Wednesday 2 February 2022

What is a project office - its role and advantages

Any company or organization focused on project management requires a special corporate management system for ongoing initiatives. At the same time, project management can be focused both externally (on the creation of a certain product, or a new technology), and internally (on the organization of work in the company itself). A distinctive feature of such an organization of activities is the project office (PMO), which is created at the start of a new idea.

The concept of "project office" is defined in the international "Code of Knowledge on Project Management" (PMBoK, 5th edition). There it is described as a kind of organizational structure designed to solve the problems of structuring and streamlining all processes associated with the implementation of a new idea, as well as to exchange methodologies, tools and resources.

Speaking in more understandable language, the project office is a temporary structure created in the company to perform specific functions related to the development and implementation of a new idea, most often an investment project. It includes the necessary specialists (managers and technical personnel), provide the required technical and software tools. In the literature, such formations can also bear other similar names that do not change the very essence of the structure:

  • project office;
  • project management service (office);
  • PMO (Project Management Office).
  • In large companies, such structures operate on a permanent basis and are separate units, the main purpose of which is to support the head of an investment project in terms of team management.

Also, the office collects the necessary information, develops business processes and implements them in the company.

Depending on the level of management, the project office in the organization can be:

  • central (corporate, software) - the level of the company, it plans work, coordinates the work of lower-level units;
  • functional - the level of one of the divisions in the organization;
  • design - created for the implementation of one idea.

As a rule, such units as a project office do not arise from scratch. First, the management conducts an audit of the current work of the organization, as well as its effectiveness, and makes a fundamental decision to implement the project method of work. After that, a survey of the company's activities is carried out regarding the possibility of implementing investment ideas in it and a methodology for conducting programs is developed. Only after the introduction of such a corporate system, the office is formed, and pilot ideas for a new model of work are launched.

At the initial stage of implementation, an important role is played by the personality of the head of the office, who should convince people by personal example, organize stable relationships with specialists of other departments, overcoming the resistance of managers who are not interested in the result. In such circumstances, the manager owes a significant level of authority from the beginning to the very end of the implementation of the idea.


How to start a project office?

The structure itself in the process of its development usually goes through the following phases:

Formation. Drawing up regulations on departments, job descriptions for the developed regulations, approval of working conditions and remuneration. Create and structure a database.

Accumulation of experience. Completion of the process of forming databases, transition to a control function regarding the allocation of resources.

Activity analysis. The accumulated experience in project activities is transferred to the executors, the regulatory framework is finalized. Audits and control checks of priority areas are carried out.

Development. In large companies, several PMOs of different levels can be created, depending on the type of tasks and specialization.

Strategic management. It is peculiar only to organizations that are able to form entire portfolios of investment programs and formulate their own investment policy.

After successfully passing the first three phases, it can be concluded that the unit has begun to function. The next tasks of the management are the search for new ideas that can give the desired result, and their high-quality support.

Composition and main functions

In an organization or company, the first person of a PMO is most often the deputy head of the company or the director of a department or other structural unit. This seems logical, since the level of authority of such a person is high, but at the same time, he, unlike the first person of the company, will be able to devote much more time to the implemented idea.

The structure of the project office on a permanent basis includes 2-3 people who form the core of any undertaking - the head, the planning manager and the methodologist. This approach makes it possible to achieve stability of work and predictability of results in this important issue. Depending on the tasks, themes and complexity of the approved idea, the PMO may additionally include:

  • curator (coordinator, administrator) of the project;
  • the general manager (head) of a particular program;
  • documentation and reporting manager;
  • specialist - a system administrator responsible for information support of work;
  • manager for recruitment, distribution of personnel and training of personnel;
  • equipment distribution manager;
  • auditor;
  • coach;
  • procurement and resource allocation specialist;
  • specialist in portfolio management of initiatives.
  • In the course of the development of the idea, the PMO can transform, the composition changes, based on the results of the tasks and the manifestation of new risks.

The range of tasks assigned to the office is extremely wide. It is very dependent on a specific undertaking and may include consulting, seminars and trainings for middle and senior managers, creating software, monitoring results. With the simultaneous implementation of several ideas, it is necessary to take into account their mutual influence in order to prevent failures in resource provision. Usually, the work of such structures is based on generally accepted international standards, such as PRINCE2 or PMBoK.

The functions of the project office are to solve such issues:

  • ensuring compliance of all management processes with approved standards;
  • development and promotion of process management and control methodology;
  • development, implementation and support of an information monitoring and planning system (if required);
  • selection of specialized personnel, its training, development of a system of incentives for employees;
  • development of programme management infrastructure;
  • implementation of ongoing (operational) control over all ongoing processes;
  • periodic reporting for the top management of the company on the progress of preparation and implementation of the investment project task (quarterly, monthly, weekly, daily);
  • analysis of the work performed and preparation of recommendations to the management regarding the decisions that should be made;
  • conducting an audit (if this function is not assigned to another unit);

ensuring prompt document flow.

In different sources, you can find different understandings of PMO functions, sometimes they are divided into basic (basic) and advanced (additional), which can vary depending on the formulated tasks. The orientation of the organization or firm also plays a role.

How a project office is created

The creation of a project office from scratch is described in detail in the video, which we present below. We advise you to familiarize yourself with it in order to understand the main aspects and issues that you will have to face in practice.

Effectiveness of implementation in the organization

Implementing a PMO in an organization, especially with a wide range of tasks performed, can bring a number of benefits:

  • correct prioritization and reduction of the number of initiatives that do not correspond to the strategic direction of the company's business;
  • concentration of forces on the most promising activities;
  • transparent separation of powers and responsibilities for the results obtained;
  • increasing the percentage of successful projects;
  • reduction of costs and reduction of implementation time;
  • unification and standardization of all processes;
  • accurate accounting and more rational use of available resources, which leads to their savings;
  • effective control over the progress of work progress;
  • improving communication between all participants of the event, simplifying the maintenance of documentation and access to the required information;
  • improving the professional level of employees
  • Practice shows that with the right approach, the economic efficiency of creating a project office usually manifests itself in the period from six months to two years.

The effectiveness of the implementation may also depend on the type of PMO being created, of which there are four. Each of them has its own strengths and weaknesses, which you need to know in advance. Their features are reflected even in the names:

"Weather station". Created to collect information about several simultaneous activities. Information is simply transmitted to the top, the office itself does not affect the progress of work, does not give any instructions and instructions. It is easy to organize, but with a complex multi-component undertaking it will be ineffective.

"Control Tower". Monitors compliance with standards and proven regulations. PMO members cooperate with project managers, certify them, and if necessary, can conduct an audit.

"Resource Pool". It is created for the correct distribution of highly qualified managers between different programs, as well as solving current problems.

"Strategic Program". Its mission is to ensure uninterrupted communication between strategic and operational management. It does not affect the distribution of finances and does not control expenses, but performs only an organizational function.

Business practice shows that the concept of project-oriented management in modern conditions is more viable than the process, and even more so than the work on individual assignments.

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