Project Management Office and Organizational Structure: What makes it Tick

PMO is the heart of project delivery. During the Initiating Process, it is basic, using generalities that are defined in the Planning Process. Throughout Executing, Monitoring and Controlling, it allows the team members to flow with the project and in the Closing phase, it is key to making sure of getting all of the ducks in a row.

The PMO provides the basis for the project, and is part of every process group. That is why defining and studying its implementation is so important.

Project Management Office Structure:

• There is no set PMO structure throughout organizations.
• There are several different types of PMO structures
• There are a wide variety of roles listed on PMO structures
• PMO Managers, PMO Directors, or Project Management Officers lead the PMO
• PMOs are often key to deliverables.
• A PMO is only as strong as the individuals listed.

PMOs rely on the skills and abilities of the project manager, or managers, and the project management team. In order to keep the project on time and on budget, a PMO will assign the most competent individuals to the team for each role within the project.

Project Management Office Structures

According to a conference paper written by J. Brian Hobbs, and Monique A Aubry, “There are many options as to form and function when setting up or reconfiguring a PMO. The variety seems almost infinite.” Their paper, available in Project management Institutes, (PMI) utilized a survey of 500 PMOs, 11 case studies, in four separate organizations.

They found there are many questions that need to be answered before coming up with a project management office structure:

• Who and which project managers should be included, if any?
• What projects and programs will be included?and
• What decisions can the PMO make, if any?

The study also showed that there was a vast amount of functions within PMOs. They narrowed their survey down to 27 all related to:

• “Monitoring and controlling of project / program performance
• Project management methods, tools and standards
• Developing the competency of project personnel
• Organizational learning
• Multi-project management
• Strategic management
• Executing specialized tasks for project managers
• Managing the customer interface
• Recruitment, selection, evaluation and remuneration of project management personnel”

So many factors go into what will be included in a PMO. The type of industry, or organization, the size of the organization, the size of the project or projects, the talent and skills of the individuals, just to name a few.

From reviewing the study, it’s clear that a PMO is individualized. It has to be structured for each project and clear to the individuals who use it to work the project through the five process groups.

Types of PMO Structures:

Since there is such a wide variety of companies and industries that utilize PMO’s, it’s difficult to get them all. For the purposes of this article, the fictional organization is Cogswell Industries. They are a multifaceted corporation that develops and builds commercial and residential properties. They also own several manufacturing companies to produce goods utilized in building certain structures.

Functional structure

Common with a variety of corporations and businesses, the functional structure starts with the company manager and works its way down the list of team members based on their specialties.

At Cogswell, the leader sorts the responsibilities under the different roles:

• Engineering
• Tool Trouble
• Production
• Quality Assurance
• Sales

Each team is a different line on the PMO. Some may be interconnected, and share resources, but each team reports to the team leader who brings the information to the manager in order to monitor and control the overall progress.

Line structure

This is utilized, mostly, for small organizations. It’s a clear, simple way to define the PMO structure. Line structure allows all members of the team to report progress and avoid miscommunication.

When Cogswell has subcontracts a job to Whipply Widgets, Engineering and Sales at Whipply may only be a two people who work by themselves, while Production may be have three guys at bridgeport machines one who is also in charge of Quality Assurance and another who can fix the lathe as Tool Trouble.  

In the PMO Line Structure defined above, the Manager would have three members of the project management team to keep them abreast of the progress of the project.

Line and staff structure

This structure type combines the first two, Functional and Line Structure.

Back at Cogswell,  Engineering has several team members, but only one lead engineer. In Production, there are 15 people making widgets. There are 3 individuals working in Quality Assurance and Tool Trouble has 1 team member. Tool trouble reports to Quality Assurance, whose team leader reports to the Production team leader.The Production Lead would then be responsible for taking all of the information and data to the overall manager.

Matrix structure

In the matrix PMO structure two managers are used:

• A project manager and
• A functional manager.

Again, using the example above, there would be a functional manager for each of the following

• Engineering
• Tool Trouble
• Production
• Quality Assurance
• Sales.

The functional managers work with the nuts and bolts of several projects.

The project managers are generally focused on one project. They may draw from the separate departments but their goal is to create project planning that effectively utilizes the resources seen over by the functional managers.

