How to Build a PMO: 8 Simple Steps
The world of project management is full of abbreviations, and one of the more commonly used acronyms is PMO. But what exactly is a PMO, and why is it important for project managers to understand how to build one?
This article walks you through everything you need to know about PMOs, including how to build one yourself from the ground up.
On this page:
- What is a PMO?
- How Long Does it Take to Build a PMO?
- How is a PMO Different From a Project Manager?
- How to Build a PMO
- Take the Next Steps to Build a PMO
What is a PMO?
A project management office (PMO) is a centralized team that establishes and oversees project management standards within an organization.
The function and purpose of a PMO will vary, but some benefits of PMOs include:
- Standardizing the organization’s project-related practices
- Enabling sharing of organizational resources and tools
- Allocating and prioritizing project resources when needed
- Ensuring that projects are aligned with organizational and corporate strategic goals
- Acting as a central repository of successful practices, lessons learned, and other valuable organizational knowledge
- Tracking and reporting across multiple projects within the PMO’s domain
How Long Does it Take to Build a PMO?
Generally, it takes about 12 months to build a PMO, from project planning to implementing your first PMO tools and processes. However, the exact timeline for building a PMO will depend on your own project management experience as well as your organization’s available resources for creating a new team.
How is a PMO Different From a Project Manager?
The biggest difference between a PMO and a project manager is the focus of responsibility. While a project manager is assigned a specific project, they oversee from start to finish, a PMO continually engages with multiple project managers to ensure that every project is on track to meet its objectives.
PMOs are continuously evaluating and allocating organizational resources. So, while a project manager will focus on making their project succeed, a PMO makes sure that all active projects succeed as a whole.
There is also a difference between a PMO manager and a project manager. A PMO manager is responsible for the development and maintenance of the framework within which projects are managed, while a project manager has the responsibility to lead and manage the project and its many teams. In other words, a PMO manager is more concerned with the “big picture” of all projects, while a project manager is concerned with the details of their individual projects.
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How to Build a PMO
Building your first project management office isn’t as daunting as it might seem. Here’s how to get started in 8 easy steps.
1. Establish PMO Goals and Objectives
Like any major project — and yes, you should treat building a PMO as a project — it’s important to have a clear outline of what you want as well as expected bottlenecks and challenges (and how to overcome them). Example questions to consider as you develop your plan should include:
- What will be the function(s) of your PMO?
- How will your PMO save the organization money or reduce project risk?
- Who will staff the PMO? Will you need to hire externally?
- Who is most on board with your PMO and can support your cause? Who is the most resistant, and how can you address their concerns?
- When will the PMO be fully set up and functioning?
2. Acquire Executive Buy-In
The next step is to get executive and senior leadership on board with your plan to start a PMO. Fortunately, this should be much easier if you already have a solid plan that emphasizes how a PMO will improve your organization’s existing project management capabilities or advance the organization’s business strategy (or both).
3. Develop a PMO Charter
Once you have buy-in from executive management, you’ll need to work on establishing your PMO charter. A PMO charter will help define your intended developmental approach for the PMO, as well as set expectations for both the team and executive management. Every PMO charter should include four critical elements that are essential when developing any new organization or team:
- Mission statement
- Vision statement
Always keep the charter in mind while you’re building your PMO. Once it is up and running, revisit the charter with your team to make sure they are using these charter elements as context for their work, especially KPIs and definitions of success.
4. Identify the Scope of the PMO
You’ll need to identify the scope of your PMO. Possibilities include:
- Portfolio-only PMO
- Program or project PMO
- Project-only PMO
Factors that will influence this include the types of projects your organization manages, the existence of any other project-related offices or other resources available to projects, and the guidance your charter provides as defined in the previous steps.
In any case, don’t neglect the fourth “P” — People. Ensure that the people on the PMO team have the skills and experience necessary to implement the PMO.
Your PMO model is a reflection of the influence and position of the PMO within the organization.
There are three main levels of influence:
- Supportive (low project control). This type of PMO functions in a supportive role by providing training, best practices, templates, and other organizational knowledge upon request. As individual projects are completed, the PMO collects the most important success stories and lessons learned to make such knowledge available to everyone in the organization.
- Controlling (moderate project control). This type of PMO is responsible for project compliance in the organization. Compliance might extend to adopting specific workflows, tools, or forms and ensuring conformity with established organizational policies.
- Directive (high project control). This type of PMO directly manages the projects in its domain.
There are also three main levels of organizational position:
- Individual PMO. These PMOs provide extensive functional support to a single complex program or project. Support might include document management, training, or development of project-wide standards.
- Departmental PMO. Also known as a Business Unit PMO, this PMO supports multiple projects at a business unit level. Projects can range from short-term initiatives to multi-year implementations of new systems or technologies.
- Corporate PMO. Also known as an Enterprise PMO (EPMO), this PMO creates organization-wide standards and best practices that apply to all projects and divisions. Corporate PMOs are responsible for allocating and prioritizing resources for different projects. They also work with senior executives on ensuring alignment between organizational and project strategies. You can find out more about EPMOs in our previous post.
5. Develop a PMO Maturity Model
What will a successful PMO look like after its first year? After three years? The PMO maturity model serves as the link between the business case for the development of the PMO and the KPIs and other metrics you defined in your charter. You will use it to help your stakeholders understand the value your PMO actually delivers relative to what you expect to deliver. For example, if the goal of your project management office is to reduce organizational risk, how will you measure that over time, and how will you gauge intermediate progress?
6. Identify Necessary Resources, Training, and Education Programs
Now that your PMO is fully laid out on paper, it’s time to make planning a reality. But before you start hiring the staff you need for your project management office, think carefully about the roles you need to fulfill the mission of the PMO. Every hiring decision should help bring the PMO one step closer to successfully achieving its goals.
Your PMO team will also need training to fill any knowledge gaps to be successful in their new roles. In addition to instructor-led training, consider longer-term training options such as mentor programs and buddy systems.
7. Execute the PMO Strategy
You have identified the scope and type of PMO you are building, and you have the staff to run your project management office. It’s time to merge everything into a comprehensive system of guides, training manuals, and playbooks to ensure that your PMO team members have everything they need to make your PMO vision a successful reality.
8. Define the Reporting, Procedures, Processes, and Tools
The final step is defining the reporting, procedures, processes, and tools you need for your PMO. The project tools you choose will depend on your selected PMO model and the project resources already available in your organization.
Depending on the size of your PMO team and the available organizational tools, you may rely on manual reporting, or you may be able to utilize automated tools like reporting dashboards. While dashboards are a great way to get quick visibility into data related to your projects, don’t dedicate so much time and resources to developing dashboards that it takes away from other more important aspects of starting your PMO.
Take the Next Steps to Build a PMO
Congratulations! You’ve successfully created your first project management office. Now the real challenge begins: directing your PMO team to fulfill the goals set out in your initial PMO plan.
We hope this guide to creating a project management office has helped you better understand the process to start building a PMO of your own. To learn more, get in touch with us today!
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