Since my latest blog I have worked on a major IT outsourcing program which took all my time to focus on. The program was an exciting assignment which provided me new insights of program management. In the mean time I have been reading “The Program Management Office Advantage” written by Lia Tjahjana, Paul Dwyer and Mohsin Habib. I have been reflecting the literature on my latest program and created my own version of it, which can be useful for IT Outsourcing programs. Let me provide you the introduction to the Program Management Office in this blog.
The Program Management Office (PMO)
Programmes are major undertakings that generate a substantial amount of information. The PMO is the nerve center and information hub of a programme. All information, communication, monitoring and control activities for a programme are coordinated through the PMO.
The PMO will often form part of the Programme team. The PMO can also be called a project or program analyst, project\program or PMO coordinator or even sometimes a project/program or PMO administrator, although this is not as common as there tends to be dedicated admin resources allocated to this role.
If the PMO is aligned to a project, they will be the gatherers of information and often the project manager’s right-hand person. They will understand the detail of the project and the content of all of the project’s outputs and controls.
If they are aligned to a program, the analyst will work closely with the program manager; depending on the size of the program the analyst may be a step removed from the detail but still have a good level of understanding. Collecting project level data, aggregating this up to a program level and compiling reports are key to this role.
The aim for the PMO is to be THE point of contact for questions on the PMO controls and processes across the project or program. The PMO must know and understand these controls inside out and establish themselves as the “Go-To” person for guidance and process questions.
It’s particularly important to understand the different forums and meetings throughout a process, alongside the inputs and outputs required for each of these. Project managers seeking process guidance will always want to know:
- What is the next step?
- What do I need to have completed before I go to the meeting?
- What templates need to be filled out?
- Who should I have spoken to?
- What is the purpose of the meeting?
- How does the meeting run? What questions will I be asked?
- What are the outputs from this meeting?
- What are the next steps?
After reviewing the PMO’s roles in both the project and business environments, we can see that the need for a Program Management Office is compounded by the following factors:
- Multiple projects result in competing demands for limited resources (people, space, infrastructure, and so on). Without the existence of a central organizer such as a Program Management Office, it is not easy to determine the best project for allocating resources.
- The degree of uncertainty from inside and outside the organization requires a flexible information flow to facilitate rapid and accurate communications among project participants.
- Interdependency among projects prompts centralized, high-level monitoring by a Program Management Office.
- Each project has its own management and administrative process, resulting in difficulties for an organization to measure the performance of one project against another.
- Lack of coordination among projects inevitably creates disruption in the day-to-day operation of the organization.
Program Management Office, as the central projects coordinator, has the main role in implementing a standardized project management process and procedure across the whole organization. Such standardization provides a solution to those problems, and it has a number of benefits to the organization, both project-wise and business-wise.
Here are some examples of PMO benefits:
- It reduces the time and cost associated with setting up the project from scratch (thus avoiding “reinventing the wheel”).
- It facilitates a faster response to changes imposed by a competitive business environment and improves the timeliness of projects’ deliverables.
- It provides consistent means of measurement for all projects’ performance.
- As the conduit between the projects and business executives, a PMO provides an efficient channel for the escalation (thus the resolution) of project issues, and it helps make project risks visible.
- PMO assists business executives by providing a high-level view of projects (strategic alignment, benefits, and performance), thus assisting them in making decisions on resource allocation.
- It manages project interdependency by acting as the communication hub for the projects.
- The PMO provides consistent project management training, reducing the need to outsource to external consultants.
- As projects come and go, the Program Management Office facilitates the formal retention of knowledge.
- The PMO can group related projects into programs to make possible the efficient use of resources.
- It ensures that programs are executed in such a way as to adhere to company goals and objectives.
- The PMO facilitates each program by the provision of tools and resources to assist the management teams.
- It provides management reporting to alert teams of project status and potential issues.
- It furnishes risk mitigation assistance when the risk is identified.
- It improves overall business performance.
These examples offer a glimpse of how a PMO offers benefits that every organization must weigh. However, as will be discussed in the following chapters, an organization must first have a clear understanding of what it will require from the PMO. Afterward, it can justify its decision and obtain the support of project participants.
Although PMOs vary from one organization to another, the activities performed are generally the same. Here are some of those activities:
- Project Resource Management. The PMO is responsible for coordinating resources (human resources, equipment, space, and so on) according to what each project demands and the amount of resources available (either from within the organization, from temporary resources, or through outsourcing).
- Financial Management. The PMO is required to produce a consolidated financial statement, compiled from each project, with a certain frequency (which could be weekly, monthly, quarterly, and/or yearly). The statement should contain information such as the actual budget and expenditure, as well as the projected budget and expenditure. In addition to monitoring the projects’ progress, the information can also be used to determine funding allocation.
- Vendor Management. The PMO assists with the management of third-party contracts with vendors.
- Process Management. The PMO standardizes and continuously improves the operational processes and procedures in the project environment.
- Program Monitoring (Quality Management). The PMO is responsible for monitoring the progress of each project in terms of schedule, scope, changes, cost, and quality. This is done through a gated approval process, the auditing process, and regular reporting.
- Knowledge Management. Knowledge management goes beyond managing data and documents. It also makes sure that all the knowledge gained and the lessons learned are not lost (i.e., by creating a project knowledge repository) when experienced personnel leave the company. More importantly, knowledge management is about making sure that the organization cultivates its existing project knowledge, continuously improving it and sharing it as a part of the staff development process.
- Communications Management. The PMO develops and implements a communication plan that involves all the stakeholders. The activities may include the dissemination of information, escalation of issues, and others.
- Training Management. A proper training program is essential to the success of the PMO. It will enhance the skill sets of employees, train them in best practices, build expertise, and ultimately enhance the organization’s ability to execute. It is the PMO’s role to work closely with various Project Offices as well as with the organization’s human resource coordinator to create a training program that is consistent with the organization’s strategic positioning.
Managing the Project Managers
The relationship between the PMO and the project manager is very important. It’s key that the PMO demonstrates value to the project and is welcomed as part of the project team. When initially being assigned to a project, the PMO should meet with the project manager to initially discuss the scope of the project and what the project is in place to deliver.
The meeting should then walk through the PMO controls one by one and ensure the correct meetings and reporting timelines are in place. The PMO can then offer training sessions to the project manager and project team on any of the PMO controls that require strengthening or improving. Offering training workshops is a great way to add value to a project and also helps to get endorsement from the project team into a particular process.
Further on they will explain how the functions can be executed by the PMO specialists. For my journey to Program Manager I have aligned these functions IT Outsourcing programs. This document is open for the public and can be requested. Please let me know if you are interested by sending a mail to: email@example.com