In this case, Cogswell already has a widget designed. This widget is currently in production to fill orders elsewhere. The project manager requires 500 of these widgets each week of their particular project. They would work with the functional manager in order to get those widgets for their project, when they needed them. The functional manager is in charge of making sure the people are available to produce those widgets while still keeping up production with the widgets from other orders.

Divisional structure

This type of PMO structure utilizes methods from the functional structure, applying it to several divisions.

Not only does Cogswell have a widget factory in Seattle, they have so many widgets they need to produce that they have just completed two additional factories in Houston and Charlotte.

Each of these locations produce different types of widgets. All of the engineering is done in Seattle, so Houston and Charlotte would require a similar, yet different PMO. Charlotte does all of the quality assurance for Houston, so they would again have a similar, yet different PMO.

Organic structure

For industries and companies whose market is constantly changing, an organic structure may work. Cogswell, nor Whipply is such an organization. For our fictional companies, using an organic structure with no real leader, possibly a project manager who reminds people of the goal, won’t get the widgets produced in time to get the sales team their orders.

An organic structure is an undefined, decentralized system where no one really has any authority.

Virtual structure

In the modern world, more companies utilize remote resources to achieve certain goals. While the structure is clear, a Virtual structure is used to define roles for individuals with know-how throughout the world.

Cogswell doesn’t use a virtual structure, but they subcontract with a marketing firm that has a variety of blog writers, graphic artists, and virtual assistants. There is one project manager for the Cogswell account who keeps the monthly information flowing and the budget in check.

Project structure

This final structure type is used for projects that are one offs.

Cogswell is using a project organizational structure to produce a special widget that will only be used once. Its specifications can’t be reused for additional projects, the product itself is proprietary. In order to complete this project the engineers will design the widget, production will make the widget, and quality assurance will check the widget over. All departments will report to the manager of the project throughout all process groups all the way through to closure.

 PMO Lifespan

Everything is Temporary

PMOs are temporary. Best case scenario is generally 3 – 5 years that one PMO can fit with all of the projects. Changes in:

• Personnel
• Governmental Restrictions
• Economy
• Competition and
• Technology

just to name a few can cause a PMO to be restructured or even taken apart completely. For this reason, coming up with an industry standard has been a difficult task, for organizations, and PMI.

Best Practices

The above referenced survey stated:

“the survey data did identify the following characteristics as being associated with better performance:

PMO structural characteristics associated with PMO performance

• Percentage of projects within the mandate of the PMO
• Percentage of project managers located in the PMO
• Decision-making authority of the PMO

Characteristics of the organizational context associated with PMO performance

• Supportive organizational culture
• Project management maturity of the organization

Using the best practices above can assist an organization with making a PMO structure that works. Be aware, though.

• Statistics don’t necessarily forecast delivery.
• Performance in a more established organization is generally more valued, and
• The ability of project management to adapt with the culture of the organization isn’t always an easy change.

Roles and Functions

Each individual in the project management office has their own role in the project. They are essential to the success of the project, so defining those roles and the functions of those roles is key to creating the structure.

The team can only work effectively if they are able to execute the assignments they are given and know how to monitor and control their progress. This gives them the ability to report to the manager, so risks can be minimized.

The PMO is directly below senior management in an organization. The PMO as a whole is used to

• Create Project Structure
• Provide data
• Produce and deliver reports
• Plan and manage resources
• Create Processes and Workflows
• Facilitate communication and collaboration to share knowledge

Project Manager

At the head of the PMO, one usually finds the Project Manager. They are the captain of the ship. If the project goes down, they stick with it to the bottom. Their responsibilities are to:

• Understand the business cases.
• Understand the organizational strategy.
• Possess the knowledge and skills for the project.
• Possess Leadership skills.
• Have command of interpersonal communication skills.
• Have excellent project planning skills.
• Be able to  monitor and control the project.
• Know the art of negotiation and
• Monitor and control the project schedule and budget.

Communication is key for the project manager. They need to have the ability to adapt between talking to CEO’s and day laborers, often in the same setting. They need to have focus on the end product at all times, while making sure the individual assignments are completed on time and on budget.

While a project manager for a construction company may not know a thing about carpentry, they should know what a house looks like. They don’t have to produce the plan for the home, but they need to understand the steps to make it livable.

They are the go to for the teams and the resources. They are the go to for the board members, sponsors, and clients.

