Aug 23, 2013

PMO Setups in Projects Delivery Organizations

Two things happened to concept of PMO in last couple years:

A)      Idea of PMO being a silver bullet for addressing all project execution and delivery organization has subsided, if not already dead.
B)       It is established that there is no one single correct way of setting up and administering PMO.

In a way, both (A) and (B) underlie irrefutable first law of PMO: PMOs need to be customized as per industry, organization, project types, resources, executive direction, strategic goals and as per the core objectives of establishing PMO in the first place. Another key factor determining purpose, function and activities of PMO is ‘organization type’ itself. Organization type here refers to either you are a project awarding or project delivery organization. Former refers to an organization which authorizes a project, issues project charter, issues tender, and hire consultants, vendors for implementation. Project delivery organizations respond to tenders, submit proposals, assemble team and carry out implementation and development for client organizations. Variation of PMO type (or difference in its nature and functions) on the basis of organization type is a relatively new discovery but it is hardly a revelation. Project awarding and project delivery organizations run at different pace, have unique processes and constraints, and even look at same project in a different way. Therefore it is only natural to have PMO tailored as per their internal organizational dynamics and goals.

For project awarding organizations, I would refer an excellent article ‘Choosing the Right PMO Setup’ by William Casey and Wendi Peck. It was also published in PMI’s PM Network Magazine.

For project delivery organizations, PMO categories are discussed below - based on my experience and observations. Example analogies (different types of towers) are inspired from William Casey and Wendi Peck’s article.

 

PMO Type 1: Weather Station

Purpose
The core purpose of Weather Station PMO is to keep an eye on project progress, health, milestone achievements and report it back to executives. Weather station PMOs keep organization executives apprised of projects progress, report vital project health stats and formulate & share relevant reports for executive audience, buy-in and decision making.

Basic Functions
1.       Take stock of project health by gathering regular reports and meetings with projects’ leadership.
2.       Evaluate projects on triple constraints and from quality perspective.
3.       See what risks and issues are being faced and how well they are being mitigated/addressed
4.       Share this data with Executives (mandatory) and account managers (optional)

Details
Successful PMOs start with smaller footprint and gradually expand, increase their reach & impact as per industry best practices and learning from their own experiences. Weather Station PMO is usually first step in this direction. Delivery organizations typically establish a small office with a core objective of project status accumulation and reporting. Audience of these reports is primarily organizational executives but sometimes these stats are also shared with project managers to divert their attention on a key project element (like watch cost against baseline in project XYZ etc.).

Akin to Weather Stations, PMO observes organizational atmospheric conditions to provide information for forecasts etc. to executives. Status measurements and accumulation can be automated or manual (get status via email versus meeting project managers). The motto of PMO is to “Only watch, monitor, see trends and publish to management”.

Catches
1.       Weather Station PMO only report progress without any direct influence on projects’ execution, status or health.
2.       No help/literature/training etc. is provided by PMO.

PMO Type 2: Lighthouse

Purpose
The core purpose of Lighthouse PMO is to provide guidance, help and training to project leadership and teams to improve project delivery and success rate.   

Basic Functions
1.       Provide guidelines, templates, best practices, checklists, past projects’ lessons learned and other relevant literature to projects leadership and teams.
2.       Setup up weekly/fortnightly/monthly touchpoints to provide project managers a platform to share experiences, hear about good tools/tacts and brainstorm resolution of common issues and challenges. 

Details
Another way of establishing PMO within an organization is to begin with Lighthouse style PMO. Lighthouse PMO, as name suggests, focuses on guiding project leadership and teams towards fundamental goal of successful project completion. This includes activities such as conducting trainings and providing standard templates and documentation. Trainings can be both in-house and inviting an industry expert to come over and discuss/train project teams. Templates and standards documentation is crafted for project artifacts (plans, requirements/design/risk etc. documents), reports, best practices and checklists etc.

Sometimes, Lighthouse PMO also maintains archives of lessons learned. PMO may also maintain training records and assessments of trained resources but usually this falls under the domain of resource management unit and PMO only shares results. For performing its functions, PMO may have dedicated resources or borrow resources from project teams. In case of later, these activities are voluntary and project managers/team members contribute to build overall skills capital across organization on the principle of share-and-learn.

