Are you thinking of setting up a PMO and looking for help? Then you want to be armed with the right advice.
The trouble is: most of the PMO stuff on the web isn’t practical at all and seems to be targeted at large enterprises. Also, most PMO experts fail to answer the most important question: How do you build a PMO that actually helps the business? That’s what a PMO is supposed to achieve, after all!
We are project management professionals who have successfully built project management offices from the ground up. Therefore, we believe we are able to give you unique insights into what it takes to build a PMO that is accepted in the organization.
Before we go into the details of building a PMO, we want to debunk some common myths around PMOs.
Are you ready?
- Myth 1: PMOs must be sourced externally
- Myth 2: There are different types of PMO
- Myth 3: Establishing a PMO requires a lot of hiring
- Myth 4: PMOs must be implemented from the top-down
- Myth 5: There is no formula for the successful implementation of a PMO
- Myth 6: The cost of a PMO is just a process improvement cost (with no ROI)
Myth 1: PMOs must be sourced externally
This is one of the most common misconceptions regarding PMOs as it is widely thought that the ideal PMO is one that has been externally sourced rather than using internal abilities. This is however, not commonly the case.
The PMO is often something that is presented as coming from outside of the organization — brought in to improve the outcomes of projects.
Our own PMO implementation practice shows that a PMO is more likely to succeed when it is grown from within the organization. Then it becomes a system that is more accepted by the business and the team, and therefore compatible with the business processes and the general way of working.
As an analogy, think of personal changes within people:
- If a person wishes to improve their health by quitting bad habits such as smoking or drinking, then the change must come from within.
- The individual must accept that change is needed and make these changes instead of being told by a doctor to do so (which doesn’t have any effect, as we all know).
In a similar way, the organization is going to have more success if its PMO is established from within by those who know the processes. In this case, the team just has to focus on improving processes rather than introducing a whole new department from outside who are not familiar with the business model and therefore have less awareness of areas to influence change.
Myth 2: There are different ‘types’ of PMO
It is a myth that there are different ‘types’ of PMO. In reality, there is simply one PMO within an organization that can offer different functions, therefore having different branches of influence.
A PMO is a strategic managerial element of an organization that has the purpose of assisting with the implementation of projects that guarantee the delivery of strategic outcomes. Therefore the idea that there are different types is a common misconception.
Rather than being different types of PMO, there are branches of the PMO which provide different services or contributions to businesses’ success factors. A PMO branch within one organization may provide support and control while another may provide strategic and functional guidance. Whatever the service or contribution, the PMO’s branches make up the overall organization’s PMO, just offering a different needed service.
The type of branches that a PMO has within an organization depends on the activities and requirements of projects. This means that the PMO is flexible and depends on the current projects, changing its services depending on the project requirements under changing business conditions.
For example, a project may be undertaken which does not require PMO operational support but more strategic guidance and operational governance. Therefore the requirement for a support branch is perhaps less active or relevant or even not present under the given circumstances.
Myth 3: Establishing a PMO requires a lot of hiring
There is a misconception about the levels of hiring required for the successful implementation of a PMO. It is often implied that, since PMO is somewhat like an additional department or function, there is a requirement for high levels of recruitment in order to support the PMO. However, this is usually not the case.
Initially, there may be a requirement to hire external PMO consultants to support the implementation. Of course, PMOs can be set up using internal resources and by providing some additional training.
In general, it is far more productive to allocate the positions to interested and motivated internal team members:
- They are already aware of the business processes rather than bringing in an external workforce who are unfamiliar with the business and therefore require much more hand-holding.
- External teams add cost and time for implementation. There are however always exceptions to this approach but the general practice shows evidence of benefits by growing the PMO from within.
Successful implementation of a PMO is based on empowering those already working within the organization to perform their work in a better and more productive way to improve projects and internal capabilities to fulfill the requirements of the PMO.
Myth 4: PMOs must be implemented from the top-down
Top-down PMO implementation is NOT always the answer!
The usual approach of implementing a PMO within an organization appears to be “top-down”. However, this is likely to be a more costly method which brings with it many more risks to the organization and less likely project success.
