Project management has become an important core competence in many companies. The number of complex projects has increased considerably. However, the professionalism with which project work is carried out often leaves something to be desired.
There are countless reasons for this. Many companies have therefore established a so-called Project Management Office (PMO), or Project Office for short, which takes care of all strategic and operational issues in connection with project management. But this is actually the universal remedy for „project-plagued“ companies.
Project Management Office – Why?
A Project Management Office (PMO) is the organizational business unit for all project-specific questions. The Project Management Office (often referred to as Project Office) is especially responsible for the creation and establishment of project management standards and project portfolio management.
With the help of a Project Management Office, a company keeps track of its current projects and increases processing efficiency!
The orientation of a PMO – and the benefits to be achieved with it – essentially depends on the strategic objective and the organizational environment of the company. The selection of the main tasks must therefore be carried out very carefully. There is no uniform standard that applies to every company. Rather, the company-specific conditions and the planned strategies and trends must form the basis for the task definition.
Benefits of a Project Management Office
Benefits for project management
- A uniform application of project management instruments, standards and processes is ensured.
- Synergies and conflicts between individual projects are recognized and can thus be used or resolved.
- Experiences from other projects are used.
Benefits for corporate management
- Project lead times are shortened due to experience documented throughout the company; deadlines are postponed less often.
- Cost and resource goals are better achieved.
- The number of successfully completed projects increases.
- Project processes and related decisions become more transparent.
- Cross-departmental and cross-departmental problems become visible more quickly and can also be dealt with objectively.
- Customer satisfaction increases.
- Supporting the PMO increases the overall efficiency of project management.
Benefits for project managers
- Project management tools, standards and processes do not have to be reinvented for every project. There is more time for managing the project or taking on content tasks.
- A systematic exchange of experience between the project managers is established.
- The effort for project administration is reduced by the use of standards and simple proven tools.
- There is an „in-house“ contact point for all questions arising in connection with project work.
Tasks of a Project Management Office
In general, each Project Office pursues the objective of standardizing procedures and processes within the framework of project work to such an extent that the productivity and effectiveness of project work is sustainably increased. Furthermore, the multitude of complex projects of a company should be coordinated and controlled centrally.
The tasks of a Project Management Office concentrate on the one hand on the establishment and ongoing development of project management and on the other hand on the planning, control and implementation support of projects and portfolios in the company. The following is an overview of the possible tasks and services of a Project Management Office, which are very common in practice.
It is rarely necessary to locate all the tasks listed below in the Project Management Office. It is advisable to start with a reduced scope of tasks for the PMO within the framework of the structure and, after successful establishment, to successively expand the scope of services of the Project Management Office (depending on the company-specific requirements).
Project management standards
The development and maintenance of a project management standard provides project participants with a clear and manageable guideline for operational project management. This ensures a high standard of quality in project management.
Project management standards are defined as all rules and methods that can be applied throughout the project.
- present the processes and results of projects in a uniform manner
- ensure the desired planning quality
- Reduce the effort of creation and maintenance
- improve communication and the flow of information within the project
- Secure experience for the company.
The project management standard consists of several components. An essential focus for each project are binding organizational regulations, such as which tasks are to be carried out as a project, role descriptions, reporting standards, signature regulations, decision-making powers, etc.
Another important and extremely helpful focus of the project management standards are the instructions for the efficient use of project management methods and tools, including the corresponding checklists, forms and IT tools. Not all methods are mandatory. It also identifies those which the project manager can use at his discretion and after assessing the benefits for his project.
Benefits of project management standards
- The central processes of project management are standardized and simple instructions are available for recurring project situations.
- Forms, checklists and IT tools are available for all projects.
- Consistent, high-quality and efficient project planning and execution.
- Effective project controlling.
- Clear expectations and requirements for the project participants through predefined roles.
- Comparability and measurability of project results.
- Simple interpretation of project information.
Project support includes a wide range of tasks. A tailor-made task profile must be developed for each company. The support tasks concentrate on the demand-oriented support of individual projects by Project Office employees.
