PM1 - Week 2 - The Project Management Office

As the number of projects increase within a business or organization, project management offices (PMO) are set up to help improve the project performance. PMO is a department that gathers technical and management personnel to standardize the process of project management, especially the methodologies for repeatable processes in order to deliver projects on time and within budget. However, a PMO doesn’t manage individual projects directly. Instead, it acts more like a resource centre that keeps all of the essential elements including documentation, guidance, template and metrics for execution of a project and its management across the whole organization. PMO can also be called a project office, program office, program management office or project control centre. “Setting up a project office”, http://www.projectperfect.com.au/info_setup_po.php, Regardless of its name, here are some basic functions a PMO provides:
· Administrative and operational support to projects
· Maintenance of project management standards
· Project consulting and mentoring
· Project management training across the organization
· Provide project managers and project staff
· Portfolio management including capacity planning and risk analysis
“Project Management Office” Sept. 29, 07 http://www.aisc.com/Service/2

We know a PMO helps deliver projects more efficiently but what types of industries or organizations can benefit most from a PMO? I believe those large engineers, construction companies, IT and manufacturing companies, financial and investment companies and governments can benefit most, mostly for two reasons. First, those organizations could carry on multiple projects constantly every year and the benefit received will be bigger than the initial cost for setting up a PMO. As the author of “The Value of PMO” said, “A PMO reflects an overhead investment.” If the organization does not have many projects, to continue with a PMO would be an unnecessary fixed cost. Second, the similarity exists in many different projects at different locations for all those industries and governments. Since a PMO tries to standardize methodologies of repeatable processes, it can ensure all the managers who deal with different projects have the same core skills, standard processes and templates. In the long run, it can save organizations and government money by reducing the time and cost for planning; execution and control; providing better resource management; increasing project successes and; supporting those projects that offer the biggest payback.

After identifying the industries that can benefit most from PMO, you may ask how to measure the success of the implementation of PMO. What performance metric organization can be set up to evaluate this return on investment? The very straightforward one could be the measurement of cost saving, such as what we did in the Management Accounting course: find out the difference by comparing the two alternatives, adding PMO or leaving it out. But this seems too difficult since a PMO doesn't deal with an individual project and it's hard to allocate the cost to a different project. The web article I read “Office Discipline: Why you need a project management office” http://www.cio.com/article/29887/Why_You_Need_a_Project_Management_Office_PMO_/2 provides one quantitative and one qualitative metric: project success rate and customer satisfaction rate. The only problem with these measurements is that it may take a long time to find out this amount since many projects' life cycles may be longer than one year.


If you would like to know more about PMO, check out this website:
Understanding the Project Management Office
http://www.cio.com/article/12263/Understanding_the_Project_Management_Office/5