How to build a successful PMO From Scratch

Executive Summary 

“How to Build a Successful PMO From Scratch” provides a comprehensive guide for establishing a Project Management Office (PMO) within organizations. In the dynamic business landscape, where effective project execution is crucial, a PMO serves as a centralized entity responsible for standardizing project management practices, overseeing projects, and enhancing performance.

• Project and Change Management for Unstoppable Success
• Leadership Support and Secure Your PMO and Project’s Future
• Build a Rock-Solid Foundation for Success   
• PMO Processes and Procedures
• PPM Tools for PMO Success
• PMO Training & Development
• PMO Phases to Success

What is a PMO?

In today’s dynamic business landscape, companies face unprecedented challenges in meeting customer demands, adopting new technologies, and staying ahead of the competition. Successful execution of projects is essential for achieving strategic goals and maintaining a competitive edge. This is where a Project Management Office (PMO) is a crucial asset for organizations.   

A PMO is a centralized entity within a company, which is responsible for standardizing project management practices, providing oversight, and improving overall project performance. The primary objective of a PMO is to ensure that projects are completed efficiently, on time, within budget, and are aligned with the company’s strategic objectives. The need for a PMO can arise for various reasons, but the results of establishing a PMO should contribute to the organization’s success and long-term sustainability. 

If you’re lucky, you have been selected to help design and implement a PMO.  So, what now? 

How to Harmonize Your Project and Change Management for Unstoppable Success 

Project Management Offices (PMOs) can provide a wide range of value to organizations by improving efficiency, project delivery, risk and resource management, stakeholder satisfaction, decision-making, and strategic alignment between your portfolio and your organization.   

All those outcomes sound great, and it is safe to assume that most organizations would benefit from these improvements.  You already know these things, and that’s why you’re here.   

You might be an executive looking for increased visibility and control of your portfolio.  Perhaps you are a senior project manager who thinks improving project governance would help obtain the necessary support, approvals, and resources for the initiatives your teams are advancing.  The point is, you are here because you have already decided you need a PMO.   

I am happy to tell you that right now is your best opportunity to influence the longevity of your PMO and the benefits it will provide.  If they are not created intentionally, thoughtfully, and with a clear purpose and vision backed by an executive sponsor, PMOs can easily suffer from damaged reputations and meet an early expiration.   

It is for these reasons that many PMOs do not last more than a handful of years.  Building a value driven and lasting PMO requires a well-defined strategy and a commitment to continuous improvement. 

In this article, I’ll introduce you to some key considerations that can help to ensure your PMO is successful and sustainable, and share a general roadmap to define, develop, and execute the rollout of your new PMO.  

Unveiling the Purpose and Value Is the Ticket to Project Management Success?   

It is essential to define the purpose and goals of the PMO clearly to understand the value proposition for creating and supporting it.  Think of this as your mission statement.  Turn it into your elevator pitch.   

The PMO should align with the organization’s overall strategic objectives, and its purpose should be to improve the value of project management across the organization. 

Do I Need A PMO ? Answer This Burning Question! (kolmegroup.com)  provides insight on three general categories used to define the objectives of a PMO.  It is worth the read.  In summary, the categories are as follows:   

• Accountability – PMOs oriented toward accountability often serve as a point of responsibility to the executive suite for execution. 

• Transparency – PMOs oriented toward transparency focus on communication and information flow for projects and initiatives. 

• Alignment – PMOs oriented towards alignment help ensure the organization’s strategic initiatives are prioritized within the portfolio and among all the other organizational activities. 

Three Categories to Define the Objectives of a PMO

Determining the value a PMO might provide can be a more complicated exercise. There are standard key project metrics that can be measured and analyzed directly, such as project success rate, schedule adherence, budget adherence, resource utilization, ROI, time-to-market, customer satisfaction, and so on.   

However, there are also a host of qualitative benefits that are harder to measure.  These include visibility into portfolio health, improved decision-making, improved professional development and talent retention, organizational agility, and reduced portfolio risk exposure. 

