Project management

The role and tasks of the Project Management Office (PMO) in an organization

The Project Management Office is found in the organizational structures of many companies in Poland and worldwide. To compete effectively in the market and quickly implement strategic goals, decisions are made to carry out a rising number of projects. The success of many projects even determines the success and survival of the entire organization in the market. These projects significantly involve human, financial, and material resources. With such a rapidly growing number of projects and the associated high commitment of resources, companies are looking for methods to implement these projects effectively. Building a Project Management Office within a company is becoming crucial to achieving this efficiency. Let us try to clarify in this article the vision and role that the PMO should play in the organization.

In this article, you will learn: The role of the PMO in an organization The most common causes of PMO failures How to effectively implement a PMO Where the PMO should be positioned within the organizational structure The biggest challenges faced by the PMO The tools that support the effectiveness of the PMO

Why does the PMO not always succeed? The most common reasons for failure.

Research shows that not all newly established Project Management Offices (PMOs) are successful. The lack of success, often leading to the dissolution of this organizational unit, is frequently due to the following reasons:

• The absence of a clear vision defining the role of the PMO in the company
• The lack of an appropriate project management culture within the company
• The person heading the PMO being too weak both in terms of expertise and organizational competencies
• The lack of involvement from the company’s management in the success of the PMO, especially during its initial period of operation
• The lack of clear communication to the organization regarding the role and scope of responsibilities of the PMO
• A weak team of employees working in the PMO
• The lack of modern IT tools supporting the operation of the PMO

Case study-Unsuccessful implementation of a Project Management Office in a large organization

At one very large international media company operating in Poland, a decision was made to set up a PMO. This company had dozens of projects of different natures going on at the same time, and everyone was bothered by the general mess of inefficient project management. A PMO manager and two subordinate employees were hired. The Project Management Office started to function, and from the very beginning, conflicts started to arise between the PMO and the rest of the organization. These were mainly due to the following reasons:

1. the employees who had previously acted as project managers felt that since there were new people employed in the PMO, they would be the ones to manage projects from now on
2. the PMO staff, on the other hand, saw their role as supporting the project teams rather than taking full responsibility for project implementation
3. the company’s management was aware of conflicts arising but felt that it was the PMO manager who had to be able to resolve them himself
4. the new PMO did not start with a precise definition of its role and its communication with the organization but immediately started with operational activities

As a result, this unsuccessful start led to the dissolution of the PMO after a few months. The mistakes the organization made could have been avoided quite easily.

Where in the organizational structure should the PMO be placed?

There is no clear answer to this question and, in different organizations, this positioning of the PMO in the company’s organizational structure varies. Most often, the PMO manager reports directly to the company’s CEO. The rationale for such a place in the organizational structure is that the organization has a lot of projects of a very different nature. These include IT, marketing, optimization, investment or R&D projects. However, if, for example, 80% of the projects supported by the Project Management Office are carried out in the Production Division, then it makes sense to place the PMO under the board member responsible for production. The rule, however, should be that the PMO reports to a board member, which significantly helps in solving various organizational problems.

What challenges do PMOs face in organizations?

In order to well define the role of the PMO in an organization, it is useful to understand beforehand what are the most important challenges facing the PMO in today’s organizations. This is summed up quite well by a survey presented by Project Management Solutions, which lists the following challenges:

1. not being able to manage project resources well (53%)
2. having enough time/resources to dedicate to strategic projects (48%)
3. resistance of the organization to implementing change (47%)
4. prioritization (47%)
5. not enough project managers (42%)

At a general level it can be said that challenges 1 and 4 can be solved to some extent by implementing a good project management program and the other elements are more of a people management nature.

For example, in a large organization it is not possible to manage project resources well without a good project management program that has good resource management functionality. This is very difficult to achieve in Excel. The following illustration from the project management software FlexiProject shows a view of the resource management module:

It is evident that having a tool alone is not a complete solution, but the absence of such a tool and its functionality hinders effective resource management for any organization. In relation to challenge number 4, which is the prioritization of projects, a good IT program for project prioritization can significantly address this issue. The attractiveness of each project in a project portfolio can be visually represented by a matrix, which is illustrated below from the FlexiProject program. The attractiveness of projects is displayed in the upper left corner of the matrix.

Vision and tasks of the PMO in an organization

When defining the purpose and tasks for the PMO in an organization, it is worth starting from the assumption that someone s decided to build a Project Management Office on the basis of certain arguments. This someone was most likely one of the company’s executives or the entire board. As a starting point, the PMO manager should understand this justification and, together with the board, define the vision and the most important tasks of the PMO’s operation in the company. The PMO manager should also understand what challenges the organization has in terms of project management.

The vision for the operation of the PMO can be simple. It is worth starting from the premise that the most important purpose of the PMO is to ensure that projects effectively deliver the business objectives set before them. And to achieve this, the PMO must ensure that the organization:

1. good project and portfolio management standards were in place
2. management had regular and good information on the situation of ongoing projects
3. there was a good process for prioritizing ideas for new projects and that new projects were launched in an informed manner with adequate resources for them
4. projects were clearly linked to company strategy
5. there was a good process for managing project resources
6. project managers and project teams had good support from the PMO
7. there was a good project management IT program
8. the management saw the PMO as a partner to solve and advise on important project issues

The crucial role of PMOs in organizations

In summary PMOs play a strategic role in many organisations. An effective PMO significantly influences the success of projects and well-executed projects influence the success of a company’s strategy. Therefore, the PMO must have competent staff, it must be properly positioned in the organisational structure and it must have a defined vision and role to play in the organization.