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How to create the PMO Framework

Processes, Guidelines & Principles to create PMO Framework

Introduction

As part of my research on “How do we go about getting an effective PMO started?”. I have mentioned in my previous article about some significant ways and process of setting up the PMOs. Now the next question is what we would do before we could create the PMO roadmap, defined the structure and process flow, so before we could define these things, we need to finalize the framework that we will be following. Defining and finalizing the framework is the first & foremost aspect of setting up a PMO group. Once we finalize our approach, framework, Identify our sponsors, then we will proceed further to define roadmap and processes, best-practices, principles, and to finalize the tools, and applications. Today I will explain, as what will be our approach in creating the PMO framework? How do we create an effective and efficient framework, which we can rely upon in our present and future? If an organization already has a framework, then how can they reincarnate the same? How the PMO framework restructure will be done when it required to do so? All that I have explained to you in my article today.

Level: -1: Facing the challenge of defining the PMO

The main objective of the PMO framework is to form a foundational understanding of the most common types of PMOs. To do this, we may need to have a specific set of subject matter experts who have spent much of their professional careers managing, operating, and building different kinds of PMOs in different environments, structures, and contexts. All the SME’s are have to have a one-day intensive workshop, where the SME’s will be working together to develop descriptive frameworks of the most prevalent PMO types. The intent of the workshop should be the followings:

• Identify and reach a consensus on the most common PMO frameworks, which is in practice today.
• Establish and define the variety of PMO practices like domains, enablers, etc.
• Develop a framework profile of each PMO configuration by identifying the practices associated with the PMO’s purpose and mission.

The first phase of the framework served as a foundational understanding, which will be tested with quantifiable measures via a survey later. After the workshop with the SME’s, the next step will be to develop PMO configurations, which practitioners could relate to within their personal context stemming from their day-to-day jobs.

Level: -2: Refining the frameworks

Once the foundational frameworks were completed in level 1, then it can be transposed to a brainstorming session. Through the brainstorming session, we can identify and develop the underlying constructs of each Framework. Especially the function and configuration of PMO’s refine and our understanding by statistically significant masses. To have a brainstorming session, we will need the people who will operate, manage, and supervise the PMO group, who will sponsor the PMO group, and whom the PMO group will report. Through the brainstorming session, it will help in identifying the framework that will best match the goals, objectives, and mission, and the outcome of the brainstorming session will be in the form of functions, capabilities, and performance related to PMO. Below given are the few possible frameworks which have been widely used by several organizations, and these are currently in practice.

1. Organization unit PMO/ Business Unit PMO/ Divisional PMO/ Departmental PMO: Provide project-related services to support a business unit or division within an organization including, but not limited to, portfolio management, governance, operational project support, and human resource utilization.
2. Project Specific PMO/ Project Office/ Program Office: Provides project-related services as a temporary entity established to support a specific project or program. May include supporting data management, coordination of governance and reporting, and administrative activities to support project or program team.
3. Project Support/ Services/ Controls Office or PMO: Provides enabling processes to continuously support the management of the project, program, or portfolio work throughout the organization. They use the governance, processes, best practices, and tools established by the organization. Provide administrative support for the delivery of the project, program, and portfolio work within its domain.
4. Enterprise/ Organization-wide/ Strategic/ Corporate/ Portfolio/ Global PMO: This is the highest level PMO in an organization. This PMO is often responsible for the alignment of project and program work to corporate strategy, establishing and ensuring appropriate enterprise governance, and performing portfolio management functions to ensure strategy alignment and benefits realization.
5. Center of Excellence/ Center of Competency: Supports project work by providing the organization with methodologies, standards, and tools to enable project managers to deliver their projects better. Increase the capability of the organization through good practices and a central point of contact for project managers.

Following are the domain of work, which is usually a PMO does, and all these aspects can be assessed in the brainstorming session to align these as primary and secondary workstreams.

