Based on empirical data, Portfolio, Programme and/or Project Offices (PMOs) have an average cyclical lifespan of 2 – 5 years. The PMO is often the first to go when things are going well and the first to be setup or revitalised when things go astray despite PMOs not being a cure for organisational woes. When setting up or revitalising a PMO model, organisations should address three basic questions.
The first is “Where are we now?”, organisations need to understand the existing resource capabilities, functions and services within the PMO (i.e. the existing arrangements).
The second question is “Where do we want to be?”, organisations need to understand what the strategic goals are in terms of agreed PMO functions, services and portfolio outcomes (i.e. the business needs).
The final question is “How are we going to get there?”, organisations need to decide:
What the PMO model will be in terms of the potential scope, services, delivery and implementation
How the PMO can be delivered taking account of existing resources, skill sets capabilities and capacity
What the resultant costs will be and the funding arrangements
To understand the existing arrangements, organisations should initially use the free to access Praxis 360 Maturity Assessment, and afterwards at regular intervals, to assess the capability maturity of a project, programme or portfolio; but also to help check that the organisation is adopting good project portfolio management practices. Another important aspect is to understand the qualifications, knowledge, skill sets, experience and aspirations of those people within the existing PMO as well as capture a baseline of the existing functions and services currently offered to decision making authorities, programmes and projects alike.
To determine where an organisation wants to be with their PMO, it needs to investigate and decide the functional areas and services it wants to continue or start providing. This should redress any Praxis 360 Maturity Assessment findings and improvement areas.
Depending on existing funding arrangements and resources, these functional areas may be divided into separate functional teams within a single office or individuals may specialise in one or more of the functional areas.
Regardless of which PMO model is ultimately selected, the three functional areas require different competencies, skills and experience. It is worth noting that organisations will often use generic terms for the various offices within the PMO model, which do not always clearly indicate the role or the importance of the office within the organisation. The industry terms for these offices are:
1. Portfolio Support - Focuses on the provision of challenge, scrutiny and oversight through management dashboards and reporting of the organisation’s investment in programmes and projects as a whole, which encompasses business change, infrastructure and digital enabling initiatives as well as improvements in assets and services. It takes a holistic overview of the asset and service lifecycle as well as inflight and emergent programmes and projects.
This function primarily supports the main investment board and senior management decision making and is responsible for the continuous portfolio investment practices of categorise, prioritise, optimise and plan that best aligns to strategic direction. This means making the difficult decisions to stop underperforming programmes and projects so the money saved can be used to start better placed pipeline programmes and projects that show a positive cost benefit ratio.
2. Delivery Support - Focuses on the practical and tactical support to enable successful delivery of business change, sometimes through a flexible pool of delivery programme and project resources (the term covers people, assets, materials, funding and services) to enable mobilisation and progress. This flexible pool of resources could involve the establishment and contract management of a standing offer arrangement for the timely provision of specialist people and skill sets.
3. Capability Support - Focuses on the development of standard processes, promoting consistent portfolio, programme, project and agile working practices and ensuring their adoption and appropriate tailoring aligns with organisational policies and standards to suit the programme and project’s environment, size, complexity, importance, capability and risk. Best project portfolio management practice exists only where there is top down (senior management), bottom up (delivery team) and sideways (HR, finance, procurement) support and commitment to continuous improvement in what makes the organisation perform well.
By being an integral link between strategy planning and strategy execution, PMO brings together the project, programme and portfolio management processes, practices, methods, knowledge and people needed to create that clear line of sight between strategic intent and the realisation of outputs, capabilities, outcomes and/or benefits.
Simply, it’s the organisation’s ability to provide continuous value to internal and external customers. Once the portfolio is focused, attention needs to turn to execution. Monitoring performance with metrics consistent with the strategic objectives ensures that business as usual operations and strategy remains continually aligned.
The journey does not end here, in the next instalment learn 'How to revitalise your PMO'.