Consulting & Coaching
Consulting & Coaching means that the employees of the Project Office support concrete projects in the planning and execution phase. Particular care is taken to ensure that the generally applicable project management standard is applied with the available tools and that typical errors and redundancies in the planning and execution phase are avoided. Administrative activities are reduced to a minimum. The project management is relieved. Another important task is the support of projects in exceptional or crisis situations.
Interim project management
Interim project management means that a PMO employee takes over the management of a project. This also gives him overall responsibility for the project. This type of support absolutely requires clear agreements regarding the transferred competencies and decision-making powers.
Clear advantages are that an experienced and professional project manager can handle a project more successfully with less effort than a less experienced project manager. In addition, there is no need to build up qualified project resources in the project executing position and methods and tools can be used promptly and without additional effort from the Project Management Office.
Demand-oriented project support
Demand-oriented project support means that the employees of the Project M anagement Office provide selective support services at the request of a project.
These are exemplary:
- Moderating project meetings (kick-off, planning workshop, controlling meetings, problem-solving workshops, etc.)
- prepare the project planning in coordination with the project manager and the team
- Taking over project administration agendas (e.g. through qualified project assistance)
- Perform project controlling
- Conduct project reviews at the end of a project phase or at the end of a project
Which form of project support is offered must always be defined company-specifically. In the best-case scenario, the Project Office offers all project-specific services that arise within the framework of a project.
Project Portfolio Management
Project portfolio management is the supreme discipline of a Project Management Office. This gives the PMO and the entire project management a new status in the company. In the foreground of project portfolio management is the overall optimization and control of all current and planned projects of one or more project portfolios.
Planning, control and coordination of the project portfolios are the main tasks of the Project Management Office. This means that the project portfolio manager must ensure that the projects enrich each other and do not hinder each other in any way. The information flow between the projects must be established and foreseeable contradictions and blockades, which arise from unrealistic or unclear specifications, must be recognized, communicated and cleared up at an early stage.
Not an easy task when you consider that in most companies all projects are equally important and must be implemented immediately and that capacities shrink continuously as the number of projects increases. This is why resource management is always at the forefront of project portfolio management. Important but difficult. Only if resource management works can it be ensured that the right skills are available and operational in the right project at the right time.
If the resources are not sufficiently available – which happens very often – then the first task of the project portfolio manager is to identify the projects that bring the greatest benefit to the company and to ensure that these are prioritized by making the scarce resources available.
Human Resources Development & Knowledge Management
Human resources development and knowledge management are central pillars for the sustainable maintenance and further development of project know-how in the company and are therefore important core tasks in the Project Management Office. Project-oriented companies radiate a specific corporate culture that is characterized by flexibility, motivation and teamwork. The development and application of suitable personnel development approaches is of utmost importance.
The cornerstones for this are tailor-made training concepts for project managers, project staff and executives who, as project clients or line managers, take on project management tasks. The promotion of a project management career in the company with clearly defined career steps and associated qualification requirements is also an integral part of modern HR development concepts.
The further development of project know-how at the organizational level is dominated by knowledge management, which must be consistent and structured. To this end, regular transfer workshops initiated by the PMO between the project managers are available to ensure that there is also a cross-project exchange of knowledge and experience. The build-up of know-how is supplemented by the organisation of lectures and events on special topics and new trends in project management.
The results of this package of measures are optimally collected and managed in a central knowledge library so that project managers and members of the project management community can access the know-how at any time. Experience shows that project-oriented knowledge management is only really lived out by an active Project Management Office.
Organizational embedding of a Project Management Office
There is no „best“ way to establish a Project Management Office. Both the tasks performed and the organizational location in the line organization of the company depend to a large extent on the desired objective. Since this varies from case to case, the establishment of a PMO requires individual tailoring with regard to the task at hand and embedding it in the corporate structure.
