How a project management office (PMO) is designed and staffed for maximum effectiveness depends on a myriad of organizational factors, including targeted goals, traditional strengths and cultural imperatives. There is no uniform recipe for success in organizing a PMO, but one thing is for certain -- it's important that the PMO structure closely hews to a company's corporate culture. You must build a PMO that makes the most sense to your organization.

There are almost as many varieties of project management offices (PMOs) as there are companies. For example, some companies rely on the PMO to be responsible for all areas of project management and project execution. Others want the PMO to provide a consolidated reporting view of all projects in the organization.

I'll organize this answer in five sections:

1. Defining a logical PMO organization
2. PMO models
3. PMO governance
4. PMO design for short- and long-term: Organized by function and services
5. PMO design for short- and long-term: Organized by role

Before you can begin designing a PMO (or re-launching one, if you're starting over), you must define how it will function logically within the organization. The value to this is twofold. First, you gain clarity and agreement on what you are doing and why. This information is communicated to clients, stakeholders and your own staff so that everyone starts with a common set of expectations. Second, this exercise provides a framework for the PMO to guide decision making in the future. For example, you wouldn't want to undertake any projects that didn't help you achieve your organizational objectives. Likewise, major decisions can be evaluated based on whether they fit into your strategy.

The following major components define your logical PMO.

Mission and strategy

• Sponsor: All organizations don't have a sponsor, but a PMO typically does. The sponsor is the person responsible for the PMO funding and, in many cases, the sponsor is the manager to whom the PMO reports. Sponsors are absolutely critical for a culture change initiative such as the PMO.

• Stakeholders: Any people or groups (internal and external) who have an interest or a partial stake in the products and services your PMO provides.

• Clients/customers: The main individuals or groups that request and use the products and services your organization provides. While there may be many stakeholders, it is important to recognize who the clients are and how the PMO will focus on helping them meet their project and business objectives.

• Objectives: Concrete statements describing what the PMO is trying to achieve in the short term, perhaps up to one year. The objective should be written at a lower level, so that it can be evaluated at the conclusion of the year or the end of a major project, to see whether it was achieved. A well-worded objective will be specific, measurable, attainable/achievable, realistic and time-bound.

• Products/services: Define tangible items that the PMO produces as the result of a project. Services refer to work done for clients or stakeholders, which doesn't result in the creation of tangible deliverables. Services provide value by fulfilling the needs of others through contact and interaction. The PMO achieves its objectives through the creation of products and the delivery of services.

• Transitional activities: These are the specific activities and projects required to implement the physical PMO.

Overall, PMOs help CIOs more predictably deliver strategic IT projects that satisfy both the CFO and internal customers. They can save organizations money by enabling better resource management, reducing project failures and supporting those projects that offer the biggest payback. A list of goals and objectives common to most PMOs appears in slides #1 and #2.

PMO models

There are two popular models for the PMOs: one that acts in a consulting capacity, providing project managers in business units with training, guidance and best practices; and a centralized version, with project managers on staff who are loaned out to business units to work on projects.

There are three basic organizational styles for a project management office. Each embodies unique functions that define its role within the project development-to-management life cycle.

1. The project repository: In this model, the project office simply serves as a source of information on project methodology and standards. It assumes that the enterprise has embraced a cohesive set of tools for project design, management and reporting. This model occurs most often in organizations that empower distributed, business-centric project ownership, or enterprises with weak central governance. It is often used as a first step to enfranchise the idea of consolidating or sharing management practices, but it falls short of direct project oversight within the business. Project managers continue to report to, and are funded by, their respective business areas.

2. The project coach model: An extension of the repository, this model assumes a willingness to share some project management practices across business functions and uses the project office to coordinate the communication. Best practices are documented and shared, and project performance is monitored actively. Results are used as an opportunity to raise enterprise performance and train inefficient or new project managers.

   In some organizations, mentoring relationships have been established across business boundaries between high-performing project managers and those who are less able. The PMO in this model is a permanent structure with staff and has some supervisory responsibility for all projects; therefore, often a "dotted-line" reporting relationship exists between business-staffed project managers and the project office for performance and reporting. Funding for this model typically is based on a fixed allocation for staffing and administrative support.

