Are you looking to fully understand the meaning and benefits of a Project Management Office (PMO)? Then, you've come to the right place.
PMOs are growing in the United States. 2020 marked a 6% increase in project management offices from the previous year. This growth also marks an increasing appreciation for the benefits of project management itself.
Getting ahead of a project by planning out schedules, risks, and other things is the best way to ensure that the project's operations run smoothly. If your business doesn't have a project management team, you're likely suffering from inconsistencies and other issues about your projects.
Below is everything we will cover. Feel free to skip ahead.
- What is a PMO?
- What do PMOs do?
- Should my company have a PMO?
- What is the difference between PMO and project manager?
- Who makes up the PMO?
- Benefits of a PMO
- PMO software for the organized project management office
What is a PMO?
PMO stands for project management office. It refers to a group of individuals who work to define and maintain project management standards. These individuals can work internally or externally.
PMOs work to create and maintain project management best practices. They are also responsible for documenting projects and their statuses.
Arguably, the most significant responsibility of a PMO is to ensure that projects are completed on time and within the given budget.
What do PMOs do?
Because project management offices develop and maintain projects across the company, they fall into many roles. PMOs serve organizational, operation, and analytic purposes while maintaining a cross-functional team framework within the company.
Let's look at what these team members have to do together and how these actions serve the company's greater good as a whole.
Choosing the right projects
First off, PMOs have to know what projects are the right projects to pursue. Often, companies are working on balancing multiple projects at once. So, PMOs have to figure out which projects are the best projects to follow at the same time.
If a company were to pursue projects that didn't make sense together, they might lose details in the noise of it all. Having somewhat related projects can help keep all projects on track.
In addition to this, PMOs have to ensure that potential projects for the company meet company-wide goals. (If you haven't written goals for your company, you should do so.) If a project isn't going to contribute anything to the company, there's no point in its staff.
PMOs have to make some tough calls when it comes to pursuing or ignoring project requests.
Setting and maintaining project expectations
As their name entails, PMOs have to take care of tasks related to project management. They are the ones that decide the overarching goals of the company's projects as well as how the company is going to meet those goals.
When it comes to project management, PMOs are the experts. They are the teams that break projects down to the bare bones and help everyone else achieve the steps along the way.
The better that a PMO can align their thoughts and ideas, the better the company's project will turn out.
Communicating project goals and expectations
After the PMO has figured out what their goals and steps are, they need to communicate effectively with everyone else in the company. Communication is critical to any project. If the project expectations and goals aren't presented adequately to the rest of the company, the project will most likely fail.
In this, PMOs have to encourage their coworkers to put in the work needed to meet their overall goals. Like we mentioned earlier, each project has a reason. PMOs have to prove this reason and give direction to the rest of the company.
Communication must be clear and consistent throughout the project as well.
Defining project metrics and success
As the project goes on, the PMO tracks predetermined project management KPIs. KPIs, or key performance indicators, are specific measurements that PMOs use to determine whether a project was successful.
Here is a list of common KPIs that PMOs use in project management:
- Time spent
- On-time completion percentage
- Number of adjustments to the schedule
- Resource capacity
- Budget variance
- Number of budget iterations
- Cost performance index
- Customer satisfaction
- Customer loyalty
- Number of errors
- Customer complaints
- Employee churn rate
- Number of canceled projects
- Number of change requests
The list goes on and on with hundreds of KPIs that your PMO team can choose to measure.
By evaluating these metrics, your PMOs can decide whether or not a project was successful. Just because a project is completed on time and within budget, that doesn't mean that a project was a success.
But, success is hard to measure. That's why KPIs are essential. They give concrete goals for projects to reach.
If your team didn't meet an expectation set via KPI, then the PMO needs to adjust the strategy for the next project.
Managing resources for scheduled projects
Once the PMO has decided to pursue a project or a couple of projects, they need to define roles and responsibilities across the companies. Furthermore, they should be able to construct a budget and a timeline for each project.
Once each employee has a set role, the PMO must make sure that they understand and can complete every task that the PMO assigned them. This may involve training and coaching throughout the project-developing process.
On top of all of this, project management offices then have to ensure that all of the parts of the project are being completed accurately and efficiently.
To say the least, that's a lot to handle.
PMOs are continually juggling multiple moving parts for every single project that is going on within a company.