The settlement of the Project Office in the company organization is a measure of highest strategic importance, since the practical effects on the sphere of action and influence of the Project Management Office are considerable. Below are the three most common variants for the settlement of a PMO in the line organization.
1) PMO as a Staff Unit
Establishing a Project Management Office as a staff unit to the Executive Board or to an area is a first step towards establishing one. The advantage of this variant is that the organizational structure in the company is not significantly influenced and thus a higher acceptance in the company can be achieved. In this function, the PMO has more of an advisory than a creative function (internal consulting).
2) PMO within a division
The establishment of a Project Management Office within an area represents an initial integration of the PMO into the company organization. Within this area, the Project Management Office has competencies, e.g. to set binding project management standards. The PMO usually does not have any influence outside of the area. In cross-departmental projects, the project management standards therefore have no binding effect.
3) PMO at the first company level
Establishing a project management office directly below the first management level is the most comprehensive form of establishing a project management office in a company. In this variant, the project management standards apply company-wide. Only here can synergy potentials be fully exploited.
Resources required for the PMO
Depending on the decision made for the tasks to be performed by the Project Management Office, it must be ensured that the necessary resources (financial, personnel, space, …) are available. This is often the most difficult part, because the sense and benefit of the planned PMO is often not seen.
Convincing work is necessary here. If the required resources are not approved or if you cannot afford them, you should generally consider whether setting up the Project Management Office makes sense at all.
A „virtual PMO“, which for the most part only exists on paper and is run by employees as a „side job“, seldom brings the desired benefit for the company. On the contrary, there is even a danger that this half-hearted solution could damage the image of project management in the company.
Implementation of a Project Office
The phases of the implementation of a Project Management Office depend essentially on the prevailing project culture and the project maturity of the company. In general, it can be said that most company organizations are characterized by a strongly individual project management at the beginning of the implementation process. In other words, project management only exists in a few project heads with little experience, which means that projects are planned, controlled and managed very differently.
The establishment of a Project Office is an extensive process, which involves a far-reaching adaptation and change of the company organization. Due to the organizational and social complexity, it is advisable to implement the implementation process yourself as an organizational development project. By treating it as a project, an efficient approach is ensured. The topics „acceptance“ and „identification“ are to be given a high degree of attention in the context of the project conception and implementation.
A decisive success criterion for the introduction of a PMO is that the benefits of a Project Management Office must be clear to all participants and affected parties. If the argumentation is correct, everyone is in the same boat and helps shape the process of introducing a PMO with their know-how and project experience. If the benefits of the Project Management Office are not sufficiently argued, there is likely to be considerable resistance across all hierarchies.
In this respect, the success and acceptance of the introduction of a PMO are significantly increased if the process of introduction is designed by a representative team of decision-makers, line managers and project managers from the company.
Typical steps in the introduction of a PMO
- Organizational embedding of the Project Management Office in the company organization. This makes the PMO visible.
- Development of project management standards for individual project handling (methods, tools, processes and procedures, roles, …).
- Conception and implementation of training measures with the essential project management methods and procedures for project managers.
- Establishment of the defined project management standards for individual project handling in the company.
- Definition and provision of project support services by the Project Office for the individual projects.
- Ongoing optimization of the project management standard for individual project handling.
- Conception and introduction of project portfolio management for the overall control of all projects in the company.
- Development of an active knowledge management in the company for all areas of project management.
- Development and establishment of a career model for project managers with clearly defined career steps and associated personnel development measures.
Test: Does a Project Office make sense in my organization?
- More than 5 projects per year are handled across departments.
- The project managers are constantly complaining about resource conflicts between the projects.
- The same mistakes and difficulties occur again and again in projects.
- The top management demands a better overview of the current projects in the company.
- Virtually no project in the company is completed by the agreed deadline.
- Sometimes the priority is on the wrong projects and the corporate strategy is not optimally supported.
- Often resources are assigned to the „wrong“ projects and the „right“ ones, because important ones, are neglected.
If you answer several of these statements with „True to the truth“, the establishment of a Project Management Office in your company is highly recommended.