Posted by: Gilad Lev-Shamur | October 19, 2009

PMO series- part 2: Shape your PMO structure

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In the second part of this series (PMO series- part 1: creating the business case), we talked about the creation of the business case for the new PMO, especially the small PMO which might handle the project’s scope of small organization, department, etc.

This part will focus on the possible models the PMO can has, with some suggestions to the smaller PMO.

We already 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 or internal projects, or whether it will take over the control on every project process in the organization (centralized PMO).

This post will present the different models a PMO can take, centralized or not, in the aspect of  it’s specific areas of expertise,  needed in order to manage and control the organization projects.   

Basic models review

The review is based on the book written by Craig J.Letavec, PMP “The Program Management Office. Establishing, Managing and Growing the Value of a PMO”.

The strong model

The strong PMO will take over every aspect of the project’s life in the organization. The PMO leader will probably manage directly all the PMs, set the vision and direction of projects, programs and portfolios and will have the approval authority for budget, resource and so. It will handle the knowledge gathering and will be responsible for setting standards for project management processes.  

The advantages of this model:

  • Due to its positions (most of time managed by high level manager in the organization), it has large influence in the specific organization it responsible to (no matter its size). This help when searching for funds and resources.  
  • Its ability to drive standardization to the project management life in the organization is higher due to the fact he control directly all the PMs and has the approval authority of projects, bids results, etc.
  • The strong PMO can achieve high levels of professionalism. Its members are full-time project practitioners, who can be devoted to their projects without the disturbances from other aspect of the business.  

The disadvantages of this model:

  • The creation of this model will require a “culture shift” (1) in the organization, specially during the establishment of the new PMO.
  • It will require an extensive cost and time to establish all the PMO standards, tools and staff requirements
  • The creation of the PMO is going to create resistance from the units who manage the project in the past. This resistance can be a huge obstacle in the new PMO start-up and operation.
  • The bureaucracy level in the organization will rise, due to the control mechanism the strong PMO will set. Whether it’s good (needed to control) bureaucracy or not, it will complicate the things in the beginning and will raise the resistance.

The consulting model

The consulting model is focusing more on mentoring project managers and staff and supporting (schedule services for example) the projects as needed. It might be responsible also to the creation of standards, but will not be involved in active management of projects.

The advantages of this model:

  • Will not need extensive reorganization.
  • Will create less resistance from the other  units (due to the fact that the active management of projects will be left in their hands).
  • Can supply independent reports to the organization management.

The disadvantages of this model:

  • The consulting PMO will probably will not control large resources. Due to that he will have problems when trying to achieve acceptance from other units.
  • May looks like overhead

The small PMO structure 

When creating a PMO for small organization (or one department in large organization for example) there are some other factors that need to be taken into consideration:

  • The creation of strong PMO requires large number of professional staff. This is not the case in a department which its main business is not projects and might have only few trained personal.
  • The amount and size of projects under the responsibility of the department might not justify the investment needed in order to create strong PMO.
  • The consulting model might not be sufficient from the same reason above:  without trained PMs, the units might have problems to run their projects. The consulting will have small influence on that.

The blended model

The best structure for the small PMO is the blended structure. It involve part of the strong PMO model (active management of projects) and the consulting model. Lets look on an example, in which the PMO is staffed with only one professional PM (full-time job) and other supporting personal  (it is taken from a PMO which handle construction projects under an operation department. CM – contractor managers):

Blended structure

First of all, it is important to emphasize that you can create any blend model you want ( The PMO manage few PMs directly, the CMs might be under the responsibility of  their PM, etc).  This is not the only blend structure exist, not even the optimized.

  • The PMO core staff surround in blue line. The PMO manager has under his responsibility the planners (who supply schedule services to him and to the other PMs) and the CMs. Also in this staff, but not under his direct responsibility are the supporting groups FPs: purchase, finance, safety.
  • As it can be seen, the PMO manager is in the department manager staff.
  • In this model, the active management of project is made in two ways: small projects are managed in the unit’s level, supported by the PMO staff for scheduling and obliged to report it.
  • The complicated projects are managed by the PMO manger, or someone under his responsibility.
  • In this model, the PMO is responsible for standardization, reporting, bids approval and so.
  • The PMs are chosen by the PMO manager and the unit’s managers.

We can continue to describe what are the exact R&R of this PMO, but it’s does not matter. You should find the best structure your organization need, trying to optimize what is the best balanced between the control you need/want and the investment needed.

 

Good luck!

 

Gilad

 

Reference:

  1.  The Program Management Office. Establishing, Managing and Growing the Value of a PMO. Craig J.Letavec, PMP. J.Ross Publishing.2006

 

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Responses

  1. Hi Gilad,

    Your article defines the PMO models very well, at Central Arizona Project (CAP), a water utility company, we have what appears to be a strong PMO model, but due to resources we have a blend. We do have full time project managers reporting to the PMO, but the workload is such that technical folks in the various IT departments sometimes have to be the PM for a project. Although they don’t report to the PMO they are governed by the standards and processes developed by the PMO.

    You mention the disadvantages of the strong model being a cultural shift this is so true and it is important to have a senior level sponsor for the PMO, one that will hold people accountable for following processes. The cost of a strong PMO does not have to be extensive it depends on how the PMO is structured and the tools that you choose. At CAP we have developed basic tools so the only cost of the PMO was the headcount. As the PMO matures then advanced tools can be purchased or developed to allow projects to run more smoothly. The resistance from other groups can be alleviated by having the senior sponsor, without one the strong PMO will fail. Finally you mention the bureaucracy increasing with a strong PMO; there is a very fine line that the PMO manager has to walk to prevent bureaucracy. The PMO can not establish processes that are redundant or not necessary; it is all about process improvement. The PMO should conduct some form of continuous process improvement whether it is CMMI or PMI’s OPM3. In summary regardless of the PMO model the key success factors or a PMO is a senior level sponsor, determining the right level of processes and standards, very good communications at all levels.

    I agree that one model of PMO is not a fit for all companies; the person leading the development of a PMO must find the best structure for their organization.

  2. Thanks for your response.

    You are totally right. Without the correct leader (high level in the organization, with the right capabilities) the PMO will not succeed to start up.
    I found that the structure you described in your organization (blended) has several advantages when working in environment which include projects and other operations as well, and not projectile organization.
    The strong model is very tempting (when you try to drive resources which you do not control them directly for example), but as you said, budget and other limitation (political for example) might prevent this structure.

    Gilad

  3. PMO success requires a strong partnership with line management — and for line management to defer to the thought-leadership of PMs. Building this trust is critical, especially when the PMO puts forward recommendations that are counter-intuitive to the executives who need to buy in. That’s why successful PMOs build courage in the executives who rely on their leadership.


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