What is PMO?

A PMO, or project management office, is an external or internal team that establishes, interprets, and maintains an organization’s project management standards. A project management office must adhere to best practices and document project strategy and status in a centralized place. The PMO ensures project completion is within budget and on time by supplying guidance, documentation, and critical metrics throughout its execution.

Some say the PMO concept originated in the 1800s, but in the 1930s, the US Air Corps established a project management office to monitor their aircraft and missile systems development. The Air Corps’ original PMO consisted of several SPOs (system program offices) grouped together. They soon realized the benefits of having one group overseeing the complete project, such as developing missiles, launchers, warheads, support equipment, aircraft, and training and logistics support. They saw benefits like:

• standardized planning
• improved budget predictions
• centralized funding into packages rather than separate components
• identifying unnecessary initiatives

It wasn’t until the 1980s that industries like construction, software development, and IT, among others, adopted the idea of using one centralized office. This was continuously modified and streamlined into what it is today—a project management office. Fast forward to today, and most organizations at all scales, not just industry champions, use PMOs to plan their projects strategically.

Responsibilities and roles of the PMO

Smaller companies that don’t have multiple projects on the go at once can typically manage without a project management office. However, a PMO can be beneficial if your organization consistently has various projects operating simultaneously. Depending on the volume, size, and scope of projects, an effective project management office would be the perfect mix of people, processes, and tools. PMO roles and responsibilities can differ across different industries and organizations, but the goal is the same— to improve project management standards.

Resource management

PMOs don’t always handle resource management, but the success of project management offices is changing the roles they take. Since the PMO oversees the complete project, it makes sense to have them allocate resources for each initiative. The PMO examines available resources and where they need them most, including budget, tools, time, and skilled team members.

Strategic planning

The project management office’s original role was strategic planning, but it no longer just creates blueprints of project goals. Planning now extends to prioritizing tasks in the order of value they bring to the project, so the organization knows which specific milestones to focus on first. Besides the value tasks generate for your business, the PMO gauges how achievable tasks are in the allotted time and how they align with your organization’s overall goals.

Project tool procurement

Equipping your team with the necessary tools is essential for success. The PMO uses its vast knowledge of the project scope to recommend specific tools and resources and acquire the ones that will lead to overall project success. Tools and resources include:

• software
• templates
• data charts
• the necessary training to effectively use these tools

Project control

Project management offices are more hands-on than ever before, offering direction, guidance, and valuable insights. Since they establish, define, and maintain project management standards, a familiar role for a PMO is complete project control—ensuring the project runs smoothly, finishes on time, and produces the desired results within budget. This role is especially effective with less experienced teams.

Project management training

Poorly trained project managers typically result in project failure. Successful organizations use their PMOs to train project managers in:

• leadership development
• time management
• project management basics
• software tools
• documentation
• individual development

Documenting and archiving projects is typically another PMO role, giving the project management office insight into any trends and allowing adjustments for training, possible tool reassessment, or amendments to specific standards.

Project selection

The PMO typically has full control over which projects to take on. They carefully and methodically choose the right blend of projects that align with organizational goals. The PMO must then create standards, policies, workflows, and processes to define and manage their projects.

What is the difference between a PMO and a project manager?

While a project management office and a project manager have similarities, they have different roles. A PMO is a group of specialists working at an organizational level. In contrast, a project manager is one individual who takes care of a project from start to finish. A project manager’s duties can include:

• managing budgets
• defining project goals
• managing costs
• data gathering
• managing resources
• task scheduling

The project management office is much more prominent in scope and implementation. This multidisciplinary team consists of finance, planning, risk management, IT, and resourcing experts who collaborate on every aspect to ensure high-quality results that achieve organizational goals. They do this by mapping out their project goals and creating the scope by defining standards, workflows, processes, resource constraints, methodologies, and budgets.

Who benefits from having a project management office?

Not every business requires a PMO, but as companies grow, so do the number of projects they take on. When you stretch your resources thin and have competing priorities, you have a higher risk of failing. The PMO is like a symphony conductor where the team works as one to understand how and where each project fits into the organization’s strategy. Understanding this flow ensures the appropriate distribution of resources to mitigate project failure. The following signs indicate you may need a PMO.

• Your projects are consistently late.
• You don’t have standardized processes for your project managers to follow.
• Your collaborators lack visibility into project progress.
• Your projects don’t align with your organizational goals.
• You can’t accurately track your project’s success.
• Your resources are inadequate.
• Your projects often end up over budget.

Who does the PMO report to?

PMO staff typically consist of highly experienced professionals in various fields, such as finance, planning, risk management, IT, and resourcing. They usually hold a PMP (Project Management Professional) certification. The majority of PMOs report to C- and D-level management, for example, CEOs, CFOs, vice presidents, and directors.

PMO manager or director

To run a successful PMO, you must have a leader. PMOs typically appoint one of its members as director or manager—the group’s overseer who will maintain project management standards and methodologies, establish and conduct the best approach throughout the project lifecycle, and manage resource allocation for all projects.

Support staff

PMOs often have support staff to assist project managers with accurate data research. Supporting roles can include:

• administrative staff
• project planners
• project schedulers
• project controllers

Does a PMO require training?

Adequately training the project management team is a high priority for the PMO as it ensures successful project outcomes. The areas requiring the most training are:

• basic project management
• software tools
• advanced project management
• PMP certificate prep
• leadership
• agile project management
• business alignment
• project management certification

The benefits of a PMO

Successful organizations using PMOs realize that the benefits outweigh the cost. Project management offices add value to organizations in various ways. Here’s what you can expect from a properly managed PMO.

• Complete projects on time and within budget.
• Improved productivity.
• Increased customer satisfaction.
• Improved project alignment with organizational goals.
• Fewer project failures.
• Improved employee engagement by offering higher project success.
• Improved tracking and documentation to forecast trends and mitigate risk.

The challenges of a PMO

When the heads of organizations sit through a presentation and see the benefits of using a project management office, they’re all for it—until they notice the costs and interim disruption to the business. The initial start-up of a project management office entails making changes to management processes and hiring new people with experience and project management skills. These things add to overhead costs and come with resistance. To overcome these challenges, focus on a PMO’s quantifiable impact across productivity, customer satisfaction, collaborator confidence, cost savings, and other KPIs that prove PMOs bring added value and higher trust throughout organizations.