Building PMO Capability

Introduction

The Project Management Office (PMO) plays a critical role in modern organisations, serving as the backbone for successful project delivery and strategic alignment. Building PMO Capability is an essential component for business success. However, a PMO does not simply appear and exist – a PMO must start somewhere, often to satisfy an organisational need at a point in time, for example to support a specific transformation initiative, or to provide reporting coordination. Also, a PMO’s value isn’t static; it must continuously evolve to meet the changing needs of the organisation and its projects. Ideally, a PMO’s value increases over time as the delivery environment grows and matures. Finally, as most people that have worked with PMOs realise, there is no ‘one size fits all’ PMO that guarantees success. It’s no wonder building a PMO can seem daunting!

This white paper explores the essential steps and considerations for evolving and uplifting your PMO, all the way from establishing fundamentals to becoming a strategic partner within the organisation.

Why Have Any PMO?

The purpose of a PMO extends beyond mere oversight; it is about creating operational efficiencies, ensuring the realisation of strategic goals, and delivering measurable outcomes. In other words, a PMO can be a value generator for an organisation by enabling effective delivery.

A simple way of understanding the value of a PMO is captured in the following 4 ‘are’s’:

• Are we doing the right things? (are we selecting initiatives that align to strategy and are balanced across organisational priorities)
• Are we doing them the right way? (are we selecting and applying frameworks and controls that are fit for purpose for each initiative at hand)
• Are we getting the initiatives done? (are we making successful progress in delivering and implementing initiatives, including governance of project variations, changes of priority, and timely interventions on troubled initiatives)
• Are we achieving the benefits? (are we achieving the outcomes and benefits that justified the initial funding allocation, and thus contributing to organisational outcomes)

It is important to think about the value of a PMO, and design with the end in mind. Your stakeholders will understand your PMO better (and hopefully thank you when the value is apparent).  

Understanding PMO Best Practices

Before considering a PMO or deciding to acquire a PMO as an outsourced service, its important to understand what a PMO can provide to an organisation, and from this list of possible functions and services decide on those services that will add the highest value. This section establishes the context for any PMO with the intent of demonstrating that there is no ‘one-size-fits-all’ when it comes to PMOs.

The foundation of a successful PMO lies in selecting from, and adhering to, established PMO practices. According to PeopleCert / Axelos’s P3O framework, which is regarded as a leading industry standard, a PMO is defined as “the decision-making and support business model for all business change within an organisation.” This encompasses a variety of structures—single or multiple, physical or virtual—and integrates with governance and other corporate functions.

Some key aspects a PMO may consider in determining which functions to provide include the following:

• Level of Decision-Making Facilitation and Support: The PMO can facilitate informed decision-making across the portfolio, program, and project levels, ensuring alignment with strategic goals. The PMO might help facilitate decisions, even if others make the decisions!
• Central and Localised Functions: PMOs can operate through a combination of centralised oversight and localised execution, providing flexibility and scalability. What geographic coverage does the PMO need to consider?
• Integration with Other Governance: Effective PMOs are often integrated into the organisation’s governance structures, ensuring that project activities align with broader business objectives. How much integration is required?

With those aspects considered, now it’s time to think about which functions the PMO actually provides.

Potential PMO Functions

According to PeopleCert / Axelos there are 3 broad groupings of PMO functions that may be considered for a new or evolving PMO. These are: Strategic Planning / Portfolio Support, Delivery Support, and Centre of Excellence.

Grouping	Sub-Functions
Strategic Planning / Portfolio Support	1.1 Portfolio build, prioritisation, analysis, reporting 1.2 Program / project setup and closure 1.3 Stakeholder engagement and communications 1.4 Planning and estimating 1.5 Capacity planning and resource management 1.6 Benefits management 1.7 Performance monitoring
Delivery Support	2.1 Planning and estimating 2.2 Monitor and review 2.3 Reporting 2.4 Risk management 2.5 Issue management 2.6 Change control 2.7 Finance 2.8 Commercial quality assurance 2.9 Information management 2.10 Transition management 2.11 Secretariat
Centre of Excellence	3.1 Standards and methods 3.2 Internal consultancy 3.3 Organisational learning and knowledge management 3.4 People and skills

At this point, it’s a matter of working out what sub-functions are needed, ideally by asking your stakeholders about what’s important to them. This will hopefully be that start of a long and fruitful relationship with those stakeholders, and the best way to start the partnership!

Now that we have established what value a PMO can provide, and what functions it might include, where do we start? And what is a logical sequence of functions and services to build upon?

PMO Evolution: A Strategic Pathway

PMO establishment, followed by ongoing evolution, can be categorised into four stages, each building on the previous to create a more integrated, mature and valuable entity.

Stage 1: Establish Fundamentals

The first stage is about laying the groundwork. This involves:

• Defining Scope and Success: Clearly articulate what the PMO will do and how success will be measured. This is typically documented in a PMO Charter. The PMO Charter also becomes a communication tool for engaging with current and future PMO stakeholders.
• Stakeholder Engagement: Building relationships and partnerships with stakeholders is crucial. Regular communication ensures that the proposed PMO’s value is understood and appreciated.
• Formalising Sponsorship: Executive sponsorship is vital for the PMO’s legitimacy and influence. It ensures that the PMO’s functions are aligned with the organisation’s strategic priorities. It also helps ensure that PMO functions are not avoided or ignored because they are perceived to be inconvenient – for example, preventing or reassessing a project that is seen as locally important, but not strategically important enough to warrant funding.