We think it is more effective to identify one area in the organization to start a “PMO Branch Pilot”. This pilot, in case it is successful, can then be expanded further and cover the needs of the entire organization.
Recognizing a specific area to implement “the required PMO branch” means that it would be less costly as it isn’t being introduced at an organization-wide level. Instead, the PMO pilot is only introduced within one area that requires assistance. This helps to break down a large PMO rollout into smaller and less expensive steps.
Not introducing the PMO from the top-down also means that middle-management has the ability to perform the implementation rather than top management. This will speed up the process as it will be a higher priority to those within middle-management positions.
Implementing this branch of PMO that resolves a commonly recognized problem is more likely to succeed because there will be consensus on the fact that the PMO is resolving a real issue the organization is facing. This acceptance and likely success will open the door for the expansion of a more powerful PMO through the organization.
Myth 5: There is no formula for the successful implementation of a PMO
You can’t follow a formula to successfully implement a PMO within your organization, because every PMO is different! This is what PMO consultants will tell you who are making big bucks advising companies in PMO implementations. But this statement is wrong.
Start by conducting a “Business Process Mapping”, which allows your organization to understand the requirement of the PMO — where, when and how to implement it within your organizational structure.
With a Business Process Map as your diagnostic tool, you can conduct the implementation of a PMO in a strategic manner and with a real purpose in mind. This approach is the opposite of simply implementing a PMO aimlessly and without thought, hoping that just “having a PMO” will improve the situation.
Business process mapping uncovers inconsistent practices and bottlenecks, usually unnoticeable, that actually hinder the efficiency of the organization in delivering products or services.
As organizations grow, there is likely duplication and repeated processes that go unnoticed due to changing coordinating structures and even functional power struggles.
A PMO will be bound to fail if those inconsistencies are not resolved. You can compare business process mapping to conducting a thorough medical lab testing of a patient before really producing a hopeful diagnostic for a cure.
Myth 6: The cost of a PMO is just a process improvement cost (with no ROI)
There are several costs associated with the implementation of a PMO that crosses the organization’s internal boundaries to consider it as just a process improvement. Since PMO involves the strategy and operational structures, the impact of cost contributions can disrupt the financial model of the contributing sections.
For instance, if the PMO is going to be highly operational and it may have to deal with heavy regulatory compliance, like in the case of a Quality Management department, it will be severely impacted in its operational and financial performance due to increased need of reporting, extra laboratory equipment, and staff to monitor and implement regulatory guidelines.
The truth is that PMO implementation expenses are indeed an INVESTMENT. As such, the PMO implementation cost must be considered as a “business case” that needs a justification with a positive ROI. Why? Because at the end, the implementation of the PMO must support the delivery of the strategic goals of the organization. This includes operational, financial and client satisfaction. PMO implementation then requires a financial evaluation prior to committing to implementation.
In the same way that a family makes a financial evaluation when choosing to buy a house, based on the “need to improve family living” conditions, it does so within the constrained limits of “what they can afford”, an organization must also be aware of the “PMO it can afford” with the budget assigned.
This is of paramount importance, otherwise (and this has happened) the implementation of a PMO may bring financial hardship to the organization or the department implementing it, as to the family who exceeds their financial capabilities.
This is one of the common overlooked misconceptions that can negatively impact the outcome of implementing a PMO.
It is important that the money available for introducing a PMO is spent wisely on areas that will help to meet the business objectives, emphasizing that money is not wasted on branches of a PMO which do not add value to an organization or meet its business strategic objectives. In order to ensure value, the expectations of the PMO need to be well understood in order to know whether or not the organization can afford to have it.
Understanding exactly what a PMO is, what it can offer an organization and how to implement it within your business is crucial to its success. Without a good understanding of the driving needs, the real benefits to be obtained, and the financial constraints, the PMO may be implemented unsuccessfully in a number of ways.
For example by having the wrong people working on it, building it within the wrong area of the organization or designing it to provide unnecessary services which add no value to the organization or its projects while there are still other needs or services which must be resolved which may contribute more productively to the overall business goals.
By providing you with an overview of these common misconceptions, we hope to get you thinking about what you hear and questioning whether or not certain PMO beliefs are actually true or indeed myths that must be taken seriously into account when planning a PMO implementation.