Organizing each piece of each project
PMOs spend their time making templates, tools, and software that can keep up with the projects they're trying to get done. Using these resources, the PMOs have to create reliable data centers for their working projects.
Typically, these data sources are the number one destination for any employee looking for answers about a project. So, the database to be up-to-date and easy-to-navigate.
The best project management software is the key to any successful business. Without it, PMOs would be unorganized, employees would be lost, and projects would be failures.
Should my company have a PMO?
We hope that every company has a PMO. Without a project management office on your side, your company isn't likely to make much headway with its projects.
PMOs keep businesses organized and accountable throughout the project planning process. This means that they'll help your company keep up with all of its projects better than it would have without it.
You might be able to get away with not having a PMO if you have a tiny business. However, any established company should have a PMO to overcome project obstacles and stick to project schedules.
If you're experiencing any of the following problems, you should look at hiring a PMO now:
- Your projects are finishing later than you planned
- Your projects are going over budget
- Your stakeholders can't see the project progress
- Your company doesn't have a standardized process for project initiation and execution
- Your company can't track projects effectively
- Your project team can't communicate effectively
A PMO can help a company do all of these things and more. Finally, companies are starting to realize this and hire PMOs.
What is the difference between PMO and project manager?
PMOs are similar to project managers, but they aren't the exact same thing. The main similarity between the two is their function of scheduling and maintaining project goals and expectations.
However, a project manager is an individual who sees the development of a project from start to finish. On the other hand, a PMO is a group of specialists that work together as a team at an organizational level. It would be best if you kept in mind that a project manager may be one of the individuals that make up a PMO.
Isolated, a project manager works on defining project goals, setting project tasks, gathering project data, and managing project expectations. On the other hand, a PMO works on bigger picture stuff while incorporating specialized opinions from experts.
That being said, PMOs can do more because they consist of a group of people with different experiences and specialties. A project manager is helpful, but an individual is restricted in their abilities and backgrounds.
We highly recommend that you hire a PMO for your company. You'll be able to get more done while improving your company and its project management process.
Who makes up the PMO?
As we've been saying, a PMO comprises multiple members whom all have different experiences and specialties. But, who decides who's in the PMO and what they should specialize in within the group?
There are two popular ways to determine who makes up the PMO within a company:
- A high-level manager chooses (or hires) the employees who make up the PMO
- A high-level manager hires a PMO Director to engage and lead the team of employees
With the first method, the company management will have more say about who makes up the team. With the second method, you're likely to get a more professional approach to the hiring process (depending on how experienced the PMO Director you selected).
If you're looking for the best of both worlds, it may be best to combine the methods. For example, you could hire the PMO Director and then have him/her lead the hiring process while you help. This makes sure that you have some say in the individual whom the PMO Director hires while ensuring that the Director can make the team they want to work with.
What should I consider during the hiring process?
When you're hiring your PMO staff, you'll want to look for professionals who have 10+ years of experience. If you decide to take on less experienced individuals, you should make sure that you're grouping them with senior professionals so that the expertise balances out.
Also, it would help if you considered PMO professionals who have a project management certification like the PMP. The PMP, or Project Management Professional, certification proves that a potential employee understands their role as a PMO member.
If you decide to hire someone without the certification, you may recommend it (or provide funding). It's worth it to invest in your PMO professionals to get the results you want out of each project.
As you're hiring (or as you're PMO Director is hiring), you should look for individuals that complement one another. You don't want to bring in the same individual ten times. Instead, you should build a diverse group of PMO professionals that will help your company reach and solve a wide range of project-related issues.
Bear in mind that the average PMO has nine staff members. Create a group that reflects the goals of your company. Don't try to mirror what other businesses are doing with their PMOs.
What about the PMO Director?
If you're going to hire a PMO Director who will hire the rest of the PMO, you should focus on finding a PMO Director that you know you can trust. The number one quality to look for in a PMO Director is the ability to juggle multiple things at one time.
Keep in mind that the PMO Director is the go-to employee for the PMO. This means that any employee who has a question about any project should go to the PMO Director to get answers. If the PMO Director can't handle juggling this many things at once, your company will not run as smoothly as you may want.
