The Role of a PMO in project management | What is a PMO? | What does a project management office do? | How can you measure its benefits?
The abbreviation PMO stands for project management office. In this article, we’ll explore this topic and provide some basic information about it. Newcomers to this topic will find answers to their questions here.
We’ll cover these topics:
- What is a PMO?
- Why have a project management office?
- The PMO’s role in the corporate hierarchy
- What benefits does a PMO offer?
- How can you measure these benefits?
- The PMO stakeholders
- What’s are the PMO’s duties?
- Establishing a project management office – the first steps
- Additional articles on PMO-related topics
Let’s start by answering a basic question that many people ask: What exactly is a PMO?Read article in German
Definition of a project management office (PMO)
A PMO is a centralized, permanent organizational unit that is responsible for handling multiple projects (multi-project management) for an entire company or department within the company. Its responsibilities may include, for example, training, project services, methodology, processes, and PM tools It may also have strategic duties, such as providing assistance in project portfolio management.
How a PMO differs from a project office, a program office, and project assistance
A project management office is responsible for the overall multi-project environment of a corporate department or an entire company. It is intended to be a permanent entity. A strategic PMO (SPMO) is involved in actively managing a portfolio and can assist in setting priorities and/or defining a strategy.
It’s important to clearly differentiate between the PMO and two other organizational entities: the project office (PO) and the program office (PrgO). People can easily confuse these different entities.
A project office is responsible for the optimum handling of ONE major project, which is why it can be viewed as a greatly expanded form of project assistance.
Somewhat more expanded in scope is the program office. Its duty is to optimize a program consisting of several projects that serve an overall program goal.
The project office and program office have a limited lifespan. They are established when a project or program with a broad scope is launched. Once their mission has been completed, these entities are generally dissolved.
There is also the project assistance function. Its mission is to support the operational and administrative work, and hopefully thereby also relieve some of the burden on the aforementioned entities.
Why have a project management office? When is a PMO needed?
Experience has shown that having a centralized project management office is especially helpful in situations where:
- You need to manage numerous projects
- Resources involving various departments need to be coordinated
- Reliable and up to date information is needed for making decisions
- The projects are happening in a variety of departments, but are interdependent and possibly international as well
- You need their ability to make decisions quickly because you’re working in a dynamic environment
- There’s a continually growing demand for reports because increasingly more people want detailed
- Project expenses are becoming a more critical issue
- You need to determine the project priorities and strategic importance and take these into
A PMO should be positioned in the company’s upper echelons. This has several advantages, among them that the right project-related information reaches upper management and the key decision-makers.
Vice versa, it also helps ensure that the demands of the key decision-makers are communicated to everyone involved in, and affected by, the projects.
The appropriate roles, processes, and tools must be implemented to ensure that this happens.
How many team members work in the PMO depends on the size of the project environment and the scope of its activities.
The PMO’s position in a company’s organizational structure
Companies running multiple projects involving various departments having interdependencies often have several PMOs (see graphic). Each project management office is responsible for the project management methodology and processes in their respective department.
- A PMO is traditionally part of an R&D department. Its goal is to better manage the development projects.
- IT departments often have a PMO as well, and this project management office works to ensure the success of IT projects.
- Occasionally, you’ll find a PMO in departments such as sales and marketing as well. It often handles elements of projects vital to the company’s mission, such as R&D projects or IT projects.
- In addition, there’s sometimes also a strategic PMO with cross-departmental responsibilities. This project management office is linked to upper management and may have broader responsibilities such as those involving portfolio management and strategic implementations.
Important: Make sure to draw a clear distinction between the PMO and the project office and program office, as described above.
What benefits does a PMO offer?
The PMO’s mission is to improve the processes in a multi-project environment. However, what is actually considered an improvement varies from company to company. So, the benefit of having a project management office is best described as:
“The PMO should give every stakeholder in a multi-project environment the reassurance that everything is under control.” (Johann Strasser)Click to tweet
The project management office thereby provides a degree of satisfaction in the multi-project landscape that wouldn’t exist without its efforts.
Here’s a list of the possible arguments for having a PMO and the added value it provides. These give the stakeholders confidence in the success of the projects.
- Every project has a strategic focus (prerequisite: the PMO has a say in strategic issues related to
- the project)
- Every project is managed successfully (a legitimate demand, but one that’s not always possible for
- every project)
- A greater degree of maturity in the company’s project management (through various measures for
- everyone involved in projects)
- Maximized project performance (i.e. R&D projects completed in a short time frame, which can
- provide a clear competitive advantage in many industries)
- Optimized use of resources (making the best possible use of the available staff resources when
- resources are scarce)
- Fewer missed deadlines, cost overruns, and excessive use of resources (for example, by providing the project manager with support in the form of training and methodology)
- Fewer project risks (for example, through lessons learned and a greater awareness of project risk management)
- Maximizing the company’s success via its ongoing projects
How can you measure these benefits?
