What is a PMO? How does a PMO differ from a project management team? Does the ‘P’ stand for Project? Program? Or Portfolio?

A PMO is an organizational entity that provides structure, support and governance for managing projects or initiatives in an organization – its mandate most typically include Standardization, Resource Management, Governance, Performance Tracking & Reporting, Best Practice dissemination, Portfolio Management.

Specific functions of a PMO can vary depending on the organizations, size, structure, industry and the maturity of the PMO – some PMO’s will have a more strategic mandate focused on strategy and functional alignment while others will have a more operational focus handling the day-to-day running of projects.

A PMO is a Project Management Office, a Program Management Office, or a Portfolio Management Office ? – its remit is to oversee a set of initiatives and add value by providing standardization and governance.

The differences between the three types of PMOs are really about scope and altitude:

• A Project Management Office operates at around 5,000 feet  with a scope of a single large or several small or medium projects – it provides standard specifications on how projects are run and reported on.
• A Program Management Office operates at 10,000 feet, with a scope of a set of related projects – it starts to integrate different workstreams and connect the dots between projects and has a lot of cross-functional interfaces to align.
• A Portfolio Management Office operates at 20,000 feet, with the widest view across the entire project portfolio– it creates order out of the chaos of leading many different initiatives by providing a comprehensive view across the organization’s project portfolio.

When should a change management office be different from PMO?

In an ideal world, change management should be fully integrated into the DNA of the PMO – it’s not seen as a separate workstream or checkmark activity, but rather a core competency that every project manager brings to the table. Building that organizational muscle is key. Without it, you run the risk of building something that looks great on paper but doesn’t actually get adopted or drive results.

For complex transformations, have a dedicated Change Management office, or a hub and spoke model –  you can have a dedicated office working hand-in-hand with the PMO to provide deep expertise and focus required to really drive adoption and behavior change. Or, you can embed change management experts directly into the project teams, with a light-touch centralized group that provides standards and guidance. This can work well when you have a lot of different types of projects going on and need a more distributed approach.

What value can a PMO bring to an organization? How do they improve the completion of key initiatives?

PMOs introduce standardization – they ensure projects across the company are run, reported on, and governed in a consistent way. This creates order out of chaos and allows leadership to view initiatives through a similar lens.

The PMO helps start projects, manage them, get resources, communicate, and eventually wind them down – that discipline can benefit any company, regardless of size. You may not have the headcount for a dedicated PMO in a smaller organization, but the mindset is still important.

PMOs enable critical governance – in most organizations, there are more project ideas than time and resources to execute them. A PMO provides necessary governance to prioritize what gets done based on strategic value to the business.

PMOs serve as a clearinghouse for collaborative work – they act as a central coordination point for all significant projects happening across the company. This allows the PMO to connect the dots between initiatives and spot synergies or overlap.

PMOs surface improvement opportunities – by having cross-functional visibility, the PMO is uniquely positioned to identify opportunities for process enhancements that span beyond a single team or department.

What types of companies are good fits for a PMO?

Any company with meaningful ongoing change can benefit from a PMO – even companies that are just in maintenance mode and dealing with break/fix work can leverage a PMO. It doesn’t mean you need dedicated PMO people in that scenario, but having that dedicated thought process around managing projects from cradle to grave is valuable for any company.

Large organizations can have more than one PMO and specialize them by area – you can have an IT PMO, a marketing PMO, an M&A PMO, etc. This enables aligning targeted expertise and oversight to projects across the organization.

What are signs that help leaders build the case for creating a PMO? 

The greater the volume of projects or initiatives, the greater the need for a PMO – people within the organization will start to feel like they are drinking from a firehose and there is too much going on. That’s when it becomes evident that having a PMO to provide some order and oversight becomes very appealing.

If there are competing demands on the same resources across different projects – a PMO can help with prioritization of these resources. The PMO can look at which projects are going to provide the most bang for the buck and ensure the right resources are being allocated to them.

In most organizations, the value proposition of a PMO should really sell itself – it provides visibility into what is going on, a centralized point of contact for flagging and resolving issues, and a common language and set of expectations around project updates and statuses. When done well, it makes everyone’s life easier.

