A Strategic Guide to the

PMO (Project/Program
Management Office)
What a PMO is, and How it Could
Keep Projects from Destroying Your
Organizations Budget and Sanity
Topics Included in This Paper?
Introduction
The Imperative for Better Project Management:
Performance and Profitability
Pitfalls in Program and Project Management
What is a PMO?

The Program/Project Management Office

The Pain Points that Make Companies Turn to PMOs:

Are Any of These Challenges Yours?

For Organizations Dependent on Service, PMOs Deliver

Client Value
Conclusion

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Introduction
In this whitepaper, we cut through the buzzwords and consultants' jargon to give
leaders a clear-eyed view of what a PMO (Program/Project Management Office) is,
and how PMOs help organizations in many industries better manage their initiatives
and run multiple projects profitably.
Organizations that must manage multiple initiatives with wide-ranging implications in
cost, human resources, impact on customer relationships and profitability are
beginning to explore and implement PMOs. If your company could benefit from a
unified, high-level method for proposing, budgeting, forecasting, and giving leadership
an actionable strategic view into all company projects, then you need to learn about
PMOs. This primer is intended to distill the facts from the noise and help you evaluate
what a PMO is and what it could mean for your company.

The Imperative for Better Project Management:

Performance and Profitability
Leadership teams across the globe are realizing that achieving increased
performance and profit means taking a new look at how they plan multiple initiatives,
manage them, and measure their success. The pressures of todays economic
environment have driven managers to realize that they need a new kind of rigor to
manage the successful execution of important projects and initiatives across an
organization.
The success of strategic initiatives, both at the organizational level and within
business units or functions, can dramatically impact the underlying value of an
enterprise, its cash flows, its relationships with customers, and the morale of its
employees.
Smart leaders also understand that programs and projects can generate significant
levels of business risk if not executed on time and on budget. In some cases, a poorly
managed transformation can even lead to business failure. Many sleepless nights for
managers and their teams can be attributed to an initiatives failure to deliver on its
promised benefits. Nobody wants to be in charge of projects that lead to stagnation or
that negatively impacts the business competitive position.

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Pitfalls in Program and Project Management

For leaders taking a hard look at program and project management across their
organization, a few recurring pitfalls manifest themselves time and time again:

Lack of uniformity and rigor in how initiatives and projects are proposed,
budgets requested and assigned, and impacts supported and justified.

Forecasting and planning activities not synchronized with project execution

and management. Too often, a bottom-up approach is taken, rather than topdown.

Senior management has no visibility around project execution, including

milestones, issues and benefits realization. This can lead to unpleasant
surprises.

Individual projects and initiatives are not synchronized with activities

elsewhere, causing critical dependencies to be overlooked or ignored
sometimes leading to adverse impacts to customers and employees.

These conditions are leading to the creation of PMOs to introduce and enforce good
project methodology, continually measure the progress of various initiatives and
deliver a clear, organization-wide picture of performance for senior management, and
to help more projects deliver on their promise.
Once only found at the largest companies, PMOs and their practices are now being
embraced by medium and smaller organizations. This trend will only accelerate as the
methodology and strategy becomes better understood and easier to apply in a wide
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range of industries.
1 Cornelius Fichtner, Host, The Project Management Podcast;7 PMO Trends;
http://www.gantthead.com/discussions/discussionsTopicContainer.cfm?ID=7662

What is a PMO?
PMO vs. PMO
As with any emerging practice, there are currently differences in how people
understand the definition of a PMO. For some, PMO means project management
office; for others, the acronym signifies program management office. In general,
overlap between the two ideas is large, and differences subtle.
Strictly speaking, a project is a unique start-to-end event not repeatable in same
format; a program is a group of projects that are linked by strategy, technology, or
other drivers. For purposes of this white paper, the P in PMO can stand for either
project or program. Why? Because each organization will implement the PMO
function in a way that makes the best sense for their size and strategy. In the end, the
M management matters more than worrying about which variety of P is
being employed.

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The Program/Project Management Office

PMOs are primarily conceived to establish organization-wide discipline for projects,
helping more of them come in on time on budget. Additionally, the PMO function has
evolved to monitor how well projects, individual and aggregate, are delivering value to
the business.
PMO offices ideally sit atop a layer of project managers and leaders, reporting to the
C-suite and functioning as a dashboard for leadership to quickly evaluate performance
and make decisions based on intelligence crystallized from all projects in the company
portfolio current and planned. The PMO will also have a broad span of control
extending beyond the purview of project managers, taking a hand in vendor selection
and contract management, for example.

The PMO is also tasked with making sure that all projects align with the master plan
and evaluating resources and dependencies from a high-level, strategic perspective.
This PMO will not prescribe how the work gets done or establish milestones within
individual projects. That is the concern of the individual project manager. The true
PMOs role is to gather and interpret strategic project information and to advance
governance standards across all projects.

