What is the appropriate design for a project management office (PMO) for maximum effectiveness in

the short-, mid- and long-term? QUESTION POSED ON: 09 JAN 2006
QUESTION ANSWERED BY: David Foote (NOTE: See this document for reference graphics necessary to
understanding this answer.)

How a project management office (PMO) is designed and staffed for maximum effectiveness depends on a
myriad of organizational factors, including targeted goals, traditional strengths and cultural imperatives. There
is no uniform recipe for success in organizing a PMO, but one thing is for certain -- it's important that the PMO
structure closely hews to a company's corporate culture. You must build a PMO that makes the most sense to
your organization.

There are almost as many varieties of project management offices (PMOs) as there are companies. For
example, some companies rely on the PMO to be responsible for all areas of project management and project
execution. Others want the PMO to provide a consolidated reporting view of all projects in the organization.

I'll organize this answer in five sections:

1. Defining a logical PMO organization

2. PMO models
3. PMO governance
4. PMO design for short- and long-term: Organized by function and services
5. PMO design for short- and long-term: Organized by role

Defining a logical PMO organization

Before you can begin designing a PMO (or re-launching one, if you're starting over), you must define how it will
function logically within the organization. The value to this is twofold. First, you gain clarity and agreement on
what you are doing and why. This information is communicated to clients, stakeholders and your own staff so
that everyone starts with a common set of expectations. Second, this exercise provides a framework for the
PMO to guide decision making in the future. For example, you wouldn't want to undertake any projects that
didn't help you achieve your organizational objectives. Likewise, major decisions can be evaluated based on
whether they fit into your strategy.

The following major components define your logical PMO.

Mission and strategy

 Sponsor: All organizations don't have a sponsor, but a PMO typically does. The sponsor is the
person responsible for the PMO funding and, in many cases, the sponsor is the manager to whom the
PMO reports. Sponsors are absolutely critical for a culture change initiative such as the PMO.
 Stakeholders: Any people or groups (internal and external) who have an interest or a partial stake in
the products and services your PMO provides.
 Clients/customers: The main individuals or groups that request and use the products and services
your organization provides. While there may be many stakeholders, it is important to recognize who
the clients are and how the PMO will focus on helping them meet their project and business
objectives.
 Objectives: Concrete statements describing what the PMO is trying to achieve in the short term,
perhaps up to one year. The objective should be written at a lower level, so that it can be evaluated at
the conclusion of the year or the end of a major project, to see whether it was achieved. A well-
worded objective will be specific, measurable, attainable/achievable, realistic and time-bound.
 Products/services: Define tangible items that the PMO produces as the result of a project. Services
refer to work done for clients or stakeholders, which doesn't result in the creation of tangible
deliverables. Services provide value by fulfilling the needs of others through contact and interaction.
The PMO achieves its objectives through the creation of products and the delivery of services.
 Transitional activities: These are the specific activities and projects required to implement the
physical PMO.
There are other aspects of the organization that can be defined as well, including the PMO vision, principles,
goals, objectives, skills, roles and responsibilities. Contact me directly for more detail on these.

Overall, PMOs help CIOs more predictably deliver strategic IT projects that satisfy both the CFO and internal
customers. They can save organizations money by enabling better resource management, reducing project
failures and supporting those projects that offer the biggest payback. A list of goals and objectives common to
most PMOs appears in slides #1 and #2.

PMO models

There are two popular models for the PMOs: one that acts in a consulting capacity, providing project managers
in business units with training, guidance and best practices; and a centralized version, with project managers
on staff who are loaned out to business units to work on projects.

There are three basic organizational styles for a project management office. Each embodies unique functions
that define its role within the project development-to-management life cycle.

1. The project repository: In this model, the project office simply serves as a source of information on
project methodology and standards. It assumes that the enterprise has embraced a cohesive set of
tools for project design, management and reporting. This model occurs most often in organizations
that empower distributed, business-centric project ownership, or enterprises with weak central
governance. It is often used as a first step to enfranchise the idea of consolidating or sharing
management practices, but it falls short of direct project oversight within the business. Project
managers continue to report to, and are funded by, their respective business areas.
2. The project coach model: An extension of the repository, this model assumes a willingness to share
some project management practices across business functions and uses the project office to
coordinate the communication. Best practices are documented and shared, and project performance
is monitored actively. Results are used as an opportunity to raise enterprise performance and train
inefficient or new project managers.

In some organizations, mentoring relationships have been established across business boundaries
between high-performing project managers and those who are less able. The PMO in this model is a
permanent structure with staff and has some supervisory responsibility for all projects; therefore, often
a "dotted-line" reporting relationship exists between business-staffed project managers and the
project office for performance and reporting. Funding for this model typically is based on a fixed
allocation for staffing and administrative support.