Stage 2: Evolve and Scale

Once the fundamentals are in place, the PMO can begin to scale its operations:

• Review and Refine: Continuously review the PMO’s scope and success criteria, making adjustments as necessary.
• Build Robust Data: Data is the lifeblood of a PMO. Developing robust data management processes allows for better decision-making and more accurate reporting. Data and processes are important prerequisites to considering any tools to support a PMO.
• PMO Tool Implementation: At this stage, consider whether a tool is needed to support scalability. However, remember that a tool should complement, not drive, PMO processes. Further, a tool will not by itself solve issues with data or processes – a tool is not a silver bullet.

Stage 3: Evolve to a Trusted Partner

As the PMO matures, it should aim to become a trusted partner with the business and generally with senior stakeholders:

• Review and Refine: Continuously review the PMO’s scope and success criteria, making adjustments as necessary.
• Deepen Stakeholder Trust: Achieve a deeper understanding of the business and its needs. Two-way engagement is critical. If the PMO understands the business it can contribute to informed decisions about priorities, scope, approach and other delivery components.
• Implement Advanced Tools: If not already done, this is the stage to implement or integrate tools that support the PMO’s growing needs. This tool integration may include solutions with Finance, Risk, and Strategy business functions.

Stage 4: Evolve to a Strategic Partner

The final (and most value adding) stage is where the PMO becomes a strategic partner, and is fully appreciated as a value creator:

• Strategic Decision-Making: The PMO is now empowered to make strategic decisions and contribute to the organisation’s roadmap.
• Focus on Strategic Planning: The PMO’s role extends to strategic planning, ensuring that the organisation’s project portfolio aligns with its long-term goals.
• Seat at the Executive Table: At this level, the PMO is involved in high-level discussions and decision-making, contributing directly to the organisation’s strategy.

PMO Uplift: Continuous Improvement

If a PMO has already been established, and the question at hand is ‘where do we go from here?’, the 4 Stage model described above can still be applied. The first step is to determine how mature the PMO currently is, and by revalidating the functions of the PMO in response to the current environment.

On top of this, there are a number of other continuous improvement considerations:

• Adherence to Standards: As the PMO evolves, adherence to agreed-upon standards and processes becomes increasingly important. New standards may be required, or existing standards may need to be adjusted.
• Organisational Change Management: The PMO must remain flexible and responsive to changes within the organisation, whether it’s restructuring, merging, or scaling down.
• Inter-PMO Collaboration: In larger organisations, multiple PMOs may exist. Ensuring that these PMOs collaborate and avoid duplication of efforts is key to overall success.
• PMO Team Management: People change jobs, or want to grow their responsibilities, or resign, or need a change. A PMO needs to evolve in response to team change. The effectiveness of the PMO may be compromised by insufficient focus on managing the team and provide suitable pathways for growth.

Overcoming Common Challenges

The journey of PMO creation or evolution is not without its challenges. Common hurdles include:

• Limited Sponsorship: Without strong executive support, the PMO may struggle to influence key decisions. Building and maintaining this sponsorship is essential.
• Ingrained Culture: Resistance to change is a significant barrier. The PMO must work to shift perceptions and demonstrate its value. Executive level support of the rationale and ongoing function of the PMO (often via the PMO Sponsor) alongside strong PMO relationships with stakeholders reinforces the message that the PMO is a fundamental component of the organisation.
• Lack of Quality Data: Without accurate data, decision-making becomes subjective. The PMO must prioritise data quality and integrity. This may involve working with project teams and other project stakeholders to provide accurate, timely and standards-based data for collation and further analysis and insight.

Leveraging PMO Tools

A common question from customers is what tools should a PMO use, and how quickly can a tool be implemented. Tools can significantly enhance the efficiency and effectiveness of a PMO, but they should be implemented thoughtfully:

• Focus on Processes First: Tools should support existing processes, not define them. The PMO should start with available data and gradually improve it.
• Treat Tool Implementation Like a Project: Tool implementation should follow a structured project approach, with clear requirements, design, and change management processes.

Measuring Success with PMO KPIs

Key Performance Indicators (KPIs) are essential for measuring the success of a PMO. The choice of KPIs should reflect the PMO’s scope and maturity. Consider a combination of objective metrics (e.g., project delivery on time and budget) and subjective assessments (e.g., stakeholder satisfaction).

The ideal vehicle for capturing agreed KPIs, and agreeing how to report on those KPIs, is the PMO Charter. From an ongoing reporting perspective, it’s important to maintain a record of historically reported KPIs so that evolution and growth over time can be objectively reported. Far too often have we seen PMOs without KPIs – in which case, any PMO road will get you there!

Conclusion

The evolution and uplift of a PMO is a continuous journey that requires careful planning, stakeholder engagement, and a commitment to continuous improvement. By following the stages outlined in this white paper, organisations can create a PMO or transform their PMO from a basic support function to a strategic partner, driving value and contributing to the organisation’s long-term success.