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Setting up a PMO
Discover how setting up a PMO (Project Management Office) can streamline project management, enhance efficiency and drive business value. This guide covers the essentials from initiation to continuous improvement. It also provides a roadmap for establishing a PMO that aligns with organisational goals and ensures project success.
The decision to establish a PMO often starts with a desire for a more structured approach to managing projects. Many organisations grapple with the frustration of delayed deliveries, escalating costs and the persistent sense that there was a better way to handle their projects.
This sense of wanting to improve, to streamline processes and to enhance project outcomes is the whole driving force behind the original concept of the PMO (see Evolution of the PMO). And it’s little surprise that when projects turn out to be more chaotic than leaders expected, a PMO is no longer an unnecessary luxury.
A PMO serves as the central beacon for project management excellence, providing the standards, governance and oversight necessary to ensure projects are completed on time, within budget and deliver value to the business.
But how do you set one up? And how do you do it from a standing start when the resources, budget and skills on-hand are inevitably meagre.
This is the exact question that one of our clients asked us recently. And while this is something we can do for you with our PMO as a Service, it’s worth getting into what exactly you need to do.
The following is based on our expert insight and the knowledge and insight of our PMO community.
🥗 Key Takeaways
Purpose: Establishing a PMO is aimed at structuring project management to address delays, cost overruns and inefficiencies.
Role: A PMO ensures project standards, governance, timely delivery, and value to the business.
Key Focus Areas:
- Clear Purpose: Essential to prevent scope creep and maintain focus.
- Executive Support: Critical for resource allocation and organisational buy-in.
- Adaptable Methodologies: Tailor project management practices to fit diverse project needs.
- Team Building: Essential to gather a mix of strategic, technical, and leadership skills.
- Effective Communication: Vital for stakeholder alignment and support.
- Continuous Improvement: Regular review and adaptation to business and project management trends are necessary.
How to set up a PMO
Here’s how to set up a PMO and structure and implement it effectively:
Define the purpose and scope
An invaluable lesson is that one person cannot do everything. In trying to do so, you will invariably do nothing well. If you are setting up a PMO on your own, a sea of templates and a multitude of admin tasks can quickly bog you down and prevent value being delivered.
For this reason, it’s best to start with a clear purpose and a simple, achievable scope. Begin by being clear on why the PMO is being established and what it is you expect to achieve. This will enable you to prioritise. Is it most important to offer to offer support and guidance? Is it to manage project portfolios? Or is it to ensure governance across all projects? Being very deliberate about the initial purpose of the PMO will aide its development and enable you to preserve a clear remit amidst the overwhelming number of things you might reasonably be expected to do. In fact, one of the reasons that mature PMO functions start to become bloated and dysfunctional is that they lose sight of this.
A detailed PMO Charter or equivalent should then be crafted to outline the objectives, governance structure, roles, responsibilities and key performance indicators (KPIs). This document will act as a foundational blueprint for the PMO’s operations. It should also detail the resource that will ultimately be required including budget, personnel and tools.
Secure Executive Support
Some PMOs find themselves in the fortunate position of operating under the CEO. Most however do not.
The success of a PMO hinges on the support from senior management. Otherwise, it will be all too easy for others to ignore it and nothing will change. To gain support, articulate a compelling business case to your stakeholders that highlights the benefits of the PMO, such as improved project success rates and more efficient resource utilisation. Be clear that those benefits will only be achieved if everyone agrees to get onboard.
Gaining this support is critical for securing the necessary resources but also for achieving acceptance across the wider organisation.
Design the PMO Structure
The PMO’s structure should align with the organisation’s needs and culture. Options include a centralised model for direct oversight of projects or a decentralised model that offers guidelines while allowing project managers to report to their departments.
Your choice depends on the organisation’s scale, project complexity, and desired level of control.
Establish Project Management Methodologies and Standards
Create a suite of project management methodologies, standards and best practices tailored to the organisation’s needs. These should be flexible enough to accommodate various project types while providing a consistent framework for project execution.
When just starting out, it is usually best to create a common toolkit that is flexible and adaptable. This allows you and the project managers to select the most appropriate tools for each project. Complexity demands meticulous mapping, while simpler projects may require nothing more than a one-page workstream flow.
Implement Project Management Tools
Invest if you can in project management software and tools that support the PMO’s objectives. They can aide tasks like project planning, risk management and performance reporting. These tools are crucial for enhancing collaboration and providing visibility into project progress for senior stakeholders. And if you are just getting started and have very few personnel within the PMO, they can be productivity multiplier. But only if you get the right solutions. We would warn against over complicated enterprise-grade solutions that may take longer to master than the value they generate.
Build the PMO Team
Even if you’re starting a PMO alone, you will eventually need to hire some professionals. After all, you probably had a job already with a long list of priorities before putting on the PMO hat. You will obviously want the right mix of strategic, technical and leadership skills to match the size of the portfolio and the maturity-level of the PMO.
Fortunately, we are also on hand to help with this kind challenge too with our PMO resource services.
Launch and Communicate the PMO
Once everything is in place, it’s time to raise the PMO’s profile within the organisation. Frequent interactions and in-person presence become crucial for the PMO manager to be recognized and respected. After all, the PMO’s primary function is to be the glue that holds stakeholders together.
Introduce the PMO to the organisation through a formal launch and clear communication of its role, benefits, and processes. Effective communication ensures that all stakeholders are aligned and supportive of the PMO’s objectives.
The heart of the matter lies in ensuring that your department is not the last priority on everyone else’s list. Building relationships and achieving quick wins are essential. The head of business change or a similarly relevant member of senior management should delineate the PMO’s scope, providing visibility, governance and strategic reporting to the board.
Monitor, Review, and Adapt
Implement mechanisms for ongoing monitoring and review of the PMO’s performance against its KPIs. Regular assessments, combined with stakeholder feedback, will guide continuous improvement efforts, ensuring the PMO remains aligned with business goals and responsive to project management trends.
Don’t let the PMO fester. As the organisation changes, so will the PMO need to adapt. And it will need careful shepherding to avoid administrative bloat1, stay relevant and keep delivering the structure, streamlining and better project outcomes the organisation wants to see.
Gain support with your PMO
This article was written with the support and insight of our expert PMO community. If you would like advice on your challenge, please get in touch on the form below or visit our PMO services.
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