Enterprise Project Management Office Guide
If you’ve been around the project management space you’ve most probably heard of the project management office, the PMO, but have you heard of an Enterprise PMO? Gartner predicts that by 2021, 50% of large organisations will have implemented an EPMO. So just what is an EPMO all about and why are organisations shifting towards it in droves? Don’t worry, we’ll answer all your key questions about EPMOs and just how much value they can bring to your organisation.
An Enterprise PMO is a centralised strategic function of an organisation that operates with enterprise executives and key decision makers to provide enterprise wide support for all project, program and portfolio management activities. EPMO activities include portfolio management, governance, stakeholder communication and management, risk management, resource management and much more (we go into detail down below). The main purpose of the EPMO is to ensure strategic alignment between the organisation’s strategic objectives and projects.
Though their activities may seem to overlap, EPMOs are different from PMOs because the level at which they operate. While traditional PMOs operate on tactical and operational levels, mainly focusing on doing things right, EPMOs operate on a strategic level to make sure that the right projects are being selected. EPMOs often report directly to the C-suite, or directors, and have more authority to control portfolios, programs and projects running across the enterprise. It is important to note that EPMOs do not eliminate the need for project, program or departmental PMOs, but rather compliments and brings these traditional PMOs to another level.
A way of visualising the differences in PMOs is presented in the graphic above. PMOs function on every level of an organisation’s operations, both vertically and horizontally.
At the project-level we have the traditional project management office (PMO) that can both work as a temporary or permanent function of the organisation and is focused on making sure the everyday runnings and activities of projects are being fully optimised. Their main purpose is to make the job of project managers as easy and smooth as possible. A step above that is programme management offices (PgMO), who are in charge of maintaining health with programmes. Additionally, another step up is the project portfolio management office (PPMO) who are charged with the health of overall portfolios.
While PMOs other than the PMO effectively cover an organisation’s vertical operations, the EPMO is positioned to ensure all practices, frameworks, tools and processes are maintained and improved horizontally, or across the entire organisation. Some make the mistake of dubbing EPMOs as PPMOs. The critical difference is the holistic scale at which they function with large organisations often having multiple PPMOs.
So what are the challenges faced by traditional PMOs that the EPMO aims to address? Key challenges include:
Though EPMOs usually deliver benefits, it may not always be completely necessary nor advised for organisations to implement them. There are many factors that can affect an organisation’s decision to implement an EPMO such as the organisation’s size, industry, complexity and culture.
A PMO is typically set up to manage and achieve project-specific deliverables at a project or program level. The overall effectiveness of the PMOs capabilities lies in their ability to trace back their activities to the organisation’s overall success. However, here lies one of the key reporting and management gaps and is exactly what the EPMO aims to address.
Your organisation may need to implement an EPMO if it suffers from:
We’ve told you all about what makes an EPMO different, but what exactly are their benefits versus PMOs? Here’s a few:
At risk of repeating ourselves, the key point of EPMOs and project portfolio management activities is not simply to maximise your resources, but to optimise them for the best results. Don’t make the mistake of believing more projects leads to greater value. Research by the Project Management Institute shows that EPMOs are able to improve strategic alignment services by 23% and portfolio reporting services by 20%.
You may be asking, ‘why is leadership buy-in important for my organisation’s PMO activities?’. Actually, very important. Peter Taylor in his book ‘Leading Successful PMOs’ states that one of the biggest challenges of a PMO is making the whole organisation buy-in to the PMO’s function and needs. Key decision makers and directors are also key culture setters. If a CEO is not onboard with the PMO and their goals, they’re never going to receive the trust needed to excel. The EPMO critically gives directors and key decision makers the necessary visibility to justify their support for the PMO and push for their agenda. Getting your key decision makers on board is critical!
One of the key functions of the PMO is to make sure resources are being allocated in the most efficient and effective manner across all projects based on priorities, schedules, budgets and more. Being able to effectively coordinate the different moving parts of multiple projects is one of the key benefits of a PMO for large corporations. EPMOs not only manage how the projects are run to increase efficiencies, but also select which projects are to be run. EPMOs have the duty of communicating and working closely with directors and key decision-makers to make strategic decisions that optimise the portfolio as a whole.
Say good-bye to departmental silos! EPMOs act as the overarching central hub that facilitates knowledge sharing and prevents teams from having to constantly reinvent their own practices. They help gather, identify, develop and implement the most effective project management methodologies, best practices and standards for their organisations context. EPMOs make sure that teams don’t keep a winning recipe to themselves. They share it and implement it across the organisation.
