The Project Management Office (PMO): 4 Steps to Choose Its Organizational Structure

The role of the Project Management Office (PMO) continues to gain prominence; many organizations of all industrial sectors are positioning them as key partners in the achievement of strategic objectives.

It has been demonstrated that PMOs can solve many of the problems organizations face when managing portfolios, programs and projects, such as misalignment between projects and strategy management, failure to anticipate corrective actions over troubled projects, use of nonstandard project management practices, among others.

When implementing a PMO, the first thing that must be done is select a structure type tailored to the specific needs of the organization, which is not an easy task, as there is no “one size fit all formula”. Organizations can be very different from one another in their needs, size, structure and project management maturity, and selecting the right structure type is a key success factor.

In this article we will focus on defining 4 steps to choose the right set of roles for the PMO.

The Challenge of Selecting the Right Type of PMO Structure

Following the project management framework established by the Project Management Institute (PMI), the types of PMO Structures can be classified in:

• Supporting: Provides methodologies, procedures, templates, best practices, training and other resources.
• Controlling: Establish procedures to ensure adherence to methodologies, through monitoring metrics and performance reporting to Management.
• Directive: Leads the recruiting of project management staff, assignment of resources to projects (including project managers themselves), project selection in alignment with the organization strategy, cancelation of failed projects, resource management across projects, among others.

To choose the right type of PMO structure, many factors must be considered, such as whether the organization is profit or non-profit, local or global, small or big, and its industrial sector, technical disciplines that employs, human cultures, among others.

Add to the mix the differences in project management maturity that can be encountered in different organizations, and it can be seen that choosing the right type of PMO structure is quite the challenge.

To overcome this challenge, it is necessary to balance the supporting, controlling and directive roles to fit the situation.

For example, in an organization that lacks defined project management procedures, it would be appropriate for the PMO to begin by adopting a supportive structure, focusing in process definition and training, and then move to perform controlling roles.

However if that same organization have already recruited personnel with project management knowledge and skills, it would be more appropriate to focus more on process definition instead of training, and then move faster to a controlling role.

Balance between supporting and controlling is key, too much focus on controlling could alienate the organization and cause resistance to change, while too much focus on supporting could end with tons of project management documentation that nobody follows.

Regarding the directive structure type, in our opinion should be reserved to more advanced levels of project maturity, as the focus should be first to embrace a project management mindset.

4 steps to choose the right type of PMO structure for your organization

Following is a proposed solution in 4 steps; it has the intent of serving as a guide to begin conversations, not to establish predefined dogma.

1.   Gather Stakeholders to Assess Their Needs

The key stakeholders that are requiring the creation of the PMO can give you valuable information regarding current business concerns. Begin conversations with them using the following questions:

• What are the main issues and concerns of the organization?
• Does the organization run mainly operations or projects? (it is important not to confuse projects with operations)
• Is the organization not meeting its strategic objectives? What are the root causes?
• What actions are being performed to achieve strategic objectives?

Identify as many stakeholders as possible by identifying the departments that each interviewed people interact with, this way you can begin to acquire a sense of the internal workings and complexities of the organization.

2.   Understand the Organization Size, Complexity and Culture

Use the following questions:

• What does the company do? What are its main products and services? What technical disciplines are involved in the core business?
• Is it a small, medium or large business?
• Is the organization at the local, regional or multinational level?
• What is the organizational structure? Hierarchical, functional or matrix? Are there staff managers? What are their functions?
• Does the organization encompass various regional cultures and different countries? What are the cultural differences? How are they managed?

3.   Assess Organization Project Management Maturity

Determine the degree maturity of project management practices, by initiating conversations with questions like the following:

• Does the organization have a Project Management Office (PMO) with clearly defined roles and authority?
• Does the organization have personnel with specialized expertise in project management?
• Have the organization documented its project management procedures and methodologies?
• Does the organization have a clearly defined career path in the field of project management?
• Is Strategic Planning in alignment with Project Management within the organization?
• Do project managers have their own reporting structure? Or they report to functional managers?
• Do project managers have control over project resources?

4.   Select a PMO Structure Type and Roles Aligned with Current Project Management Maturity

Following is a basis for deciding which supporting, controlling and directive roles will perform the PMO. Know that there are no two PMOs with the same mix of functions and roles.

The focus of the new PMO must be in a Supporting role if:

• The organization lacks methodologies, procedures and project management tools.
• Project management practitioners lack knowledge and skills in project management standard practices (for example if they have ample technical experience but no formal training in project management standards).
• Project Managers have knowledge and skills in project management standard practices, but are not using common procedures and sharing knowledge.
• Lack of procedures specifically oriented to identify project management skills and competencies among project manager candidates.
• Lack of training programs specifically oriented to develop project management knowledge and skills.

The focus of the new PMO may be in a Controlling role if:

• There is some level of project management mindset in the organization.
• Project Managers have basic knowledge of project management standard practices.
• The organization is accustomed to work in multidisciplinary projects (no silo mentality).
• There is a clear support of senior executives to the implementation of standard project management practices.
• The Supporting PMO has been or is currently being implemented.

You can start with very basic manual controls (Excel sheets and PowerPoint presentations), and then move to implement state of the art systems and applications in the cloud.

Monitoring and control can be exercised at the project, program and portfolio levels, each one with its own set of needs, metrics and reports.

A PMO can assume a Directive role if:

• Progress has been made in implementing supporting and controlling PMO Roles.
• Changes have been made to the executive management structure, as functional managers must give up some degree of control over resources management and project selection.
• The organization has adopted a project mindset instead of a silo mentality.
• The project management profession has been established as a clear career path within the organization.
• Metrics and controls have been established at the project, program and portfolio levels.

Size and Complexity of the PMO Organizational Structure

For large organizations that spans across regions and countries, one alternative is for the PMO structure to mimic that of the organization, in which local and regional PMOs report to a Central PMO with a strategic and policy making role. Another alternative is to create instead a global center of excellence, leveraging technologies such as the internet and cloud computing. As always the decision will depend on the particular needs and resource availability.

And what do you think?

What type of PMO structure does your organization have? In your opinion, what should be the primary role of a PMO? Could you define a roadmap and actionable steps to implement a PMO in an organization?

This article was written by our guest author Ricardo Rodriguez, editor of the blog The Tech Project Management Office[Update: the template website is no longer available, so we removed the link]. Ricardo is a systems engineer and a PMI project management professional (PMP) with more than twelve (12) years of experience; he has advised clients in the telecom, banking, manufacturing, wholesale and retail sectors. He has led various IT projects in areas such as web applications, mobile and telecom customer services. In addition, he is an expert in project management methodology and agile project management, and has provided consulting services in those areas. You may also follow Ricardo on Linkedin.