Since 2008, the correlated PMO implementation failure rate is over 50% (Gartner Project Manager, 2014). It is therefore crucial to find out what type is adequate for my company. In fact, there is no ‘one size fits all’ solution. An effective PMO is one that both meets the demands of today and adapts to those that may arise tomorrow. To define the mission and function of our PMO we should consider the standard models on offer and assess them based on the unique needs of our business. That way we can determine which PMO best suits our reality.
Since no two businesses are exactly the same, the design process is bound to vary from organization to organization
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2 different types of PMOs
In the eBook Roadmap to define your own Project Management Office we described the widely accepted types of PMO: ‘weather station’, ‘control tower’ and ‘resource pool’. In this blog post, instead of using those terms, we will draw a distinction between strategic and tactical PMOs.
- A strategic PMO measures – and ultimately determines – how a project drives forward corporate strategy.
- An operational or a tactical PMO is more focused on the success of individual projects.
An operational or a tactical PMO will ensure projects deliver their expected value. Strategic PMOs go beyond this to play an active role in planning strategy and will monitor and evaluate projects against the company’s strategic plan.
3 variables to help you determine what type to select
1. The organizational maturity
A mature organization has clear and established processes, executed by staff trained in those procedures. The holy grail in business excellence is when your people know what they are doing and are constantly striving to improve. If your company is one of the lucky ones with a high degree of maturity, then implementing a strategic PMO should work like a charm. Organizations with a lower maturity level (and don’t worry there are plenty of those!) would be better off concentrating on the basics and introducing an operational or a tactical PMO.
2. The nature of the business
In practice, all organizations manage projects, whether they know it or not. What does your company do day-to-day? In other words, what is the nature of your business? Spend some time considering if the efficient management of projects is key to the success or failure of your company. The greater the impact of projects on the business, the more need there is to introduce a strategic PMO. For example, an organization that is running cross-functional business transformation projects is crying out for a strategic PMO in contrast to organizations with discrete unrelated projects.
3. The management model
What is your company’s management model? If management is project-based instead of/or in combination with other models – eg management by objectives – it makes sense to implement a strategic PMO, since this PMO model highlights the relevance of projects to the organization. If the managing board is closely involved in the definition and delivery of projects, then this is fertile ground for the strategic implementation of the PMO. On the other hand, if the board’s involvement with the project portfolio is limited, this means projects are less relevant to the business – in this case, choosing an operational or a tactical PMO is the best option. If you want the PMO to have managerial – rather than operational – functions, then you should opt for the strategic PMO model.
Does the PMO have the power to “kill” a project?
In a strategic PMO
If the answer is ‘yes’ or the PMO can make this recommendation to the board then it is strategic in nature. That means the PMO
- understands the business,
- is aware of the resources in use and
- understands the value added by each project.
To sum up, the PMO has the information needed to make informed choices.
In an operational PMO
If the answer is ‘no’, then the PMO should be operational (providing administrative support to projects, support to the reporting mechanisms in place, and guiding project leaders) or tactical (managing the methodologies, resources and tools). There is no merit in choosing one type of PMO over another. One is not necessarily more complex than another; they just fulfill different needs. Not every company requires a strategic PMO. We cannot stress this enough. If what your company needs is a tactical PMO then stick to that! Don’t overcomplicate life. In contrast, if a strategic PMO is required then you may want to establish a tactical one as the first step.