A promising sign of real economic growth is the increase in inquiries I am receiving about setting up a PMO.  It is a sign that companies are investing in their capacity to deliver products and services.

The Project Management Office (PMO) trend kicked off roughly fifteen years ago, so those interested in establishing a PMO don’t need to pioneer the concept. The wealth of lessons learned is laced with the reality that implementing a PMO is an organizational change project with all the associated risks.

It’s great to see a renewed interest in the PMO. In an attempt to grease the skids for these first-timers, here are seven success factors we’ve observed.

1. Delivering stakeholder value is as important for a PMO as it is for projects. Define the role and purpose of the PMO through the eyes of project stakeholders. Project managers are major stakeholders, and so are project sponsors and resource managers. All the people that benefit from choosing the right projects and strong execution are stakeholders. Promoting standard processes and related technology are typical of PMO duties but that is not the mission of a PMO. The mission of a PMO is to serve the people involved with selecting and executing projects. So PMO processes and technology must solve real problems for these people.

2. There are many successful models for PMOs. At a minimum, the PMO owns and promotes project management practices. On the other end of the spectrum the PMO is accountable for managing projects.  So how does a business choose? Refer to success factor #1: serve the stakeholders. The corollary is that it can make sense to have multiple PMOs: each one is structured and placed to solve a different set of problems within the organization. 

3. Product development is improved by project management, but don’t confuse the two. Typical product development steps begin with envisioning new requirements, then designing, testing, and shifting to production. Instituting a discipline to capture and repeat best practices at each stage is important – and not the same as project management. As an example, you will have a schedule and status reports for each stage. Your project management activities will complement the product development activities. The good news is that a PMO is a great place to manage development processes, too!

4. Strong sponsorship is the #1 success factor of an enduring PMO. Implementing a PMO is an organizational change, so it needs a strong sponsor that will fight to realize the vision. Two key actions include allocating budget and publicly supporting the practices promoted by the PMO.

5. Change agent, visionary, and project management expert are the top three characteristics of a PMO leader. Change agent is obvious – you’ll need to win cooperation. The PMO leader is going to be promoting standards for project management; promoting the right practices and offering insightful guidance requires expertise.  The visionary leader helps others see what’s possible in the near term and how to continue growing in the future.

6. Evolving a PMO from start-up to sustaining will include the three levels of enterprise project management: project, program, and portfolio. Start with the biggest pain point. Are you overwhelmed with too many projects? Then a little portfolio management will go a long way. Are you fumbling on project execution? Focus on project management basics. But wherever you start, chances are the next opportunity will be at another level.  The spiral pattern of evolution is the most common for PMOs that succeed in incrementally adding value over the long term.

7. The efficiency and effectiveness gains aren’t free. The PMO is an overhead cost.  The value of improving execution and project selection are real but measurement is usually anecdotal. Ironically, the more sustained the benefits of a PMO, the less visible they are. That means the first year of a PMO we can clearly see the difference from our new emphasis on project management. But the efficiency gains don’t go on forever, thereby reducing the visible value of the PMO and increasing the temptation to ‘cut the overhead.’ PMO leaders and their sponsor should be aware of this risk and proactively emphasize all the previous success factors to ensure their PMO continues to demonstrate visible value.

Bonus Tip: A PMO serves its stakeholders. (It’s worth repeating!) Kicking off a new PMO is exciting. Build momentum by adding value quickly, which is best accomplished by focusing on the projects and project stakeholders and creating the systems and processes that solve their problems.

As always, the insights published on this blog are a product of many peer conversations as well as client work. This post was particularly influenced by a recent meeting of the Project Management Office Roundtable of the Puget Sound chapter of PMI. Thanks for sharing!

What’s your best practice for building an effective PMO? Please add your comment.

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