What kind of projects or initiatives can a PMO take on? What isn’t a good fit?

Projects with a significant change impact Change management initiatives are prime candidates for PMO oversight – especially when they span multiple departments or business units. The PMO can ensure all the moving pieces are coordinated and that the change is being implemented consistently.

Any strategic, enterprise-level projects should have some PMO involvement – things like a new product launch, technology implementation, entering a new market, or standing up a new business unit. These are often complex efforts that require cross-functional coordination, which is where the PMO thrives.

Projects that only impact a single team or functional area – are less likely to need heavy PMO support. There are still benefits to having the PMO engaged to provide status tracking and standardization, but it won’t necessarily be driving those initiatives day-to-day.

Building a PMO

How should organizations approach outlining the scope of work for a PMO?

Leadership needs to have buy-in and alignment – what are the goals and objectives of the PMO? What are the kinds of projects that will fall under its purview? Which ones are out of scope? Getting that clarity up front is critical.

Have an alignment session where you define the swim lanes for the PMO – put a stake in the ground that says “These are the kinds of projects we will support and here are the types of decisions we will help enable.” That scope can evolve over time but it’s important to start with a clear mandate.

Some of the capabilities you want to gain agreement on include:

• Process improvement
• Standardized reporting
• Resource management
• Project plan templates
• Tracking and metrics
• Status updates and communication

Think of the PMO as a toolkit that you don’t have to use all at once -decide which tools are most important for your organization at its current maturity level. Maybe you just need the reporting tool at first, or maybe you want a heftier PMO that has input into resourcing and more control. It should be fit-for-purpose.

Where should a PMO sit? Where should it report to?

PMOs can reside within a functional area or across functions – for example, it could be in IT or it can sit outside the functions in more of a strategic or transformational capacity. PMOs can report into Strategy, a Transformation Office, or even into the Office of the CEO. Where it sits depends on what is the best fit for that company.

Regardless of reporting lines, the PMO should operate horizontally across the organization rather than being siloed – most projects of significance are going to impact multiple areas of the business, so the PMO needs to bring people together. What’s important to Finance might be different than what is important to Marketing, and the PMO can reconcile those different points of view.

Strategic projects run through the PMO should report into the C-suite – initiatives that are critical to the future of the company should have that top-down sponsorship and visibility.

PMOs commonly evolve from standalone entities to practices embedded in the business’s fabric – the processes and tools become second nature and get adopted by the functional teams rather than being imposed from the outside. Center of excellence type PMOs often have a goal of working themselves out of a job by building organizational capability.

How should you staff your PMO? How does it change depending on the PMOs purpose?

Functional Experts to measure and track value and cost are essential within the PMO – particularly if one of your mandates is to help track and realize business results. Someone with a strong finance or accounting background who understands the P&L is going to be important. They can help validate if the projected benefits of projects are actually being captured.

For PMOs leveraging project management software and tools should have an IT resource – it can be someone from IT or someone with a strong systems background. Administering and getting the most out of project management tools is a specific skill set, and the tools are only as good as the people who are using them.

It’s critically helpful to have someone with their PMP certification or deep expertise in formal project management methodologies – they can help determine which of the many various PM tools and techniques are the right ones to standardize on for your organization. The PM Book of Knowledge (PMBOK) has hundreds of tools and frameworks to help guide projects, so you need someone with the experience and judgment to pick the most appropriate tools for the job. There’s a very thick book with 3,000 different things you can draw from, so you need someone who can navigate that and pick the appropriate tools for the job.

The size and composition of the PMO team can vary significantly and can include both fulltime and part-time resources  ranging from 1-10 people – this is based on the size of the company and the nature of the projects you are supporting. The key is to staff it based on the PMO’s strategic remit, workload and the importance of what is coming through the pipeline.

What role does technology play in the operations and effectiveness of a PMO?

At a minimum, you need a tool to manage your project plans and track status – it could be as simple as Excel and PowerPoint for very basic PMO needs. As you get bigger and more sophisticated, purchase purpose-built project and portfolio management software. Many great tools exist to manage everything from project intake to resource allocation to real-time status tracking and reporting. Tools like Smartsheet, Monday.com, and Workfront are all popular choices. For IT projects, tools like Clarizen and ServiceNow are common.

