For years, the Project Management Office (PMO) has been a concept many project-based organizations are familiar with, however most small to mid-sized firms do not have the personnel available to staff this mid-level management position. With the recent challenges we have all faced during the COVID-19 pandemic, we have seen a renewed interest by firms who want to enhance their management of project performance, accounts receivable collections, WIP Aging, and utilization metrics. Having a handle on these key areas is vital to a firm’s success.
What exactly is a PMO?
The PMO can be just one person, a remote outsourced resource, or a team of Project Coordinators who can help your firm move the needle on project and profit performance. Google “PMO” and you will find a myriad of definitions.
Listed below is a synopsis of how a PMO can benefit your firm.
What does the PMO do?
Governance over all things project-related in your firm. The PMO:
- Assesses and refines delivery tools, including project setup, review tools, and establishes guidelines to ensure consistency across the entire project portfolio.
- Empowers your Project Management team by ensuring they have the tools and training to apply Project Management Best Practices for internal and external coordination and delivery.
- Manages best practices, which may include publishing a PM Standards Manual or Guidebook to hold the Project Management team accountable. Accountability for standards compliance is exceptionally challenging without written guidelines.
Schedule & Resource Management
- Assists with the Project Management Team. The PMO coordinates with the Project Management team to ensure that resources are assigned to projects, estimated start and completion dates are updated on projects/phases (absolutely required for forecasting), and that scheduling tools are up to date. All these items are essential to ensure that the Project Management team has an easy view into staff availability and utilization.
Financial Management Oversight
- The PMO should maintain continual oversight of projects to ensure that Project Managers are aware of existing and potential financial performance issues on projects. The PMO works with the Leadership and Project Management teams to define the Key Performance Indicators (KPIs) most relevant to the firm and ensures that those KPIs are reported and reviewed regularly.
KPIs commonly used to assess project performance are Labor Multiplier, Reported Percent Complete, Earned Value Analysis, Profit % with comparison to Profit goals, Estimate at Completion, and Estimate to Complete. The PMO ensures accountability and progress towards achieving Firm targets.
Risk & Issue Management
- This is an area where the PMO can be a game-changer. In too many firms, Project Managers are wearing multiple hats or lacking the tools and reporting that would provide the forward look needed to assess projects for potential risks and issues. Part of the PMO’s responsibility is to evaluate financial metrics, deliver schedules, and budget performance to assess projects for potential risks. The PMO is also responsible for ensuring that Change Management processes are published and that teams are held accountable.
In my experience, quality control is sometimes overlooked due to scheduling challenges. Does this resonate? A project deadline is Friday and all hands are on deck to get the project out the door, but the QAQC review gets missed in the frenzy. A PMO tracks the project delivery deadlines and the associated required tasks to ensure that the team does not miss this vital process. The risk your firm assumes by omitting the QC phase is not worth meeting the deadline.
Do You Need a PMO?
If you can answer “yes” to the questions below, it’s highly likely your firm could benefit from a PMO. Ask yourself these questions.
- Projects are delivered late
- Projects are delivered over budget
- Project Managers don’t have true “ownership” of successful project delivery
- Clients don’t receive appropriate project status updates
- Every project is ‘special’ and doesn’t conform to standardized work breakdown structure, billing rates, or performance metrics
- Project Managers aren’t held accountable for project performance
- WIP and AR balances aren’t ‘healthy’
- Everyone is ‘too busy’ to review project performance
So, how did you respond? Remember, this doesn’t need to be overcomplicated, nor do you need an entire ‘office’ of people to establish a PMO. For more insight into the Project Management Office, please join our upcoming webinar, where we’ll highlight the advantages of PMO and other outsourced Ajera services.
Valerie Higgins | Managing Director, AEC Advisory Services
Val’s 25+ years working in and with the AE industry has provided her with a wealth of “boots on the ground” experience that she brings to the table with each of her client engagements. Val specializes in assisting clients with an assessment of their business processes, ERP systems efficiencies, and a passion point – Best Practices for Project Management.