What is a project management office (PMO)?

Every organization reaches a stage of growth where teams start doing things a little differently. For example, let’s say your marketing team develops a unique creative brief template to coordinate work across the entire department. Simultaneously, your product team develops a robust intake request process. Having these processes in place helps marketing and product get their highest-impact work done—but which template should they use when the two teams need to collaborate? 

This is where a project management office (PMO) comes in. PMOs increase efficiency and effectiveness by standardizing processes and defining best practices across your organization. In this article, we’ll dive into what a project management office is, what they do, and how your team can benefit from a PMO.

What is a project management office (PMO)?

A project management office (PMO) sets and maintains your organization's project management best practices—including defining how your organization executes core processes and strategic initiatives. A PMO can be an internal team or an external support system. 

You may have heard the acronym “PMO” referred to as a program or portfolio management office, but these are distinct types of PMOs:

• A project management office (PMO) guides all project management initiatives. 

• A program management office (PgMO) guides employees to use best practices when undertaking projects and programs. 

• A portfolio management office (PfMO) guides all change management processes within an organization.

To support cross-functional collaboration and reduce chaos, a PMO defines, standardizes, establishes, and runs business-critical planning and operational processes across the entire organization or within a specific department. Typically, this includes determining how products and services are built and delivered at a department or company level.

These teams are shared services organizations, meaning that in most cases they are a central support team that drives and enables the work of many other teams and departments. 

Who works within the PMO?

An internal project management office is a shared services team. Usually, these project managers work as cross-functional partners to standardize processes across the department or organization they support. 

In addition to project and process managers, PMOs also consist of business strategy team members—who not only standardize processes but help to optimize and improve upon them. 

How do PMO teams differ by organization size? 

• Smaller companies: At a small organization, you might have one PMO team that standardizes project management best practices across all of your departments. 

• Larger companies: Alternatively, in larger companies with many different systems and less cross-functional collaboration, PMOs may be embedded in the departments they serve. 

Internal vs. external PMOs

An internal PMO is an in-house team that supports project success. Internal PMOs are permanent teams that collect all of your organization’s processes to establish standards and best practices. These teams are tasked with:

• Providing trainings

• Updating guidelines

• Standardizing and maintaining best practices

• Supporting change management initiatives

Alternatively, an external project management office is an agency or consulting group that helps you create best practices for your company. External PMOs:

• Intake processes and suggest optimized best practices

• Do not enforce those practices or continue supporting your organization 

The type of PMO you invest in depends on your organization’s unique needs. However, an internal PMO is generally better equipped to support your organization in the long term. In this article, we’ll talk about the roles, responsibilities, challenges, and benefits of an internal PMO. 

What are the three types of PMOs?

There are three types of internal PMOs. The type of PMO you choose depends on where your company is at, how disorganized projects are, and what your specific needs are. 

1. Supportive PMO: Focuses on providing mentoring, training, information, and support—without being too prescriptive. Supportive PMOs will often provide suggestions and structure for projects, but allow each project manager to decide whether they want to adopt those suggestions or not.

2. Controlling PMO: Most beneficial if you need to reign in processes and ensure every team is marching to the same beat. Unlike a supportive PMO, a controlling PMO will standardize guidelines and expect project managers to follow those guidelines effectively. Controlling PMOs may also review projects to ensure they’re compliant. 

3. Directive PMO: Takes over the project management elements and coordinates most project planning details like resource allocation, project risk management, and project scoping. Because the PMO is effectively running most large initiatives, these project management offices tend to staff the most people.  

PMO roles and responsibilities

A PMO helps you standardize project management processes across the business. They do that by putting best practices and guidelines in place for your team. PMOs:

• Get teams on the same page: Schedule a project kickoff meeting to go over scope, deliverables, timelines, and roles  

• Establish who’s in charge: Define clear ownership between project leads, budget owners, and other stakeholders

• Standardize tools: Create templates for projects and project briefs

• Develop guidelines: Outline best practices for how project milestones are set and how project health is communicated

• Design reporting processes: Standardize how project status is reported

• Set expectations: Set clear expectations around project planning, QBRs, and post mortems

WIth a PMO in place, teams know exactly what’s expected of them so they can complete projects efficiently and on time. These roles and responsibilities can be summarized by the following categories.

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Project governance

Project governance is the framework for decisions made during the project life cycle. This includes details within the project itself—like where information is stored, who has access to information, and how the team will collaborate—and best practices like the five phases of project management or other project management methodologies. 

