As business and project professionals set out to create or re-structure a project management office (PMO), they also must decide how and where the PMO will fit into their existing organizational hierarchy. Should a PMO function like a new department? How will the PMO report up through the command ladder? Who should PMO team members turn to for guidance and support when needed? As is often the case when it comes to project portfolio management (PPM) decisions, there is no one right answer. An organization’s size, line of business, strategic objectives, and PMO software play instrumental roles in shaping the project management office’s responsibilities. Let’s explore some considerations that can help you determine where your PMO fits into the mix.
Structure the PMO as a Relational Function
A PMO plays a decisive role in ensuring project success within the organization’s system, structure, and qualified staff. As part of this broad mission, many of the PMO’s responsibilities will involve other corporate functions, such as:
- Selecting projects to be undertaken, deferred, or terminated
- Defining project priorities
- Aligning projects with strategic objectives
- Assessing a project’s business value and benefits
- Evaluating and managing project and portfolio risk
These activities, among others, often require input from senior officers across an organization, including operation leaders, financial managers, human resources professionals, and more.
Add to this the fact that your typical PMO has a responsibility to train, coach, and provide guidance to all populations involved in project work, and it becomes clear that the role of a project management office is very much integrated with that of other teams and offices.
The bottom line is this: a cross-functional, enterprise-wide process like PPM involves a wide range of participants. As such, the PMO is bound to interact and collaborate with them. A project management office’s structure heavily depends on how it will collaborate with departments.
A PMO software solution like Sciforma makes understanding these connections much easier. Track data, analyze project activities, and communicate seamlessly on one platform so that your fledgling PMO has all the information it needs to succeed.
Who Does a PMO Report To?
With their broad scope and varied responsibilities — and the highly strategic impact of PPM — many PMOs report to the CEO. This is especially true of enterprise PMOs, which coordinate projects at the firm level. However, some types of PMOs – like domain, division, or business unit PMOs – might instead fall under the purview of region, portfolio, or department managers.
It’s also possible that a CEO may be unwilling or unprepared to oversee the PMO. When this is true, responsibility for the project management office might go to another senior leadership figure, like a COO or CFO.
Another PMO Structure Option: PPM Governance Council
Not every C-suite knows how to sponsor and champion a PMO. Besides, CEOs, CFOs, and other executives already have their specific territories to oversee. They might not have the time, resources, and skills required to focus on project portfolio management (PPM) effectively and successfully.
While the senior executives ultimately retain responsibility for PPM and should approve major decisions, day-to-day oversight may be delegated to a “Governance Council.” This council is responsible for the key decisions that affect the firm’s portfolio of projects.
Such a Council may consist of one or several of the C-managers mentioned above or of their representatives — typically high-level managers. When appointing a Council to oversee and champion the PMO’s activity, it is common practice to formalize and issue a PPM charter detailing the following:
- Purpose and nature of the PPM process
- Roles of the various participants
- Respective responsibilities of the council and of the PMO
- Escalation mechanisms dictating how and when to elevate issues and decisions to upper management
Interactions Between PMOs and Governance Councils
In addition to regular internal meetings, the Council should frequently meet with the PMO in order to communicate and collaborate effectively. The objective is to make sure that the information required to select and prioritize projects is readily available and that all decisions are made based on this data.
Should anything go wrong — either because of technical impediments, reduced performance, budget or scheduling issues, or any other internal or external factors — the PMO should notify the Council by issuing a report that may also include recommendations. Then, the Council is tasked with assessing the situation, evaluating its impact on revenue, and reviewing key details like strategy alignment, risk, and priorities. Ultimately, the decision of deferring or killing projects falls within the scope of the Council.
What if the PMO Ran the Business?
When we listed the possible C-suite sponsors for the PMO, we assumed that the organization didn’t have someone in a relevant role, like a VP of Projects or a Chief Project Officer (CPO). Although not universal, these functions are gaining traction in project-focused firms. In any case, a constant is that the leadership and direction for the PMO usually come from the very highest levels of management.
As a matter of fact, we’re seeing many PMOs — especially enterprise PMOs (or EPMOs) with an organization-wide reach — evolve their roles from operational monitoring into the provision of strategic data and insights to executive leaders.
As they are becoming supporting and enabling partners of senior, C-level executives, it could make sense for such PMOs to join them on the Board as “Chief Insight Officers” — or even “Chief Transformation Officers” tasked with leading change and digitalization across the enterprise.
Final Thoughts on PMO Structure, Roles, and Responsibilities
In many cases, a new or restructured PMO can fit seamlessly into your organization – it exists to collaborate with other teams and bring elements of all areas of project activity to one place (ideally, a software solution) for monitoring and management. Many project management offices report to executives and senior leaders, but others rely on specific governance systems. Your organization’s size and strategy will likely play the biggest roles in shaping your project management office structure. There is no correct answer here: whatever makes the most sense for your needs is a completely valid option.