1. Standards, Methodologies, and Processes: Methodology definition, Metrics definition, process development, and improvement.
2. Project/ Program delivery management: Define business goals, resource management, schedule, cost, scope management, business realization management, risk management, stakeholder management, communication, and Project integration.
3. Portfolio Management: Prioritization, Strategic alignment, Portfolio reporting, Resource management allocation, opportunities, investment analysis, risk management, benefits realization management — Benefits realization structuring, tracking, and reporting.
4. Talent Management: Provides Training, Career paths, career development, career capability, or skill development, Certifications, career counseling, and enhancements.
5. Governance & Performance Management: Provides Performance reporting, issue escalation, information distribution, metrics, or KPIs, compliance, financial management, PMO performance management.
6. Organizational Change Management: Provides Customer, or Stakeholder satisfaction, managing resistance, readiness assessment, stakeholder management, and communication management.
7. Administrative & Support: Tools — Provisioning, Implementation, and support, consulting, and IT/IS support.
8. Knowledge Management: Define knowledge management policies, Managing intellectual collateral/ Property, lessons learned, content management, and collaboration.
9. Strategic Planning: Confirming strategic priorities, defining business goals, aligning to initiatives, environmental scanning, and opportunity analysis.

Once we are clear on the PMO strategy and framework, it’s significant to have a comparative view of all the Frameworks that we discussed. The below table is an example of the comparative view of five frameworks, which are widely used across industries. I prepared a few sets of questions, which I usually asked in the brainstorming session to my sponsors and leaders, and based on their answer, I prepared the following output in a table.

I have done the analysis based on the usability of all the frameworks; it covers all the mentioned criteria and the inputs from the brainstorming session and represents the same as an average % value. It is a sample, which I had done for one of my organization while working on PMO set up. To set the right expectations and get the maximum outputs to finalize the PMO framework, the following questions I asked in the brainstorming session.

1. Which of the following PMO framework will best the organization (all division and global locations)?
2. What are the primary & secondary areas that we are focusing on?
3. What are the frequencies of services that we are planning to provide as part of our PMO group? — It will be a multiple option question, and the possible options are routine/ Occasionally/ rarely/ never
4. List all the criteria by which you think your PMO should be evaluated? Or list down the criteria which you feel are or would be the most appropriate for evaluation. Evaluative criteria should be examined individually or in aggregate.
5. To what extent the PMO focused on external, customer-facing projects, as opposed to projects for internal stakeholders?
6. The Project Management maturity comprises not only performance within portfolio, program, and project but also the organization’s evolution towards an improved state, which is illustrated by standardizing, measuring, controlling, and improving (SCMI) its performance. So how do you characterize the project management maturity?
7. What are the different sizes of projects that are in the pipeline with respect to the budget, which will be part of the PMO group?
8. Any pipeline projects which has a budget above $250k?
9. What is the total estimated value of the projects which were delivered in the past?
10. What was the total estimated financial value (revenue increased, or cost reduction) delivered in the past?
11. Indicate the resource structure of the PMO group, as what will be the contractor and FTE mix?
12. What Percentage of Project managers with PMP, other credentials, and contractors, we are planning for?
13. To whom the PMO will report to?
14. How often do you expect the PMO to report the progress?
15. How often would you like to rate the effectiveness of the PMO group? And the rating would be extremely effective, very effective, somewhat effective, not at all effective.
16. Please specify or characterize the involvement of the PMO group in each of phases of strategic management — Answer will be in multiple-choice, i.e., Routinely/ Occasionally/ Rarely/ Never.
17. How would you realize the PMO to contribute business value to the organization — Answer will be in multiple-choice, i.e., Fully realized/ almost realized/ partially realized/ not at all realized.
18. In your past estimation, what percentage of projects completed within the organization that met original goals and business intent?
19. In the past years, within the organization, What percentage of projects completed within their initial budget?
20. In the past year, within the organization, what percentage of projects completed within their initial schedule?
21. Which of these functional areas best describes, to which the PMO will report?