Project governance also standardizes, in broad strokes, how the organization supports projects. In this case, a PMO establishes project governance rules to ensure that their organization is investing in projects that are contributing to long- and short-term company goals. 

Data-driven reporting

In addition to establishing project best practices, a PMO is an analytical partner to leadership teams. Part of the office’s role is to frame key questions, determine and get agreement on analytical approaches, and summarize data to generate action plans if necessary. 

The PMO bringsreporting capabilities to effectively evaluate project performance. These metrics empower project teams to make data-driven project decisions and reduce business risks.

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Strategic planning

A strategic plan is a three- to five-year roadmap detailing where your organization wants to go and how it will get there. A project management office is often the team responsible for creating and monitoring the strategic plan. This includes:

• Helping business partners develop their strategy

• Standardizing who sets goals

• Defining annual OKRs

• Breaking OKRs into quarterly plans

• Creating a system to track goal progress

• Establishing how goals are communicated

The PMO then ensures the strategic plan continues to flow down to the project level by:

• Defining how projects should be pitched—including providing a standard project charter or business case template

• Standardizing how and when project stakeholders are assigned—for example, by encouraging organization-wide adherence to RACI charts

Information sharing

When teams set up information, folders, and tools for their own use, they aren’t thinking about how other team members will access this information. But this model of information isolation leads to more manual, duplicative work. In fact, the average knowledge worker spends 60% of their time on work about work—things like searching for documents, following up on work status, and communicating about work. 

Part of a PMO’s job is to reduce information silos like these. To do so, a PMO will: 

• Create a central source of truth for key information

• Establish best practices for how team members should collaborate

• Standardize security practices for information storage and sharing

• Assign and monitor responsibility for updating information regularly

• Ensure everyone knows who’s doing what by when to reduce duplicative work

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Tool adoption and maintenance

A key part of standardizing processes is ensuring everyone is using—and knows how to use—the same tools. If your teams aren’t all using the same work management software already, a PMO will drive the change management process and adoption of a new tool, monitor usage, facilitate trainings, and automate processes where possible.

Resource management

Resource management is the process of planning and scheduling your team’s resources in order to complete a project. In this case, a resource is everything from equipment and financial funds to tech tools and employee bandwidth. 

PMO resource management depends on how big your organization is. For small organizations, the PMO may be the team directly allocating resources to different projects. For larger organizations, a PMO might establish a system of resource management planning and change control processes to prevent scope creep. At the enterprise level, this can also include capacity planning and resource forecasting.

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Standardized language

A key part of effective teams is how well your team communicates and collaborates cross-functionally. Part of a PMO’s role is to audit existing processes across different teams and standardize those processes in order to enable more effortless cross-functional collaboration. If necessary, this includes aligning on standardized language within your organization to build shared values and support healthy organizational culture.

Ongoing training

Once their standardized processes are successfully up and running, a PMO’s final responsibility is to schedule ongoing training sessions to train new project managers and support new initiatives. For example, a PMO might host training sessions on how to start setting team- or company-wide key performance indicators (KPIs) or offer webinars on how to resolve conflict within a project. 

Benefits of a project management office

The biggest benefit of a PMO is gaining the tools to standardize systems and processes. When everyone on your team is in sync, you lower the barrier to cross-functional collaboration and unlock higher-impact work. 

This is simultaneously one of the most challenging things to tackle as a PMO and one of the main reasons PMOs are used in the first place. Over time, teams and departments naturally develop their own processes. In order to get their best work done, each team implements its own standards, technologies, and project management tools. But because they’re only adopting processes and tools that meet their specific team’s needs, this can quickly create information silos and knowledge gaps. 

Left unchecked, these silos lead to operational inefficiencies and make cross-functional coordination challenging. 

In addition to helping teams get their best work done, a PMO:

• Aligns projects to corporate strategy, connecting daily work to company goals

• Enables cross-functional collaboration by standardizing systems

• Fosters strategic decision-making through project governance

• Establishes organization-wide project management standards

• Shares real-time visibility and context between teams

• Develops, shares, and monitors project management best practices across your organization

• Trains new project managers or teaches newproject management skills

• Integrates and democratizes data throughout your organization

• Increases operational efficiency by standardizing and streamlining processes

• Improves resource utilization by establishing a resource management plan

• Reduces time and cost spent on projects

Create a successful PMO that drives collaboration

PMO teams help everyone move in the same direction so teams know what to do, why it matters, and how to get it done. If you think a PMO is right for you, start by investigating what teams are currently doing. The first step to creating a PMO is understanding where you are—once you’ve aggregated all of this information, you then define best practices and empower cross-functional collaboration.