3. The enterprise project management office: The most permanent, consolidated organizational model concentrates project management within a project office. This implies direct management or oversight of projects -- depending on scope and duration -- wherever they occur within the enterprise. In some cases, all project managers actually are staffed within the shared service and consigned to projects as needed. This model also assumes a governance process that involves the project office in all projects, regardless of size, allowing it to assess scope, allocate resources and verify time, budget, risk and impact assumptions before the project is undertaken. Funding is generally a combination of direct, budgeted allocation for baseline services and a fee-for-service charge for others.

   An enterprise project office acts as a contracted project manager, assessing scope, allocating resources and verifying time, budget, risk and impact assumptions. However, management's choice of models should not focus solely on control, but also on enabling project planning and leadership.

   A PMO should address a set of business needs; and the development of excellence in project management, as in any evolving discipline, may be a progression through organizational styles that add layers of capability as a result of time and experience. Hybrids of these models evolve as organizations improve their project processes.

   In the #2 coach model, the project office acts as a trainer, a consultant or a mentor and a source of information on project processes. This project office often helps in project setup and post-project review. Some enterprises use variants of this model to "seed" their enterprises with trained project management professionals. In either model, the project office usually:

   • Maintains the IT organization's repository of reusable project-related artifacts (e.g., project plan templates, estimating models and components)
   • Helps institute architectural standards
   • Collects and disseminates best practices
   • Performs project close-out (i.e., collecting such metrics as project cost, size, quality, and end-user satisfaction)

In robust PMO organizational models, the office is assigned the key roles of assessing and validating project estimates, as well as staffing the project manager function. There are five key roles for a PMO to be incorporated in its design, although implementations vary based on business structure, the degree of dysfunction and the sense of urgency across business divisions that a need exists for a shared solution to project control. (See slide #3).

Standard methodology: The key to implementation -- a consistent set of tools and processes for projects -- provides a basis for measuring performance and can act as a communication and training vehicle for developing project skills.

Resource evaluation: The initial assessment of resources (i.e., people, money and time) is critical on several fronts. Based on experience and evidence from previous projects, the project office acts to validate business assumptions about project and life cycle costs. It also serves senior management by feeding back information that may alter project priorities, based on resource availability or cross-functional project conflicts.

Project planning: The project plan is a cooperative effort coordinated by the project office, which -- as a best practice -- serves as a competency center and as a library for previous project plans.

Project management: Consistent practices, frequent review and a governing responsibility are the baseline roles for management within the project office. In most initial implementations, project managers are not staffed directly from the project office. However, in some organizations, the project office is also the source for project managers, who are deployed as consultants -- in effect -- for the life of the project.

Project review and analysis: Enterprises need to know if project goals are achieved on time, on budget and as designed. The review and analysis phase is a loop back to the resource evaluation role.

A PMO is a shared competency designed to integrate project management within an enterprise. A project management office can be a key resource in establishing an enterprise competency in project analysis, design, management and review. Given the appropriate governance, it can improve communication, establish an enterprise standard for project management and help reduce the disastrous effect of failed development projects on enterprise effectiveness and productivity.

PMO design for short- and long-terms: Organized by function and services

Slides #4 through #6 depict a logical grouping of recommended functions and services provided by a fully implemented PMO organization in both short-term and long-term models. The diagrams do not imply a physical PMO organization.

There are three major functions within the PMO organization in the functional view.

1. Project delivery unit: This unit is responsible for the delivery management and project oversight of projects managed by the PMO. These project managers report into the project delivery unit. This unit also performs project oversight.

2. Monitoring and reporting: This function monitors and reviews all projects, whether they are managed by the PMO or outside of the PMO. The initial focus and priority is on the mission-critical "high risk" projects. In addition, management reporting will be collected and consolidated for senior DHS management and control agencies. This unit also provides administrative support for the PMO and the projects.

3. PM process and mentoring unit: This function is responsible for the project management methods, processes and tools. In addition, this unit provides mentoring, education, intellectual asset management and consultative support to the project management constituencies.

The actual roles and responsibilities of those performing the functions and services are shown in matrices appearing in slides #7 (staffing and ownership/participation by function) and #8 (roles for IT, PMO, and projects/programs).

For detail on each function and all services that define them, as well as for job descriptions for each PMO staff position, please contact me.

PMO design for short- and long-terms: Organized by role

Slides #9 and #10 show recommend short-term and long-term PMO organizations charts by role. Note that each role does not necessarily represent an individual staff member (i.e., one role may be staffed by multiple individuals and one staff may perform multiple roles).