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The Pain Points that Make Companies Turn to PMOs:

Are Any of These Challenges Yours?
The customer and competitive landscapes have pressured many a company to turn
inward in a thorough search for ways to better utilize resources. Regulatory burdens
are another driving factor. The imperative for establishing PMOs include:
Failed or Stalled Business Transformation Initiatives
Reducing the risk of transformational initiatives is a major reason that companies turn
to PMOs. The organizational stakes in such initiatives are high; stalled efforts can
result in negative market perceptions, business interruption or failure, loss of
management tenure, cost overruns and damaged customer-supplier relationships.
PMOs give leaders who want to achieve step changes in business performance a way
to help their transformational initiatives deliver on their promised benefits.
Frustrated Project Teams
PMO leaders can help individual project managers and their teams be more effective
by seeing how their activities tie to the wider vision, and to ensure that their efforts are
being invested in valuable projects. As projects of questionable feasibility start to bog
down, running late and over budget, a sense of futility can infect project teams. This
can result in spiraling morale, which in turn can hurt individual performance and
accelerate talent flight.
Late and Over-Budget Projects
Completing more projects on time with fewer resources is a challenge faced by many.
Rolling global recessions got many an organization focused on maximizing resource
usage in the face of hesitant markets and shrinking budgets. A PMO can solve this
problem by establishing repeatable, effective management methodologies that, over
time, curb the number of resource-swallowing problem projects and improve the
performance of project teams.
No Executive Visibility into Projects
st

In the 21 Century, more companies have come to the realization that upper-level
management has no visibility into project performance across the organization. PMOs
give companies a tool for proactive decision-making on a wide array of company
projects from a high level, rather than a reactive stance that only focuses attention on
problem projects as they surface.
No Systematic Way to Spot Underperforming Projects, Nurture
High-Potential Projects
Correctly prioritizing all projects in the company portfolio has major implications for the
bottom line. PMOs help everyone in an organization spot suspect projects that should
be rethought or abandoned, and place a higher resource priority for executing projects
that are more likely to be successful.

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Sarbanes-Oxley Act
Since large projects fall into the category of investments that must be reported, public
companies have a definite stake in keeping tabs on expenses and progress across all
initiatives. The significance of this driver multiplies for the company executing multiple
projects internationally having centralized documentation and oversight into all
projects can help leadership more easily prepare for and weather regulatory scrutiny.

For Organizations Dependent on Service, PMOs Deliver

Client Value
Professional Service Organizations (PSOs) from IT to advertising have started to see
revenue return to pre-2007 levels, giving them the opportunity to capitalize on Service
Execution and Human Capital Alignment, two of the five Service Performance
Pillars identified in SPI Researchs 2012 Professional Services Maturity
Benchmark.
The service execution pillar is where the rubber meets the road and client value is
created. Regardless of strategy, sales, and talent, if services are not executed with
high levels of quality, on time and in an orderly process, the organization will fail. Our
research shows PSOs with high levels of quality execution share common traits,
which include:

Resource management, with visibility from prospect to project to ensure the

right resources with the right skills are available when needed;

Structured or standardized service delivery processes, where all

employees understand their role and what is expected of them;

Solid project management, which provides visibility into the schedule,

resources, deliverables and risks to ensure projects are delivered on time and
on budget;

Accurate and timely project accounting, where all financial information,

including time and expense capture and billing are accurate and timely to
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ensure revenues and costs are kept in balance.

PMOs can positively impact every critical factor identified above, and the benefits are
in no way limited to PSOs. Industries from auto manufacturing to pharmaceuticals
any organization with multiple, broad-spanning projects can see performance
improvements from successful PMO implementation.
1 Service Performance Insight, LLC; 2012 Professional Services Maturity Benchmark

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Conclusion
Too often senior executives and stakeholders become frustrated when they are
unable to manage the level of risk associated with the execution of strategically
important change programs and the high cost associated with the over-reliance on
external consulting firms. Likewise, numerous individual project teams peering at
Gantt charts and thousands of separate Excel documents are unlikely to see a
strategic path to improved performance. The ever widening execution gap that
separates strategic decision making from project related activities means that
leadership can quickly lose sight of progress, and issues that accumulate almost
daily go unresolved.
It is your companys culture, size and goals that must determine how a PMO is
chartered. Implemented successfully, a PMO provides greater executive visibility,
reduces the cost of projects, enables repeatable success, reduces dependency on
outside consultants, helps reduce organizational strain, and drives positive ROI on
all your initiatives.

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About KeyedIn Solutions

KeyedIn Solutions was founded by veteran ERP industry executives to transform the
traditional enterprise software systems market through a suite of integrated business
applications delivered on a true SaaS platform and a consulting organization rich in
business, industry and IT expertise.
KeyedIn SaaS Solutions replaces rigid, on-premise enterprise systems with more
agile, feature-rich and cost-effective integrated business applications that scale to any
size environment. With applications developed in .NET for its ubiquitous nature and
deployed via the Cloud using a true SaaS model, integrated business applications
from KeyedIn SaaS Solutions represent the next generation of enterprise systems for
specialized vertical and micro-markets.
The KeyedIn Consulting Group provides strategic and tactical consulting services
around existing or planned systems, helping organizations achieve a strong return on
their IT investment and realize a true business advantage in their market. Whether
engaged independently, or in conjunction with the companys leading-edge
technology platform, the KeyedIn Consulting Group delivers results for a wide range
of businesses and industry types worldwide.
This winning combination of industry expertise and transformative technology has
positioned KeyedIn Solutions for rapid growth. Customers look to KeyedIn Solutions
for innovative, integrated business applications and results-driven consulting services
delivered with integrity and a laser-focus on their needs.
You should too. Keep up with us at www.keyedin.com.
KeyedIn Solutions - US
5001 American Blvd W
Suite 1010
Minneapolis, MN 55437

Tel: +1 866 662 6820

Email: info@keyedin.com

KeyedIn Solutions - UK
Offshoot House
68 The Grove
Ilkley
West Yorkshire
LS29 9PA
Tel: +44 1943 604543
Email: ondemand@keyedin.com

Learn more at www.keyedin.com

KCG_US_WP_PMO_0512_1

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