Establishing Project Management Office (PMO)

Step by Step 

The first step to establishing a Project Management Office (PMO) is to determine your organization’s needs. The Project Management Institute’s (PMI’s) project portfolio management framework breaks down the three levels of work (project, program and portfolio) into 12 process groups that contain 92 processes relating to the management of knowledge areas. Examples of PMI processes/components include a project charter, project plan, work breakdown schedule and cost estimate. 

Begin by defining and implementing an end-to-end project management process. This requires implementing a flexible project management process and basic tools for project planning and reporting. 

PMO leaders should devote resources to developing competent project managers through formal training, coaching and mentoring. Not all projects require the same level of experience. Use a mix of internal and external hires, contractors and external service providers to allow for staffing flexibility. 

Once best practice basics are in place, the PMO has demonstrated improvement in project delivery and the office has gained credibility, it is beneficial to consider broadening the PMO’s scope beyond project management to program management and portfolio management. This will help mitigate business risk. 

Determining Your Organization’s Maturity Level 

Perhaps you have already established a PMO on some level. The road to project portfolio management maturity starts with recognizing the problem and its affect on business improve processes.

Level 1 is the Reactive Project Management stage where methods are undocumented and delivery, budgets and schedules are uncontrolled. 

At this basic level, PMOs need to establish methods for project scheduling, time tracking, resource assignments, project tracking, oversight & support, and perhaps use an automated project dashboard to track project success. 

Level 2 occurs when companies begin adopting Repeatable Processes. The main project management processes have been defined, but not constantly used. Still, project teams find it difficult to repeat earlier successes, and the project still risks exceeding budgets and schedules. 

At this established phase, PMOs should automate project budgeting, risk and issue tracking, requirements tracking, resource management. 

Level 3 PMOs show a commitment to Proactive, Standardized Project Management. They employ documented standard project management and delivery processes, and consistently use these processes companywide for project delivery. 

In this growth phase when these new tasks are mastered, the PMO can focus on automating other functions such as financial management and business process modeling. 

Level 4 PMOs demonstrate Measured Project Management. Quantitative key performance indicators have been specified for project success and are monitored frequently. The PMO has achieved predictable and controllable project delivery, and is now free to become more innovative 

At Level 5, the most mature PMO enterprises continuously improve project management. At this level, the connected PMO can focus on automating vendor management, collaboration through social networks and blogs – and communication through text, IM, video or mobile. 

These PMOs should produce predictive analysis dashboards and reports, and manage business processes.