The objective of a project management office (PMO) is to ensure that projects are delivered within budget and on schedule which in turn provides an opportunity for organizations to be effective and efficient in their line of business. The establishment of an effective PMO model is beneficial to any organization which manages a portfolio of projects. When planning and building a PMO model, it is imperative that it is done in a manner which compliments the existing structure of the organization. This will allow the company to gain maximum benefit. Since every organization is different, the optimal structure for the PMO must be designed based on many considerations and variables. PMO strategy offers a well-defined methodology along with templates, dedicated project managers, a knowledge base, metrics, and standardized tools. The result being that project estimation, scheduling, and risk mitigation are more consistent.
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There are at least three models for implementing a PMO:
The Supportive PMO : The supportive PMO generally provides support in the form of on-demand expertise, access to information, and expertise on other projects, and the like. This can work in an organization where projects are done successfully in a loosely controlled manner and where additional control is deemed unnecessary. The PMO is primarily a support service that collects, compiles, and reports on information. Outsourcing the coordinator role in your organization is both low cost and quick to implement. The value of this decision is often more difficult to quantify than in some other models.
The Governance PMO : This model assumes that the PMO is responsible for defining and controlling use of methodologies, standards, templates, and policies related to project delivery. This is where many companies get stuck when trying to implement an effective PMO with internal staff. It makes sense to leverage the proven methods and best practices that a provider can bring.
The Directive PMO : With this model, the PMO is accountable for the project management function within the company and responsible for providing program and project management resources to run projects. This role, coupled with the governance model, typically provides the best value for your investment. This type goes beyond control and actually takes over the projects by providing the project management experience and resources to manage the project. As organizations undertake projects, professional project managers from the PMO are assigned to the projects.
PMO As Service Managed Service Advantage
As with other forms of outsourcing, PMO outsourcing improves operational efficiency and reduces costs. The outsource provider is entirely focused on the task at hand and understands what it takes to effectively implement and run a PMO. They also have subject matter expertise to build standards and methods that form a flexible framework while also producing predictable and measurable outcomes quickly. While talent identification and acquisition is a growing issue in most PMO, by outsourcing, this risk is mitigated.
Another advantage is in the cost avoidance associated with failed projects: projects that implement the wrong solutions, those that take longer than planned, or others that are over budget. When these duties are left to internal staff who are typically pulled in several directions, the output is less successful. Perhaps the best strategic advantage is that now you are free to focus on your business core competencies and leave the rest to others. In this way the PMO startup can bring success immediately. Finally imagine being able to hold internal staff to a rigorous service level agreement (SLA) with financial and contractual penalties for missed metrics. Since this may not be feasible, focus your attention instead on defining SLAs with your PMO partner. The SLA should have strict guidelines for managing scope, quality, budget, schedules, and other risks. The benefits of outsourcing your PMO are plain to see and we encourage you to consider it for your organization.
- Direct end-to-end project support from a project management team that takes full control and responsibility for the project
- Indirect support through the adoption of project management methodologies, templates and tools and the provision of project execution assistance
- Education on the use of the processes, templates and project workspace; coaching on individual projects and assistance in addressing challenging projects
- Development, maintenance and storage of project templates and/or project documentation