EPMO Best Practices
Those who are already familiar with a project management office (PMO) will understand that a PMO can operate under one of three levels of organizational scope: individual, departmental, and enterprise.
While individual and departmental PMOs support project management teams at the project or business unit level, respectively, enterprise PMOs (EPMOs) work differently. In fact, enterprise PMOs are so influential and far-reaching in scope that they form their very own business units.
But while a well-run EPMO can help your organization achieve its business objectives more quickly and efficiently, it can only do so if it’s set up for success.
This article explains the basics and best practices for enterprise project management offices, including what an enterprise project management office is, why it’s important for organizations, and some best practices for developing and managing an EPMO.
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What is an EPMO?
An enterprise project management office, or EPMO, is a strategic business unit that provides guidance, standard processes, best practices, tools, and governance for project management teams across an entire organization. Unlike a traditional PMO, an EPMO functions at a strategic level and in collaboration with the organization’s senior management and executives.
Typical EPMO functions include:
- Creating a strategy that aligns the organization’s project portfolio with its short- and long-term business goals
- Developing standardized workflows, policies, and templates
- Setting visibility and accountability for project management teams across the organization
- Managing organizational change
- Setting key performance indicators (KPIs) for measuring project performance
The Importance of an EPMO
A well-established EPMO is designed to look beyond the scope of any project management team or even a traditional PMO. While a traditional PMO might work to connect projects with business strategy, an EPMO is involved in developing that strategy as well as ensuring that the organization is properly using its resources to achieve both project objectives and business objectives.
EPMOs are helpful for any organization that utilizes project management methods and practices, including agile organizations. An EPMO can help break down silos, increase overall visibility, and optimize the organization’s allocation of resources.
In general, it’s a valuable business function for global organizations that seek to maintain process and technology uniformity across regions. An EPMO is also valuable to organizations struggling with challenges such as:
- Lack of visibility over financial performance
- Standards and policies that work well only for some projects
- Inability to develop a robust organizational contingency/what-if analysis model
- Lack of alignment between projects and organizational strategy
In fact, a 2017 report by the Project Management Institute (PMI) found that 50% of organizations with a PMO have an EPMO, as well. Those organizations that align their EPMO strategy report that 38% more projects meet their initial goals and business objectives, while 33% fewer projects are failures.
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EPMO Best Practices
An enterprise PMO can help an organization achieve its business objectives while minimizing failed projects, but only if the EPMO is set up to succeed. Below[AB2] are a few best practices for EPMO management and processes.
Positioning of the EPMO Within an Organization
Ideally, an EPMO should be established at the strategic level of the organization, with the EPMO chief reporting directly to the COO or CEO. That way, the EPMO is able to collaborate with and influence the executive team, while executive leadership can maintain a direct line of communication with the EPMO team.
Effectively Collaborating With Other PMOs
One of the core functions of an EPMO is to facilitate communication between other project management offices within the organization. When one project management team runs into a problem, it’s often the case that other project management teams have faced the same issue before. A centralized EPMO serves as the node where different project management teams come together.
Senior Management Buy-In
It’s important for every organizational business unit to have senior management buy-in. This is especially true for an EPMO. By setting up a new business function at the enterprise level, an EPMO necessarily needs not only the approval of senior leadership and executive management but also the willingness of senior management to actively engage with the EPMO.
As an EPMO is positioned within the organizational structure, the EPMO chief should be in constant dialog with senior management, addressing concerns, answering questions, and setting expectations for both management and the EPMO team.
Most critically, senior management and executives should understand that their active collaboration is needed if the EPMO is to successfully align the enterprise’s project portfolio with the organization’s business objectives.
As with setting up a traditional PMO, it helps to come to senior management with a solid plan about what the EPMO will accomplish and how it will enhance the organization’s existing project management capabilities.
Establishing the EPMO as a Separate Business Function
Setting up an EPMO as a separate business function is about more than control. On the one hand, it should provide oversight of all project management teams in the organization, from client-facing development teams to internal project managers. On the other hand, executive management should direct and collaborate with a single person, the EPMO chief, who can help guide business strategy from the lens of the organization’s project management capabilities.
Only as a separate business unit can an EPMO achieve both of these goals at an enterprise level.
A Clear Organizational Structure That Supports the EPMO
There is some amount of flexibility when it comes to setting up an EPMO within an organization’s existing structure and hierarchy. However, once the EPMO is established, the new organizational structure should be made clear and communicated to everyone, including whom the EPMO chief reports to and which business units fall under the supervision of the EMPO.
The new organizational structure should also outline the internal hierarchy within the EPMO. Depending on the EPMO plan and charter, the EPMO may be responsible for directly overseeing business management processes, training, the project management team, the project portfolio, or a combination of these. Having a clear internal organizational structure will help the EPMO chief best understand how to build a successful team.
Harmonizing project management practices across large organizations is challenging. Ensuring that the objectives of all projects support the organizational strategy may be complicated by projects originating out of different business units or divisions. Developing practices and project-related standards that work for all projects in these types of organizations and getting visibility into their performance are no easy tasks. When the entire organization’s project efforts must be aligned to achieve common business objectives, an enterprise PMO can be the best solution to help bridge the gap between executive management and the organization’s project management capabilities.
To learn more about EPMOs and project management best practices, get in touch with us today!
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