PMO Best Practice – What is the point of a PMO?

PMO Best Practice

Is your PMO a vital cog in a well-oiled machine or do you spend time wondering what it is that they actually do? In this blog post our PMO Best Practice expert David Walton gives his take on how to make sure you run are running a ‘value adding’, rather than ‘administrative’, PMO.

I saw a recent linked-in post title: “the PMO doesn’t do anything” and this resonated with a recent assignment that we had run for a large retailer. They had a central PMO staffed with 5 PMO analysts and an Admin person. The cost of this PMO was not insignificant and the IT Director was constantly asking what was he getting for his money.

In truth, the answer was: “Not a Lot”.

However, the reason that the IT Director was questioning the value of his PMO was not because there is no point in a PMO, but because this particular PMO was focused on the wrong things; its sole purpose was to produce lots of financial reports based on timesheet data.

Our assignment was to redesign this PMO into a ‘value-adding PMO’, one that became the eyes and ears of the IT Director. A value-adding PMO needs to have an independent view on the portfolio and highlight areas of concern.

For example, there may be a concern on the continued viability of a particular project or program, e.g., the business case may no longer be valid. Or, there could be a concern about how a project is being run and the capability of its project manager.

If a PMO can identify projects that either requires stopping or early intervention, this is a very valuable service. All too often projects that are failing are only discovered at a very late stage in their lifecycle.

At this point, they could have burnt through a lot of money and resources and may even be irrecoverable. The earlier a project can be terminated or receive intervention or help, the more money that can be saved by the business.

It only requires one or two projects a year to be stopped as a result of the PMO highlighting concerns, for the PMO to pay its way.

There are two broad types of PMO

In my PMO Best practice experience have come across many PMOs and there are two broad types:

• Admin focused PMO;
• Value-adding PMO.

With proper automation of processes like timesheets and financial control, you could argue that there is no point in the admin-focused PMO.

However, in the case of a value-adding PMO, which is staffed by project managers, who have the experience and skill to interrogate projects and take an independent view, there is a very strong case that this type of PMO is very valuable.

As many readers of my blog know, we develop PMO / PPM tools, i.e. PM3. One of our clients was a very lean retailer and they had no PMO.

Our PMO tool, PM3, was their PMO. It automatically generated portfolio reports from the underlying project information. Other clients use PM3 to interrogate their Portfolio to gain that independent view on the portfolio.

In summary, there may be a PMO Best practice argument that the PMO, which is focused on purely administration type functions has little value, but the value-adding PMO has huge value to the business.