How to start a project management office? In this article, we will explore the concept of a Project Management Office (PMO) and how its role can be broadened to encompass the entire services business. This extension of the PMO’s scope is motivated by the imperative for such a structure, and we will delve into the reasons that necessitate it. So, if you’re intrigued by the idea of unlocking the full potential of a PMO, read on to unveil some valuable insights on establishing one.
Defining the Project Management Office
Traditionally, the fundamental goal of a Project Management Office (PMO) has revolved around the efficient delivery of projects within set timeframes and budgets, achieved through the diligent application of project management best practices. A PMO assumes comprehensive oversight over all project facets, including financial resources and workforce allocation.
Organizations that forgo the establishment of a PMO frequently encounter glaring disparities in their project management practices and, consequently, the quality of project outcomes. It’s often a response to suboptimal project performance that PMOs are created, driven by the organization’s dissatisfaction with prevailing project success rates.
The Need for a Unique Organizational Structure in PMO
Defining the PMO’s Organizational Dilemma
As an organization delves into the endeavor of establishing a Project Management Office (PMO), a fundamental conundrum arises. This dilemma revolves around the pivotal question of how to structure the PMO itself. The company must decide whether the PMO should be conceived as a multifaceted entity encompassing diverse technical resources, essentially giving birth to an entirely new services organization. Alternatively, the question arises: Should technical resources continue to operate within their existing functional structures, with project managers exclusively nestled within the PMO? In essence, this decision crystallizes into the creation of a dedicated project department. Self Development, Productivity, Time Management, Happiness
Distinguishing Project Work in the Services Landscape
Project-related work, particularly pervasive in sectors like IT services, delineates itself significantly from conventional operational tasks. A stark contrast emerges when comparing the characteristics of internal and external projects. Internal projects typically bear strict, unwavering deadlines, while the timelines for external projects exhibit greater flexibility, contingent on the availability of resources. Furthermore, external projects introduce an additional layer of complexity through contractual obligations that mandate on-time project delivery.
The Imperative of Restructuring for PMO Efficiency
To facilitate the optimum functioning of a Project Management Office, it is imperative for senior management to demonstrate a willingness to decentralize power and authority from functional management. This reconfiguration paves the way for the creation of a service organization where project leaders exercise substantial decision-making authority. Attempts to fit a PMO within an existing management structure often yield interdepartmental disputes, obstructing the seamless allocation of resources to projects.
Mitigating Bottlenecks through Dedicated Project-Oriented Organization
The specter of bottlenecks looms large when functional management retains control over resource allocation, in contrast to the streamlined allocation of resources within a dedicated PMO framework. The implications of such bottlenecks extend beyond mere inefficiencies; they encompass issues like incurring financial penalties and the intricacies of allocating resources effectively, crucial considerations for the successful execution of projects that vary in scope and scale. This underscores the compelling necessity for the adoption of a project-oriented organizational structure within the realm of Project Management Offices.
How to Start A Project Management Office (PMO)
1. Embarking on the PMO Journey with a Holistic Vision
The establishment of a Project Management Office (PMO) is a multifaceted process, commencing with a comprehensive perspective that spans the entire services industry spectrum. From the initial groundwork in sales to the eventual project delivery and the ongoing operational activities, a holistic approach is essential. At the core of this intricate process is the appointment of a high-level individual entrusted with orchestrating this endeavor. Their pivotal role revolves around ensuring that all employees are seamlessly aligned with the overarching project structure. Underestimating the significance of this role by appointing a less-experienced individual could lead to dire consequences for the entire PMO initiative.
2. Setting Collective Objectives Across Functional Boundaries
The initial step in this PMO journey involves the delineation of expansive objectives that transcend the boundaries of individual functional domains. This means that regardless of an individual’s origin within the organization, be it the sales department, the delivery organization, or operations, a shared sense of ownership in the project’s success must prevail. The triumphant realization of a project should be a shared endeavor, fostering a collective spirit that encompasses sales, delivery, and management realms.
3. Structural Blueprint: Engineering Excellence
To further illuminate this intricate process, consider the structural blueprint of a services corporation that specializes in developing and implementing voice/data networks. Within this domain, engineers armed with certifications from industry behemoths such as Cisco, Avaya, and Microsoft are indispensable. The strategic classification of these engineers into pay bands is a crucial element of the structural framework. These pay bands are meticulously aligned with the engineers’ expertise and qualifications, thus ensuring that each resource is optimally positioned for project success. Cracking the Federal Job, Resume, Job Application, Career Guide
4. Resource Allocation: A Project Manager’s Prerogative
Within this PMO structure, engineers are organized into a resource pool, with project managers vested with the discretion to assign them to specific projects. An assignment to a project carries a profound implication – it signifies the engineer’s exclusive dedication to the assigned project, effectively prohibiting them from participating in other projects without the explicit consent of the project manager. In this context, the project manager assumes a central role, exercising oversight over every activity that engineers are required to undertake to secure the project’s success.
