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One Size Fits All? - Which Project Management Office Fits Your Business?

One size does not fit all; from Armani to Columbia Sportswear, clothing sizes that are available is a huge variable.

Then there is the custom fit experience. When working with a customer on a project in Hong Kong, I took the opportunity to meet a recommended tailor. They treated me well and took great care to measure me accurately and provided me with a great fit, and at a reasonable price. Happy customer.

Likewise, not all businesses are the same, and also not in the same place as to their growth cycle and specific needs. There are variables to consider for the right fit so to have a Project Management Office structure in place that is highly effective in delivering projects with value and is viewed as a successful partner by the business.

Unfortunately, studies have shown that PMOs have a relatively high failure rate on their first try (by some estimates, more than 50%). These failures are to a significant degree because of two factors:

- the PMO's mission and objectives weren't meeting the needs of the organization

- and the PMO wasn't matched appropriately to the maturity of the organization.

Choosing and implementing the proper PMO is very important for your business. Size Matters !
Here is a key to setting up a successful PMO, with some examples, considerations and recommendations.

Project Management Offices: Determining the Appropriate Structure for Your Business by Benchmarking an Organizations Maturity for the Right Fit

A key to setting up a successful PMO is to first understand where your organization fits in the “Maturity Model” and then to organize a PMO structure accordingly. For example, if your organization is a small to lower middle market business, then your organization may likely depend on the skills and abilities of key performers to get things done. By the time your company reaches larger market capacity, you will want to reduce this dependency on individuals and to establish reliable processes. We call this "emerging discipline." And that is why choosing the proper PMO is important.

Which PMO model is right for your business?

Let’s break down some examples:

1. Project Management Communities

Project management communities are usually ground zero for organizations as their project management practice begins and evolves naturally; no matter whether they appear online in the form of discussion boards, in lunchrooms at work, or on manufacturing floors. But for a project management practice this community support is a primary foundational tool to be nourished.

The fact is, this allows an organization to mature naturally, and can be a much better solution for a smaller company than imposing a more controlling PMO. It will help a company progress up the maturity curve faster with less friction and resistance. And as we’ll see in some of the other PMO models, internal resistance is one the greatest challenges a project manager sometimes faces.

2. Project Management Support Groups

A project management support group can be a department staffed by project management specialists who oversee projects throughout an organization. This model is ideal for growing companies who have needs that have outgrown an informal community network. The advantage is that people who may be experts in their field but have little project management experience now have the support they need to get things done in an efficient manner.

As well as this project management support function, there can be some other project related functions:

  • Organizing and implementing project management training.

  • Provide basic staff assistance services, such as resourcing, scheduling and scoping.
  • Policing best project management practices throughout the organization.

What makes a project support group different from a full-service PMO is in its level of oversight and reporting. Conventional PMOs by their very nature concentrate on establishing a firm set of policies and procedures rather than just helping the project staff produce results. A project support group is more of a supportive arrangement rather than a controlling arrangement, and this significantly increases the effective life span.

3. Project Management Office

If organizations already have functioning project management communities and/or support groups, establishing a PMO for managing individual projects could just mean adding formalized project management processes, tracking and reporting to the mix; including documenting best practices in a more formal manner.

Sounds simple, right? It can be. But unfortunately, studies show that this process fails about half the time. In some cases, there wasn’t a functioning community or support group in place when an organization decides to improve efficiency. And there seems to be a tendency for some organizations to jump right in and try to establish a full-service PMO when it simply isn’t ready.

What can happen is that previously successful project managers simply give up on the dictates of the PMO, and then new “cops” are brought in from the outside under the auspices of the PMO. Eventually, senior management gets tired of the dissention in the ranks and the PMO is dissolved, which leads the organization to slip back into inefficiencies.

The good news is, organizations that have failed once actually have a high probability of success on the second try. After all, the opposition won out the first time, but usually there were some strong social networks established that can be leveraged by the new PMO.

4. Program Management Office

Once companies mature into larger businesses, their sophistication leads to them having similarly structured inter-related projects or they find themselves with a single initiative described as a program since it involves wide-ranging fundamental business change and expenditures with significant bottom-line impact. Either of these scenarios requires them to manage such a program or groups of projects cross-organizationally in an overall program office.

This enables them to more effectively manage a multitude of risk and to realize better results with consistent approaches. In a sense, these companies are looking beyond mere project management and execution. In essence, Program Offices take the overall lead in best practice governance, integrated risk management and issue resolution, and financial performance management.

5. Project Portfolio Office

The job of a project portfolio office is to manage the pipeline of projects, measure results and ensure that all assets are being managed correctly. Its approach is similar to the management of investment portfolios, so the office needs to be staffed by individuals with potentially very different skills than found in a PMO.

While it is important to know how each project is performing, the impact of each project on the overall portfolio and the enterprise is just as important. Within most PPO systems there is a project evaluation process with metrics, which is utilized at various points during their life cycle. Evaluations are constant, and at any point in the process, if objectives are not being met, the project can be stopped. This way the organization can ensure that strategies are being met and resources are being allocated properly.

One of the reasons that many organizations separate the PPO from the PMO is that it enables the PPO to operate in an oversight capacity. This frees up the PMO to concentrate on what it does best — devising and implementing effective methods and processes for project management support.

6. Enterprise PMO

Larger companies with a tactical approach find their projects driven from corporate departments or divisions without common management oversight. This can lead to an increase in the number of projects and inefficiencies in their delivery. To manage these issues, an enterprise program management office (EPMO) can be used to provide enterprise-wide holistic management over multiple PMOs and ensure strategic alignment with the business.

The business is constantly endeavoring to deliver against strategic and operational goals which require a strong supporting cast to be successful. The challenge for many is bringing all the necessary support together, throughout a program/project life-cycle, while facilitating effective management of priorities in light of constrained resources (people, time, dollars). An effective EPMO can accomplish this.

At the end of the day, you want the EPMO to be the glue in driving implementation of effective solutions that provides the support to turn business strategy into reality. As an integral part of the business, an EPMO can be that strategic partner providing enterprise project management services and leadership resulting in consistent common governance and continuous business transformation.

What Can We Conclude? - There are many considerations for the right PMO

Some Key Considerations

  • To help alleviate project management failures, it is important to know the different types of PMO models.
  • The structure of the PMO needs to be aligned to the maturity and nature of the organization and its markets.
  • A "shared view" of the PMO becomes increasingly important as an enterprise reaches higher levels of maturity and the PMO operation becomes broader and more expansive.
  • Hybrid PMO structures can also evolve for organizations, which include the right components for them from various maturity levels.

Some Recommendations for Success:

  • Utilize a PMO diagnostic framework to assess your organization’s project management capabilities.
  • Compare your organization to a PMO capability maturity model to understand where you are in the journey.
  • Determine the right project management structure for your organization.
  • Design and build your PMO with leading practices.
  • Have a transition roadmap for smooth implementation and operation of your PMO.

What about Your PMO Experiences?

It’s not uncommon for companies to end up dissatisfied with their PMO. But what about you? Are you satisfied with your PMO and how it supports your organization? If so, what did you do to ensure such satisfaction? If not, where do you think you went wrong?

We invite you to email us your comments.

One size does not fit all; from Armani to Columbia Sportswear, clothing sizes that are available is a huge variable.

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