different projects, assign project managers and team members or provide personnel from their own team to implement a project.
When does it make sense to implement a PMO?
Since it is not only costly but also takes a lot of time to implement a PMO, you should carefully consider whether it makes sense in your case. The more different projects have to be controlled and the more resources are used across departments, locations or even countries, the more useful a Project Management Office is as a coordinating interface. It is also useful when quick decisions and priorities need to be made based on corporate strategy, as well as when numerous stakeholders want to be kept accurately informed about ongoing projects.
Advantages of a PMO
(depending on its approach and tasks)
- Strategic selection and prioritisation of projects
- More successful execution of projects in compliance with costs, time and quality
- Higher number of completed projects through better coordination and increased productivity
- Optimised use of resources
- Higher efficiency and lower risk through standardised systems, processes and methods
- Transparent communication across team boundaries
- Training of project managers and team members
Challenges of a PMO
(depending on its approach and tasks)
- High costs
- Implementation is complex and time-consuming
- It can lead to increased administrative effort and slower processes
- Acceptance within the company not always given
Implementation of a PMO – a project
Implementation of a PMO – a project Since the tasks and responsibilities of a PMO should be adapted to the needs of your company, the implementation of a PMO is structured like a project: First, you prepare an analysis of the current situation, from which you then derive a customised concept, subsequently introducing it and transferring it into regular operation.
1. Situation analysis
In order to optimally define the goals and tasks of the PMO in the following, you should first create a project list. If you are already using project management software with a portfolio management function, you can view the complete list there. You should also analyse the current status of your project management landscape. Ask yourself:
- Which processes, methods and tools are currently used? Are they effective and efficient?
- How are the project teams trained?
- When is a project treated as such?
- What projects are there currently and what is their priority?
- How useful are current status reports?
- Where are problems or weaknesses?
In addition to this analysis, you should also have conversations with the individual stakeholders to understand what is expected of a PMO. This means you should clarify who the stakeholders are and what benefits they expect.
If you compare the wishes with the results of the actual analysis, you can derive recommendations for your future PMO.
Now you should determine which tasks, rights and competencies should be assigned to your new PMO and where its focus should lie. The status analysis with the identified requirements serves as a basis for this. In addition, you should consider in this phase where in your company hierarchy the PMO should be integrated and which employees are needed.
Our tip: Stakeholders often have many different expectations towards a new PMO. But it takes a long time before it is really accepted by all employees and can work effectively. Therefore, it is easier to focus on a few essential tasks at first and gradually expand the scope of tasks. This increases acceptance and comprehension within your organisation.
Now you can start the implementation of your PMO, hire the PMO manager and his team and train the team. When hiring, look for many years of experience in project management as well as service orientation, but also assertiveness.
You should also ensure good communication with stakeholders and staff during implementation. Internal marketing will help you communicate the tasks and services offered by the new department.
Also prepare the tasks of the PMO now: For example, criteria for selecting a project management method can be established, processes can be designed or a list of available resources with their tasks can be compiled.
4. Regular operation:
After implementation, regular operation follows, i.e. the team of your Project Management Office now takes over all tasks independently. It is important that the tasks and areas of responsibility of the PMO are constantly questioned during regular operation. In this way, the PMO can be optimised and better adapted to your company and its current needs.
Tips for introducing a PMO
- Quick wins: A few quick wins directly after the implementation of the PMO can create enthusiasm and increase acceptance in the company. So consider already in the conception phase where you can achieve a quick win or for which problems you can support project teams easily. For this, an accurate and honest analysis of the weak points in the current project management is important.
- Involve stakeholders: Make sure to communicate transparently with all stakeholders at an early stage. This way, everyone is informed exactly why the PMO is being implemented and where it can provide assistance. If stakeholders are made aware of the benefits of the Project Management Office, they are more likely to work constructively together with you. In our experience, however, some staff may be initially sceptical about a new PMO. Therefore, it is especially important that management stands firmly behind this new department.
- Define tasks clearly: A PMO can take on countless different tasks and do so simultaneously in different departments and locations. Especially in the early stages, this can lead to confusion and work overload. Therefore, it makes sense to start with a few essential tasks that are precisely defined with a small scope and then expand the PMOs tasks as needed.
Every Project Management Office is different, as it should be adapted to the individual needs of a company. Therefore, it can also take on many different tasks – from pure support functions to managing entire projects. However, a PMO can only work really well if all stakeholders understand the added value of this department and work together with it. Then, however, it can contribute a lot to the company’s success.
The project management software myPARM with portfolio management functions can help your PMO to overview and plan your project portfolio and prioritise projects. Integrated opportunity and risk management helps you make the right decisions when evaluating new ideas and projects. Simulations based on quantitative and qualitative criteria allow you to follow your company’s strategy in a reasonable way. Meaningful dashboards also support you in monitoring, controlling and evaluating your portfolio.
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