A project management office (PMO) is a department within a organisation or company that sets out and manages standards for projects and project management.
A PMO will usually have a set of processes and methodologies to guide project managers and administrators, business analysts, IT staff and project sponsors. These might include:
- using particular software and tools
- providing the guidelines for a work approach or specific methodology eg Agile
- providing templates for documents like business or system requirement specifications, test results, presentations or project reports
- time management, invoicing and payment processes
- enforcing compliance with respect to completed documentation and agreed project processes
The project management office can also fulfill a number of other functions depending on the type and size of the business:
- it can manage existing personnel and allocate them to different projects in progress. This centralised approach allows resources to work across multiple projects at the same time and keep people productive when there is slack on one particular project. The efficient use of human resources translates directly to billable hours and overall profitability
- it may employ new resources if a project expands in scope or if a new project is launched
- consulting to executive management on project strategy – what projects will provide the most strategic or tactical value in the coming year
- consulting on budget allocation. Project budgets are always a source of much debate especially with respect to return on investment (ROI). The project management office can provide good insight into which projects are proceeding well, which are wasting money or have the highest chance of delivering their proposed business value
- managing the project schedule to ensure deadlines are being met
- reporting to senior management on progress, or lack thereof
training and mentoring of personnel
- be responsible for overall product delivery
- manage expectations of the project sponsors
A project management office is most often introduced into a company to reduce the risk of project failure, improve work efficiency and provide a shared service to business departments or divisions.
Project management offices are not always successful and depend a lot on how they are structured and run, especially in bigger companies. They can be unpopular with project personnel for being too controlling and creating unnecessary admin work. The relationship between the PMO and executives can also be a difficult one. Especially when the cost of the additional management structure is not being justified by an increase in the number of projects successfully delivered.