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Project PMO: setting up a project office

PM Oracles
September 3, 2014

Starting a PMO is a project in its own right. In our own experience and in feedback discussions we have had with many project management and PMO professionals, difficulties in establishing a PMO are frequently due to the fact that some of the key tenets of treating it like a project, for example focusing on senior management commitment did not, in hindsight, receive the level of attention they warranted.

Let us first consider the two basic milestones in any project, ‘Start’ and ‘Finish’, and how they relate to establishing a PMO:
The Start occurs when the idea is in the early initiation or exploratory phase of the PMO. We’ll assume that it’s the point at which either you have been approached by C-level executives or you’re approaching them with the idea of a PMO. It has some merit and at least a verbal approval to continue obtaining information as to its viability. The Finish milestone is reached when the PMO is considered to be established and is now ongoing as a normal part of business process or operations.

That leaves a great deal of middle ground to consider. After the start, the next key milestone is met when you present the project for a go/no go decision for funding approval. To ensure success, your presentation should describe the establishment of a PMO as a project in itself, albeit a temporary endeavour until the PMO is established. It will require a project manager who could, of course, be the designated PMO manager once the project is complete. Therefore, like any project, the ‘Establish a PMO project’ will have a project charter with clear and measurable purpose, scope, schedule, quality, budget, risks, critical success factors with suggested key points.

Guidelines for each of these are as follows:

Purpose: As in any project, are you trying to solve a problem or act upon an opportunity? If project execution has historically been a problem, then your presentation will approach the subject from the aspect of how the PMO would resolve this difficulty, broken down into specific points.

If an opportunity, then you are assuming a PMO will provide added benefits such as shorter project execution times, increased productivity, or lower administrative overhead.

Scope: Pare to a summary all the work to be done to set up the PMO: hiring the manager and/or project managers, centralised database, document standardisation, common metrics, communications, scheduling software, etc. just as you would for a project.

Schedule: As you may know, a PMO can take time to reach the maturity level you are seeking, and it can be either a slow or a fast transition proportional to the amount of churn the organisation can digest and from which it will benefit. Both approaches can be successful. These days, the ‘fast’ track seems to be a more prudent choice; stakeholders want to see results quickly and a long transition can lose momentum. We suggest putting your phase transition times in a date range versus a hard date so that you can manage the quality of the change management at the pace required for your organisation.

Quality: Empirical data will come later; the initial establishment of the historic baseline and agreement to the PMO primary metrics should be done up front; remember, ‘you are what you measure’.

For the start of the project, focus on the intrinsic elements as to how your customers view the change and your project manager’s morale managing through the transition. As the performance ranges of your metrics start to show some degree of consistency and fewer outliers, switch to more empirical focus. If timed right, the ‘emotion’ of the change has subsided and focus on the expected benefits will be the primary task at hand.

Budget: There is an overhead cost to initialising the PMO and a budget estimate should be established so an ROI can be provided. The trick here is to emphasise the long-term benefits of a PMO versus the expectation of early ones. However, any positive results early on, even anecdotal, is good backup to provide during PMO stakeholder updates.

Risks: As in any project, there are risks. We often hear that a primary risk is the initial stakeholder and customer expectations of results to be achieved versus the long-term benefits of success. Continual communication with your stakeholders and customers is crucial. So is the establishment of a project controls group that includes senior management.

Keep in mind that no matter how well you manage the change transition to a PMO, there will most likely be an impact on your customers. Address their concerns in a proactive way with positive communication. Hold a project success plan meeting at the start.

Critical success factors: We generally like to use an AS IS and TO BE format wherein you list the existing challenges and/or potential opportunities on the left side; on the right, itemise the expected benefits once the PMO is fully established (which need to be tracked and monitored).

You could consider breaking these benefits into increments expected at the end of each phase or timeframe. It is prudent not to oversell the results prematurely. All success factors should be measurable, obtainable, and agreed upon upfront with your sponsor and/or key decision makers.

In conclusion, we hope that you feel these ideas for establishing a PMO by approaching it like any project, therefore giving it the same discipline and rigour, is a good strategy.

A project manager needs to own it, work effectively with all key stakeholders, set milestones, manage resources, purchase tools, and report results. Such actions need to continually serve the needs of stakeholders and the organisation as a whole. The benefits and success of establishing a PMO will come at regular intervals and, just like any other project, they will not be fully realised until after it is launched: plan the benefits and report against progress in achieving them.

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PM Oracles
PM Oracles is Gareth Byatt, Gary Hamilton, Jeff Hodgkinson and Duke Okes, all experienced PMO, program, and project managers who share a common passion to help others and share knowledge about PMO, portfolio, program and project management.
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