The term ‘PMO’ can apply to many things (e.g. project management office, program management office and portfolio management office, to name a few). And while all of these entities help businesses achieve their goals and run more efficiently, they operate differently and serve varied purposes.
When evaluating whether to build, fix or optimise a PMO, businesses should first ask themselves what the ‘P’ in their ‘PMO’ stands for (project, program, portfolio or more!), which can encourage them to look at the bigger picture.
In this article, we’ll look at the differences between projects, programs and portfolios, and outline helpful definitions for standard terms associated with PMOs.
The relationship between project, program, and portfolio management can best be described like this:
A project is a temporary endeavour undertaken by a company. Examples include the creation of a new project or the implementation of a new department.
A program is a collection of interrelated projects. They are typically managed and coordinated as a group rather than independently.
A portfolio is a group of different programs and projects within the same organisation. They may be related to each other, but they don’t have to be.
Here’s another way to visualise the differences: projects can fit within larger programs, which themselves can fit within portfolios. Although related, tasks associated with project, program, and portfolio management are inherently different.
With an understanding of project, program and portfolio management, let’s start with the various types of project management offices (PMOs) serving organisations today.
A supportive PMO functions as a storehouse for your organisation’s projects. It also provides support as required by supplying standard project temples, guidance on best practices, training and lessons learned. While it exercises a very minimal level of control over projects, it plays a consultative role. Supporting PMOs work best with Functional or Weak Matrix organisational structures.
A controlling PMO manages everything a supportive PMO does, but it also can enforce compliance. Where supportive PMOs guide and recommend, a controlling PMO wields a moderate level of management over projects. This type of PMO works well for organisations with Balanced Matrix organisational structures.
As indicated by its name, the directive PMO bears the authority to direct projects. It uses its high degree of oversight to provide resources and support to an organisation’s projects. This type of PMO assigns project managers to specific endeavours, and they report back on their progress.
A Directive PMO helps to bring out a high degree of consistency across an organisation. Its single reporting and authority structure is best suited for Strong Matrix or Projectised business structures.
When organisations flounder under passivity, waste and unfocused vision, an Activist PMO can play a crucial role in driving strategic success through project quality and efficiency. An Activist PMO is risk-alert and continuously improving. It acts as the nexus of excellence in project and program management, and it uses its flexible structure to support change.
Also known as the Project Delivery PMO, the Delivery PMO is tasked with planning and controlling projects’ strategic execution to meet business expectations. This may be the most common PMO style (Gartner estimates that more than 40 per cent of PMOs fall into this category).
Delivery PMOs encourage project managers to proactively make decisions and escalate issues as needed. Ultimately, the goal is to establish repeatable processes and techniques that build a productive culture and culminate in desired outcomes.
Organisations that lack consistent documentation, processes, methodologies and procedures find great value in establishing Compliance PMOs. The project management office sets standard practices for gauging project performance and then monitoring the status of critical initiatives and deliverables.
When organisations already have high project management levels, they typically work to reduce dependency on PMOs and focus more on project tracking and reporting. But when PPM maturity levels are still fledgeling, a Centralised PMO provides essential support.
A Centralised PMO can quickly bring new hires up to speed and mentor them through their journey toward proficiency and independence. In this model, representatives from various project support teams meet regularly to share best practices and counsel about issues, achievements and lessons learned.
A Project Support Office is an administrative support department of a business that offers daily development and supervision services to project teams and their managers.
The PSO’s primary responsibility is to fill the gaps in your project teams. Because those gaps change frequently, project support officers don’t have specific roles; their duties depend on the project teams’ needs on any given day.
Project support officers act as coordinators and assistants to your project managers, facilitating communication and providing help and resources. They might perform some or all of these tasks:
With the support of a PSO, project teams will thrive and have a much better chance of reaching success.
A program management office has similar responsibilities to a PMO, but its role extends from simple projects to complete programs.
PMOs usually report to a PgMO, which has greater decisional authority within the business. While their duties might be similar, their focus is different. A PMO works toward the success of individual projects, and a PgMO centres its efforts around the attainment of broader goals. In short, PgMOs are more strategic, and PMOs are more specific.
PgMOs are critical for ensuring the compliance of programs to industry and international standards. They do this by overseeing the management of several projects that make up a single more extensive program. To improve efficiency, the PgMO manages collaboration and information distribution between related projects. It also establishes processes and tools to help the business achieve its objectives and subsequently monitor a program’s benefits according to expectations and proposed outcomes.
A portfolio management office provides advice to senior management about whether the right projects and programs are being pursued. As the organisation’s priorities evolve, the portfolio office provides data about conflicting priorities, current issues and potential risks. It must also challenge portfolio decisions as industry forces morph and change, and it provides information and recommendations so executives can make informed decisions. In sum, a portfolio office provides value by focusing decision-making on the organisation’s strategic priorities.
An enterprise project management office contrasts with a traditional PMO in that it functions at a strategic level in collaboration with executives to make sure that projects benefit the entire organisation.
An EPMO aims to provide business-wide direction, governance, standardised processes, project portfolio approaches, tools, and best practices. A frequent reason for project failure is a lack of alignment between the project and the organisation’s overall business objectives.
Businesses often upgrade from a traditional PMO to an EPMO when they want to address ambiguous PMO direction, underutilised resources, low company performance or misalignment between projects and organisation-wide strategy.
A Transformation Management Office is typically an enterprise framework responsible for actuating complex initiatives that align with a business’s strategy.
A TMO provides a crucial link between the executives’ vision and the work of the business. Sometimes a TMO is referred to as a “Strategy Realisation Office.” No matter what it’s called, the TMO’s mandate is to transform the business into the organisation envisioned by C-suite leadership.
A TMO should assume some or all of the traditional PMO roles and responsibilities. However, a transformation management office handles more than just projects. While a PMO knows how to support a project delivering a new machine part, a TMO helps facilitate the transformation of an organisation’s culture.
Therefore, a TMO must play some specific roles that PMOs don’t. For example, a business may have several needs that appear to be unrelated, such as cutting costs and updating its technology. These initiatives may appear to be misaligned with the business’s strategy. By bringing all of the initiatives together under the TMO’s umbrella, executives can oversee the transitions and ensure that each project fits within the parameters they’ve set.
A Project Management Centre of Excellence has organisation-wide authority to create vision and strategies, identify and develop competencies, develop project management processes and create quality standards. Essentially, the PMCoE re-shapes the organisational culture to rally around high, consistent project management standards.
The agile approach to project management requires minimal planning and maximum collaboration. Instead of focusing on centralised authority and top-down control, an Agile Project Management Office analyses processes while working in parallel with project managers. The AMO treads lightly, moving one step at a time, and it helps provide a smooth transition when projects have to change directions mid-stream.
Here at MetaPM, we’re dedicated to raising project capability everywhere. To improve your project delivery capability and set your organisation on a strategic course for the future, reach out to schedule a consultation.