EPMOs are uniquely positioned to enable key decision makers and directors to have a clear understanding of what is happening within their portfolio of projects while also being able to link each project’s outcome back to their broader strategic goals. By getting a holistic view of all projects – past, current and future – EPMOs enable organisations to focus on the long-term instead of simply hitting annual or shorter term goals.
The EPMOs key job is gathering and analysing vast amounts of data regarding projects occurring across the enterprise. This process of intentional data collection allows the EPMO to properly define and track benefits and quantify the value of projects in an on-going manner. More importantly, all this valuable information will help key decision makers make informed decisions that are clear of any biases and personal preferences. This helps reduce the likelihood of ‘pet projects’ as project value can now be intentionally tracked and visualized.
EPMOs help create, implement and maintain effective governance frameworks that clearly define responsibilities, accountability and mechanism of oversight for projects throughout the entire organisation. Standardising processes across an organisation has the benefits of reducing costs, improving traceability of success or failure which allows for the repeated implementation of systems that lead to proven success. The job of the EPMO is to maintain consistency in project executions to facilitate communication and collaboration amongst teams and make sure more projects are being delivered on time, within budget and within scope.
Risk management is an essential part to any business. However, taking bigger risks does not always translate to bigger rewards. EMPOs helps organisations identify, prioritize and evaluate all the risks associated with projects within a portfolio, often through a RAID log, and produce contingency and risk response plans to mitigate these uncertainties. The EPMO does more than just mitigate risk: it must balance risks against their potential rewards.
In the end, this is the most important benefit of the EPMO. The end goal of becoming more efficient, strategically aligned and optimised is to make sure your organisation is getting more value for their money. With an effective EPMO, your project investments will have a higher likelihood of achieving their intended results as they set the organisation with systems, practices and environments that support project success from start to end. From the very first project idea to its completion, EPMOs are there to set organisations up for a win.
EPMOs have to wear many hats and juggle a wide range of activities. Below we list out some of an EPMO’s most critical responsibilities. These include:
It’s important to note that just as no two organisation’s are alike, neither are the best approaches to EPMO. There is no one-size-fits-all approach to setting up and running an effective EPMO. However, organisations can pull from a wealth of trusted resources, and through experience, build their own best practices. Self-determined best practices are formed and evolve by balancing all the above mentioned roles and responsibilities into a single working framework depending on an organisation’s unique context and needs.
Don’t let your EPMO be left as a fancy ornament. EPMOs need to be intentionally positioned, endorsed and supported to ensure they have the proper authority to make enterprise-level changes. EPMOs typically report directly to a director or C-Suite member. Make sure the EPMOs strategic-level position is clear and fully utilised.
EPMOs can sometimes be perceived as barging into the territory of other PMOs in the organisation. It needs to be clearly understood, communicated and maintained that EPMOs are there to complement and support the work of PMOs.
In a similar vein, executives should not perceive the EPMO as barging into their territory. It must be clear that EPMOs are there to support leadership by giving them the critical information to make key decisions. EPMOs should be seen as a complimentary support service for the organisation’s leadership rather than overlapping their responsibilities.
It is important that EPMOs are not drafted under any other business function or department. EPMOs are meant to be functioning outside departmental silos, acting as the overarching enterprise-wide control center that is not biased to a single department.
In a similar vein as the previous point, establishing a clear chain of command and flow of communication is critical to prevent potential bottlenecks. EPMOs add another layer to the organisational structure so it must be clearly defined who they report to and who reports to them. Without clearly defined roles, responsibilities and structures – EPMOs end up adding the bureaucratic processes they aim to reduce.
EPMOs handle a wide range of higher level activities and require experienced team members to be truly effective. Having team members who have project management expertise and business acumen will be critical. EPMO activities are not limited to just analytical and numbers-based skills as there are a wide range of crucial soft-skills they need to excel. Have a look at the five most important soft-skills we believe every PMO leader needs to succeed.
So you’re sold on the benefits of an EPMO and you want to establish one. Great! But how do you start forming an EPMO? Who do you need, what type of roles will they cover and what skills do you need to look out for? Some thoughts below:
Now it would be nice if we had a clear cut list of every team member and role you would need, but as we’ve always mentioned, there is no one-size-fits-all model to PMOs and so the exact roles you need may vary depending on your organisation’s needs. Through our research, we’ve found there are four distinct roles within any PMO – directors, managers, analysts and coordinators as well as trainers and coaches.
The EPMO director or Head of EPMO is the central overseer for the planning, funding and resourcing of an organization’s programs and projects. They often work directly under the C-Suite and play a significant role in strategic planning and execution. Directors play a critical role of ensuring key stakeholder expectations and requirements are being met.
