Do I Need A PMO?

To PMO Or Not To PMO? 

Of the many questions our team gets around portfolio management, PPM tools, and PMOs, probably the most important one of all is, “Do I need a PMO?”

The reason it is so important is that if you don’t have a good answer at the ready, then your portfolio, potential PMO, and future projects are all at risk.

At Kolme Group, my partners and I all started off as project managers and then worked our way into building, managing, assessing, and fixing PMOs. We work with PMOs across many industries every day to help them run more efficiently and provide more value to their organizations.

So when we hear the question, “Do I need a PMO?” we have a ready answer.

The Wrong Way To Think About PMO 

The “old school” way to think about PMOs is that they are simply a team of project managers that enforce process and governance to make sure projects are done “right.” Do I Need A PMO?

This perception comes from project managers’ natural tendency toward organization, structure, and processes. This often expresses itself in PMOs that focus more on adherence to process than on delivering value.

Such organizations become more “Project Management Obstruction” PMOs rather than organizational enablers.

The New Reality Of Execution 

Not only is it more important to focus on value than process, but the very concept of a common delivery process across an organization is becoming obsolete.

At least 71%, and maybe as many as 97% of organizations have implemented some form of Agile, an approach which champions team-level self-organization and, as the name implies, a propensity for flexibility.

This often means devising unique ways of working for each team. While there is ample evidence that self-organized Agile teams are more productive at the team level, this can lead to chaos when trying to execute initiatives that span multiple teams, each working in their own way.

This is the new reality of project execution – each team may have its own methodology, or no methodology, and the PMO needs to coordinate across these teams in order to deliver enterprise-wide initiatives.

So, the modern PMO’s mission is more about finding ways to orchestrate execution in a heterogeneous environment than trying to impose some kind of artificial homogeneous process across the organization.

The Right Way To Think About PMO 

The purpose of a PMO should be defined the same way we define the purpose of an individual project. A project’s purpose is to deliver value to its stakeholders. And a PMO should strive to deliver value to the organization.

The value provided by a PMO can take different forms depending on the organization’s needs, and it will evolve and change as the organization changes.

To do this, the PMO should always strive to be entrepreneurial in its leadership and engagement with the organization.

In fact, one of our partners hosted an informative podcast with a popular speaker on this very topic, which you can find here: Entrepreneurial Project Management with Rolondo Talbott

PMO value categories 

When it comes to the specific value provided by a PMO, we find that it falls into three general categories: Accountability, Transparency, and Alignment.

PMOs typically provide value across some mix of these categories. When thinking of your existing or potential PMO, it can be a useful exercise to work with your stakeholders to “put a pin” in the diagram below where you need the most help.

Do I Need A PMO?

 Accountability 

PMOs oriented toward Accountability often serve as a point of responsibility to the executive suite for execution. Focus areas for Accountability oriented PMOs may include:

  • Responsibility for executing key strategic initiatives
  • Financial accountability and reporting for the portfolio
  • For Professional Services organizations, engagement profitability and customer satisfaction
  • Regulatory compliance

When we talk with executives that need an Accountability-focused PMO, we listen for key phrases like, “I need someone I can trust / count-on to get our initiatives done,” or, “How do I make sure I get the value I expected from my CapEx budget,” or, “How do we enforce regulatory compliance?”

Transparency 

PMO’s oriented toward Transparency focus on communication and information flow for projects and initiatives.

The goal is most often to help minimize the surprises that come from project risks and issues, and to enable the organization to be more proactive it its management of risk and change. Focus areas of transparency typically include:

  • Risk and issue reporting and change management
  • Resource management and planning
  • Common reporting across the portfolio to identify projects that are at risk or in trouble

When we talk with executives in organizations that need a Transparency-focused PMO, we often hear key phrases like, “I know my people are busy, but I don’t know what they are doing,” or, “We are tired of all the surprises and firefighting.”

