For many organizations, their first experience with PMOs occurs when they are still at a very early stage of introducing project management as a standard competency. The power structure of such companies is usually either functional or a weak matrix. The most common driver for setting up a PMO in such cases is to bring consistency and repeatability to project selection, prioritization & delivery practices.
Project managers (if any are on staff) report into functional areas and the establishment of the PMO might be viewed as an opportunity to centralize these resources within a single “service bureau”. If there are no project managers in the organization, the PMO might be setup purely as a Centre of Excellence.
This seems like a reasonable approach, doesn’t it? Having a staffed department responsible for project management should help to generate the visibility and focus necessary to initiate and sustain improvements.
Unfortunately, even if the PMO has been vested with sufficient formal authority to require that staff comply with its practices, the establishment of a separate department at a time when project management is still not truly embraced across the organization is likely to be viewed as divisive instead of a step forward. In fact, having formal authority may worsen this perception as staff will complain that they are following certain practices because they were forced to do so by the PMO and not because they truly embrace the benefits in doing so.
If there are project managers reporting in to the PMO, their work might become more difficult than it was before. While they may gain some benefits from co-location and direct peer support with other project managers, by not being part of the same functional team as their project team members, they are likely to experience greater challenges in escalating and resolving team member issues by themselves, and the functional managers they work with may be less helpful than before.
A different problem exists with regards to improving existing project management and associated practices – at low levels of organization maturity, most improvements will demand behavioral changes on the parts of the leadership team and mid-level managers, and a new PMO or its leader may struggle to get the necessary commitment and buy-in from these groups for such changes to be approved or to stick.
A very real risk of centralizing this task of project management maturation within the PMO is that if the winds of change start to blow against the new department, it’s less painful for the senior management team to shut it down as a failed “experiment” than if project management improvements are viewed as an organization-wide, cross-functional responsibility. Worse, even if the PMO is not shut down, its role and authority may be sufficient marginalized to a point where capable PMO staff leave the organization.
So when is the right time to set up a PMO?
Obviously timing varies from company to company, and some companies might never be mature enough to benefit from a staffed PMO, so here are some organization-level prerequisites that should be met.
- Basic project management, staff capacity & skills and work allocations practices exist and are being consistently followed by all functional areas.
- A basic work intake process exists and is being effectively executed by governance committees such that low-value, discretionary projects don’t divert valuable resources from strategic or non-discretionary projects.
- Functional managers have demonstrated appropriate behaviors in supporting project planning & execution. In addition, most functional managers have also led cross-functional projects following standard project management practices.
- Project sponsors are appropriately selected considering both capacity and competency and fulfill their roles effectively.
- Project and portfolio monitoring and reporting is consistently done and the members of the senior leadership team hold themselves and their peers accountable for responding to escalated issues, actions, risks & decisions in a timely, effective fashion.
Once such foundational capabilities are in place and the leadership team feels they are sustainable, a PMO can then be the ideal catalyst to help an organization reach higher levels of PM maturity.
Ecclesiastes 3:1 “To every thing there is a season, and a time to every purpose…”
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