What is Project Management Office (PMO)? Definition, Function, Types

  • Post last modified:5 May 2023
  • Reading time:15 mins read
  • Post category:Project Management
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What is Project Management Office (PMO)?

Project Management Office (PMO) is a branch of an organisation that determines and maintains the standard of a project. This is similar to a sales team in an organisation, which is responsible for increasing the sale of products/services. The responsibility of increasing the success rate of projects in an organisation is assigned to an organisational body called Project Management Office (PMO).

In global IT projects, project management is controlled by setting up of a project management office or PMO in short. Most of the proj­ ects that are globally executed are managed by the PMO.

Project Management Office (PMO) Definition

Project Management Institute (PMI), one of the world’s largest non-profit membership associations for project management professionals, defines PMO as “an organisational body or entity that is assigned various responsibilities related to the centralised and coordinated management of those projects under its domain. The responsibilities of PMO can range from providing project management support functions to actually being responsible for the direct management of a project.”

The ultimate objective of PMO is to ensure that each and every project of an organisation yields the desired result. PMO makes continuous improvements in order to make an organisation capable of successfully managing its project.

Process of Setting up PMO

Setting up a PMO is a complex and complicated task and involves the following steps:

  • Appointing a project champion in each country. This project champion ensures that PMO activities actually take place.

  • Once the project champions or respective countries are appointed, then the next process is the discussion on the processes for software development. Generally, the CMMI model or any other model is taken into consideration. This is deliberately done to ensure that the process of development is uniform throughout with little variations.

  • The next process is the formulation of the parameters on which the project management would be carried out. These parameters are required to manage global projects and form the components of the dashboard.

  • Once the formulation of a parameter is decided, the next part is the development of the software and the implementation of the processes.

  • When sufficient data is obtained, the pilot run of the PMO in undertaken.

  • When the pilot run is successful, the PMO rolls out.

There are some parameters that are used to manage the various proj­ects which are under global execution but the process of identifying and defining parameters is very crucial.

Project Parameter

The following parameters are used for managing the various projects:

Parameters related to quality

Since the PMO is global in nature, quality becomes the core controlling parameter. In order to ensure the best quality, it is required to choose the right procedures and methods while developing the software. Apart from that, the proj­ ect management practices should be consistent with the organi­ sational objectives. some of the parameters which are related to quality include the following:

  • Defect age
  • Defect removal efficiency
  • Review defects
  • Testing defects
  • Preventive and corrective actions undertaken and their effec­tiveness

Parameters related to time

This is the parameter related to time. As PMO is widely used in global projects, the parameters related to time are:

  • Effort variance
  • Schedule variance

Parameters related to cost

This is the parameter related to cost. some of the parameters related to cost include the following:

  • Fixed cost
  • Variable cost
  • Operating cost

Worth mentioning is the fact that all the cost involved in the proj­ ect is calculated in terms of global currency which is generally in US$.

Parameters related to scope

These are the parameters related to scope of the project. some parameters in the scope component include the following:

  • Project scope
  • Onsite scope
  • Offshore scope
  • Other country scope

Function of PMO

The following are some of the functions of PMO:

Maintains Consistency

PMO keeps track on the performance of a project, and thus maintains consistency and efficiency of the project. Moreover, it tries to ensure that the project undertaken by an organisation is in line with its corporate objectives.

Eliminates the Duplication of efforts

PMO helps in eliminating the duplication of efforts by efficiently distributing project work- load in an organisation.

Defines goals and objectives

PMO helps in the proper execution of a project by clearly defining the goals and objectives of a project.

Maintains Knowledge Database

PMO makes efforts for the continuous improvement of an organisation by preparing and maintaining a knowledge database regarding the performance of various projects undertaken by the organisation.

The database maintained by PMO contains project-related information that can be used for designing project organisation in the future. The knowledge database comprises information such as project performance, difficulties and constraints faced in a project, etc. Such information can later be utilised for making improvements in future projects.

Assists in Managing Project Finances

PMO regulates the progress of a project in order to ensure its completion within the prescribed budget and financial means. Moreover, by keeping track of the progress of the project, it assists the management in making informed decisions.

Establishes Metrics

PMO provides various standardised documents, such as risk logs, issue logs, etc., to an organisation, which save the time and efforts of project managers in creating these documents.

Provides Templates

PMO helps in establishing the metrics of a project, which assists an organisation in measuring the performance of a project.

Types of PMO

Three types of PMOs are mentioned below:

Supportive PMO

Supportive PMO provides templates, best practices, on-demand expertise, etc., to an organisation in successfully implementing a project. This type of PMO is mainly beneficial for those organisations that do not require additional control and have successfully completed projects in a controlled manner.

A supportive PMO assists in the following:

  • Planning and scheduling of a project
  • Preparation and administration of contracts
  • Administrative and financial services
  • Tracking, reviewing and auditing of a project
  • Management of documents
  • Defining project metrics

Controlling PMO

A controlling PMO acts as a central governance office for monitoring ongoing projects in an organisation. It is beneficial for those organisations that aim at governing their documentation, processes, and other project-related activities. This type of PMO demands an organisation to comply with governance and to adopt certain methodologies, forms and templates.

A controlling PMO usually performs the following activities:

  • Identification of best practices
  • Standardisation of projects
  • Enhancement of the competency of project manager
  • Project metrics benchmarking
  • Training and internal consulting

Directive PMO

Directive PMO provides the resources and management experience required for managing a project in an organisation. In directive PMO, a professional project manager is assigned to give proper direction to projects. Each project manager reports directly to the directive PMO, thereby ensuring a high degree of consistency and quality across all organisational projects.

Directive PMO usually performs the following activities:

  • It directs stakeholders and assigns and supervises their work. It reports project outcomes to executives focusing on how capable they are for running a project.
  • It assists an organisation by ensuring that projects are completed and deliver acceptable results on time and within the specified budget

Tracking Global Project Execution Through Project Management Office

Once PMO is setup, the next process is to monitor various projects. The monitoring of the project is done through the dashboard by view­ ing the identified parameters as discussed in the previous sections. These parameters are tracked and discussed in the review meetings by video call or conference calls or by leaving a note at the PMO for the project manager to answer the queries of the overall management of PMO.

Issues, concerns and other core parameters are closely monitored and are discussed in the meeting room of the PMO or through webinar.

Best Project Management Courses

Project management skills are in demand. If you are ready to get started, consider enrolling in the Google Project Management: Professional Certificate Learn the job-ready essentials of project management in six months or less, such as initiating projects, risk management and change management. Also we have made list of best project management courses as there are a plethora of options available, and it can be challenging to identify the best one.

Google Project Management
Google Project Management
Project Management for Professionals
Project Management for Professionals

Best Project Management Tool

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Best for:

  • Mid & Large Size Team
  • Higher Plan
  • Standard Feature
  • Flexible Database & Stability

Best for:

The ideal project management tool selection will eventually rely on the particular requirements of your team. We suggest experimenting with the free versions of various tools to gauge your team’s comfort level and then proceeding accordingly.

Project Management Tutorial

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