What is a PMO?
A Project Management Office (PMO) is a department, group, or company responsible for defining and maintaining project management standards and practices across an organization. The purpose of a PMO is to provide governance and support to projects, ensuring that they are aligned with the organization’s strategy, delivering value, and meeting business objectives.
Types of PMOs
According to Gartner, there are four basic types of PMOs
- Uses a centralized platform for knowledge exchange and for experience sharing from experienced performers to the inexperienced, so that work can happen more efficiently
- Processes are not defined/standardized
- Establishes standard practices
- Focuses on establishing systems for monitoring & controlling variances
- Uses Audits
- Plans & controls the tactical execution of projects
- Promotes proactive project management
- Uses repeatable processes and techniques
- Follows a results-based culture
- Uses an enabling approach rather than a controlling approach
- Reviews business cases of project proposals
- Uses dashboard-based monitoring & control
- Is strategic
- Follows a results-based culture
On the other hand the Project management Institute (PMI) has classified PMOs into;
- The directive PMO is the highest level of the PMO roles. They maintain a strong degree of control over many aspects of the project and they often communicate directly with stakeholders and clients, working intimately with the CIO.
- Directive PMOs usually hire and assign project managers and serve as their guides and supervisors. They are an important part of project planning and manage an organization’s projects throughout its lifecycle in terms of scope, budget, and timeframes.
- Project performance can often be linked to the active participation and initiatives set out by a directive PMO system.
- The next level of PMO according to the PMI breakdown is the controlling PMO. They have a good degree of control over managing projects but not as much as the directive PMO.
- The controlling PMO approaches project control as someone who enforces the guides and practices agreed upon in the project charter, as well as being in charge of conformance and compliance.
- They make sure everyone is using the right tools and have some oversight over resource management. In less complex projects it is possible to adopt a PMO in between directive and controlling.
- This type of PMO has very little direct control over the project but instead serves as project support when team members ask for more guidance.
- In other words, one can say the supportive PMO is a consultant. The supportive PMO system is also used to onboard and train staff and arrange shared templates and common analysis metrics.
- The supportive PMO does not have much of a say in prioritization but is useful when it comes to real-time change management.
Key Characteristics of a PMO:
- Project management framework: A project management framework is the foundation of a PMO, providing a structure for managing projects and ensuring that projects are aligned with the organization’s strategy and objectives.
- Project management tools and technologies: Project management tools and technologies are essential for the successful operation of a PMO, providing support for project planning, execution, and control.
- Project portfolio management: Project portfolio management is a key component of a PMO’s role, providing a centralized view of the organization’s project portfolio and ensuring that projects are aligned with the organization’s strategy and objectives.
- Resource management: Resource management is critical for the effective operation of a PMO, ensuring that the right resources are available at the right time to support the delivery of projects.
- Performance management: Performance management is a key component of a PMO, providing a mechanism for monitoring, reporting, and forecasting project performance and ensuring that projects are delivering value.
Key Challenges of Conventional PMO’s
- As the number of stakeholders is high, as is the case with large EPC projects, project data collection from various sources gets difficult
- The collected data does not necessarily reflect actual scenarios
- Professionals need to spend a lot of time analyzing the data collected in order to pinpoint the problematic areas
- The difficulty of data collection and collation leads to the non-availability of the right information to the right people at the right time
- The above factors lead to delays in corrective and preventive actions resulting in schedule and cost overruns
A Digital PMO is a project management office that uses Digital tools and technology to support project management activities. It utilizes Digital tools and technologies to improve project management processes and activities including project management software, collaboration tools, data analytics, and other Digital resources that help improve project performance, productivity, and collaboration.
Digital PMOs can help organizations improve their project management practices by providing a centralized source of project management knowledge, supporting standardized project management methodologies, and providing real-time project tracking and reporting. They can also help identify project risks and opportunities for improvement by analyzing project data and performance metrics.
EPC projects involve complex and large-scale construction projects, such as power plants, refineries, industrial facilities, highways, Metro rails, etc. Such projects involve many stakeholders like engineers, suppliers, contractors, sub-contractors, and project owners. A Digital PMO for EPC projects helps improve project management processes and activities by leveraging Digital tools and technology.
Key Benefits of Having a Digital PMO for Large EPC Projects
The broad benefits of having a digital PMO can be summed up in three Es:
- Exception – Management by Exceptions: The ability to manage projects by focusing directly on the problematic areas which need immediate attention but without having to waste time and effort to find out where those problematic areas are.
- Evidence – Data driven decision making: The project status can be substantiated with data, and a dPMO facilitates drill-down analysis.
- Early – Early Action. Corrective and preventive actions help avoid rework, and prevent cost and schedule overruns.
