Reporting Arrangements
The reporting relationship of a PMO is an important factor in establishing the power and potential roles of a PMO. A variety of reporting arrangements is possible. A PMO
can be set up as an independent group reporting directly to a president or executive committee. This potentially provides the office with considerable power and independence. Alternatively, a PMO can report to an executive within a functional department. This provides a lesser degree of independence but may still provide the group with considerable power. The reporting arrangement can be at lower levels; but in these cases, the role of the PMO generally becomes more restricted to particular areas of an organization’
s operations.
In addition to the external reporting arrangements, there are a variety of possible internal reporting arrangements that may impact the roles of a PMO. For example, in geographically dispersed organizations, there are benefits in establishing separate PMOs. These PMOs may report locally but be affiliated with the other PMOs or report to a central PMO. Matrix reporting relationships are also common.
Organizational Positioning
PMOs can be established as stand-alone groups or can be part of a functional group such as information technology (IT) or operations. Typically, a PMO will be positioned in a functional group with prime ownership for projects. For example, in financial institutions that are heavily reliant on information technology and its development, PMOs are often located in the IT areas. This has the benefit of bringing a PMO close to the project execution areas; however, there can be a downside when the PMO is seen to be too heavily influenced by the functional group in which it is located.
Broadening the reporting arrangement to a cross-functional steering committee can overcome this concern.
Projects in Scope
There is a wide variation in the scope of projects for which a PMO can have responsibility. PMO responsibilities can include all the projects undertaken by an organization; all the projects undertaken by a particular functional group such as IT; or projects of a certain type. The scope of responsibility should be closely aligned to an organization’
s needs. Typically, when PMOs are first established, scope is restricted within an organization. This is often part of a “prove yourself” strategy as organizations assess the value of a structured approach to project management.
PMOs may be established to progress particular organizational priorities. For example, many organizations set up PMOs to oversee and implement special projects.
Similarly, PMOs have been set up to support organizational transformation projects or to facilitate organizational acquisitions. Projects in scope typically evolve over time to reflect changing organizational strategies and also organizational project management maturity.
Ownership of Resources
A PMO can operate as an independent group with a mandate to oversee and influence projects but without direct control of projects. In these cases, a PMO can be quite small in size. Alternatively, a PMO can “own” the staff who undertake projects. This could be restricted to owning an organization’
s project managers but
could extend as far as owning an organization’
s total pool of project resources. All
these models have been adopted. The choice depends on the expected extent of direct involvement in projects.
A Permanent or Temporary Office
A PMO can be set up either as a temporary or permanent office. A temporary office may be set up to manage a particular group of projects. For example, a number of organizations set up PMOs to overview their Year 2000 initiatives. Other examples include managing an acquisition or managing a major organizational transformation project. The motivation for a temporary office is to support a set of projects with a fixed duration. A permanent office is suited to supporting an organization’
s projects
on an ongoing basis.
Although an organization may initially adopt the temporary model, the value demonstrated and the infrastructure established often lead to the PMO being given expanded responsibilities and a continued mandate.
Size and Budget
In addition to the direct ownership of project resources, budget and staff resources are fundamental organizational factors to be addressed. Clearly, the staff and budget need to be increased as the responsibilities and capabilities of a PMO are expanded.
HUMAN RESOURCE RESPONSIBILITIES
A PMO can have a broad range of human resource-related responsibilities. These responsibilities can range from no responsibility for human resources to a role where a PMO takes on a wide range of human resource responsibilities for project resources.
These expansive roles can occur both in the case when project resources report directly to a PMO and in cases where resources report independently to different functional groups. Potential human resource responsibilities of a PMO include the following.
Recruitment and Selection
A PMO can have responsibility for recruiting and selecting project staff. This may be restricted to a narrow group of positions such as project managers or it could include a broad cross-section of project resources. Recruiting and selecting staff provides an opportunity to have a significant impact on the project management culture of an organization, to ensure that skills acquired align with projects in scope, and to shortcut the development of project management skills.
Training and Certification
PMOs can take on the role of providing project management training to organizational staff. They ma y do this by providing this training themselves or they may facilitate this through outside vendors. In these cases, the role generally would include the selection of vendors. Responsibilities can also include the certification of project managers.
A PMO may set minimum standards that staff must achieve to be selected or promoted as project managers, or set a project management accreditation path within the organization. For example, an organization may agree that only externally accredited project managers be designated as project managers. Training and certification provide a PMO with significant opportunity to develop and promote project management skills.
Appraisal and Promotion
Appraisal of project managers often provides challenges that are not present in the traditional hierarchical organization. Project managers often move between projects and consequently between different sponsors and managers. This makes it difficult for consistency and comprehensiveness of appraisal. A PMO can play a central role in the appraisal process by providing appropriate templates and guidelines and acting as a coordinating point to obtain and combine appraisals from a variety of managers.
This role can be expanded to being responsible for making or recommending promotions. The need for these roles increases as the movement of project managers across diverse projects increases.
Providing Resources to Projects
A role that PMOs can fill is to coordinate the provision of resources to projects. This could be restricted to the allocation of project managers, but could extend to providing entire project teams. As the size of an organization and its project resource pool increases, there is an increased need to systematically manage resources. This includes both managing availability and competencies. For example, in a large IT
group where there may be hundreds of employees with a diverse set of skills, it is important to know when staff are available and the skills that the staff have in order to make the most effective use of resources. This facilitates the alignment of resources and requirements and the minimization of idle resources. A role that PMOs have provided is to maintain a project resource repository and to use this to manage the allocation of project resources. In a resource pool with hundreds or even thousands of resources, this becomes a major undertaking. Even in a smaller resource group, the uncertainty associated with project execution and competing priorities in an organization can make this a daunting task.
Time Recording
A PMO can have the responsibility for managing a time recording system. This role may include selecting the time recording tool and tracking time spent. This may also include analyzing staff utilization or time to be charged to a client, utilization against budget, etc. These roles are most relevant in large organizations and organizations where staff time is billed to the department being served.
Career Planning
A PMO can have the role of supporting the career planning of an organization’
s
project resources. This role can be linked to other human resource responsibilities such as recruitment, training, certification, appraisal, and resource allocation. A PMO, by monitoring and administering these factors, can potentially play a significant role in career planning — both from an organization’
s and an individual’
s perspective.
This has value, both in supporting individual growth and in building organizational capability.
Personnel Administration
Personnel administration, such as managing holiday schedules and sick leave, administering salaries and bonuses, etc., can be a role for which a PMO is responsible. Reasons for having a PMO undertake these roles include freeing project and program managers from these day-to-day responsibilities to better focus their efforts on project execution.
External Vendor Management
PMOs are frequently exposed to a variety of external vendors due to the central role they play in a variety of projects. These may include recruitment agencies, service providers, hardware and software vendors, management consultants, etc. The multiple exposures that come from these interactions may place PMOs in a position where they are best able to manage the relationships with these vendors.