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Built to last: the foundations of a PMO

The portfolio management office (PMO) is considered by many to be the core component of an organisation’s project delivery capability. But why do some businesses consider it to be so vital? And how do you go about setting one up from scratch?

Building an effective PMO is not always a straightforward undertaking. PMO development is a journey not a task, and requires a wide capability-based perspective. Many robust and successful PMOs start from quite humble beginnings and then grow into highly-valued organisational functions.

What is a PMO?

Within some organisations, PMOs act as a simple monitoring and reporting function, and in other they can also be responsible for multi-disciplinary activities including compliance, assurance, development, training, facilitation, and guidance.

They first emerged to tackle very specific and difficult business challenges — among them, a lack of effective project governance, processes and approaches, inadequate methods to allocate scarce resources, and an ability to prioritise investment in the most strategically-aligned projects and programmes. These challenges have been, and continue to be, addressed by PMOs.

If you are one of the many about to embark on a PMO journey, or you’re looking to the next phase of your PMO’s growth, the following thoughts may aid your initial planning.

A balanced PMO

Unlike the projects and programmes they support, PMOs are very much part of the ‘business-as-usual’ (BAU) day-to-day operations of their parent organisations. Kicking off with this vision firmly in mind, not only sets solid foundations, but it highlights the intention that your PMO is here to stay.

Successful PMO building, balances the development of key capability aspects:

  1. Ongoing alignment with its owner’s requirements
  2. The knowledge, skills, and experience of its human resources
  3. The routines (both the documented processes and the tacit activities) that it utilises day to day
  4. The tools it uses to maximise productivity and communications
  5. The relationships it forms and develops with each of its customers, suppliers, key stakeholders and other business functions

1. Ongoing alignment with its owner’s requirements

Things can go wrong very quickly if key stakeholder expectations are not managed and met from the outset. Executives will look to the PMO to achieve very specific requirements, but like all business functions, your PMO will be resource-constrained (i.e. it won’t be able to do everything straight away). As a result, growth and development of services, as well as stakeholder expectations, must be carefully managed using project management, change management, and other best practice techniques. Not only that, but the techniques used must be the same as those promoted to the rest of the organisation.

2. Human resources – knowledge, skills, and experience

Regardless of the size of your PMO, having the right people with the right knowledge, skills, and experience (KSE) is critical. Understanding the KSE required of the various PMO roles, and having an effective tool to assess existing and potential staff, is very important. There are various free-to-use self-assessment models available, including the internationally-recognised Association for Project Management (APM) Competence Framework (version 2).

3. Documented and tacit routines

The day-to-day routines of a PMO must reflect its overall scope. Routines may be documented (processes and procedures, internal web resources, handbooks, etc.) or tacit (the habits and sense-based actions that grow up over time). Both are necessary, and together they set the tone of how the PMO team operates.

As the PMO develops, it must grow its scope and competence, and evolve in maturity. Maturity reflects an organisation or team’s ability to work in a robust and predictable way, improving itself over time. This can and should be regularly assessed and, again, there are assessment models available to help with this. These include the AXELOS Project, Programme, and Portfolio Management Maturity Model (P3M3) which is internationally recognised and free to self-assess.

4. Productivity and communication tools

PMO tools loosely fall into two categories – productivity and communications (some specialist PMO-targeted software tools contain aspects of both). However, before investing in any specific tools, try creating a simple list of existing projects/programmes and take the time to learn what information you will need to gather and manage. Start by using the communication methods that are already prominent in your organisation, e.g. email, social media or text (but never forget the power of a phone call or a face-to-face conversation). Once you fully understand your own information needs, you may wish to invest in specific productivity and/or communication tools that are right for you.

5. Stakeholder relationships

Whether you are getting your PMO off the ground solo, or you are already a PMO manager and are looking for your next stage of growth, never lose sight of the fact that your role is 80-90% communication. Gathering/sorting data and generating robust reports, etc. is only a tiny proportion of what you do. As a head of PMO, developing deeper relationships with stakeholders is a must. By interacting with them on a regular basis, you will learn what they need from you, and vice versa.

Do I now have a fully-functioning PMO?

This is just the beginning of the PMO development journey. It is worth remembering that the modern-day PMO only became invaluable once it learned to meet the needs of its own unique business environment — they are generally not successful when created as a generic, one-size-fits-all function.

If you’re looking to establish a PMO in your organisation, or you’re working towards the next phase of your PMO’s growth then ILX’s consultancy team can help you on your journey. We will work with you to design, develop and deliver a PMO that meets the specific requirements of your organisation.

Find out more about our consultancy offering.