3. The enterprise project management office: The most permanent, consolidated organizational

model concentrates project management within a project office. This implies direct management or
oversight of projects -- depending on scope and duration -- wherever they occur within the enterprise.
In some cases, all project managers actually are staffed within the shared service and consigned to
projects as needed. This model also assumes a governance process that involves the project office in
all projects, regardless of size, allowing it to assess scope, allocate resources and verify time, budget,
risk and impact assumptions before the project is undertaken. Funding is generally a combination of
direct, budgeted allocation for baseline services and a fee-for-service charge for others.

An enterprise project office acts as a contracted project manager, assessing scope, allocating
resources and verifying time, budget, risk and impact assumptions. However, management's choice
of models should not focus solely on control, but also on enabling project planning and leadership.

A PMO should address a set of business needs; and the development of excellence in project
management, as in any evolving discipline, may be a progression through organizational styles that
add layers of capability as a result of time and experience. Hybrids of these models evolve as
organizations improve their project processes.

In the #2 coach model, the project office acts as a trainer, a consultant or a mentor and a source of
information on project processes. This project office often helps in project setup and post-project
review. Some enterprises use variants of this model to "seed" their enterprises with trained project
management professionals. In either model, the project office usually:
 o Maintains the IT organization's repository of reusable project-related artifacts (e.g., project
plan templates, estimating models and components)
o Helps institute architectural standards
o Collects and disseminates best practices
o Performs project close-out (i.e., collecting such metrics as project cost, size, quality, and
end-user satisfaction)

PMO governance

In robust PMO organizational models, the office is assigned the key roles of assessing and validating project
estimates, as well as staffing the project manager function. There are five key roles for a PMO to be
incorporated in its design, although implementations vary based on business structure, the degree of
dysfunction and the sense of urgency across business divisions that a need exists for a shared solution to
project control. (See slide #3).

Standard methodology: The key to implementation -- a consistent set of tools and processes for projects --
provides a basis for measuring performance and can act as a communication and training vehicle for
developing project skills.

Resource evaluation: The initial assessment of resources (i.e., people, money and time) is critical on several
fronts. Based on experience and evidence from previous projects, the project office acts to validate business
assumptions about project and life cycle costs. It also serves senior management by feeding back information
that may alter project priorities, based on resource availability or cross-functional project conflicts.

Project planning: The project plan is a cooperative effort coordinated by the project office, which -- as a best
practice -- serves as a competency center and as a library for previous project plans.

Project management: Consistent practices, frequent review and a governing responsibility are the baseline
roles for management within the project office. In most initial implementations, project managers are not staffed
directly from the project office. However, in some organizations, the project office is also the source for project
managers, who are deployed as consultants -- in effect -- for the life of the project.

Project review and analysis: Enterprises need to know if project goals are achieved on time, on budget and as
designed. The review and analysis phase is a loop back to the resource evaluation role.

A PMO is a shared competency designed to integrate project management within an enterprise. A project
management office can be a key resource in establishing an enterprise competency in project analysis, design,
management and review. Given the appropriate governance, it can improve communication, establish an
enterprise standard for project management and help reduce the disastrous effect of failed development
projects on enterprise effectiveness and productivity.

PMO design for short- and long-terms: Organized by function and services

Slides #4 through #6 depict a logical grouping of recommended functions and services provided by a fully
implemented PMO organization in both short-term and long-term models. The diagrams do not imply a
physical PMO organization.

There are three major functions within the PMO organization in the functional view.

1. Project delivery unit: This unit is responsible for the delivery management and project oversight of
projects managed by the PMO. These project managers report into the project delivery unit. This unit
also performs project oversight.
2. Monitoring and reporting: This function monitors and reviews all projects, whether they are managed
by the PMO or outside of the PMO. The initial focus and priority is on the mission-critical "high risk"
projects. In addition, management reporting will be collected and consolidated for senior DHS
management and control agencies. This unit also provides administrative support for the PMO and
the projects.
 3. PM process and mentoring unit: This function is responsible for the project management methods,
processes and tools. In addition, this unit provides mentoring, education, intellectual asset
management and consultative support to the project management constituencies.

The actual roles and responsibilities of those performing the functions and services are shown in matrices
appearing in slides #7 (staffing and ownership/participation by function) and #8 (roles for IT, PMO, and
projects/programs).

For detail on each function and all services that define them, as well as for job descriptions for each PMO staff
position, please contact me.

PMO design for short- and long-terms: Organized by role

Slides #9 and #10 show recommend short-term and long-term PMO organizations charts by role. Note that
each role does not necessarily represent an individual staff member (i.e., one role may be staffed by multiple
individuals and one staff may perform multiple roles).