A new wave of tools is purpose-built for private equity portfolio company PMOs – tools like Maestro and Midaxo have pre-built templates and workflows for things like 100-day plans and value creation initiatives. They can be very helpful for PMO’s handling M&A.

PMO Projects

How does a project go from idea to completion?

The PMO should define a standard intake and stage-gate process -for how projects are born, evaluated, and ultimately approved and launched. The goal is to have a well-understood path for how an idea becomes an initiative.

Typical PMO Project Progression
Step one:	Ideation and intake – the PMO gathers potential project proposals from around the organization. These should be high-level concepts at first, not fully baked business cases. The PMO may do some initial screening and prioritization to decide which projects  move forward.
Step two:	Sponsor assignment, discovery, and planning – this is where the real business case gets built out. What is the problem we are trying to solve? What are the potential solutions? What are the expected costs and benefits? The PMO usually provides some consulting support and templates to guide this, but the bulk of the work is done by the project team.
Step three:	Approval phase – the PMO usually has a governing body or steering committee that reviews the case and greenlights projects to move into execution. This is the official stamp of approval that signals time and resources will get invested.
Step four:	Execution and delivery phase – the PMO is monitoring progress, tracking milestones, and helping remove any blockers. There are usually regular stage-gates or checkpoints along the way where the project gets revalidated.
Step five:	Once the project is complete, the PMO facilitates a closeout and lessons learned process – it’s a review of intended results and outcomes—what went well and what could we have done better? Then the PMO undergoes a formal transition from project mode back into operational mode.

The PMO will evolve over time – PMOs may start out very focused on one specific initiative or transformation and then once that is complete they have to re-invent themselves to stay relevant. They might shift from being a delivery arm to more of a center of excellence and best practice sharing function. Or they take on more of a strategic planning role rather than hands-on project management.

How do you ensure that the PMO prioritizes projects and initiatives that align with company objectives?

Governance practices should ensuring alignment between the PMO and the broader org:

• The PMO should facilitate a regular cadence of project review and prioritization discussions – they should bring key decision makers together on a quarterly or even monthly basis to review the current project portfolio and make any necessary tradeoffs or changes in direction.
• Compile a master list of every project that is going on across your organization – ask “What are the ones that are truly critical and need to be resourced appropriately?” It won’t be an easy conversation, but it’s critical to have. It provides much better clarity on where you’ll need to be spending your time and energy.

The PMO needs to lead prioritization conversations and be seen as a strategic partner to the business -sometimes that means playing bad cop and saying no to certain projects. But that’s all in service of ensuring the company is focused on the things that really matter. It can’t just be a box-checking exercise.

How should the PMO communicate to both investors and the executive leadership team?

Establish a regular cadence of project status reporting and communication -this is one of the most important things a PMO can do. Arm leadership with a clear and consistent view of how initiatives are progressing, where there are risks or roadblocks, and what decisions need to be made. The cadence that is right for your organization will be a function of many variables, but typical ones include :

Cadence	Communication
Weekly or bi-weekly	Develop a standard template that each project can use to report status – it should be a crisp one-page dashboard that can be consumed quickly. Green/yellow/red indicators are helpful to draw attention to the areas that need it most. Make sure these updates are shared on a predictable schedule.
Monthly	Schedule deep-dive review sessions for your most important projects – this is the chance to get into the details of what is going on beyond just a status report. It’s an opportunity to re-validate priorities, discuss key milestones and dependencies, resource constraints, budget issues and brainstorm solutions to any challenges the team is facing.
Quarterly	The PMO should pull together a holistic report on the project portfolio – it should address how you are tracking against your strategic objectives, what value has been delivered so far and what is still to come, pending decisions, and needed support. This is your chance to tell the story of how the PMO is moving the needle for the company.

With investors, this cadence might be less frequent – but the content is largely the same. They want to know that their money is being put to good use and that the PMO is on top of the things that matter most to them. Tailor your communication to their areas of interest and don’t bombard them with too much tactical detail.