Here is a Detailed List of The Functional Benefits of Using a Digital PMO:
- Centralized project management knowledge: A Digital PMO can create a central repository of project management knowledge and best practices which can be accessed by project teams which helps standardize project management methodologies and ensures that all project teams follow the same guidelines.
- Project tracking and reporting: A Digital PMO can use project management software to track project progress and provide real-time project reporting which can help project teams identify and resolve issues more quickly and efficiently.
- Collaboration and communication: A Digital PMO can use collaboration tools to improve communication and collaboration among project teams, suppliers, and contractors which helps ensure that all stakeholders are working together effectively and efficiently.
- Data analytics: A Digital PMO can use data analytics to analyze project data and identify trends and opportunities for improvement which can help project teams identify and address issues early on in the project lifecycle.
- Continuous Alignment: Digital PMOs can help organizations better align projects and programs with strategic objectives by providing real-time data and insights into portfolio performance.
- Increased Visibility: Digital PMOs can provide increased visibility into project performance by using Digital tools to track progress, identify issues, and generate real-time reports and metrics.
- Enhanced Collaboration: Digital PMOs can facilitate collaboration among team members and stakeholders by using Digital tools to share information and documents and communicate in real-time.
- Better Decision Making: Digital PMOs can enable organizations to make data-driven decisions about resource allocation and portfolio performance by providing real-time data and insights into project performance.
- Reduced Costs: Digital PMOs can help organizations reduce costs and improve efficiency by automating processes and reducing manual effort,
- Better risk management: Digital PMOs can help organizations to identify and manage risks more effectively by monitoring project performance in real time.
- Scalability: Digital PMOs are easy to scale up or down, depending on the size and complexity of the project portfolio.
Overall, a Digital PMO can help organizations improve project performance, increase efficiency, and make data-driven decisions about resource allocation and portfolio performance.
Critical Success Factors for Implementing Digital PMO.
- Start with the end in mind i.e., dashboards
- Always top driven
- Closer to the decision maker
- Stakeholder engagement
- Identify key stakeholders (reviewers, decision makers, influencers)
- Organizations / functional departments participation
- Define the key pain point(s) the DPMO must solve
- Identify the best-fit solution (reduce customization)
- Prioritize the top 3-5 modular solutions in order of preference for the customer
- Use early simulation and detect failures with stakeholders
- Define the major milestones
- Identify risks and prioritize / reprioritize based on delivery capabilities.
- Define the major milestones with dates
- Start implementation (execution)
- Always work on Early-Stage live project data, which ensures better user participation. This will also provide leadership attention to support timely launches.
- Streamline implementation plan continuously based on the actual progress
- Have legacy data strategy
- Feature implementation vs prioritizing modular rollouts in the order value creation
- Early simulation and detect failures with stakeholders
- Adapt changes with intent to Go live and break the loop of endless testing cycles
- Stop all parallel reporting.
- Do not wait for all processes to be in place for drill down analyses, use existing weekly and monthly reports data
- All go live points help to create positive engagements
- Ensure active use by User teams (the more The usage the less their propensity to reject the system)
- Do not reengineer the business process while creating dashboards, use as is
- Be firm and conclude promptly once clarity is in place.
A Digital PMO makes it possible to;
- Get accurate and real-time project progress information any time through fully automated, intelligent and customizable dash boards
- Get notifications on outliers or exceptions (cost, schedule, risk, quality, safety etc) so that management teams can focus on the problematic areas. This saves effort and improves the overall effectiveness of project management.
- Perform forecasting of cost and schedule by facilitating proactive project management. The ability to prevent problems before they occur reduces slippages and overruns.
- Build compliance into the digitalized workflows, eliminating the need for time consuming audits, corrective and preventive actions.
- Create accurate current / historical data repositories for effective integration with other tools.
- A Digital PMO can perform many of the mundane activities performed by conventional PMOs more efficiently and economically with the help of affordable cloud-based tools.
- Most of these tools are available on subscription model, which makes them extremely affordable even for small organizations.
- Today’s Digital PMO tools have built-in industry best practices, which eliminates the need for compliance audits as there is no room for deviations in a digital workflow.
- The accurate data repository created by these tools comes in handy for data-based decision support which speeds up decision making and enables integration with other systems.
- The adoption of a Digital PMO will help the PMO staff focus on activities that deliver strategic value to the organization, thus converting them into VDOs (Value Delivering Organizations).
- The adoption of Digital dashboards with built-in industry best practices is an easy and quick route to efficient project delivery maturity.
Abrachan Pudussery is domain expert in Project Management area and a seasoned trainer. He heads the Wrench Academy, and brings in deep domain expertise and a conviction about higher quality in project management training.
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