Optimizing a company and it's PPM with a PMO system

Abstract

Project Management Offices (PMO) are centralised functions within organisations that facilitate project, programme, and portfolio management. PMO systems aim to standardise project management practices, optimise resource allocation, and align projects with strategic objectives. They support project management at various levels, including project, programme, and portfolio management. Integrations in PMO systems can include tools and models such as the stage-gate model, earned value management, and SWOT analysis. PMO systems aid in risk management, resource management, and visualisations, such as project dashboards and Gantt charts. The implementation process for a PMO system requires a change management plan to ensure stakeholder buy-in and effective execution. Applying change management models, such as the ADKAR model, can help organisations effectively manage and implement PMO systems, leading to improved project outcomes and organisational performance.

Concept of PMO system

PMO systems are a centralised function within an organization that oversee project, program, and PMO systems are centralised functions within an organisation that oversee project, programme, and portfolio management. They provide a framework for standardising project management practices, optimising resource allocation, and aligning projects with strategic objectives.

The concept of a PMO system involves implementing a set of processes and tools to manage and optimise the project management function. Its primary objective is to improve project performance by providing project managers with the necessary support, guidance, and resources to manage projects effectively. The system also helps organisations standardise their project management practices, increase project success rates, reduce project risks, and achieve strategic business objectives.

How it supports project, program and portfolio management

• Project level: A PMO system can help ensure that a project is completed on time, within budget, and at a certain level of quality. This can be done by including tools for project planning, risk management, and quality control. The system can also support individual projects with the needed templates, guidelines, and best practices.

PMI defines the primary function of a PMO in project support, but not limited to, as:</ref>Project Management Institute. (2013a). A guide to the project management body of knowledge (PMBOK® guide) – Fifth edition. Newtown Square, PA: Author.</ref>

• Managing shared resources across all projects administered by the PMO;
• Identifying and developing project management methodology, best practices, and standards;
• Coaching, mentoring, training, and oversight;
• Monitoring compliance with project management standards, policies, procedures, and templates by means of project audits;
• Developing and managing project policies, procedures, templates, and other shared documentation(organizational process assets); and
• Coordinating communication across projects.

• Program level: At the programme management level, a PMO system can provide support for managing multiple projects that are related or have dependencies. This can include tools for programme planning, resource allocation, and risk management. By providing a holistic view of multiple projects, a PMO system can help ensure that programme goals are aligned with organisational objectives and that resources are used effectively.

• Portfolio management level: A PMO system supports managing portfolios to align with the organisational strategies by including tools and models for project selection, prioritisation, and resource allocation. This ensures that organisational goals are reached with value maximisation, and proper resources are allocated. The portfolio level aligns with the executive level for strategic informed decision-making and overview. A PMO system can provide real-time visibility and transparency in project, programme, portfolio, and company performance.

PMI describes a portfolio management office as service for project and program in following areas:

• Aggregate and provide performance results of the portfolio components;
• Define portfolio management methodology, best practices, and standards for use as guidelines while formulating the methodology and standards for project and program management;
• Forecast supply and demand for a portfolio that can be further broken down into supply and demand for projects and programs;
• Define a portfolio management strategy;
• Provide portfolio oversight and manage the overall portfolio value; and
• Identify risks, analyze risks, and plan risk responses at a portfolio level.

Integration of tools in a PMO system

There are a variety of models and tools that can be suited for a PMO system, and the specific tools and models that are used will depend on the needs and objectives of the organisation. When implementing a PMO system, it’s essential to map the models and tools used in practice already and integrate them into the common platform of the PMO system. Some examples of tools and models which can be used are:

• Stage-gate model: The model can help create a structure to follow the different levels of PPP management in the PMO system, tracking progress and department involvement in terms of clear communication and ownership allocation for each stage and gate customised according to need.

• Earned value management (EVM): EVM helps to track the progress of a project by comparing the amount of work completed to the budgeted cost of the work. EVM is often used in PMO systems to help project managers identify potential cost and schedule overruns and take corrective action.

• SWOT analysis: SWOT analysis is a strategic planning tool used to identify organisational strengths, weaknesses, opportunities, and threats. SWOT analysis can be used in PMO systems to help organisations identify areas for improvement and to develop strategies to take advantage of opportunities.

Risk Management

With the holistic view a PMO system offers in project, programme and portfolio management, it also opens up the opportunity to assist with identifying, analysing, and responding to risk management.

• Identifying risk involves using the holistic view and historical records to recognise similar risks from the past. Although all projects are unique, this approach provides an additional resource in the identification process. The system can track portfolio or programme-level risk down to individual projects, creating more transparency. If the PMO system is properly aligned with the company strategy, it will be easier to identify any risks of misalignment between that and a project objective.

• Analysing risks can be visualised and structured using an impact-likelihood matrix, providing a comprehensive insight into the identified risks. The analysis can also be compared to a risk register of previously assessed risks. Associated quantitative measures of the risks being realised and qualitative measures on well-being and retention can be considered.

• Response strategies can be developed with support from the system analysis of the risk. With a holistic, broad view, resources can be appropriately allocated to mitigate risks across the portfolio, programmes, and projects. The system should also be able to help provide a time estimate to anticipate the potential realisation of the risks.

Visualisation

Visualisations can be a powerful tool for PMO systems because they provide a way to quickly convey complex project information to stakeholders, which should be considered, when setting up the PMO system. Some ways to visualise models and tools in the PMO system could be:

• Project dashboard: Project dashboards can take in the available data from both inside and outside the organisation and provide a high-level overview of a project's status and performance using charts, graphs, and other visualisations depending on the needs. Dashboards can help stakeholders quickly identify areas of concern or opportunities for improvement, through for an example KPI’s.

• Gannt charts: Gantt charts are a popular project management tool that provides a visual representation of a project schedule. They can be used to track progress, identify potential delays, and communicate project timelines.
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Benefits of a PMO system

PMO systems can help organisations address issues such as lack of project visibility, inconsistent project management practices, insufficient resource allocation, and poor alignment with strategic objectives. Some main benefits of implementing a proper PMO system is:

• Improved project success: Improving the success rate of projects by providing consistent methodologies and tools, as well as increased visibility into project status, risks, and performance.
• Increased project efficiency: Increasing project efficiency by providing a centralised warehouse of project information, which can help reduce redundant work and ensure that resources are allocated properly.
• Improved strategic alignment: Ensuring that projects are aligned with the organisation's strategic goals and objectives, which can help ensure that projects are delivering value to the organisation.
• Better resource management: Optimising resource allocation by providing a clear view of resource availability and demand, which can help ensure that resources are allocated to the projects that are most critical to the organisation.
• Improved stakeholder communication: Improving stakeholder communication by providing a centralised platform for project information, which can help ensure that stakeholders have access to the information they need to make informed decisions.

Limitations and pitfalls of a PMO system

PMO systems can face challenges such as lack of executive collaboration, resistance to change, and insufficient resources. It's important to address these challenges and customise the PMO system to the needs of the organisation.

• Lack of support and resistance to change: A PMO system can face challenges if it lacks support from key stakeholders or if stakeholders do not understand the purpose and value of the PMO. Implementing a PMO system may encounter resistance from employees who are resistant to change. This can be addressed by involving employees in the planning and implementation of the PMO, communicating the benefits of the PMO, and providing training and support to help employees adapt to new processes and tools.

• Limited resources: A PMO system may struggle if it does not have sufficient resources, including budget, staff, and technology. It is important to assess the resources needed to effectively support the organisation's projects and programs, and to advocate for the necessary resources to be allocated.
• More to come

References