PMO Team Leaders or Project Specialists

The first mate and the officers. There may be one, there may be many, but each team leader needs to know how to:

• Plan and execute the terms for projects;
• Define and implement the framework for projects;
• Work with clients, resources, and team leaders to plan, monitor and deliver:
• Support the project management team when closing projects;
• Keep track of resources to ensure no overlap;
• Identify dependencies between tasks;
• Create baselines and milestones to monitor the project;
• Manage risk

The team leaders are part of the project management team in the PMO structure. They work with the project manager to make sure all of the data and information is available and reported. If there is an issue, they are there to suggest change, recommend preventive or corrective action. They assist with refreshing or rehashing the plan if or as necessary.

Generally team leaders are picked for their expertise and experience. They may be in charge of a variety of project management duties within their individual tasks, such as budgeting, resource management, and risk assessment.

Also known as a PMO head, they bring benefit and value to the project through their ability to control quality and communicate with the project manager.

Their expertise should cover

• “Project initiation;
• Risk analysis;
• Issue and change control analysis;
• Configuration management;
• Planning techniques;
• Producing methods and tools;
• Quality assurance;
• The ability to brief project board and project assurance members on their roles and responsibilities;
• Providing a fast-track project support service;
• Design and support project reporting;
• Build and maintain a repository of good project documentation.”

PMO Project Officers/Coordinators/Administrators

These individuals are part of the team. They help to keep everything organized by:

• Implementing the  guidelines, procedures and templates to collect and maintain consistent data;
• Keeping the project plans updated;
• Reporting and monitoring project progress;
• Maintaining an information management system;
• Managing the quality review process;
• Providing service coordination

As well as officers, coordinators, and administrators there are also functional roles within the project teams.  Each individual in the Project Management Office may perform these functions. They are assigned based on the expertise of the individual, not necessarily their role in the project.

• Benefits and value ensure the consistent approach within the project;
• Commercial  ensures that contracts are procured in an informed manner;
• Communications and stakeholder engagement makes sure there is effective use of stakeholder;
• Information management manages the master copies of project information;
• Finance establishes financial controls within projects;
• Change control ensures processes are in place to deal with changes within the project;
• Planning and estimating maintains the project plans and dependencies;
• Quality assurance;
• Resource management to adequately procure resources and utilize them efficiently;
• Risk management makes sure processes to deal with risk are in place;
• Reporting to collect data and;
• Secretariat/administrative support.

Benefits of a PMO structure

1. The first key is setting the standards for projects within the organization. Just as PMO structures change and adapt, so do standards and processes within them. Each project will almost always have a different set of standards no matter how similar it may be to other projects that you gathered historical data from.

That being said, the goals of standards and processes are the same, to finish the project, at the very least, on time and on schedule.

Project standards are clearly defined by the PMO. They provide all of the objectives of the project and identify the resources needed to get the job done.

The PMO structure

1. Determines quality assurance necessities,
2. Produces a risk management plan.
3. Puts security measures in place,
4. Implements testing
5. Sets documentation and portfolio requirements
6. Provides a resource management plan.

2. The PMO is also responsible for creating reports throughout the scope of the project. In order to make sure that the plan is on track or adjust the plan as necessary, the PMO structure allows the project manager to know who to go to to get the necessary data.

3. Resource management is one of the most important parts of a project, and who better to do that than the PMO. The individuals named in the PMO are the experts when it comes to the resources they have and those that they require for the project. External or internal, human or tools and equipment, the expert knows which widget needs to be acquired and when.

Resource management isn’t just about what resources are available, but when they are available. There may be one person that is in charge of all of the blue widgets. So, ensuring that the blue widgets are ready in phase 2 and 5 means they need to be accessible.

Competency

In order to have a functioning PMO, the individuals involved must have:

• Experience
• Skills
• Attitude, and
• Knowledge.

Certifications in project management professions, whether it’s an PMP, CAPM, or a specialized certificate, show that individuals within the PMO provide the project all of the above. The requirements necessary to receive certificates through the Project Management Institute (PMI) are set in order to do this.

PMI not only requires specific standards to be met for education and experience before sitting for the initial certification exam, they also require maintenance of that certificate through a variety of areas to ensure that those representing PMI are utilizing best practices throughout their careers.  

Certifications provide team members with the skills and knowledge, as well as giving them the opportunities to learn the tools and techniques necessary to make a project successful. Interpersonal communication within the PMO is one of those techniques that can’t be ignored.

