At the heart of project management lies the Project Management Office (PMO).
The PMO serves as the central hub for managing projects; this office provides guidance, standardisation, and support to project teams.
But did you know that various types of PMO structures exist?
In this article, we will explore these PMO structures to understand their types and how to implement them to help you determine the one to use in your organisation.
Let’s jump in.
PMO Structure: Why Do They Matter?
Before we dive into the types of PMO structures, let’s take a moment to understand why they matter.
A well-designed PMO structure improves the way companies manage and deliver projects. They impact project delivery, improve resource allocation, and increase overall organisational efficiency.
It provides a framework for project management practices bringing a level of consistency across projects.
A clear PMO structure in place benefits organizations by streamlining project management processes and achieving desired outcomes.
PMO Structures: Understanding the types and how they work
Explained: Functional PMO Structure
The functional PMO structure is like a project management headquarters separate from project teams.
Its main job is to provide help and guidance to projects by creating and using project management methods, rules, and best practices.
In this setup, the project management team acts as a knowledge hub – they possess the project management knowledge and share it across the organisation with project managers and teams to help projects succeed.
For example, imagine a software development company. Their PMO would decide how projects should be managed, like using Agile or Waterfall methods, and make sure rules are followed.
Part of their role will also involve giving training and assistance to project managers so they can do their job well.
Explained: Projectized PMO Structure
In the projectized structure, the PMO is decentralized and embedded within project teams or departments.
Project managers report directly to the PMO. This setup allows for more independence and flexibility in project management because project teams can directly access the resources and support provided by the project management office.
Think of a construction company as an example of a projectized PMO structure. In this case, each construction project has its own dedicated project team, which includes a project manager and support staff.
The project manager reports to the PMO, which provides project management expertise, tools, and templates to ensure the successful execution of the project.
Explained: Matrix PMO Structure
The matrix PMO structure is a mix of functional and projectized structures.
It’s like a blend of two different ways of organizing things.
In this structure, project managers have two bosses: the PMO and their functional manager.
The PMO is responsible for projects staying on track and meeting company goals.
The functional manager takes responsibility for the project team’s everyday work, like assigning tasks and solving technical problems.
Using an example of a manufacturing company. The project management office ensures the smooth and efficient running of projects while functional managers handle daily tasks related to teams and other technical issues.
Implementing a PMO Structure in Your Organisation: what to consider
When implementing a PMO structure in a company, several crucial factors need to be carefully considered. Failing to do so can have significant consequences for the effectiveness and success of the project management office.
1. Clearly Defined Objectives: Clearly define the objectives of the PMO, aligning them with the company’s strategic goals. Without clear objectives, the PMO may lack direction, leading to confusion, misalignment, and wasted resources.
2. Organisational Culture: Assess the company’s existing culture and determine how the PMO will fit within it. Failure to consider the culture can result in resistance to change, lack of collaboration, and difficulty in integrating the office into existing processes.
3. Stakeholder Engagement: Identify key stakeholders and engage them early in the PMO implementation process. Neglecting stakeholder engagement creates problems later on, like resistance, lack of buy-in, and limited support for the project management office – limiting its effectiveness.
4. Resource Allocation: Determine the necessary resources, such as budget, staff, and technology, required to support the PMO. Inadequate resource allocation can limit the PMO’s ability to deliver its services, causing delays, inefficiencies, and compromised project outcomes.
5. Governance Structure: Establish a clear governance structure that defines roles, responsibilities, and decision-making authority within the PMO. A lack of a governance structure creates unwanted confusion, conflicts, and delays in decision-making, impacting project execution and overall performance.
6. Change Management: Develop a robust change management plan to address the impact of the project management office on the organisation and its employees. Neglecting change management can lead to resistance, low adoption rates, and overall disruption to business operations.
7. Communication Strategy: Develop a comprehensive communication strategy to ensure effective and transparent communication within the PMO and across the company happens consistently. Poor communication is costly – resulting in misunderstandings, lack of alignment, reduced collaboration – all of which affect project outcomes.
8. Performance Metrics: Define key performance metrics to measure the success and effectiveness of the office. Without clear metrics, evaluating the PMO’s impact becomes challenging; identifying improvement areas and demonstrating its value to the organisation becomes difficult.
9. Training and Development: Provide training and development opportunities for staff and project managers to enhance their skills and knowledge. Neglecting training can limit the PMO’s ability to deliver high-quality services, resulting in poor project outcomes.
10. Continuous Improvement: Foster a culture of continuous improvement within the project management office. Encourage feedback, lessons learned, and process refinement. Without a focus on continuous improvement, the project management office may stagnate, miss opportunities for growth, and fail to adapt to changing business needs.
Project Management Methodologies: How do they align with PMO Structures
When establishing a PMO structure, consider alignment with specific project management methodologies.
It often turns out that different PMO structures may be suitable for specific project management methodologies. For example:
- The functional PMO structure is well-aligned with a Waterfall project management methodology, which follows a sequential and linear approach to project execution.
- The projectized PMO structure is often associated with Agile project management methodologies, which emphasize flexibility, collaboration, and iterative development.
- The matrix PMO structure can be used with various project management methodologies, depending on a company’s needs and project characteristics.
By aligning the project management office structure with the appropriate project management methodology, optimisation of project delivery and resource allocation can take place.
PMO Hierarchy: Who Does What?
In a PMO structure, it’s important to define the roles and responsibilities of different stakeholders. Here is a breakdown of the typical PMO hierarchy:
- PMO Head: The PMO head is responsible for overall PMO governance, strategy, and decision-making. They ensure that the PMO aligns with the organization’s goals and objectives.
- Project Managers: Project managers are responsible for the successful delivery of individual projects. They work closely with project teams, stakeholders, and the PMO to plan, execute, and monitor projects.
- PMO Staff: PMO staff members provide support to project managers and project teams. They may be responsible for developing and implementing project management methodologies, providing training and support, and ensuring compliance with project management standards.
- Functional Managers: In a matrix PMO structure, functional managers play a crucial role in resource allocation and technical expertise. They oversee the day-to-day operations of project teams and ensure that resources are allocated appropriately.
Challenges in Establishing a PMO Structure
While implementing a project management office structure is beneficial, there are potential challenges to be aware of. Some common challenges include:
- Resistance to Change: Implementing a new structure may face resistance from stakeholders who are accustomed to existing project management practices. Addressing concerns and communicating the benefits of the new structure becomes important.
- Resource Allocation: Allocating resources to projects can prove a complex task in a PMO structure. Balancing resource availability and project demands requires careful planning and coordination.
- Maintaining Consistency: Maintaining consistency across projects can be challenging, especially in large organisations with diverse project teams. PMOs should develop and enforce project management standards and provide ongoing support to project managers and teams.
- Continuous Improvement: Project Management structures should evolve and adapt to changing business needs. Continuous improvement is essential to keep up with industry trends, emerging technologies, and evolving project management practices.
Finding the best fit:
Choosing a PMO structure that’s right for you, your team and your organisation is crucial to the success of your project management efforts.
By understanding the different types of PMO structures (covered above) and considering key factors such as:
- Business needs
- Project management methodologies
- Stakeholder engagement
- Your chances of creating a PMO structure that aligns with your organisation’s goals and maximizes project success – increase.
- Remember, a well-designed project management office structure:
- Enhances project delivery
- Improves resource allocation
- Increases overall efficiency
We recommend evaluating your options carefully and choosing the PMO structure that fits your organisation best.