In large organisations, they typically coordinate with multiple portfolio managers within the organisation to ensure all programs and projects are moving in the right direction. EPMO directors are not only presenting accurate numbers they also need to ensure cultures, frameworks and practices are in place which foster the most success and are thus the spearheads of effective change management within an organisation.
EPMO managers have the unique role of being the managers of managers. Though in the past it may have been rare for a PMO to maintain and manage its own staff, the increasing shift away from functional organisation structures has led to more centralised project management expertise within the PMO itself. The most successful organisations today are those with EPMOs that effectively manage their project managers and project support roles.
EPMO analysts and coordinators are there to support the EPMO director and managers gather all the relevant data they need to do their jobs. An analyst will ensure project metric and statuses are always readily available for review and are dealing with any red flags. Coordinators will help with the nitty gritty communication, collaboration and allocation of resources to different teams and departments to carry out the overarching strategy.
Change management is a big responsibility of the EPMO and with change comes the need for training and coaching. Though this role may not be a permanent, it has a significant influence on the effectiveness of change management initiatives. It is important that training is clear, directive and detailed to minimise any potential confusions down the line. Strong plans and direction make the backbones for effective change.
As EPMOs have a distinctly different focus to normal PMOs, they also require additional skills that are specific to regular PMOS. Though some of these skills may overlap with PMO skills, the most essential EPMO skills to look out for include:
The EPMO has the essential role of communicating and managing stakeholder expectations and requirements. As a EPMO team member, it is critical to be able to effectively identify the needs of key stakeholders, ensure that realistic expectations are set, mitigate any resulting changes and communicate it effectively to all relevant parties.
Some organisations may have distinct portfolio managers that can handle this key job, but in cases where there is none, EPMOs may have responsibility for aspects of portfolio management. As the central hub tasked with executing strategies, understanding the exact condition of the portfolio(s) becomes invaluable. Portfolio analysis skills include being able to calculate the optimal strategic value within an organisation. pmo365 offers handy tools that help simplify all your portfolio analysis related calculations be it calculating efficient frontiers or Monte Carlo simulations. Such valuable tools need people to drive them.
Knowing how the organisation functions from inside-out is key to identifying all the most effective ways to implement change that can lead to genuine results. That is why it is essential for members of the EPMO to understand general business processes and management practices and tools so they can make the most out of new emerging practices and implement them effectively within their own unique context.
EPMOs act very much like project managers on a much higher portfolio level. EPMOs are constantly planning, coordinating, communicating, analysing, reporting and executing tasks and activities. So all the same critical skills of resource management, schedule management, cost management, and much more become the very foundations of an effective EPMO team member. pmo365’s intuitive platform integrates and streamlines all these activities onto a single platform. Read all about how we can revolutionise your program management activities here.
Just because the EPMO may seem like a more numbers focused PMO, it does not mean that hard technical skills alone will get the job done. Rather, soft skills are equally and sometimes even more important.
Leadership skills are particularly important in the EPMO and are not simply reserved for the director. As the strategic hub of an organisation, employees are looking to the EPMO for direction and stability when things are shifting beneath their feet. Every team member is an extension of the PMO itself and needs to exhibit the level of leadership the team as a whole is meant to represent. If employees cannot trust your team members ability to lead, your entire EPMOs ability to lead might come into question.
Additionally, coordinating and managing the whole breadth of projects within an organisation needs continuous communication. Communicating effectively, clearly and concisely to all necessary parties is critical. It is important to note that communicating is not overloading people with information, it is largely about listening.
At pmo365, we love everything PMO. So if you want to establish your EPMO, you know we’ll be supporting you every step of the way! We want to equip you with everything you need to establish an effective and successful EPMO. That’s why we’ve put together a free downloadable guide to finding your next PMO star player.
But we don’t stop there! We know how hard it can be to find PMO talent that fits the exact needs of growing EPMO teams. The EPMO’s staff are key that’s why we made a free PMO job platform that connects you with quality PMO talent out in the field. Post your job today!
Here’s a quick list of the many ways we can help your organisation’s EPMO. We help by:
Providing all key stakeholders and decision makers the necessary visibility and control to make informed and timely decisions.
Reducing all your overheads and removing all your admin costs through our intuitive, easy-to-use and efficient software.
Integrating all your organisation’s activities onto a single platform, you own ‘single source of truth’ for all your EPMO activities.
Giving complete accessibility and control over all your project and portfolio management activities from resource management to cost management to portfolio analysis and much more.
Providing all necessary training, learning materials and methods to up-skill users to be able to use pmo365 in the most efficient and effective way
Matching your PPM maturity and needs with our unique PPM packages, all on your grounds. No lock-ins and no-set up.