Note: Considering the high performers, we will have to create an algorithm based on the three-performance metrics (80%+ of the project met Original intent, budget, and schedule) to create a definition of high performers.

***Due limitation within LinkedIn to add the table, so I have added the table snapshot***

***Note: The percentage mentioned above has been derived from the output of twenty-one questions asked in the brainstorming session. Based on the answer, I have calculated average and convert the number to the percentage, which is represented in the above table. ***

Now that I have explained the steps to have an appropriate PMO framework, but to have a final decision, let us understand the top five frameworks in detail which are used by most of the organizations. Below I have explained all the five frameworks in detail along with their criteria. I have also provided the score of each criterion. I have also mentioned the preferred industry, which follows these frameworks.

Organizational Unit PMO/ Business Unit PMO/ Divisional PMO/ Departmental PMO

Description: The organizational unit PMO supports the organizational unit strategy by providing PMO services, including but not limited to portfolio management, governance, operational, and project support to a specific organizational unit. This PMO may provide appropriate information to PMO entities as part of organizational governance and maybe responsible for the consolidated reporting for the Projects, Programs, and portfolios within it’s a domain. There are 54% of organizations who followed this framework. The below mentioned tabular analysis has been extracted from the PMI website, as per the PMI research and analysis Schedule/Cost/ Scope Management is having 77% value addition to an organization if they are proceeding with this PMO group. The sub-criteria is mainly part of “Primary functions performed” by a PMO, so the overall score of each criterion like “Project/Program delivery management”; “Standard, Methodology, processes”; and “Portfolio management prioritization” is what will matter the most to any organization who are planning to have their PMO set up. Likewise, the other two key functions, i.e., “criteria that PMO is evaluated on” & “primary focus/industry of the PMO,” are also considered a similar way. After considering all the key aspects, it’s criteria and sub-criteria, then an organization can decide their PMO framework, which they wanted to use.

Project Specific PMO/ Project Office/ Program Office

Description: The Project-specific PMO provides a range of the project, and program support services as a temporary entity established to support a specific project or program. These services may include supporting data management, coordination of governance & reporting, and administrative activity to support the project or program team. The group may coordinate with other PMOs to support organizational governance requirements, to provide project and program artifacts, and to facilitate knowledge management activities. This group usually doesn’t exist beyond the life span of a project or program it supports. There are 31% of organizations who followed this framework. The below mentioned tabular analysis has been extracted from the PMI website, as per the PMI research and analysis Schedule/Cost/ Scope Management is having 91% value addition to an organization if they are proceeding with this PMO group. The sub-criteria is mainly part of “Primary functions performed” by a PMO, so the overall score of each criterion like “Project/Program delivery management”; “Standard, Methodology, processes”; and “Portfolio management prioritization” is what will matter the most to any organization who are planning to have their PMO set up. Likewise, the other two key functions, i.e., “criteria that PMO is evaluated on” & “primary focus/industry of the PMO,” are also considered a similar way. After considering all the key aspects, it’s criteria and sub-criteria, then an organization can decide their PMO framework, which they wanted to use.

Project Support/ Services/ Controls Office or PMO

Description: The Project support office provides enabling processes to support the management of projects, programs, or Portfolio work. It utilizes the governance, processes, best practices, and tools established by the organization and provides administrative support for the delivery of the project, program, and portfolio work within its domain. If required, it may also develop tools and practices to support a particular project effort specifically. Additionally, it may support mentoring, training, and certification activities for project managers within its area of responsibility. There are 44% of organizations who followed this framework. The below mentioned tabular analysis has been extracted from the PMI website, as per the PMI research and analysis Schedule/Cost/ Scope Management is having 73% value addition to an organization if they are proceeding with this PMO group. The sub-criteria is mainly part of “Primary functions performed” by a PMO, so the overall score of each criterion like “Project/Program delivery management”; “Standard, Methodology, processes”; and “Portfolio management prioritization” is what will matter the most to any organization who are planning to have their PMO set up. Likewise, the other two key functions, i.e., “criteria that PMO is evaluated on” & “primary focus/industry of the PMO,” are also considered a similar way. After considering all the key aspects, it’s criteria and sub-criteria, then an organization can decide their PMO framework, which they wanted to use.