The article linked above discusses the importance of assessing an organization’s requirements, a critical step in the formation of a PMO, and why mapping them out to determine the most suitable value category should be pursued. As the organization grows and develops, the PMO’s role will evolve and change accordingly. Careful evaluation of the organization’s needs can offer valuable insights and considerations to aid in the successful launch of the PMO. 

How to Win Leadership Support and Secure Your PMO and Project’s Future! 

A PMO needs strong support from leadership to be successful.  If senior leaders do not support the PMO, it will not have the resources, authority, or influence it needs to be effective.   

Establishing and growing a coalition of support from top-level executives should include understanding their goals and objectives, building a business case that supports those goals, and clearly communicating the business case to potential sponsors.   

Involving an executive sponsor during the development of the PMO increases their sense of ownership and improves the likelihood of long-term support.  Once the PMO is operational and providing value, visibly celebrate the success of your PMO to continue growing support among other stakeholders.   

It never hurts to make your champions look good, either.  

Your PMO Dream Team: Who You Need to Build a Rock-Solid Foundation for Success? 

To build a sustainable PMO, you need to have the right people in place.  Hire experienced professionals from both inside and outside of your organization who can design, lead, and manage the PMO effectively.  Ensure that they have the necessary skills and knowledge to support the PMO’s goals.   

The particular roles you will need in your PMO will be different than those of other PMOs and will be determined by its purpose and goals.  In most cases, however, your PMO is likely to need the following roles: 

Roles You Will Need in Your PMO

PMO Director/Manager: The PMO Director leads and manages the Project Management Office, overseeing strategic direction, project portfolios, and driving performance improvement, while fostering a culture of project excellence.  A PMO Manager may also fill this role, depending on your organization. 

Project and Program Managers: Project and Program Managers play a critical role in planning, executing, and delivering projects and programs, ensuring effective project management practices, and driving successful outcomes aligned with organizational objectives. 

Experienced Project Support: Project Schedulers, Planners, Controllers, and Analysts play a vital role in managing project schedules, resources, budgets, and data analysis to support effective project planning, execution, monitoring, and control. 

New to Project Support: Project Coordinators and Admin Assistants play a significant role in coordinating project activities, managing documentation, facilitating communication, and providing administrative support to ensure the smooth operation of the PMO and project teams. 

PMO Processes and Procedures: Chaos or Symphony?  

Establish processes and procedures:  

To achieve success within an organization, it is crucial to establish clear and consistent processes and procedures for the PMO team and the organization to follow.  

Without these, projects can become chaotic, lacking structure and direction, resulting in confusion, delays, and unsatisfactory outcomes. Chaos can arise when projects are managed independently, without standardized practices or communication channels. However, a well-designed PMO with robust and adaptable processes and procedures can orchestrate project activities, harmonize teams, and ensure alignment with organizational goals.  

The PMO serves as a conductor, guiding projects with clarity, coordination, and efficiency, enabling teams to work together towards shared objectives. By establishing a symphony of processes and procedures, the PMO enables smooth collaboration, effective decision-making, and the successful delivery of projects, transforming chaos into a harmonious and productive environment. 

Consider Change Management: 

Organizational Change Management (OCM) can further drive the successful adoption of new processes, procedures, and tools by following a structured approach to change that will guide stakeholders through the change lifecycle.  According to Prosci, the world’s leading change management entity, organizations are up to 7 times more likely to meet or exceed their change objectives when they follow a defined OCM methodology.  Do I need to say that a little louder?  Seven times.  How is that possible? 

When we distill it into the simplest terms, OCM is all about understanding that organizational change is a journey for individuals.  We are more successful in implementing changes when we lead the impacted stakeholders through the change instead of foisting it upon them and hoping they do their part.  Individuals need to be aware of the change and why it is needed.  They need to have the desire to participate in and support the change.  They need the knowledge of how to change.  They need to be granted the ability to implement the desired skills and behavior necessary for the change.  Finally, they need ongoing reinforcement to sustain the change.  When we measure impacted individuals in terms of these five steps, we can map their location along the change journey and are able to support their advancement toward successful change outcomes. 

PPM Tools: The Secret Sauce for Project Management Success?  