A successful project starts and ends with the project manager. By hiring a certified Project Management Professional to do the job, a company ensures that success.

The project manager’s ability to know which tools are necessary, and who best within the project management office team can provide the skill necessary to use them. They make sure that lines of communication are open and available within the PMO at all times throughout the project. This allows them to address a crisis in order to keep the project on track.  

That being said, without the team, the project can’t go on. One of the duties of the PMO is to ensure that all team members know what their roles are. Not just know their roles, but have skills and abilities to perform the tasks assigned to them in the most effective and efficient way possible. Team members who possess knowledge of project management processes and standards are more likely to have a positive impact on the project. They aren’t there to make a name for themselves by gold-plating, or cutting corners. They understand that the experience they receive by being part of the team is best for the project as well as their future in the field.

To quote a cliche that has been used a Lot, “There is no I in TEAM”.Ensuring that the team, not just the PMO, are competent, forward thinking, and willing to work through any issues that may arise for the good of the project will make any project a success.

Project Planning

During project planning, a PMO will assist with structuring the:

• Time
• Tools and
• Goals of the project.

Time

The initial planning phase when working within a PMO, allows the project manager to map out the schedule of the project. No matter what management style the PMO utilizes, from Kanban boards to Gantt charts, all work to project the time necessary for each task involved in the project.

Tools

Knowing the who, what, when, where, why, and how of the tools necessary for the project is a large part of the PMO. Each individual within the PMO has unique input to who needs what, when and where they require it, why they need it, and how they are going to utilize it. This allows the PMO to manage resources, whether it’s software, people, or equipment, keeping those resources available for each task respectively.

Goals

Some of the goals that a PMO can help define are to:

• Create quality by controlling, coordinating,  and reporting change, cost, and risk throughout the scope of the project

• Make sure all teams within the project, and resources that may be utilized in various projects are coordinated

• Provide training and lines of communication for teams to coordinate and collaborate

• Ensure that resources are available to decrease production time without reducing quality

• Be aware of costs and eliminate tasks that are redundant

• Reduce risk in order to provide timely, profitable projects, with customer satisfaction within corporate standards.

PMO Risk Management Responsibilities

Back to planning, a PMO is essential to creating and enforcing a risk management plan. What can go wrong will go wrong is the motto of risk management. The unimaginable, and unforeseen are taken into account before the schedule is set within the scope of work.

The PMO takes an active role in anticipating, identifying, verifying, and mitigating risks. Each member brings their own set of skills, and experiences with input that is invaluable to the process. This ensures that the organization as well as the project maintain quality standards.

The PMO sets the guidelines that must be followed to ensure completion. They follow strict criteria in order to support the teams, and the team members.

When necessary, the PMO will provide additional training, mentoring, or instruction for teams and team members. This training allows the project to follow the guidelines set to be followed throughout the teams, in a consistent and coordinated manner.

The Bottom Line

1. A PMO is utilized to create standard procedures throughout the organization. These standards are set and followed within all projects to provide consistent results.

2. The PMO manages data, trains personnel, develops tools, and establishes methods to improve efficiency of processes.

3. A PMO prioritizes projects to keep with the goals of the organization. It manages resources, maintains, updates and reports project data to stakeholders, manages documentation for all projects, oversees progress and provides support to team members and team leaders.

4. The  PMO is directly involved with upper management and often acts as a go-between to ensure collaboration and communication through all layers of the organizational ladder.

A PMO is not always part of an organization, however, it can be extremely helpful when organizing a variety and/or number of projects at once. It provides the projects with consistent management and strategies to ensure profitability and maintain the reputation and sustainability of the organization.

Having the ability to be proactive as well as reactive is something a PMO can assist with. Seeing the widgets can’t be painted black, but knowing that there is enough blue paint left over from another project, may not only save money, but time. As well as satisfying the customer. Turning a negative into a positive is one of the many ways a PMO is beneficial to an organization.

A PMO provides:

• Standardization
• Accurate results
• Consistency
• Cost Control
• Knowledge
• Centralization
• Training, mentoring and coaching
• Quality, and
• The ability to make decisions.

All of these promote the completion of quality projects that are aligned with the mission statements and goals of the organization.

Understanding the information in this article is an essential part of project management and a vital part of the PMP exam. Improve your project management skills or prepare for the PMP Certification exam by taking a quality online PMP exam prep course.