Sooner or later, you’ll be asked the question: what are the actual benefits of having a project management office and can these be quantified? So, as the PMO responsible, it’s best to be prepared for this question.
You don’t necessarily need detailed quantifiable figures. One quick proof of the PMO’s effectiveness can be, for example, positive stakeholder feedback. That may be enough, so start by simply collecting Likes or star ratings.
The advantage of this method is that collecting the feedback is quick and easy. You simply ask the participants in a portfolio meeting, training session, etc. how satisfied they were with your work in this area.
Start collecting this feedback immediately after establishing your project management office. If you wait too long before doing this, you may miss the opportunity to document the positive effects especially noticeable in the beginning.
Our recommendation: Begin documenting your successes right from the start! Ask people that you’ve helped to evaluate your work by simply giving it a star rating or a Like.
Measuring the satisfaction lets you chart your success over time. A graphic with a nice upward curve is a good, clear way to illustrate the PMO’s positive influence on the project landscape.
Here are a few other ideas for using graphics to document the PMO’s benefits:
- Project status (Tracking the number of red, yellow, and green traffic light indicators displayed in
the project manager meetings. There should ideally be fewer red alerts as time goes on.)
- Project quality (Number of projects with a signed project order, status reports, and other methods of better managing the projects. This number should be steadily increasing.)
- Delays (To track the change over time, you need a planning basis for every project. As early as possible, the PMO should prepare a centralized list of all the projects, with a planning basis for every project, or obtain the information necessary for creating this list. The number of delays should decrease over time.)
- Budget deficits (Having a centralized list, showing every project and its associated planning basis, is helpful here as well. The number of deficits should decrease over time.)
Our recommendation: If the data quality is sufficient, you should be able to track and document these indicators over time. This provides evidence of the PMO’s value, should someone question it. You can thereby show how, by serving as an early warning system, the project management office has improved the multi-project environment, for example.
PMO stakeholder demands
Various stakeholders such as decision-makers, project managers, team leaders, and the finance
department generally each have their own expectations of the PMO. Make sure that the project management office always fulfills these expectations first.
As a service provider, the PMO should develop a friendly relationship with these stakeholders. It should serve as a catalyst, encouraging the stakeholders to work together. Its mission is to reassure everyone that all the projects are being managed well and everything is running smoothly.
This maximizes everyone’s acceptance of the PMO.
“The PMO serves as a catalyst within the company, facilitating smooth collaboration among all the stakeholders.” (Martin Rudolph)Click to tweet
The project management office will sometimes be called upon to act as inspectors / project police. For example, if the project manager misses a deadline for submitting a status report. In this case, the PMO must have the authority necessary to exert pressure where needed.
Please be aware though that not everyone will welcome this increased transparency. The best strategy is to do a stakeholder analysis. It will help you determine what problems could result from having greater transparency.
Having regular feedback discussions in the course of your stakeholder management will also let you know how things are going.
The following graphic depicts the various stakeholders and their expectations of the project management office.
- Overview of all the projects
- A reliable basis for making decisions (such as, whether a project should be launched or terminated, whether resources should be reassigned, or if a project needs additional support)
Project manager / project owner:
- Training and career model for project managers
- Tools (PM platform with integrated database)
- Allocated resources
Team leader / scrum master:
- Accurate resource requests
- Processes for handling conflicts when resource problems occur
- Up-to-date forecasts for managing the budget
- Reports of hours worked are delivered punctually so that clients can be invoiced
- Work schedules that reflect a balanced deployment of employees
- Easy reporting pf hours worked
- Training and support
Our recommendation: It’s essential to begin by conducting a good stakeholder analysis. The best way to collect feedback from the project managers is through surveys. For the decision-makers, a one-on-one meeting works best. To ensure good stakeholder management, make sure that you meet regularly with the key people.
Now that you’ve had a quick overview, let’s take a look at the PMO’s key duties and responsibilities.
What are the duties and responsibilities of a project management office?
Let’s get one thing straight: there is no ONE universally applicable list of a PMO’s duties and responsibilities. The duties and priorities of a PMO always depend on the type of project the project management office is expected to manage in a multi-project environment.
Possible areas of responsibility could be:
- Managing a multi-project environment: This is the PMO’s primary duty, and it includes
- maintaining a good overview of all the projects and ensuring that all the necessary data is always up to date. It provides a good basis for the decisions reached in the decision-maker meetings. To achieve this, the PMO must have the authority needed to exert pressure on project managers who are tardy in submitting their reports.
