PMOs aren’t particularly new idea to project management, but that doesn’t mean they are not effective. As your projects increase in number and complexity, establishing a PMO is worth looking into. Here’s our Top 10 PMO edition: the Top 10 Benefits of a PMO. We’ve also outlined how establishing a PMO can significantly increase the effectiveness of your project management processes.
What is a PMO?
Before we get into the benefits of a PMO, let’s define what it is.
A project management office (PMO) is a group, department or office that defines, and maintains the standards and practices for project management within an organisation. The PMO can either be external or internal, depending on the financial resources and skill-set available to the organisation. PMOs can also play a significant role in supporting and improving strategic decision-making. This is particularly important when the organisation has programmes and portfolios. It therefore could benefit from either the establishment of an EPMO, or a PMO with a strategic focus.
In organisations with hundreds of projects occurring simultaneously, understanding of the project’s progress and strategic value is challenging. A PMOs job is to be the supportive backbone to your project management program. They ensure your organisation is executing projects in the right way, while choosing the right people for the task.
Benefits of a PMO for your organisation
1. Gives organisations transparency and a big picture understanding of their projects
The completion of projects are not always linked to a legitimate contribution to organisational strategy. When organisations use top-down structures, those who choose the projects may understand their feasibility or their strategic impact. It also limits the executive team’s understanding of the impact and value of projects.
The PMO is responsible for being an authoritative source on all information about projects. It should ensure all processes maximise project value, while most effectively identifying, reporting, and managing activities and risks.
2. Aligns the organisation’s activities with their strategy
PMOs make sure that your organisation’s portfolio is actually producing value inline with your strategy. This is the key way to maximise and optimise your portfolio. Without a proper PMO, organisations use their resources to complete as many projects as possible. However, more projects don’t always mean more value. Research by PMI shows that having a body overseeing portfolios and strategic alignment can improve strategic alignment by 23% and portfolio reporting services by 20%.
3. Optimizes an organisation’s resources and portfolio
One of the main tasks of the PMO is to ensure resources are used as efficiently and effectively as possible. All projects should be managed according to priorities, schedules, and budgets. PMOs also ensure that teams are using practices and processes that increase productivity. Some common processes that many PMOs use include governance frameworks and project pipeline management structures.
It can be a challenge for PMOs to stay on top of these tasks as the number of projects increase. To complete all these tasks well, it’s essential for to invest in an effective PPM software. pmo365 is an example of such a software, with hundreds of satisfied PMOs utilising its capabilities of resource management, native scheduling, and Power BI reporting.
4. Eases your risk management activities
Project managers know the importance of identifying and managing risks to successfully execute a project. We know that high risk doesn’t always result in a high return. PMOs are responsible for ensuring organisations take on the right risk for the right returns. PMOs can help organisations identify, prioritise, and evaluate all the risks associated with projects. A PMO might evaluate risks through a RAID log, and produce contingency and risk response plans to mitigate these uncertainties. Risks aren’t as scary or damaging when an effective PMO is managing them.
5. Enhances the decision making-process
As established in the outside, the key benefit of a PMO is their ability to gather data across all projects. Then, they can analyse this information to give key decision-makers within an organisation relevant information. To make informed decisions, people need real-time, accurate and precise information on a on-going basis.
Many organisations haven’t put in place processes to ensure the right data is collected. To solve this, the PMO should establish these processes, thereby gathering data that provides tangible measurements of value. This results in reducing the likelihood of ‘pet projects’ being chosen. Instead, an organisation will choose the projects that generate the most strategic value.
6. Facilitates the sharing of knowledge to achieve success
A recurring issue in many large organisations is individual departments working in individual silos. Ideally, an organisation should be using standardised processes and tools to execute their projects. Sometimes departments use highly effective processes, but are too isolated to share it with the rest of the organisation. PMOs are there to make sure teams don’t keep good things to themselves!
By acting as a central hub, PMOs facilitate the sharing of knowledge. They ensure project teams use standardised and effective processes. The PMO will gather, identify, develop, and implement the most effective project management methodologies and best practices organisation’s context.
7. Governance initiatives are easier to implement
This point works hand-in-hand with point 6. When processes are standardised, any governance initiatives are applicable across an organisation. This reduces costs, improves traceability of successful models, and ensures the organisation can repeat successful frameworks. PMOs generate all of these benefits as part of their role to create, implement and maintain effective governance frameworks. These frameworks should clearly define responsibilities, accountability, and oversight responsibilities for projects.
8. Improves communication, collaboration, and coordination across departments
As your organisation’s central hub, PMOs can facilitate smooth and efficient communication between different departments or teams. Open and organised communication also improves collaboration and coordination within an organisation. Simply because of a lack of communication, organisations often don’t fully optimise their skills and resources. With an effective PMO, those issues will be long gone!
9. Supports project teams so they can do their jobs better
PMOs are your project managers’ coach, teacher and hype-man, not just tick boxes and manage quality control. An effective PMO will ensure project managers have all the tools they need to achieve results that executives are expecting. Members of the PMO should work with project delivery support, and provide necessary training and mentoring to project managers. This include training for project managers to use any PPM solution effectively. PMOs don’t just push for what the head of organisations want. They make sure the teams have everything they need to meet these expectations.
10. Increases your organisation’s ROI
In the end, the most important benefit of the PMO is increasing organisational ROI. The reason for increasing efficiency, strategic alignment, and portfolio optimisation is to generate the most value for investment. An effective PMO should guarantee a higher chance of achieving better results of an organisation’s project investments. These improved results will come from the activities of the PMO, ultimately the final result of all the benefits this article has listed. PMOs are there to make sure an organisation is working in the most effective and efficient way to accomplish the most valuable projects.
pmo365 brings the best out of your PMOs
Ready to establish a PMO? The rewards you’ll gain will be well worth the effort you invest. Make the process of establishing a PMO easier with pmo365. With over 15 years of industry experience, we know how to implement a PMO so you see results as quickly as possible.
If you want to know more about how pmo365 can revolutionise your PMO activities, make sure to book a free trial and speak directly with our PMO experts.
