Blog: Portfolio Management Office

• July 26, 2019

Organizations are going through rapid change, often driven by digital technology and changes in local and national priorities.

Therefore, it’s important to have a central repository – the PMO – where organizations have an oversight of all change initiatives and are able to co-ordinate them.

Before discussing the functions and value of a PMO, it is important to establish what “PMO” means, as there are three possible meanings in common use:

• Project Management Office: supporting individual projects
• Programme Management Office: coordinating, identifying dependencies of projects and supporting the transition of outputs to business as usual (BAU)
• Portfolio Management Office: single point at corporate level where all the change initiatives within an organization are managed.

Rather than investing at project or programme level, organizations should prioritize investment in a Corporate Portfolio Management Office. Establishing a central PMO will provide the organization with the capability to deliver change initiatives in a consistent way and ensure these are constantly aligned with its strategic objectives.

The many advantages of the PMO

Today’s organizations face a range of challenges in creating successful change initiatives. So, how does the PMO respond?

1 A corporate approach 

Currently, there are several frameworks and methods available for managing programmes and projects and each approach uses different terminology for the same role or documents. Therefore, one of the PMO’s primary functions is to develop a corporate approach for managing change initiatives.

In this way, the portfolio function develops methods, consistent approaches and terminology which works best for the organization. Rather than creating a new terminology that nobody understands the PMO should take the available documents, roles and responsibilities, processes and principles from existing best practices such as P3O®, MSP®, PRINCE2® and PRINCE2 Agile®.

2 Implementing training

The PMO needs to create training in its corporate methodology and provide it to staff working on organizational change initiatives. In some cases, organizations can become accredited training providers through PeopleCert and AXELOS.

3 Oversight and assurance

Any change initiatives started in the organization should be reviewed by the PMO and receive the necessary support and guidance during delivery. The PMO also takes on an assurance role, challenging and scrutinizing the delivery of change to ensure alignment with strategic corporate objectives and effective management.

4 Providing an internal audit

The external gateway reviews for change initiatives (such as those provided by the National Audit Office for publicly-funding initiatives in the UK) can be done internally instead by a mature PMO. By default, the PMO should operate independently within an organization and report directly to the leadership team. This is a proactive approach that avoids surprises.

5 The organizational memory

Whenever a change initiative starts, an obvious question is: “Have we done something similar before or has this change been delivered at another organisation?” An effective PMO can provide guidance and share previous lessons learned. According to the latest AXELOS PPM benchmark study, only a quarter of organizations always conduct reviews to identify lessons learned, while 23% do it “most of the time” and 28% “sometimes”.

6 Has change delivered? 

The PMO office should provide scrutiny before, during and after a change initiative and follow up with operations managers to check whether it’s made a difference.

The future of the PMO

Organizations’ leadership teams need to recognize the role played and the value added by a PMO. AXELOS’ 2019 benchmark study shows that 78% of those working in successful PPM functions say the value of what they do is recognized and appreciated by senior managers.

When setting up a PMO, staff need training in relevant certifications. Equally, the leadership team should be clear that the PMO is not an administrative department to be treated as just an overhead filled with lower-skilled people who are there merely to collect data.

The PMO is a centre of excellence and the guardian of the organization’s corporate approach to change, offering a better chance of success in a fast moving and ever-changing world.

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