Project management office: A comprehensive guide for beginners

Is a project management office right for your business?

Are you having trouble keeping your organization’s projects on track?

Implementing a project management office (PMO) could solve your problems.

A PMO is a department, unit, or group of individuals who create and oversee all project management methodologies at an organization.

They maintain a business’s project management standards and provide employees with the tools and frameworks to ensure consistent success.

PMOs are great for improving resource allocation, boosting efficiency, and meeting primary business goals.

After all, there’s a reason why 89% of organizations report having at least one PMO (with some having several).

However, building a successful PMO requires time, money, and other resources.

Also, there are times when PMO teams complicate matters by adding too many rigid processes and procedures. If left unchecked, these can stifle creativity and lead to resentment, so there’s a right and wrong way to implement a PMO.

When done right, though, the benefits outweigh the risks.

In this article, I’ll teach you everything you need to know about PMOs, including whether they’re right for your organization. So stick around to learn more.

What is a project management office for?

At its core, a project management office is the central hub for all project management processes, tools, and techniques.

As the intro states, a PMO creates and enforces an organization’s project management standards.

This ensures all project teams have expectations to live up to, so PMOs are great for improving efficiency, productivity, and quality of work.

Consistent project success is the goal of any PMO, regardless of its size or type.

Larger, more mature PMOs can provide:

1. Expert analysis of key project performance metrics (quality, efficiency, etc.)
   
   
2. Risk management
   
   
3. Aiding with performance-based decision-making
   
   
4. Resource management
   
   
5. Consulting and advising with project management teams
   
   
6. Strategic planning for future projects
   
   
7. Developing key performance indicators (KPIs) for individual projects
   
   
8. Mentoring project managers and team members

Smaller PMOs will have less robust capabilities and may only provide simple support services to project teams.

However, virtually all PMOs will find ways to ensure all project goals are met and deliverables go out on time and within your budget, which is why they’re so helpful.

After all, every organization, regardless of size or industry, needs a way to develop and enforce quality standards for projects.

A project management office is like the ‘command center’ for all your projects. It’s where standards are enforced, workflows are created, and strategic goals are developed.

If your organization struggles to achieve flawless project execution, building a PMO is an excellent remedy, provided you have the resources to implement it.

What are the key responsibilities of a PMO?

Now that you’re more familiar with what a PMO does, let’s explore an average day at one.

While the responsibilities of a PMO can be pretty vast, we’ll break things down into five main categories, which are:

1. Creating regular processes and quality standards for all projects
   
   
2. Aid with project delivery
   
   
3. Consolidate all project planning and workflows
   
   
4. Data analysis and future forecasting
   
   
5. Project portfolio management

Let’s take a closer look at each group of responsibilities.

#1: Create regular processes and project quality standards

One of the most crucial PMO roles is to develop quality standards and strategic objectives for all projects.

The PMO also determines the tools and methods project teams will use, which involves proper resource allocation and management.

In this regard, the PMO molds your project delivery process into a comprehensive management system, which every successful project needs.

The most common way PMOs implement the processes and standards they develop is through templates.

Once they’ve created a template, they teach project managers and project teams how to use them.

The types of templates PMOs often use include the following:

1. Project proposal templates. This type of template lays out all the elements a project will entail, including the project’s scope, budget, methodologies, and tools. A project proposal helps teams avoid scope creep, which is when a project’s scope grows outside its original depth (usually due to the demands of stakeholders). Clearly defining each project stage with a proposal template will keep teams glued to the original scope.
   
   
2. Project status report template. Next, a status report template clearly states how a project’s success will be measured during its duration. This means defining clear initiatives and monitoring your team’s progress during the project’s implementation. A key aspect of using status report templates is identifying weak areas and learning from mistakes. You can then use these insights to improve your future projects.
   
   
3. Project change report template. No plan is perfect, and things are always subject to change if something unexpected happens. For these scenarios, PMOs use change report templates, which are used to define, request, and track changes to projects. It could be that you can’t use a particular tool for a project, so you use a change report template to suggest a replacement. Once approved, you can use the template to educate your team on the changes.
   
   
4. Project closure report template. Lastly, a closure report template takes stock of a completed project. It’s where you analyze what went well and what didn’t to improve your future processes. Closure report templates are great for briefing your team on recently completed projects while providing candid suggestions for improvement.

#2: Aid with project delivery and implementation

PMOs aren’t just there to set the rules and disappear. Instead, they typically play a weighty role in a project’s implementation, which is not limited to ensuring quality standards are met.

For example, it’s common for PMOs to provide mentoring to project managers and team members throughout a project.

This can include teaching project leads the management skills they need to ensure success.

It also entails:

• Troubleshooting common issues. A major function of a PMO is to help solve problems that arise during a project’s lifecycle. Typical problems that arise include issues with resource allocation, change management (i.e., gaining buy-in from staff on new projects), and strategic planning.
  
  
• Getting struggling teams back on track. PMOs regularly assist with projects either A) struggling to get back on track or B) having difficulty getting started.
  
  
• Equipping teams with proper project management tools. The PMO decides which tools project management teams will use and then provides them. That includes training staff on tools to become more familiar with, such as project management software programs like Monday.com or Asana.
  