Implement tools and technology:

To improve project management practices, it is important to invest in tools and technology that will help the newly formed PMO team.  Only 23% of organizations use enterprise Project and Portfolio Management (PPM) tools, but 77% of high-performing teams utilize project management software (Wellingtone, 2020).   

PPM tools are the secret sauce for project management success, and this technological magic can elevate your PMO to new heights!  

These advanced software solutions streamline project planning, resource allocation, progress tracking, and reporting, enabling teams to manage projects efficiently and with precision. PPM tools can provide real-time insights, empowering project managers to make data-driven decisions swiftly. With enhanced collaboration features, team members can communicate seamlessly, ensuring everyone is on the same page. 

The automation and analytics offered by these tools simplify complex tasks, optimize resource usage, and identify potential risks, leading to improved project outcomes. Embracing PPM technology can be a transformative step for any PMO, fostering a culture of excellence, driving productivity, and ultimately achieving organizational success in an ever-competitive business landscape. 

Unleash Their Potential with Top-Notch Training! 

Promote Continuous Improvement through PMO Training 

To ensure continuous improvement within your PMO, it is essential to invest in training and support for your team. Equipping the PMO with the necessary skills and knowledge is crucial for effective performance. Providing both initial and ongoing training on project management methodologies, tools, and technologies is essential for staying up to date with industry best practices. 

Coaching and mentoring should also be offered to team members who require additional support, fostering a culture of collaboration and knowledge sharing. Encouraging team members to pursue certifications in their respective disciplines helps in developing a roster of generalizing specialists, who can contribute to various projects effectively. 

While there are a variety of options for project management knowledge curricula, it is beneficial for the PMO to ensure that its project managers share a baseline set of skills and knowledge. According to PMI’s Pulse of the Profession (2020), a significant number of organizations (61%) provide some form of PM training, while nearly half (47%) have established clear paths for developing PM careers. 

By prioritizing training and continuous development, your PMO can enhance its capabilities, drive excellence, and adapt to the ever-changing demands of the business landscape, ultimately leading to improved project outcomes and organizational success.  

Evolving or Revolving? Unleash Endless Growth with Continuous Improvement! 

To build an enduring PMO, it should be designed for continuous improvement and steady growth.  Starting your PMO office lean and piloting projects with reduced risk, before scaling, is a strategic approach that holds paramount importance.  

By adopting a lean approach initially, you can focus on essential functions and avoid unnecessary complexities, ensuring efficient resource allocation. Piloting projects with reduced risk allows you to validate the effectiveness of your PMO processes and procedures on a smaller scale, identifying potential challenges and refining your strategies without committing to a full-scale implementation.  

This approach not only minimizes initial investment but also provides tangible evidence of your PMO’s value and impact. Once the value has been proven through successful pilot projects, you can confidently scale your PMO, leveraging the insights gained from the pilot phase to drive organization-wide improvements, ensuring a more seamless and successful implementation. 

Regularly monitor the performance of the PMO and make necessary changes to improve its effectiveness and value delivery.  Ensure that the PMO remains aligned with the organization’s strategic objectives over time.

Strive for an entrepreneurial nature within your PMO so it is constantly evolving and finding new ways to add value to the organization.  For more insights regarding entrepreneurial project management, you can listen to Episode #45 of the Project Management Happy Hour podcast.    

PMO maturity models (e.g., OPM3, CMMI, P3M3) are another great way to assess strengths and improvement opportunities for project management.  The continuous improvement lifecycle of Assess, Strategize, Plan, and Implement is a simple model that can be used to keep your PMO relevant by evolving alongside your organization and growing its capabilities and benefits.  Identify where you need your PMO to be, complete a gap analysis, and develop an improvement plan to implement. 

The PMO Odyssey: Navigating the Unique Phases to Success! 

It is worth remembering that every PMO, like every organization, is unique and has its own set of requirements, activities, and milestones.  A generalized PMO startup roadmap broken up into 6 phases may look something like this: 

Six Phases of Starting a PMO

Build a Rock-Solid Start for Unstoppable Success! 