Catches
1.       Lighthouse PMO does not record and report project progress to anyone.
2.       PMO does not have any direct influence on projects’ execution, status or health. 

PMO Type 3: Watch Tower

Purpose
The core purpose of Watch Tower PMO is to ensure processes are followed religiously in projects execution. 

Basic Functions
1.       Lay down processes, methodologies and guiding principles for projects execution.
2.       Ensure processes and methodologies are being followed. 

Details
The main objective of setting up PMO of this kind is to ensure processes are being followed religiously in projects execution, right mythologies are employed as per projects’ type and project manager/team are adhering to standards. “Standardization is the key to ensure quality execution and project success” – is a foundation stone of Watch Tower PMO.

This setup is similar to military watch tower since laying down processes, standards and mythologies is a one-time job with maximum bi-yearly reviews for adjustments/enhancements. Therefore real function of PMO in its execution life is to act as a watch dog; keep an eye on project documents for ensuring templates are followed, keep tab on risk management and other areas, conduct audits etc. – all to make sure projects are not derailing for the processes and standards. CTOs or Project Managers with a background in custom software development usually setup Watch Tower PMOs since they understand value of following processes and conventions in SDLC (Software Development Life Cycle).

Catches
1.       Training or only status reporting does not fall under functions of Watch Tower PMO.
2.       Achieving a right balance among ‘adhering-to-processes’ and ‘situation-based-decision’ remains a challenge for this kind of PMO.

PMO Type 4: Air Traffic Controller

Purpose
The Air Traffic Controller PMO provides guidance, lay down processes and exercises governing control over project delivery across organization.

Basic Functions
1.       Own all project execution and delivery activities across organization.
2.       Take stock of project health, keep tab on project management activities and share status with internal audience (Executives).
3.       Lay down processes, methodologies, standards for projects execution and make sure they are followed.
4.       Provides guidelines, templates, best practices, standard checklists, past projects’ lessons learned and other relevant literature to project leadership and resources. 

Details
Simply put, Air Traffic Controller PMO is a combination of Weather Station PMO, Lighthouse PMO and Watch Tower PMO with an additional element: PMO owns project management activities across organization. In project delivery organizations, executing projects is the most important business function catapulting Air Traffic Controller PMO as the most-powerful and equally most-accountable unit in whole organization. ATC PMO cultivates resources, establish standards, manage projects, and reports to internal organizational audiences (CFO, COO, CEO etc.).

ATC PMO is a natural progression from Weather Station, Lighthouse and/or Watch Tower PMO. Weather Station and Light house PMOs provides concept of ‘PMO’ a solid ground in an organization, which makes sense since PMO is a newer concept and generally organizations deliver projects before advent of PMO too. Once PMO establish itself – both in the eyes of project teams and executives – next logical step is to assume ‘authority’ and be ‘accountable’ about projects. Therefore some organizations directly jump to ATC PMO while others move to intermediate stage of Watch Tower PMO before elevating to ATC PMO. ATC PMO is the ultimate sign of organization-wide project management maturity where both strategic and tactical decisions/affairs are planned, governed and audited at PMO’s desk making this elite unit as both custodian and responsible for quality project delivery. 

Catches
1.       Biggest challenge for ATC PMO is not to lose sight of day-to-day affairs and facilitating project management team while focusing on strategic matters. PMO’s success lies in operating at both Macro and Micro levels.
2.       Since PMO owns all projects’ delivery, interaction with Finance and Sales organizational units is mandatory. Important thing here is to have unequivocal guiding principles and goals which are mutually agreed to prevent any conflicts of interest in these interactions.

Conclusion
PMO setup is an important milestone in an organization’s journey and one that is planned and executed very carefully since stakes are high and impacts are wide. Categorizing PMO should help in laying out plan for PMO implementation and assist in clearly defining functions and objectives of PMO. This essentially covers expectations management aspect as well. Lastly, it should help in answering million dollar question - ‘Which PMO type suits us?’ While answer cannot be given offhand since it depends on various factors and only on the basis of dedicated study of a specific organization any suggestions can be made – I hope above categorization will help in identifying a right setup for your organization. Good luck!

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