Posted by: Gilad Lev-Shamur | August 24, 2009

PMO: centralized or not?

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* This post is referring to construction projects, but I think the principles are the same for all other industries.

 In our world, where global organizations want to deepen their control over their increasing sites number across the globes, the centralized PMO has major benefits. Organizations that want to achieve better control are forming their PMO again to take the role and control every aspect of projects life. But seeing it as the only way is wrong.

 Centralized PMO has major benefits. Among them:

  •  Improve project standardization in the organization.
  •  Improve the reporting for upper management.
  •  Improve professionalism of project managers

 This structure also has few drawbacks:

  •  It move to slowly when it came to small in house projects
  •  Not get full cooperation from the functional mangers
  •  Limited sometimes by its own standards

 Looking at the business needs of today worldwide organizations, a combination of the centralized PMO must be created – a blended PMO.

 The idea is to decide whether a specific project should be handled by the centralized PMO or by other division / department which will do it in addition to her other responsibilities. Its’ seems simple, but this decision might cause many arguments and debates.

Controlling projects in a department – like an operation or maintenance department for example- PMO (reporting to the department manger and not the enterprise PMO) has few advantages in specific projects:

  • When it came to modification / fit-ups of existing systems, the department engineers and technician has better understanding of the system operation and limitation.
  •  They have long history with their internal customers. They do not see them for the first time when the project start.
  •  Most of the project resources came from the same department, reporting to the same department manger. The project manager- who came also from the same department- has less controlling problems.
  •  The project manager has ‘better’ life due to the less rigorous standards as in the centralized PMO.

 But working in that mode (decentralized PMO) only, is not the best solution:

  •  Project managers are sometimes doing that as part of their job, with other duties.
  • When it came to large projects, the department PMO might not have enough staff to support.
  • Although none of us love bureaucracy, when it comes to large strategic projects, more control is needed. The organization must enforce specific standards in order to achieve project success. There is no benefit in department PMO in this case.
  •  As the projects managers and staff of the department PMO will probably use/ maintain the projects area they tend to create the best in class projects no metter what the cost is. It does not mean the centralized PMO project managers do not want to achieve the best results. They just keep better on the scope, budget, and schedule triangle.

 The solution for all that mess is to create blended PMO: global organization which set standards (and decide for what level of projects to apply them) and manage the strategic projects. All other projects should be handling in lower level PMOs.

What is strategic project? This is other issue…

 

 Gilad

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Responses

  1. […] These PMOs can be developed in an organization which include more blended structure: global organization which set standards (and decide for what level of projects to apply them) and manage the strategic projects. All other projects should be handling in lower level PMOs (PMO : centralized or not?) […]

  2. […] reviewed the difference between the centralized, decentralized and blended options for the PMO (PMO: centralized or not?), from the control point of view – whether it will handle specific department projects, external […]

  3. […] The PMs need to follow  some bureaucratic procedures without someone helping them to overcome this (this is equal to having the wrong projects organization structure –PMO: centralized or not?). […]

  4. […] Internal conflicts when it comes to cost control – PMO: centralized or not? […]


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