Excellent project management will definitely help you deliver your projects but do you just want to deliver projects or achieve your strategic goals. For that, you would need to manage your portfolio of projects as a portfolio. This series hopes to share my experience in portfolio management, what I did well and what I messed up in hope you can short-cut your learning.
Most of the time, a project to set up a PMO doesn't crash and burn. More often, though, it got mired into some slow-motion progress that does nobody any good. It delivered something that on paper seems to be what was designed but everyone else can see has morphed into a project police that proponents have promised to avoid. It has become just another group in the company with its own interest and stake in the organisation's projects to justify its existence, and not the enabler of projects.
There is no standard blueprint for building a PMO like there is for building a rocket. Building a PMO may be no rocket science and yet why do so many PMOs fail?
This is the second in a series sharing the reasons why the PMO didn't work. The first article may be necessary to provide the background
What PMO did you think you were supposed to build?
You were asked to set up a PMO. How much thought have been given to what those initials stand for? For starters, does the P stand for Project, Programme or Portfolio? Each one of them is different as I will discuss below. For clarity, I will abbreviate them to Pj, Pg and Pf respectively. PMO will then be used to describe generic PMOs, where the role is still indeterminate. If it is all three Ps, perhaps you can call your office the C3PO for Corporate 3P Office. I promise you it will be equally comic - but read on, you may just see why.
In the first place, does the sponsor or the initiator of the idea know the difference and what the different PMOs do? Quite often, they don't. It is then incumbent on the PMO head to determine what the immediate needs of the organisation is and the change capacity of the organisation to accommodate the PMO way of doing things.
Of course, all organisations would definitely benefit from a PfMO, but is it ready for such an organisation. Particularly if the organisation is not organised for projects and, in particular lacks a collaboration culture, the PMO may need to start lower down the value chain with a PjMO instead.
I will explore the three types of PMOs below and hope to provide guidance on the selecting the PMO best suited to organisational needs. Roles below are not mutually exclusive and your PMO may overlap with two (but hopefully not all three) of the roles.
Project Management Office
This is the most basic type of PMO and the one that management understand best. Often, organisations require a PjMO after encountering repeated problems in delivering projects due to bottlenecks, resource conflicts, etc. Sometimes, a corporate PjMO follows a successful single-project PjMO (but note that the skill-sets in running a single project may differ from setting up a PjMO). Occasionally, it is set up as a result of a disastrous project failure or a series of them.
A PjMO can be a fixed-life PjMO set up for a single project only or a permanent set up. I will only be discussing permanent PjMO.
What it does
It runs projects. That is it.
It provides all the key factors required to successfully deliver projects: a project delivery methodology and trained project managers on the bench. Typically, the PjMO
sizes up the number of project managers required based on the project pipeline
recruits or obtain by outsourceing project managers to meet the demand
schedules project managers to projects
develops a project delivery methodology, normally based on PMBOK or PRINCE2
provide training for project managers according to the methodology and soft skills
sometimes, has a QA section to review project manager performance in accordance with the methodology
When does the PMO get involved
After a project is approved, the PjMO will assign a project manager to the project. Once the project is handed over to BAU (Business As Usual), there may be a 'warranty period', formally agreed or informal, during which the project manager could be called back to 'sort out problems'. Otherwise, the PjMO's involvement ends with the closeout or sometimes, the benefit realisation exercise.
Methodology
Usually a project delivery methodology, for instance from PMI or PRINCE2 (if an IT PMO) is employed. Standard templates to facilitate project delivery and reporting are normally developed.
Type of organisation that will benefit best
PjMO works best for standard types of projects, for instance software delivery. As a result, an organisation may have more than one PjMO. Most commonly, there will be one PjMO in the IT division and there could also be one for product launches, though it may not be called a PMO. Basically, each PMO runs its own projects to its own SOP.
As most of the project expertise are concentrated within the PjMO, the project maturity demands on the rest of the organisation is not that high. This allows PjMO to work even in organisations with low maturity level for project management.
Success criteria
That projects are successfully delivered to scope, on time and within budget.
Skillsets
The Project Managers in PjMO require conventional project delivery skills together with the technical knowledge in that area of delivery. The head of the PjMO is a master HR-manager, scheduler and trainer-mentor.
Programme Management Office
A programme differs from a project in that it brings several related projects together towards a single business goal. For instance, launching a new iPhone would involve separate projects to deliver (i) the phone itself, (ii) the marketing aspects and (iii) the sales logistics involved, etc, etc. Business cases would exist only at programme level, held by the programme manager who ensures all projects are working in alignment towards the same launch date and objective.
A programme is much more than a large project as the strategic aspects of the programmes and projects starts to dominate. A programme manager would need to be able to change the scope/delivery dates of the projects within the programme as the environmental scenarios changes.
What it does
A PgMO of course, runs programmes but usually do not deliver the projects within the programmes, each of which would likely has its own single-project PjMO. The programme manager from the PgMO would need to work with project managers, who does the actual delivery and is also expected to act as the bridge between delivery project managers and the business/operations/users.