  
• Facilitate seamless communication across project teams and with senior management. Maintaining consistent communication is another responsibility of a PMO, as they must decide how teams will communicate updates and new developments. PMO managers are also responsible for relaying important project details to stakeholders and upper management.

#3: Consolidate all project views and workflows

Next, PMOs must find ways to consolidate all project views into one central location.

This is not only convenient but also makes maintaining communication far more manageable. Most PMOs will use centralized project management software applications like Asana above.

These tools allow PMOs to monitor every project and team member’s progress through various dashboards. They also help streamline workflows through automation and instant messaging.

Project management tools also provide internalized messaging systems to facilitate communication, scheduling, and assigning tasks.

PMOs that don’t use project management software still need a system to consolidate all their workflows in one spot. Typical solutions include Excel spreadsheets and Google Docs detailing assignments, deadlines, and specific instructions for task completion.

#4: Data analysis and future forecasting

Projects will never improve if organizations don’t learn from past successes and mistakes. That’s why PMOs are responsible for data analysis and future forecasting for new projects.

This means keeping track of key performance indicators and metrics like:

• Productivity and efficiency
  
  
• Employee engagement levels
  
  
• Project progress (deadlines met, tasks completed, etc.)
  
  
• Quality, cost, and error rate

Whenever things go wrong, PMOs step in to determine two things:

1. What caused the project to go off the rails
   
   
2. What could be done in the future to prevent it from happening again

This enables PMOs to ensure future projects don’t fall victim to the same pitfalls as past endeavors, improving overall quality and efficiency.

#5: Project portfolio management (PPM)

Lastly, the PMO engages in strategic portfolio management, aligning projects with the organization’s primary business goals.

After all, why engage in projects if they don’t contribute to your ultimate goal?

Strategic portfolio management ensures that every project an organization takes on has a purpose and will achieve business goals.

It entails laying out all available project options and then selecting the ones that are the most promising for completing key business objectives, like increasing revenue or adding new business capabilities.

The different types of PMO structures

It’s important to understand that the term project management office encompasses quite a bit, as your organization can implement multiple PMO structures.

The one you choose will depend on your level of project management maturity, which refers to how sophisticated your project, portfolio, and program management systems are.

These include the following:

1. Supportive PMO. The supportive PMO model works best for organizations with lower levels of project management maturity. As such, supportive PMOs take on more of a consulting role for project management, so there will be little control over project implementation. However, supportive PMOs still define standard procedures and ensure best practices are followed.
   
   
2. Controlling PMO. Next up is the controlling PMO model, which works best for organizations with medium levels of project management maturity. A controlling PMO provides everything a supportive PMO does (i.e., consulting and ensuring best practices). Still, it also provides some hands-on project support via compliance and ensuring data quality.
   
   
3. Directive PMO. Lastly, a directive PMO boasts the highest level of control, so it’s ideal for organizations with the most substantial project management maturity levels. Besides providing project support and enforcing best practices, a directive PMO combines all five responsibilities mentioned before, acting as a true central hub for all things related to project management.

Selecting the PMO structure that aligns with your current maturity level is essential. Otherwise, you risk overwhelming your employees and going over budget, which is never good.

What are the benefits of having a PMO?

Before we wrap up, let’s examine the key advantages and potential drawbacks of implementing a PMO at your organization.

The key advantages of PMOs include:

• Strategic alignment. With a PMO calling the shots, all project teams will know exactly what to do and how to do it. This boosts efficiency, productivity, and project success rates.
  
  
• Increased project success rates. Speaking of project success, organizations with PMOs have higher success rates. According to a Project Management Institute (PMI) report, organizations with PMOs achieve project success 65% of the time, while organizations without PMOs only report success 56% of the time.
  
  
• Higher ROI and increased efficiency. Higher success rates mean achieving better returns on investment, which is always good.
  
  
• Better communication across project teams. As shown previously, organizations with PMOs boast more assertive communication across project teams and other departments (especially upper management).

Conversely, the possible disadvantages of a PMO include:

• Resistance to change. Adding a PMO qualifies as a form of change management, and with change can come resistance. If you don’t make candid efforts to obtain buy-in from your staff, they may resist new projects, causing your decision to implement a PMO to backfire.
  
  
• Steep initial setup costs. For a PMO to be truly effective, it needs proper resources, trained professionals, and a budget. These costs may be too steep for smaller organizations.
  
  
• Too much red tape. If you aren’t careful, your PMO can transform into a bureaucracy filled with unnecessary rules and regulations that stifle creativity and frustrate employees.

Final thoughts: Project Management Offices

We’ve gone over a lot, so let’s recap the main points before signing off:

1. A project management office is any unit, group, or department that oversees an organization’s project management standards and procedures.
   
   
2. There are supportive, controlling, and directive PMOS, which correlate to your project management maturity level.
   
   
3. PMOs create best practices, enforce quality standards, aid with project implementation, and engage in future forecasting.
   
   
4. There are many reasons to implement a PMO, but if your organization lacks the proper budget, it may not be worth it.
   

Additional resources:
Debunking 7 productivity myths and unlocking efficiency
The pros and cons of an unlimited PTO policy
90 sample phrases for negative performance reviews

Want more insights like these? Visit Matthew Scherer’s author page to explore her other articles and expertise in business management.