Building a Project Management Office

While implementing a process improvement initiative can be expensive, studies confirm the resulting benefits of improved time-to-market, productivity, and quality far outweigh the initial investment. Establishing a project management office (PMO) is the first step towards improving:

To establish a PMO, determine the company’s needs. Examine key program management processes as defined by the three-level framework adopted by the Project Management Institute (PMI). Each of those levels (Project, Program, and Portfolio) is broken down into 12 process groups (e.g., project initiation, project planning, etc.) and 92 total processes that relate to the management of nine knowledge areas (e.g., scope, cost, time, and resources, etc.). Process examples might include the project charter, project plan, and work breakdown schedules.

Determine which of the three PMI levels best fits the company’s needs. For some companies, all three might be required. For example, if your office oversees a single project that has a definite starting and ending point, the process groups and processes associated with PMI’s Project level would best ensure that the finished project or product meets stakeholder requirements. On the other hand, a company would adopt PMI’s Portfolio level and associated processes if it oversees a collection of projects aligned to meet specific business objectives. PMI’s Program level is appropriate for companies that have a collection of projects or portfolios that can benefit from coordinated project management.

If the determination of the proper process level is not obvious, analyze the importance of each PMI process to your organization. For example, if your company urgently needs to improve project success rates, consider beginning as a Project level office. Or, if the company needs to control expenditures, a Portfolio level office might be appropriate.

In most companies, senior management allows the PMO only a relatively short timeframe in which to demonstrate clear and tangible value to the company. It is critical, therefore, to create a process that quickly quantifies the PMO’s value to the company. Begin by establishing a baseline of performance. Again, using PMI’s definitions of industry-standard best practices can be helpful. Then, establish a measurement process. By confirming its positive impact on the organization, the PMO can retain the executive sponsorship needed to enact organizational change.

By focusing on immediate and short term goals that quickly produce measureable return on investment, the PMO justifies its creation. As the company grows, the PMO can expand to include all PMI program levels.