Enterprise/ Organization-wide/ Strategic/ Corporate/ Portfolio/ Global PMO

Description: The Enterprise PMO is the highest level PMO entity in an organization, often responsible for the alignment of project and program work to corporate strategy, establishing & ensuring appropriate enterprise project, program & portfolio governance, performing portfolio management functions to ensure strategy alignment & benefits realization, and responsible for the alignment of initiatives to corporate strategy. The EPMO may facilitate governance at the enterprise level and may incorporate strategy development and strategy planning support. The EPMO may have direct responsibility or may influence over other lower-level PMO’s. Management of multiple stakeholders, and ensuring continuous communication are the key roles of the EPMO. There are 39% of organizations that followed this framework. The below mentioned tabular analysis has been extracted from the PMI website, as per the PMI research and analysis Schedule/Cost/ Scope Management is having 73% value addition to an organization if they are proceeding with this PMO group. The sub-criteria is mainly part of “Primary functions performed” by a PMO, so the overall score of each criterion like “Project/Program delivery management”; “Standard, Methodology, processes”; and “Portfolio management prioritization” is what will matter the most to any organization who are planning to have their PMO set up. Likewise, the other two key functions, i.e., “criteria that PMO is evaluated on” & “primary focus/industry of the PMO,” are also considered a similar way. After considering all the key aspects, it’s criteria and sub-criteria, then an organization can decide their PMO framework, which they wanted to use.

Center of Excellence/ Center of Competency

Description: The center of excellence supports the execution of project work by equipping the organization with methodology, standards, and tools to enable project managers to deliver the projects better. The Center of Excellence increases the capability of the organization by implementing good practices and providing a central point of contact for project managers. It may also provide mentoring, training, and capability development for people and could facilitate knowledge management through knowledge capture and information distribution. There are 35% of organizations that followed this framework. The below mentioned tabular analysis has been extracted from the PMI website, as per the PMI research and analysis Schedule/Cost/ Scope Management is having 51% value addition to an organization if they are proceeding with this PMO group. The sub-criteria is mainly part of “Primary functions performed” by a PMO, so the overall score of each criterion like “Project/Program delivery management”; “Standard, Methodology, processes”; and “Portfolio management prioritization” is what will matter the most to any organization who are planning to have their PMO set up. Likewise, the other two key functions, i.e., “criteria that PMO is evaluated on” & “primary focus/industry of the PMO,” are also considered a similar way. After considering all the key aspects, it’s criteria and sub-criteria, then an organization can decide their PMO framework, which they wanted to use.

Conclusion

I have done a PMO framework research in 2012, 2015, and in 2019. In each of these years, I have identified these five frameworks mentioned above. The research is mainly done to identify the different configurations of PMO’s, i.e., frameworks, to learn about their respective missions, goals, and objectives as well as how they are structured, how they operate, and what they look like. This essential step will lay out a basic understanding of PMO structure, landscape, and will address questions raised by mid-to-upper-level management responsible for developing, reincarnating, implementing, managing PMO. Furthermore, by aligning performance metrics in the delivery of business value, the research and analysis will help to determine which PMO frameworks can be more productive through its methods, services, and processes. This analysis will further provide PMO directors and managers with the ability to:

• Compare the PMO with the closest matching framework to benchmark against important services, and performance criteria.
• Learn about the best standard practices across all the PMO frameworks and the higher-performing PMOs.

With this PMO managers will be in a better position to reengineer their provision of services and support for executing an organization’s portfolio of projects and strategic initiatives.

Disclaimer:

This article I have written based on my professional experience of setting up PMOs, processes, governance models, best practices, and tools inlined with the organization’s strategic plan and initiatives. The tables, which I have used in this article, I have created them during my research and analysis for PMOs set up and establishments. I have referred the PMI website for the statistical data for better understanding.