5. Mitigating Administrative Distractions
While project management and resource allocation are vital, administrative concerns such as vacations, performance evaluations, and sick leave must not be overlooked. To shield the project manager from administrative distractions, an administrative manager, often referred to as a resource manager, assumes responsibility for managing these intricacies. This arrangement safeguards the project manager’s unwavering focus, guaranteeing their undivided attention to project-related activities.
6. Resource Manager’s Multifaceted Responsibilities
The role of a resource manager is multifaceted and extends beyond the realm of administrative affairs. It encompasses several pivotal responsibilities, including the astute determination of when additional resources are required. This requires proactive analysis of current project workloads and ongoing sales, addressing the first facet of their role. The second aspect involves the resource manager soliciting feedback from project managers and sales teams to gauge the suitability of existing engineers’ skill sets for current and future projects.
The resource manager employs this feedback not to evaluate individual engineers but to assess the overall skill set of specific engineer types. It is through this analysis that engineers in need of further training or mandatory certifications are identified. Additionally, the resource manager collaborates with internal training departments or external training agencies to craft customized education programs tailored to bridge skill gaps.
Furthermore, the resource manager assumes a pivotal role in the identification of when new skills need to be introduced to meet the demands of forthcoming projects. This decision-making process is carried out in close collaboration with sales and delivery teams, ensuring that the service organization remains equipped to tackle new projects that necessitate a diverse array of skill sets. This approach fosters adaptability, ensuring the service organization can effectively respond to evolving client requirements and industry dynamics.
Navigating Profitable Projects Through the PMO
Formulating the Project Sales and Management Procedure
Within the realm of the Project Management Office (PMO), a pivotal responsibility lies in the meticulous formulation of the complete project sales and management procedure. Before even embarking on the journey of selling a project, the services organization engages in an intricate process of meticulously crafting a comprehensive business case for the service at hand. This detailed endeavor involves a thorough delineation of the service’s scope, the requisite skill sets essential for execution, and the array of associated activities. Learning Language Guide, Speaking, Reading, Writing, Listening Skills
The crux of this process hinges on precision, as it encompasses defining the deliverables of the service with pinpoint accuracy. Each of these deliverables is assigned distinct accountabilities, a choreography involving various facets like engineering, project management, operations, and more. These deliverables each operate within their own structured template, ensuring a well-orchestrated approach to service delivery.
The Collaborative Sales and Delivery Process
In the domain of services, the sales and delivery process is not a siloed endeavor but a harmonious collaboration. When a sales opportunity emerges on the horizon, the sales team and the designated individual responsible for project delivery within the particular service domain engage in a close-knit partnership. This designated individual shoulders a multifaceted role, encompassing responsibilities such as contract negotiation, revenue management, and overseeing the project’s profit and loss (P&L).
This all-encompassing oversight essentially implies responsibility for the entire project. In many organizations, this role is often conferred with titles like Practice Manager or Principal. However, it is crucial to underline that the role of the sales team extends beyond merely passing on opportunities to the Practice Manager.
The synergy between sales and delivery emerges as the potent catalyst for effectively sealing deals. It requires an efficient and seamless creation of Statements of Work (SOW) and the adept management of all pertinent areas, necessitating a closely woven partnership between the sales and delivery teams. In this orchestration, all resources involved must align strategically with the project’s objectives and collectively partake in the project’s journey to success.
Compensation Aligned with Project Success
The compensation structures in place for all stakeholders involved in the project must be inextricably linked to the successful completion and operation of the project, firmly underscoring its profitability. This approach extends to the sales team, whose compensation system should not be exclusively reliant on commission-based incentives tied to service sales. Regardless of whether the project spans a mere three-month deployment or extends into a three-year outsourcing agreement, a substantial portion of the compensation structure should be intrinsically tied to the quality of service delivery.
Distributing remuneration throughout the entire lifecycle of the project incentivizes the sales team to secure contracts that are not only signed but can also be feasibly and successfully delivered, resulting in favorable financial outcomes. Nevertheless, it is imperative for the sales team to possess a deep appreciation of the delivery perspective.
Mitigating Risk Through Delivery Expertise
The delivery team assumes a pivotal role in ensuring the project’s success, commencing with the meticulous verification of project hours that must be accurately reflected within the Statement of Work (SOW). Beyond mere documentation, the delivery team plays a vital role in comprehensively gathering customer requirements and clarifying any assumptions or prerequisites that are fundamental to a well-defined project scope.
This compensation system, founded on successful project completion, is not solely rooted in the interests of the sales team but rather safeguards the overall profitability of the project. By doing so, it shields the project from any detrimental deviations that could potentially result in financial losses. The delicate balance and shared responsibilities between the sales and delivery teams ensure a holistic and efficient approach to project management, ultimately underpinning project success and profitability.
In the journey of establishing a services company, adopting a project-centric approach to structure and compensation is paramount. By designing the service, determining deliverables, and estimating costs before venturing into the realm of sales, a company greatly enhances its prospects of effectively selling and executing profitable projects. This meticulous pre-planning instills accountability at every stage, ultimately leading to more successful ventures in the realm of services.