Ph 1 – Establish PMO Foundations

Focus on defining the PMO’s mission, vision, and goals, gaining a clear understanding of the organization’s project management needs and challenges.  Identify key stakeholders and establish communication channels.   

Define the PMO’s structure, roles, and responsibilities.  Establish governance processes, project selection criteria, and prioritization mechanisms.  Define initial metrics and key performance indicators (KPIs) to measure the PMO’s performance. 

Ph 2 – Assess Current State and Identify Gaps

Perform a comprehensive assessment of existing project management processes, practices, and capabilities, including gathering feedback from stakeholders, project teams, and senior management.   

Analyze project performance data, lessons learned, and historical project information.  Identify gaps, challenges, areas for improvement, and opportunities for standardization, process improvement, and knowledge sharing.  

Ph 3 – Develop and Implement PMO Framework

Develop and document project management processes, methodologies, and standards.  Establish templates, guidelines, and tools to support project management activities.   

Implement processes and tools for project selection, prioritization, and resource allocation.    

Define project governance structures and decision-making frameworks.  Provide training and support to PMO staff and project teams on PMO processes and tools. 

Ph 4 – Pilot Projects and Proof of Value

Select a few pilot projects to demonstrate the value and benefits of the PMO’s processes and methodologies.   

Closely monitor their progress, track feedback from project teams, evaluate the effectiveness of the PMO’s practices, make necessary adjustments, and document lessons learned and success stories to share with executives and other stakeholders. 

Ph 5 – Expand PMO Services and Engage Stakeholders

Build on successful pilot project results.  Expand the implementation of the PMOs processes, methodologies, and tools across a wider range of projects while actively engaging stakeholders and communicating the value of the PMO.   

Provide ongoing support and guidance to project teams and establish regular communication channels and reporting mechanisms to ensure stakeholders are informed about project progress and performance. 

Ph 6 – Continuous Improvement and Maturity

Continuously monitor and evaluate the PMO by its performance, metrics, and KPIs, identifying areas for further improvement.   

Develop and execute improvement plans.  Implement process enhancements, best practices and foster a culture of continuous learning and knowledge sharing within the PMO.   

Conduct regular reviews and assessments to track the PMOs maturity and progress towards its goals.  

Charting a Course for Sustainable Success and Beyond! 

Starting a PMO from scratch requires a well-thought-out approach that considers a variety of critical factors. By focusing on the considerations discussed in this article as you are planning your roadmap, you can build a PMO that is valuable and sustainable, ensuring long-term success for your organization.  However, establishing a PMO involves navigating complexities and implementing best practices, which can be challenging for some organizations. 

This is where Kolme Group and its team of experienced consultants can provide invaluable guidance in project management processes, procedures, and capabilities of PPM tools (Planview – AdaptiveWork Services, LeanKit Services, ClickUp Services, RAIDLOG, TimeJam Services, and GUIDEcx Services), as well as Organizational Change Management (OCM Services) and Agile methodologies (Agile Transformation Services), and a tailored approach to PMO implementation. 

Our consultants work closely with organizations to understand their unique needs, culture, and strategic objectives. Through careful analysis, they develop and execute customized PMO strategies that align with the organization’s vision and goals. Kolme Group’s consultants bring a wealth of industry knowledge and hands-on experience, allowing them to identify potential challenges early on and implement effective solutions. 

Throughout the process, Kolme Group emphasizes knowledge transfer, empowering the organization’s internal teams with the skills and knowledge required for sustainable PMO success. Whether it’s selecting and implementing the right PPM tools, optimizing project management processes (PPM Services), driving Agile transformation, or managing organizational change, Kolme Group’s consultants provide continuous support and guidance, ensuring a smooth PMO setup and an enhanced ability to drive successful projects. 

By partnering with Kolme Group and their team of experienced consultants, organizations can gain access to industry-leading expertise, best practices, and tailored solutions that enable them to build a robust and effective PMO. With Kolme Group’s guidance, organizations can confidently navigate the complexities of PMO implementation and optimize their project management capabilities, contributing significantly to their overall success in an increasingly competitive business landscape.