Increasingly we see the Project Management Office (PMO) evolving beyond an administrative function to one that is strategic in nature and more closely aligned with the delivery of key business objectives. As the pace of business increases and with it the expectation of faster returns on investment, the PMO is now being recognised as playing an important role in delivering business value.
Here’s why PMO’s are so important, the challenges they face, and why you need to understand the type of PMO you should consider.
Why are PMOs so important?
Most organisations have significant budgets and outcomes tied to their project investments, some formally managed inside a PMO, but a significant amount of others being run as part of ‘business as usual’. In today’s business climate, with the growing need to manage dispersed workforces and respond to changing business needs, here’s why PMO’s are so important:
- Align project spend to strategic goals and communicate this to the wider business
- Determine and prioritise high level initiatives against organisational objectives
- Assist execution teams to provide consistent and timely outcomes (projects, programs & BAU work)
- Ensure compliance with corporate governance and provide accurate data to executives
- Create capability to pivot quickly and effectively to meet changed business needs
- Evaluate the success of initiatives, providing best practices and standards for all future initiatives
- Achieve strategic goals, providing tangible, repeatable, long-term benefits to the business
Types of PMOs
As you consider the structure of your PMO, you need to clearly understand the role you want it to play. Generally, there are 3 types of Project Management Offices seen in organisations as described by Gartner:
Project Management Office (PMO)
For a business running a ‘traditional’ PMO, this generally refers to a governing body that helps projects to be planned and executed in a consistent manner, providing business process consistency in solving problems and focusing on bringing in projects on scope, on time and on budget.
Strategic Project Management Office (SPMO)
When a business commits to an SPMO, the focus is more than consistent project delivery. An SPMO will help a business to realise the strategic roadmap of their organisation by aligning all project and portfolio initiatives towards achieving strategic goals.
Enterprise Project Management Office (EPMO)
An EPMO governs all projects within an organisation, whilst typically being more orientated to delivering the overall business strategy. At the enterprise level, they will strive to enable digital transformation and the switch to more agile mindsets. Depending on the size of the organisation, Departmental PMO’s will often report into the EPMO.
So, how do you know which PMO structure is right for you?
Sensei recently held a webinar on “Driving an Effective PMO Function”, which you can watch on-demand here.
As part of the webinar there were over 50 responses to the question – ‘What PMO do you have?’ 43% of attendees selected they were working in a PMO, 35% advised they formed part of an EPMO, 6% chose the option that they were involved in an SPMO, whilst 16% selected that they don’t currently have a PMO function.
While the traditional PMO function is still the most prevalent, EPMO’s are growing at a fast rate as organisations look to manage and leverage their initiatives more effectively, with SPMO’s emerging in response to the changing business and economic landscape of the last 18 months. If your business is looking to implement a new PMO function, or you are managing a PMO transition, it’s important to understand the differences in PMO structures and choose the function that aligns with your business processes and objectives.
|EPMO & PMO Function||SPMO Functions|
|Standardising processes such as new project intake, scoping change requests and providing project status updates||Participates in the selection of corporate strategic OBJECTIVES and Key Results|
|Outlining best practices for project management – operational||Agile approach to changes in the organisation with the need to prioritise|
|Limited influence on resources and decisions outside the realm of its projects||Building the common foundation of objective prioritisations|
|Developing training for project managers||Assists executives to track strategic goals and PM(O)’s with executing the appropriate initiatives|
Regardless of the function selected, at the heart of any project management structure, there needs to be a PMO leader who understands the ever-evolving landscape in which the PMO operates. They must continuously evolve their PMO to be a proactive, strategic function aligned to the goals of their organisation to support the achievement of both business value and adaptive, continuous and compliant delivery.
Talk to a Sensei PPM expert today to find out how to best manage and prepare for your businesses growth, through the right PMO function.