The Importance of a Project Management Office (PMO) and Who Needs One

Project management office (PMO) is a buzzword that’s been gaining a lot of popularity and attention. It’s a word that many organizations are gravitating towards and with good reason. However, the question of who needs a PMO and when it is most valuable for an organization, is an important one to ask.

The PMO is a department or group within an organization that defines the standards and processes for project management. The most effective PMOs reflect the culture and strategy of its organization and are important for establishing (and maintaining) consistency, efficiencies and management of costs. While these departments can certainly be instrumental to project success, this does not mean that they are appropriate for every environment.

A perfect analogy to help you visualize what a PMO really does and why it is essential for certain environments (and not for others), can be seen when comparing it to an air traffic controller, whose job is to coordinate the movement of air traffic and to make sure that aircrafts stay a safe distance apart.

Similarly, in an environment with projects coming in from all directions, a PMO office is needed to control the “traffic” of projects coming in and going out – ie starting and completing projects within reasonable time frames from one start/completion date to the next.

Now let’s say there are only two planes coming and going from an airport, an air traffic controller would prove to be an unnecessary expense. But if we’re talking about JFK, an airport that sees well over 1 million flights per year, a rather large air traffic control team would prove to be more than necessary – it is essential.

When determining if a PMO is a strategic move for an organization it’s important to evaluate one point in particular: is the company a project-oriented organization. If not, a PMO may not be necessary. But if yes, then a company should definitely have one to assist with driving the delivery of projects, establishing methodology and managing resources. While project managers are responsible for these elements on a per project basis, the central location for the management of these elements on a company-wide level can only be found within the project management office. Bottom line, if a company works on more than a handful of projects, they should look into the possibility of having a PMO and what kind of value it will bring to the organization.

Another measure for evaluating the need for a PMO can be a maturity assessment, by comparing internal metrics and performance indicators versus industry averages; or even an internal audit by comparing a project’s performance with that of other departments within the company. Doing these sort of comparisons can shed a bright light on how profitable a PMO may really be.

One thing is for sure, a PMO that is implemented properly within the right environment, will improve project success rates and the standardization of project management practices.

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