So, we recommend looking for a PMO Director with the following qualities:
- The ability to communicate clearly and consistently
- The ability to bring people together, despite arguments and differences
- The drive to keep projects moving
- The confidence to juggle multiple projects at once
- They want to work with an entire company to complete projects
Your chosen PMO director has to be the head of every project within your company. Make sure that you're picking a qualified individual who is up for the task.
Benefits of a PMO
If you're unsure whether your business would benefit from hiring an entirely new group of people, you should consider all of the benefits that come with a PMO. It's likely that your business is going to see a positive change with a PMO.
So, let's run through some of the positive changes that companies have experienced due to building a PMO.
1. PMOs finish projects under budget
We know. It sounds too good to be true.
But, PMOs can finish projects under budget through a mix of two actions:
- They implement an 'emergency' section into your budget but don't need to touch it
- Find cheaper alternatives that still provide the quality that the project needs
It may seem counter-intuitive to put more money into the budget in an effort to reduce spending, but it works. Adding an emergency fund into your budget can help your company by providing extra funds for challenging projects and giving a cushion for more straightforward projects.
Even if you don't need to use the emergency fund, your employees will feel more accomplished because they didn't touch a part of the budget. This is not to mention that your company's bank account will feel much better for it.
When it comes to finding cheaper alternatives, PMOs are experts. As we've said, a PMO is made up of a group of specialists and experts who know what they're doing. When it comes to a constrained budget, they can find room.
Without compromising the project's quality, PMOs can find alternative routes that can get the project done with less money. You'll be able to put the extra cash towards something else for your company.
2. PMOs increase customer satisfaction
We've said it once, and we'll repeat it: PMOs are experts. They know what your target audience wants, and they know how to impress your customers. Even better, they know how to fix what customers don't like.
By launching test runs, understanding the consumer experience, reading through customer reviews, and taking in other outside opinions, PMOs can take a project and make it successful. No matter what you think the project should be, PMOs always take it a step higher.
That's how they increase customer satisfaction.
They understand what customers are looking for and how to make a product they're going to rave about. Plus, they can handle customer complaints and create a better system from those complaints.
3. PMOs improve productivity
Through their experience and expertise, PMOs know how to take a project timeline from okay to efficient. You might think that your current project management timeline is enough, but a PMO will change it up.
They know how to push their employees to do better while accommodating extra time if there are any mistakes.
In addition, PMOs know and communicate more efficient and effective strategies for completing projects. This means that your team will be able to get tasks done faster.
You'll be completing projects faster than ever and won't have to worry about going past the timeline. Your PMO knows how to create a project management timeline that will keep your employees moving while meeting the expectations that they set forth for the project.
4. PMOs meet company objectives
As they're choosing, organizing, and completing projects, PMOs keep the company objectives in mind. A PMO will never address a project that doesn't improve the company or waste time on a task that doesn't suit the company's goals.
Instead, your PMO will continuously and consistently work to create projects that help your company further its mission.
If yours is a company that sets goals often, your PMO is going to run with those goals and help you meet them faster than you could've ever imagined. You don't have to worry about wasted time and energy.
5. PMOs achieve their goals
Before your employees start a project, the PMO ensures that everything is in place. From the schedule to the budget, your PMO will make sure that they've gotten everything for the upcoming project.
The best part about the organizational tactics of a PMO is that it leads to more achieved goals. By preparing so adamantly for the projects it's going to complete, the PMO ensures that everything is in place for a successful project.
This means that your team is going to be more likely to finish projects on-time and within budget. Plus, those projects are more likely to meet the goals and expectations that the PMO outlined in the first place. This means that you're likely to see increased customer satisfaction, customer loyalty, and more.
Without a PMO, you're going to have an unorganized approach to project management. If you've dealt with this in the past, you know that a disorganized system only leads to lost money and wasted time.
PMO software for the organized project management office
So, what is a PMO? It's a professional and organized team of specialized individuals looking to make your projects more streamlined. With this, their goals include meeting company expectations, satisfying customers, keeping budget and time restraints in mind, and more.
Without a PMO, your projects aren't likely to succeed. Any company looking to be successful with multiple, complicated projects needs more than a project manager. They need a PMO.
More than that, a company looking to improve its project management approach needs a trustworthy project management system. Lucky for you, TrueNxus is the best. Our online project management software helps teams understand project goals, meet project deadlines, and communicate project ideas.
Too often, teams are broken apart because of a lack of accountability or forgotten risk. We're here to change that.
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