Project Management Office (PMO) fundamentals - Part I

– – The Project Management Institute (PMI) states that a PMO “can range from providing project management support functions to actually being responsible for the direct management of a project.” Even the definition of a Program Management Office adds to the complexity by stating that “corporate benefits [are] realized by the sharing of resources, methodologies, tools, and techniques, and related high-level project management focus.” OK. I empathize with the CXOs and businesses trying to make sense of this complicated, all-encompassing, acronym—so let’s review the PMO fundamentals:

At its core, its most basic level, the PMO offers competency in project management fundamentals that assist within and around the activities of an enterprise’s value chain.

– – Our drawing (upper right) illustrates nine knowledge areas from the PMI’s PMBOK® Guide with the addition of standards, methods, process and tools; supporting PMI’s notion that “other standards on organizational project management maturity, project manager competency, and other topics that address what is generally recognized as good practices in those areas” may supplement the PMBOK® Guide.

– – A key learning here is that the PMO should be customer-driven, i.e. any or all of the illustrated fundamentals must, according to Kotler & Armstrong (Principles of Marketing, 2010), “solve customer problems and create more customer-satisfying experiences;” the perceived value of the PMO must provide “the customer’s evaluation of the differences between all the benefits and all the costs” in creating and sustaining the PMO whether it is a single individual or a department. In Fundamentals - Part II we will discuss: Who is the customer? Can you have more than one customer? Can you have more than one PMO?

Project Management Office (PMO) and the Organizational Value Chain

– – According to Porter (1985), “every firm is a collection of activities that are performed to design, produce, market, deliver, and support its products.” Our drawing (upper right) illustrates the organization as a minimum of primary and support activities helping deliver value and margin to customers and shareholders respectively. Primary activities are “involved in the physical creation of the product and its sale and transfer to the buyer as well as after-sale assistance.” Support activities “support the primary activities and…various firmwide functions.”

– – According to Stevenson (2007), “business organizations typically have three basic functional areas…Finance is responsible for securing financial resources at favorable prices and allocating those resources throughout the organization, as well as budgeting, analyzing investment proposals, and providing funds for operations. Marketing and operations are the primary, or ‘line,’ functions. Marketing is responsible for assessing consumer wants and needs, and selling and promoting the organization’s goods or services. Operations is responsible for producing the goods or providing the services offered by the organization.”

– – If you search many of the online job boards for “PMO” in the title of the job description you will find that they are everywhere in the value chain helping transform in efficiency (doing things right) and effectiveness (doing the right things). Nevertheless, those job descriptions often look like a silver bullet using the PMO as a change agent destined to fail, i.e. according to one study; more than 70% of PMOs have reorganized in the past three years.

– – Nearly half a century ago the PMO emerged from the construction and defense sectors initially providing planning and scheduling services—today they are built anywhere within the value chain, across a value chain, and even built to address strategic customers.

– – Keep in mind, when building your next PMO:

At its core, its most basic level, the PMO offers competency in project management fundamentals that assist within, and around, the activities of an enterprise’s value chain.

– – Whether the PMO has a focus on individual development (training/mentoring in building project management capability) or on organizational development (building capacity, competitive advantage, or strategic competency aligned to core)—the PMO must understand its value-add and its alignment to the value chain, otherwise it will lose its own efficiency and effectiveness and become destine to fail. Addressed in my upcoming book Design Considerations for Building the Enterprise PMO—this text helps today’s CXOs recognize project management as a strategic competency, how to create a multi-generational strategy and plan for their PMO, and how to evangelize PMO’s as a means of performance transformation within their organizations.