How can the PMO influence contributors without having direct authority?

Influencing without authority is an important skill for any PMO leader – because often the resources you are trying to marshal and align don’t report to you directly. Building strong relationships and partnerships gives the PMO influence. If you have the trust and respect of the functional leaders, the project managers, and the executive sponsors, you can drive a lot of change. But it’s not something that happens overnight; it has to be earned.

Factors that can improve the PMO’s credibility include:

• A crisp definition of the PMO’s role – and how it helps the business achieve its objectives. When there is alignment up front on what the PMO is there to do, it’s much easier to get buy-in and cooperation. You aren’t fighting as many political battles.
• Standard processes and reporting templates – when there is a consistent way of doing things that everyone understands, it greases the skids. People are generally happy to comply if it’s clear what’s expected and it doesn’t create extra work for them.
• Emphasizing value-add, not just becoming an administrative burden – when you can demonstrate that the PMO is helping drive real business results and making people’s lives easier, they are much more willing to come along for the ride.

What are the key performance indicators (KPIs) that a PMO should track and measure?

At a high level, every PMO should be tracking some combination of operational, financial, and stakeholder measures – the specific metrics will depend a lot on the nature of the PMO and what it has been chartered to do. A PMO that is focused purely on project delivery is going to be looking at different KPIs than one focused on business transformation. The measures should be tailored to the mandate.

Operational Metrics	• Schedule variance – are projects being delivered on time? • Resource utilization – are we using our people effectively? • Quality – are projects meeting their requirements and specifications? • Risk and issue resolution – how well are we identifying and mitigating risks?
Financial Metrics	• Budget vs. actual spend • Benefits realization – are we achieving the intended ROI? • Portfolio ROI – what is the aggregate impact of all projects?
Stakeholder Measures	• Customer satisfaction – are the end users happy with what is being delivered? • Leadership confidence – do executives feel the PMO is adding value? • Team engagement – are project team members motivated and bought in?

Lean on a mix of leading and lagging indicators – you want some metrics that give you early warning signs if a project is going off track, and then others that let you know if you were ultimately successful after the fact.

Every PMO should track and report on a metric around actual business results – it’s not enough to just deliver projects on time and on budget. The PMO’s job isn’t complete until those projects achieve the outcomes they were put in place to achieve. That’s why 

What are the most important things to get right?

Get crystal clear alignment on the remit of the PMO from the very beginning – what is it there to do and just as importantly, what is it not going to do? Investing the time upfront to agree on scope and success measures with leadership is vital.

The PMO has to be laser focused on driving real business value – it’s not just about checking boxes and following a methodology. It’s about making a meaningful impact on company performance. Tracking and communicating that impact is an important part of the job. Don’t focus more on templates and compliance than actual results. You need good hygiene and processes. But if the PMO is seen as just a giant checklist, it quickly loses credibility. Always tie your activities back to the “why” and the business outcomes.

Get the right team in place – the PMO needs a mix of skill sets, from hard core project managers to folks who can be strategic thought partners and influencers. Don’t underestimate the importance of strong leadership. The person running the PMO sets the tone for the whole function.

Determine the right level and type of process for your organization’s culture and maturity – what works for a startup is going to be different than what works for a Fortune 100. The PMO needs to meet the business where it’s at while still putting enough structure in place to be effective. It’s a balancing act.

What are common pitfalls?

Trying to boil the ocean and take on too much too fast – PMOs sometimes try to roll out a whole new methodology and suite of tools right out of the gate without getting buy-in. It’s the classic “PMO as dictator” trap. Start small, build momentum, and then expand.

Lack of senior leadership support – if the top of the house doesn’t buy into the value of the PMO, it’s going to be an uphill battle. Building those C-suite relationships early and often is critical.

Many PMOs struggle with resource management – either they are chronically understaffed, or they have folks sitting on the bench because they are clinging to headcount. Being smart about how you flex resources up and down based on demand is an important part of running an efficient PMO.

Misalignment between the PMO and the functional groups – If you have the business going in one direction and the PMO going in another, that’s a recipe for disaster. The PMO needs to be tightly integrated into the business planning cycle and decision making.