A PgMO may also monitor the external and internal environment (either directly or through another department) to assess whether there has been any developments that may change the business case. If the business case is changed as a result, the PgMO may ask for a review of the business case to assess whether it is still of value to the organisation to proceed with the programme as currently scoped and intended.
Sometimes, the PgMO also play a coordination role to ensure that the various projects will receive the appropriate resources and management attention at the right time from all departments in the organisation involved. This avoids user/operational departments having to dance to the tunes of project managers, each acting only for their project.
When does the PMO get involved
Normally, from the project proposal stage or the business case stage. Ideally, the PgMO controls the project initiation process that allows them to get involved at an early stage of the project conception.
Methodology
There may or may not be a standard project delivery methodology but there will usually be some programme delivery methodology, based loosely on PMBOK or some other best practice. I say loosely because there are much more variations at the programme level and as such, broad guiding principles will be more appropriate than set standards. Also, the PgMP syllabus I have reviewed from PMI is really PjMP on steroids.
Templates at programme level tend to be for reporting or for risk management purposes only. By reporting here, I mean how the programme manager communicate programme status to the organisation at large, not from project to the programme level. Any programme manager who relies wholly on reporting templates from project managers would be suspect to me. I expect the programme manager to have verified project reports and overlaid the impact on management from these reports.
Type of organisation that will benefit best
Organisations with successful PgMO typically have a higher level of maturity in project management. The project management structure has extended from delivery departments (as in organisations with PjMOs) to user/operational departments. Most of the latter departments would also have a designated manager (or even a unit) with project responsibilities, who will also be the liaison with the PgMO.
Success criteria
When I headed a PgMO, my KPI I wrote for myself was that the strategic intent of the programme was achieved. It took a bit more work to define what the strategic intent was and there is a lot more judgement involved in the appraisal. Normally, though whether the strategic intent was achieved or not was quite clear.
Skillsets
Progamme managers need to have basic project management skills overlaid with
understanding of strategy and finance - to handle the strategic intent and business case
strong analytical skills - to understand the impact of new developments/information and assess which project manager/stakeholder need to be informed
exemplary people skills - as the programme manager only deliver via project managers
The PgMO head is really at near-executive level, with great big-picture strategy vision and excellent people skills to keep business owners align their competing interests.
Portfolio Management Office
Portfolio management is a rather new discipline. A portfolio is a collection of connected or unconnected projects and programmes, usually held together by a common corporate strategy. Ultimately, all projects and programmes come together in a single organisational portfolio under the CEO. Portfolios can exist at different levels: the COO's portfolio, for instance, is a subset of the CEO's portfolio.
PfMOs is really a new species, although there has been CEO/COO/CFO Offices that have been playing part of the role, albeit not necessary in a structured manner.
What it does
A PfMO will design the portfolio of projects/programmes needed to deliver the organisational strategy and goals. The PfMO will also identify broadly the scopes and timelines (and occasionally costs as well) of these projects/programmes so that strategic decisions can be made on how the organisational goals can be met with the limited resources at hand.
Programme managers will then oversee these portfolios - one being assigned to each of the C-suite, for instance. The work involve monitoring the progress of the projects/programmes, and initiating projects/programmes at the right point as required by the strategy. A key role is also identifying any risks that could be a threat to the delivery of the strategy (as opposed to the project/programme) including those arising from people, leadership, structural issues.
The PfMO will monitor the internal and external environment to assess whether the portfolio of projects/programmes remains relevant to the delivery of the goals of the organisation. It will also assess whether there is sufficient capability and capacity in the organisation as a whole to deliver the strategy.
When does the PMO get involved
I would expect a good PfMO to be involved, if not facilitate, the formulation of the organisational values, vision & mission statements, goals and strategy. From there, the PfMO will design the portfolio of projects/programmes based on the critical success factors identified for the success of the strategy. As such, the PfMO would be involved in projects/programmes even before they are initiated. Often, the PfMO is the one to engage the appropriate stakeholder/owner/sponsor to initiate it.
Methodology
While only PMI is currently known to have any portfolio management standard which is more project-orientated rather than strategy-orientated, I do not expect much methodology by the PfMO other than those already mentioned for the PjMO and PgMO. It is still a developing field and I am not sure if anyone can claim to have to have morphed their experience into a methodology as developed as for project management. It is still very much an art than a science.
Type of organisation that will benefit best
A project-driven organisation, where the entire organisation is organised to determine the right projects and to deliver them, would be ideal. But sometimes, a focussed PfMP can happen first and drive the development of a project-driven organisation - for instance, when a project-driven organisation is identified as a critical success factor for the strategy to succeed but none currently exists.
Success criteria
That the strategy has been delivered. At the PfMO level, there is no exclusion of scope to strategy delivery. Anything less would mean that the PfMO is only periphery to the organisational strategy.
Skillsets
Same as with PgMO but with even more emphasis on the strategic awareness as well as relationship with key stakeholders at the executive level. Knowledge of how strategies are developed as well as translating strategic intent into a delivery framework is also necessary. In reality, there can only be one portfolio manager for each portfolio as the intricacies and inter-relationships of all projects/programmes within.
So, do you know which PMO you were supposed to set up?
If you wish to continue the series, the next article is about When.
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