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Currently, many organizations are operating with a "PMO" mindset. Whether they consciously transformed their operations to embrace the multi-project management philosophy, or they were forced to embrace the concept due to the evolution of their businesses, the PMO philosophy has emerged as an important aspect in the strategic thought process for aligning and delivering business products.

What is a PMO?
But what exactly is a project management office? At some point in our profesional tenure, we have all worked for a company that, at one point, was overwhelmed with the amount of customer demands; all managed by different individuals with their own idea of how and what products should be delivered. Not surprising, the probability of delivery success was very low due to inconsistencies and non- conformances.

The PMO is not to be confused with project management (PM). The project management office (PMO, or program management office) is the unit which monitors and reports on the performance of the portfolio of active projects. The PMO sets the tone, the discipline, the protocols, and the momentum for all approved projects. The first value proposition of the PMO is to ensure that all projects in the active portfolio are approved and fully aligned with the strategic goals and objectives of the organization. Secondly, the return on investment (ROI) potential of the project mix has been estimated to add positively to the bottom-line of the organization.

Besides providing artifacts and protocols for project management, the PMO works closely with each project manager, as a consultant and mentor, to ensure projects stay on track, while progressing within established baselines for delivery on schedule and within budget, as planned. Essentially, the PMO monitors the project portfolio, resource portfolio, and asset portfolio to gain a high-level analysis of overall performance. This analysis is discussed frequently with upper management to facilitate executive decision-making for the best selection of projects and balance in the mix that will meet strategic objectives and produce the maximum return on investment to the organization.

Defining the PMO in Organizations
The type of project management office implemented may differ in organizations due to their culture, business objectives, geographic dispersion, and the complexity of the projects. There are basically three (3) types of PMO structure that are currently embraced by most organizations. These three will be defined first. The fourth PMO structure is defined and contrasted, thereafter.

[1] The Supportive PMO
This is probably the most common structure due to its "hands-off" approach. This structure gives considerable authority to its project managers and project teams to enable them to deliver projects within estimates. There is no control over, or guidance offered to the project leaders, but support is provided through ongoing training, coaching, administrative requirements, and performance reporting. The chances of success are dependent on the leadership of individual project managers, and the influence of functional executives, having their own priorities in a siloed environment.

[2] The Controlling PMO
The controlling PMO displays a slightly more disciplined approach to project leadership. In many cases, support alone is not enough to keep projects within performance expectations. Controlling services include periodic reviews, project audits, performance assessments, and sometimes, corrective action. This means that the PMO has direct influence over the projects which may include risk management, quality standards enforcement, and communications channels. As a rule, upper management is very involved in this type of PMO. With this controlling approach, project managers may feel constrained due to lack of autonomy. Success is determined by how much cost containment efforts and adherence to task completion estimates can deliver projects as anticipated.

[3] The Directive PMO
The directive PMO is probably the least common structure. This is probably because most companies are designed with a function- oriented, or product-oriented organizational matrix structure. The directive PMO is a more authoritative structure providing not only project support and direction, but is also fully responsible for the day-to-day management of approved projects. Usually, this is a smaller environment having a few important projects. In this structure, while project team members may be located throughout the organization, project managers report directly to the PMO Director as staff of the PMO department within an organization. This projectized environment is not suited for the traditional organization, but rather a specialized development group. Success is determined by the experience and skills of the PMO operatives in managing larger and/or more complex initiatives.

[4] The Deliver Value Now PMO
The fourth and most recommended alternative to the traditional PMO structures is the Deliver Value Now model. In this approach, the PMO greatly empowers the project managers and serves as an advocate, a guide and a mentor for the project teams. The PMO is highly influential and relied upon by senior management for assistance with establishing and prioritizing a project portfolio that meets the strategic goals of the organization. This structure does not require the project managers and team members to report to the PMO, as a matter of fact, the PMO is more effective as consultant, trainer, and mentor for the teams. The PMO also operates at a higher level with key stakeholders in ensuring strategy success by fine-tuning the project, resource, and asset portfolios. Continuous communication between the PMO, functional managers, and project managers fosters the conditions necessary to successfully accelerate project delivery to meet the strategic objectives of the organization.

Conclusion and Rules of Thumb
The type of PMO structure an organization adopts depends squarely on its culture, PM maturity, and organizational structure. While the first three structures discussed are not the most highly recommended, they are the most common in existing organizations. The success of the PMO will be determined by the compatibility and effectiveness of the PMO structure chosen for the organization. Efforts to determine the most effective PMO for the company may be well served by considering the following arguments:

[1] It may be best to implement the Supportive PMO structure when introducing the PMO to an organization for the first time, or one having a very low project management maturity level. This will provide for smooth transition to the concept and foster acceptance due to the empowerment of the project teams.

[2] A Controlling PMO may be considered initially for an existing PMO unsuccessful in providing desired results. This approach may help to bring the projects in line. This PMO also ensures independent assessment, and direct impact on the quality of the project deliverables. The PMO can also implement best practices, standards, and tools to increase probability of project success.

[3] If the company is commited to a few, but risky important projects, the Directive PMO structure may be appropriate for this environment. This structure provides the PMO direct responsibility for project outcome, while allowing direct control over project resources. These characteristics may enhance the probability of success in project deliverables, but restrict creativity and flexibility in the process.

Regardless of the PMO structure chosen initially, the organization should plan to transition to a "Deliver Value Now" PMO as soon as possible.

[4] The Deliver Value Now approach is the PMO structure I recommend for any organization. This approach encompasses the best practices of the other three structures, and encourages others. Unlike the other structures, this PMO focuses on increasing throughput and reducing cycle time as opposed to cost containment and rigid performance schedules. It also stresses the importance of the strategic resource, and the need for good multi-tasking in order to accelerate project delivery, reduce cost and increase in ROI in a multi-project environment.

Our next article discusses how to establish a successful PMO with the Deliver Value Now model.

References:
Recommended reading for more insight and discussion on the Project management Office value proposition:
Gerald I. Kendall, PMP & Steven C. Rollins, PMP 2003; Advanced Project Portfolio Management and the PMO, J. Ross Publishing
Jean Brittingham; Aligning project Delivery for Success in a Program Management Environment, CH2M HILL
Michael Thirty, 2006; The IT PMO: What is it Really Managing? www.pmforum.org
Russ Martinelli & Jim Waddell, 2007; Program Management: A Framework for Collaboration; Program Management Academy