Alignment 

PMOs that focus on alignment help ensure the organization’s strategic initiatives are prioritized within the portfolio and among all the other organizational activities.

It is important to note that when a PMO takes this role, it does not absolve individual teams from accountability for delivering on their team-specific initiatives. However, the most transformative and valuable changes are typically those that must span different parts of an organization, so a PMO that can manage alignment across different teams is key to success.

Focus areas for Alignment-oriented PMOs typically include:

  • Mapping and tracking projects to strategic organizational goals and objectives
  • Project intake, prioritization, and selection
  • Stage-gate controls and release management

When we talk with executives in organizations that need an Alignment-focused PMO, the most frequent comments we hear are, “We spend all this money, time, and effort on projects, but our strategic initiatives never seem to get done,” or, “We find ourselves struggling to complete projects that we should have just terminated long ago.”

Transformation, too! 

There is a special ‘superclass’ of PMOs we often see that encompass all three of the above value types  the Transformation PMO. These organizations can be temporary in nature and are implemented to drive a specific and often radical organizational transformation. Typical transformations that use this kind of PMO include:

  • Mergers and Acquisitions
  • Agile transformations
  • Creating a new line of business

 

Think In Terms Of The Value Transaction 

When thinking about the value a PMO can provide to your organization, it can be helpful to map it out using a value transaction or spider diagram. This is a great tool to identify not just the value the PMO provides to different parts of the organization, but the level of commitment the PMO needs in return to deliver that value.

This diagram can be a great collaborative brainstorming tool to use with your PMO stakeholders. It’s also a helpful communication tool to use with your executive team.

The example below is a very high level one – you will likely have more than the four teams shown in the example, and many, many more items in your value transaction tables.

 Do I Need A PMO?

Figure 1 – Example of a highly simplified Value Transaction (spider) diagram 

 

When A PMO Is Not The Right Way To Go

Put simply, if you cannot define the value a PMO would give to your organization, then don’t create one. This doesn’t mean that a PMO cannot give you value, but if your team cannot identify how it would do that, then it won’t succeed in the face of any resistance.

Another contraindication for a PMO occurs when the value you do identify isn’t strong enough to get vested interest and sponsorship from your leadership team.

If they’re not buying what you’re selling, your PMO won’t survive for long.

 

What If We Go “Agile” – Why Would We Need A PMO? 

PMOs are easy targets to catch blame for project delivery issues. That blame then often extends to the whole discipline of Project Management, which can then make organizations think, “I’ll just go Agile and everything will be better.”  

The reality is that standing up a dedicated team to drive project delivery (i.e. a PMO) is a LOT easier than completely transforming an entire organization to an Agile framework. And if you cannot successfully create and operate a PMO, then you will likely fare worse when restructuring the entire organization.

Keep in mind that organizational agility isn’t just about doing “Agile.” 94% of highly agile organizations report having a PMO or similar project governance team.

And if you are going to start an Agile journey, organizing a Transformation PMO to drive that change can be a lot more cost effective than bringing in a busload of “Big 3” consultants to do it for you.       

How Do We Start? 

If you think a PMO is for you, our recommendation is to start by having conversations within your leadership team about the potential value you might get from a PMO.

Map out your value transactions using a visual aid such as the spider diagram above –  DOWNLOAD YOUR FREE WORKSHEET TEMPLATE – complete the quick form below! 

Once you have organizational alignment on the value transactions for your proposed PMO, the next step is to start planning what the PMO should look like from an org structure, reporting, and measurement perspective.

To help you with this process or for support assessing the value a PMO can give to your organization, please Contact Us and we’ll reach out to you shortly. 

 

Kim Essendrup Administrator
Partner

I help our customers because I’ve “been in their shoes,” and can share pragmatic advice about what works and what doesn’t in the world of Project & Portfolio management. I have 20+ years managing teams, projects, programs and PMO’s. I’m a certified PMP and PMI Registered Education Provider, and love to nerd out over PPM with my colleagues and clients.

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