Skip to content
× FreshBooks App Logo
FreshBooks
Official App
Free - Google Play
Get it
You're currently on our CA site. Select your regional site here:
9 Min. Read

What Is a PMO (Project Management Office)? A Complete Guide

What is PMO (Project Management Office)? A Complete Guide

As your business continues to scale and grow, it can be more and more difficult for project managers to stay on top of all the demands of a project. With so many moving parts and multiple team members, there can be a lot to take into account. So how can managers become more equipped to keep their projects on track?

It can be easy for things to get out of hand and a project management office (PMO) can help avoid any issues. You can make sure that you’re staying on top of important details and reaching certain milestones throughout the project life cycle. Let’s take a deeper look into PMO and how it can help you get ahead.

Here’s What We’ll Cover:

What Is a PMO?

How Does a PMO Work?

What Are the Benefits of a PMO?

How Do You Know if a PMO Will Work for You?

Establishing a PMO

Key Takeaways

What Is a PMO?

A project management office, or PMO, is an office or department within your company that oversees and manages projects. They can work as either a direct PMO where they plan and manage projects directly. Or they can operate on a higher level and provide key performance indicators (KPIs).

Either way, a PMO helps to standardize project management methods throughout your organization. They also help to reduce workloads for executives and other employees. This helps to make sure that large-scale projects are successful in the long run.

It’s also worth noting that a lot of times, PMOs are used within enterprise organizations that manage more than one high-priority project at a time.

FreshBooks Keeps you organized year-round

How Does a PMO Work?

The Project Management Institute explains that PMOs are most commonly used to help set and monitor KPIs for a project. But, the role of a PMO extends to managing progress and standardizing the project management methodologies. They can also help your company scale and grow, tackle portfolio management and manage resource allocation.

But what does that all actually mean? Let’s take a closer look.

KPIs

Some of the biggest KPIs usually compare your project progress with the planned project schedule. Here are some KPIs and milestones that you can set and monitor throughout your project.

  • The on-time completion rate
  • Planned hours vs the actual time spent
  • Any variance in the budget
  • The number of errors or issues that arise
  • How many milestones you’re able to complete and fulfil on-time

Standardization

Standardizing project management methodologies and tools used is another role of senior management. This helps to make collaboration within the project team as seamless as possible. It also makes it easier for team members to manage all the different resources included in the project.

Scaling and Growing

At its core, a PMO is meant to increase your business's project management maturity. When you set and monitor KPIs, standardize tools and provide training, PMOs help optimize business processes. And this makes a drastic difference when it comes to how your business performs.

Managing Resources

Depending on the size of the project, there can be a thousand moving parts. Everything from coordinating and managing budgets, locations and team members. Understanding the status of each project allows you to allocate the right amount of resources. You can identify areas where they’re most needed in order to boost project performance.

What Are the Benefits of a PMO?

It’s all well and good to gather information and put a strategy in place. But what are the actual benefits that you can get from implementing a PMO? Where do most companies see a return on investment? Is there a one-size-fits-all approach to project management?

Here are the 5 main benefits to a PMO and how they can help you and your business get ahead.

Cost Savings

One of the biggest challenges to any project is allocating the right amount of funds and staying within budget. A PMO can help you properly distribute resources to avoid any excess hires or the need to outsource. And not only can this lead to cost savings, but you can then use those savings on other areas of your project.

Increased Productivity

It’s not a surprise that productivity increases when everything is outlined properly and each team member knows what’s happening. When your employees know exactly what they need to do and when they need to do it, it will lead to less downtime. And, by setting KPIs and milestones, you can track project progress easier.

Better Align with Your Goals

When you set KPIs, milestones and goals for your project, a PMO can help guide you towards them. Think of it as a type of guiding compass. Setting strategic objectives keeps your team on track and increases the possibility of success.

An Increase in Project Success

A challenge to every project is being as efficient as possible to reduce the amount of wasted time. But by taking the time early on in the project to identify KPIs, milestones and any potential risks allows you to plan accordingly. This leads to less wasted time and wasted effort since you’re prepared for what might come.

Ultimately, this contributes to a higher success rate for projects.

Customer Satisfaction Can Increase

You always want to keep your customers happy and satisfied. Without them, where would your business be? Staying efficient, productive and within budget can help make sure you deliver a successful final project.

There will be fewer delays and broken promises, which will lead to higher customer satisfaction. You can turn possible customers into long-term, loyal customers.

How Do You Know if a PMO Will Work for You?

Even though you now understand all the benefits that you can get, PMOs aren’t going to work for every type of business. Here are some things for you to consider before implementing a PMO.

Do you have projects that are big enough to justify an investment in a PMO?

A PMO isn’t something that you can just add to your business processes. You might need to hire a full-time project manager and other team members. Plus, you need to consider infrastructure and additional resources that might be needed.

Take a look at your budget and determine if a PMO is a right investment for your business. If your company doesn’t take on multiple projects each year or if they’re on the smaller side, a PMO might not be worth the investment. But, on the other hand, if your business works on enough big projects, then a PMO would be a beneficial investment.

What are your main business or company priorities?

Where do you see your business going in the future? Do you want to try and standardize all your processes? Or, do you want your PMO to act as direct supervisors or coordinators? The type of PMO that you decide to implement is going to have an impact on your business operations.

Can you get the same results by upgrading current processes and tools?

Maybe you are managing your projects well but want to increase efficiency and productivity. Upgrading some of your current tools or processes might be a great solution. For example, if you use a basic spreadsheet and email, then investing in a project management tool can give you a productivity boost.

This can be a great solution for smaller businesses or teams.

Accounting that makes you look good.

Establishing a PMO

You want your business processes to be effective. And in order for your PMO to be effective, you need to do more than just hire the right people. You also need to have the right tools and best practices in place.

The first thing you should do is determine how you’re going to document the details of your project. Having a centralized project documentation board helps manage all the moving parts in one place. Team members can see tasks, track completion status and more.

From there, you can start to plan and implement your project roadmap. This will outline the main tasks and stages of the project life cycle. Your roadmap is going to evolve and adapt as the project moves forward. This is because there can be a change in the market, your company goals or your customer's needs.

Key Takeaways

Are you a project manager that’s starting to get overwhelmed or struggling to stay on top of tasks? Maybe the project grew unexpectedly or there are just too many things going on at once. Depending on the size of your business and the number of larger projects you take on, a PMO could be a great option.

A PMO is basically a department or office within your business that helps to oversee and manage your projects. Usually, they work in one of two ways which depend on the project.

The first is as a directive PMO, which is where they would plan and manage all the projects directly. The second is where they would operate on a higher level and provide the KPIs for the project. Whichever way your PMO works, they help standardize project management throughout your business.

As well, a PMO can help to reduce the workload for other employees, which helps large-scale projects be more successful. PMOs are typically used by enterprise organizations that manage many high-priority projects.

But, just implementing a PMO isn’t enough. You need to lay the foundation and have the right tools in place. Without having the right tools, a PMO won’t have the same type of impact that it would otherwise. It could even cause more delays and slowdowns in the progress of the project.

Figuring out how you’re going to develop and monitor the project process is critical. It can help to have a centralized location where everything can easily get accessed by team members. Things like task overviews, files, status updates and anything else related to the project.

Once you know how you’re going to document the details of your project, you can create a project roadmap. This will help keep everyone on track and can help avoid scope creep. Everyone will know important deadlines and when certain milestones need to get met.

There will be less confusion among your project team which will lead to higher productivity and more efficiency. All in all, this will contribute and lead to your project being successful.


Did you enjoy reading this guide? Head over to our resource hub for more great content!


RELATED ARTICLES