When is it Time to Create a Project Management Office?
A Project Management Office (PMO) is a department or group of people that defines and maintains the standards related to project management, within an organization. As an extension of defining and maintaining these standards, a project management office is more importantly, responsible for the successful execution and implementation of projects that fall under their jurisdiction.
There are a number of benefits that come from implementing such a structure within a company. But a PMO is not something that is typically started right out of the gate, especially within a smaller company. The following article will discuss some of the benefits of a PMO as well as some of the tell-tale signs suggesting it might be time to establish a PMO.
Three Benefits of a Project Management Office
There are a number of benefits that come to a company as soon as they implement an enterprise-wide project management office:
1. Create and Implement Consistent Systems and Processes
One of the most noticeable benefits of a project management office is their ability to create and implement consistent systems and processes. Companies will become successful for a number of reasons. They have a great product, they have great salespeople, they are innovative, or a combination of other factors will lead to their success. With this success comes growth, and with growth comes growing pains.
There’s a certain mindset that occurs as a company is growing exponentially. I once heard a colleague of a fast growing company express the sentiment that “any decision that moves the company forward is the right decision”. The spirit of what he was saying was that you can’t take time to slow down in a fast growing company and methodically analyze every possible solution to a decision that needs to be made. Rather, people need to make decisions on-the-spot and in real time in order to keep things moving.
This works great in theory. However, long-term, what it introduces is very inconsistent, unpredictable, and sometimes unreliable ways of getting the work out the door, whatever that work may be. Once a company has reached this point of confusion, it’s a great relief to those who are affected to have an objective third party (also known as a PMO) come in and smooth things out.
The members of the project management office will identify the systems and processes that are working, get rid of those that aren’t, and fill in any missing gaps.
2. An Objective Source of Truth
Another benefit that comes once a project management office is implemented is that there is one objective location to find the truth. What does this mean? If it is set up properly, a PMO will not have any resources reporting directly to them (other than project managers and perhaps some business analysts). As such, there is nothing to hide or cover up when it comes to reporting on project status.If a department is running their own projects, they may not be quite as objective to report on the true status of where things stand.
We’re not talking about people deliberately lying here, but rather providing their “version of the truth”. For example, a department may know they missed the date of a deliverable. But, they also know that by the time the next status meeting comes around they will be able to catch up and choose not to report it is a potential risk. Then, an emergency happens, this deliverable never gets finished, and now the project is in crisis mode.
A project management office provides visibility into such an occurrence and heads off the negative consequences. If the deliverable was not complete on the date needed and a clear (and near) end date was not forthcoming, this would have been reported as a potential risk. This would have given the project sponsor or company executives the ability to do something about it so it didn’t get out of control.
The President of a software development company once told me that he uses the person that runs his project management office as the barometer for how well (or poorly) things are going on within the company. “If he’s a little on edge, I know I need to dig into more details and see where I need to help. If he’s calm, cool, and collected then I just go to lunch. I know everything is going just fine.”
3. Introduces Economies of Scale
A project management office also reduces or eliminates duplicated efforts and wasted resources. If someone doesn’t have an overarching view of the activity that is happening within a company, similar projects and initiatives can start to appear in multiple locations when there really is no need. One solution would suffice, but the people that are working on the other solutions are not aware that there’s already a solution. A project management office can stop this duplication of efforts by employing online project management software to coordinate amongst various departments, to get the job done…once.
The above are just some of the benefits you’ll realize once a project management office is implemented successfully. But, how do you know when it’s time to go down this path?
When is it Time for a Project Management Office?
There’s no particular size, revenue, or makeup of a company that would indicate that it’s time to start a project management office. However, the following symptoms may be signs that you want to look into setting up this valuable department.
- Work is not Getting Out the Door: Due to the success of the company and what you offer, there are log-jams and slowdowns that are creating bottlenecks across the company. This is drastically slowing work down, creating rework, and introducing all of the subsequent problems that occur because of this type of mismanagement.
- It Feels like Every Project is the First Time you’ve Done Something Like This: Even though you may have done a particular type of project time and time again (for example, your company may create websites that require some amount of customization for a client) it feels like this is the first time you’ve ever done this type of project. People are tripping over each other, necessary questions are not asked until it’s too late, or deliverables sit on a shelf somewhere, not getting worked on, while the department that should be doing the work is sitting on its hands. If it becomes a comedy of errors to get a project out the door, then it may be time to set up a project management office.
- There is not a Single Group that Knows What’s Going on Across the Company: Everybody has bits and pieces of where things stand, or they may have their own very myopic view of the world…but nobody knows how everything ties together… and this is starting to create problems. Deliverables that are passed from one department to the next may not be configured in the proper way, or they be missing key elements of what was originally agreed upon re delivery. It may be time to put a project management office in place to provide that general overview.
As previously mentioned, a project management office is something that will typically be introduced into a company once it has reached a certain size. However, the principles of a project management office can be applied across companies of any size as they get a jump start on creating the systems and processes needed to successfully run their projects as they grow.
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