A project management office is often associated with just the management of projects, but in this article the case will be made to broaden the scope of a Project Management Office to encapsulate the entire services business and will explain the reasons such a structure is necessary.
How a Project Management Office is commonly Defined
Historically, the purpose of a Project Management Office (PMO) is to deliver a project management on-time and on-budget through the use of project management best practices. A PMO manages all aspects of a project including budget and resources. Organizations that don’t use PMOs will often find variability in how projects are managed and a lack of consistency in the delivery of quality projects. Often PMOs come into existence through organizational frustration with current project success.
Why a PMO needs a different organizational structure
When organizations are looking to implement a PMO a common question is: Should we establish the PMO and place various technical resources in that PMO and thus creating a new services organization? Or should technical resources stay within their current functional organization and only have the project managers housed in the PMO? In other words just set up a project department.
Project work, such as in the IT services business, especially projects for outside customers, is much different from standard IT work. First, internal projects often have a definitive delivery schedule but often the deadline is flexible, depending on when resources are available and unlike external projects, there are no contractual obligations for an on-time project completion. Second, internal projects, if using internal resources, will be of a size and scope that internal resources can handle. External projects, on the other hand, can be quite large in size and may require many resources
In order for a PMO to work effectively management at the executive level has to make a decision to shift power and authority from functional management and create a service organization with decision making authority given to project leaders. To place a PMO within the current management structure can and will cause conflicts. The resources need to be available to do work on a project as the PM sees fit and not negotiate with the functional manager every time the resource is needed. By using a functional management, bottlenecks can often occur (e.g. having the same engineer work on multiple projects), versus an engineer that is assigned to a project in a PMO and only that project. The financial penalties and the assigning and managing of resources variable size projects dictate a project structure is enacted.
How to Design a PMO
The creation of a PMO starts with a holistic approach to the services business covering all aspects from sales to project delivery to operation. There needs to be a high-level person in charge of putting together the entire process and aligning personnel (responsibility/accountability) to the project structure. Someone of a lower stature would be ignored.
The first step is to set objectives that transcend individual functional areas. Joint ownership in project success is required whether the participant is from sales, the delivery organization or operations. Everyone has to have a vested interest in the project being sold, delivered and managed profitably.
Let’s talk about the organizational structure and use the example of a company is in the services business of designing and deploying voice/data networks. It will need engineers with Cisco, Avaya and Microsoft certifications and expertise and these engineers will be categorized into broad pay scale bands based on their expertise and accreditations. These engineers are placed in a pool and are assigned to a project as needed by the project manager. Assigning means they are attached to the project and are not available to be used on other projects, unless the PM agrees. The project manager directs all the activities that need to be done by the engineer for the project.