- Methods and processes:Choosing and adapting the PM methodologies and processes to best suit the needs of everyone involved at the company
- Tools:Selecting and implementing suitable tools for those in the various roles in project management and portfolio management
- Training and coaching:Training and supporting the project managers and those involved with the processes
- Project services:This involves providing the project-related operational support needed to handle PM duties (PMO services in the form of elements such as workshop moderation or providing a temporary project manager or project controller).
- Strategic support (sPMO): Aligning project work with the corporate strategy by classifying, selecting, and prioritizing (and, if necessary, terminating) projects if the project management office is situated high enough in the corporate hierarchy.
Our recommendation: If possible, staff your team with people whose primary responsibility is project management, and “loan” these team members to the projects as a PMO service. For example, the team leader and the project management office head can be the same person. This constellation allows the methods to be used more effectively and enables more complex tools to be used. This produces better results than if you use less experienced project managers (such as glorified assistants without any real PM training).
Our experience has shown that you’ll have greater success in managing a multi-project environment if you carefully choose a few key methods and apply these to all the projects. It becomes more difficult if a handful of projects use a variety of detailed methods and others use few methods or none at all.
The PMO’s mission is to get the numerous projects under control and then manage these well. The best strategy is to introduce the methods step by step for all the projects.
For example, a good first step would be to gather a signed project order with all the necessary information for each individual project (see graphic below).
After collecting these project orders, your next step should be to establish a reporting cycle to obtain project status reports for all the projects.
Once you have these reports, ensure that all the schedules all have a similar format and especially that an accurate schedule actually exists. For individual projects, you can also conduct a risk analysis.
Before introducing a new method, it’s of course best to test drive this on a few select projects to ensure that the methods actually work and to fine-tune them. This will help ensure their acceptance.
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Establishing a project management office – the first steps
Sometimes the desire to establish a project management office originates with the need to remedy a problem. Maybe too many previous projects failed for one reason or another. If this was the case at your company, then there are several important things to keep in mind when establishing your project management office.
Don’t bother trying to convince someone to quickly set up a project management office because it simply won’t work. This approach is doomed to failure.
Be realistic and begin one step at a time. Remember that you’re dealing with human beings that you’ll need to keep involved. This isn’t the same as introducing a new tool.
Everyone involved needs to understand what they’re expected to do, and in what order. We therefore recommend that you do an in-house stakeholder analysis so that everyone is in agreement on what the project management office is expected to accomplish, and in what time frame.
Our recommendation: When defining the PMO’s responsibilities, it’s better to start small to avoid a major flop later. Don’t try to do too much too quickly. Document what the project management office is expected to accomplish, and by when.
Start by clarifying:
- How much time is available? (Is the person responsible expected to do this in addition to their
- normal duties because they are also a project manager, or is this a full-time job or even an entire
- team because it‘s expected to immediately handle numerous projects?)
- What is the PMO’s mission?(To determine what its first tasks should be, you can conduct an in-house stakeholder analysis, for example.)
- Which items are not the PMO’s responsibility? (Document this and communicate it to everyone in the PM environment.)
Our recommendation: Make sure that your project management office has a clear mission right from the start. Document this and communicate it to everyone in the PM environment. Define what things are not part of the PMO’s scope of responsibilities. This helps ensure that people don’t expect the PMO to do things that are outside its scope of responsibilities.
Here you can read more about the right way to establish a PMO. This is merely one article in a whole list of in-depth articles on PMO-related topics, which are shown here.
Additional articles on PMO-related topics
- 10 Vital Success Factors for a PMO
- How to successfully establish a PMO in 4 simple steps (+ download)
- PMO Reports for Project and Portfolio Management
- How to create KPIs for the PMO – Using KPIs to document PMO success
- Why projects fail and how PMOs can prevent this
- PMO Benefits – Maximizing the Advantages and Acceptance (2020 update)
- Why Agile PMOs Are Comparable to Hummingbirds
In your view, what are the pros and cons of having a PMO? Do you have any suggestions or ideas? We look forward to your feedback, so just leave us a comment.
After earning his engineering degree in environmental technology, he gained many years of experience in project management through his work at an engineering office, an equipment manufacturer, and a multimedia agency. Achim Schmidt-Sibeth and his team have been responsible for marketing and communication at TPG The Project Group for many years now.
Johann Strasser (certified engineer, has been a managing partner at TPG The Project Group since 2001)
Johann Strasser Certified engineer, has been a managing partner at TPG The Project Group since 2001. After many years as a development engineer in the automotive and energy sectors, Johann Strasser spent a decade as an independent trainer and consultant in the field of project management. During his tenure, he also served as project manager for software projects in the construction industry and provided scheduling and cost management support for large-scale construction projects. At TPG, he applies his expertise in product development and consulting services for international clients. His special focus is on PMO, project portfolios, hybrid project management, and resource management. For many years now, he has shared his knowledge through presentations, seminars, articles, and webinars.