What is a project management office (PMO)? The key to standardizing project success

The ever-increasing pace of change has upped the pressure on companies to deliver new products, services, and capabilities. And they’re relying on PMOs to ensure that work gets done consistently, efficiently, and in line with business objectives.

Project management office (PMO) definition

A project management office (PMO) is a group, or functional unit, that sets, maintains, and enforces the practices, policies, and standards for structuring and executing projects within an organization.

According to the Project Management Institute (PMI), a PMO is essential for enterprises seeking to centralize and coordinate the management of projects throughout their life cycles.

“A good PMO drives discipline, communication, and orchestration. They make sure value gets delivered to the organization,” says Dave Wolf, who as a principal at professional services firm KPMG focuses on transformation delivery.

SUBSCRIBE TO OUR NEWSLETTER

From our editors straight to your inbox

Get started by entering your email address below.

Please enter a valid email address

Debra Chin, a certified Project Management Professional (PMP) and program manager/consultant with ROC Implementation & Management Group (ROCIMG), describes the PMO more succinctly, saying, “It’s a centralized point that helps manage projects.”

Nearly three-quarters of midsize and large companies report having a PMO, according to the 2022 State of the Project Management Office report from PM Solutions, a project management services firm. Moreover, the report found that most PMOs — some 83% — report to a vice president or higher, with 50% reporting directly to a C-level executive, indicating the PMO’s strategic importance for companies today.

Roles and responsibilities of a PMO

The PMO has a multitude of responsibilities, according to project management experts and the PMI. One key responsibility is to create the processes, tools, techniques, and policies that will be used to run projects within an organization. The PMO also establishes standards for the skills required for project managers to lead projects.

The PMO determines what documentation is required for the various projects, and it enforces adherence to the practices and standards it has established.

The PMO also collaborates with business leaders to prioritize projects and ensure projects are aligned to the company’s strategic objectives.

“They make sure everyone is aware of the direction that the company is going,” says Ordonna Sargeant, a PMP-certified global project manager for a company with worldwide operations, an adjunct professor at Metropolitan College of New York, and a PMI member.

The PMO also helps define and ensure adherence to each project’s scope, schedule and budget, and it helps manage any required changes to those three items.

PMO staffers also play a critical oversight role by identifying problems that arise within individual projects or that bubble up within multiple projects; they then work to address those issues to minimize any negative impacts.

As Sargeant explains, “They’re seeing if trends emerge, and they’re watching for how things are progressing for the different projects.”

Additionally, the PMO ensures project teams have the resources required for success; offers training and guidance for PMO staffers as well as workers throughout the organization; and communicates between project teams and business leaders.

Furthermore, the PMO serves as a centralized deposit of project-related information, such as status reports, identified risks and project interdependencies.

Most importantly, perhaps, is its overarching responsibility, which is to ensure projects deliver value. The PMO works with a project’s business sponsors to articulate expected outcomes, establish metrics for measuring success, and then report on the returns generated by the finished project.

The PM Solutions report identified the top activities of high-performing PMOs as:

Facilitating the sharing of resources, tools, methodologies, techniques

Enabling consistent use of policies, procedures, templates

Communicating strategic work/progress (escalations, risks, benefits)

Standardizing project-related governance processes

Aligning work with strategic goals

Implementing/managing dashboards/scorecards

Establishing just-enough process and practice discipline

Interfacing with functional units (finance, HR, IT)

Advising/supporting senior management

Benefits of a PMO

An organization typically requires a PMO when the number and complexity of its projects reach a point where project teams have difficulty prioritizing resources and standardizing policies, procedures, and risk assessments across all of them, experts say.

Chin says a PMO makes sense when the organization needs more visibility and coordination across its portfolio of projects, adding that PMOs bring the benefit of giving a “look from a 10,000-foot level.”

“PMOs are looking at the big picture,” she adds.

Others point to additional benefits that a PMO brings to the organization, saying the office helps validate that teams are working on the projects that support business needs and objectives; can best orchestrate the placement of resources and sequence projects to prevent bottlenecks; and can better identify, monitor, and manage all the elements that support projects as well as the risks that projects present.

Project management office structure and roles

The structure and roles of PMOs differ based on their type and the organizations they support. PMOs will often be headed up by a director who is responsible for ensuring project alignment with business objectives.

In larger organizations, program managers or portfolio program managers may be part of the PMO to provide oversight for multiple related projects. Either way, project managers are a key role for PMOs, providing leadership over individual projects.

Project coordinators, administrators, and analysts are other roles that may be found in a PMO.

PMOs often reside within the IT function, given the high volume of projects within that department.

But, as the PM Solutions 2022 State of the Project Management Office report found, where PMOs reside in an org chart and who oversees them varies.

Wolf says where the PMO resides is less critical than its ability to understand what’s happening within the organization.

Choosing the right PMO for your organization

PMOs differ based on their approach to managing an organization’s project management function and can be gropued into the following commonly recognized PMO types:

Controlling: This type of PMO requires rigid adherence to the policies, practices, standards, templates, tools, and techniques it has established to ensure uniformity across all projects within the organization. According to Sargeant, companies in highly regulated industries, as well as organizations where projects present high levels of risk, often opt to implement a controlling PMO.

Supportive: Faithful to its name, a supportive PMO supplies best practices, templates, and other items to support project teams, offering training, guidance, and services to support those teams as needed.

Directive: The distinguishing feature of a directive PMO is its direct involvement in project execution; the office’s project managers insert themselves into each initiative to direct the activities required to move the project to completion, thereby assuring a high degree of consistency from one project to the next. Similar to the controlling PMO, a directive PMO is also often found in highly regulated, high-risk industries.

Various project management authorities offer additional categories that organizations might choose from when implementing a PMO.

For example, tech research and advisory firm Gartner breaks down PMOs into four categories: the activist PMO, the delivery PMO, the compliance PMO, and the centralized PMO.

Others divide PMO types into centralized and decentralized categories.

Another commonly recognized PMO type is the enterprise PMO (EPMO). Sargeant says an enterprise PMO, which sets the standards, processes, and delivery approaches (such as the project management methodologies) for the entire portfolio of projects across the organization. It typically has enterprise-wide key performance indicators (KPIs) and functions as the go-to authority for all project work, Sargeant explains.

An enterprise PMO can operate as a controlling, supportive, or directive PMO.

Project management experts say each PMO type has what could be perceived by some as advantages but by others as disadvantages.

For example, a controlling PMO supports strong compliance to standards but is not flexible, whereas a supportive PMO has flexibility but has less consistency across the company.

Whether those are pros or cons depend on a company’s perspective, according to experts, which is why they say a company’s requirements should dictate the type of PMO it implements.

“I don’t think there’s a one-size-fits-all PMO,” Chin says, “so you need to understand as an organization what you’re trying to achieve.”

For example, a controlling PMO would be a good fit at a construction company that must comply with a long list of safety requirements, Sargeant says. On the other hand, a startup that values speed for innovation and wants the ability to pivot quickly may find a controlling PMO too restrictive and would likely be better off with a supportive PMO.