Regardless of what you call it – Enterprise PMO, Program Management Office, Project Management Office, or Portfolio Management Office – project management offices exist to ensure companies 1) select and approve projects that align with strategy and help advance corporate goals, and 2) successfully complete project work on-time and within budget. If deployed and managed properly, they can also increase efficiencies and reduce the overall cost of delivery. However a poorly implemented project office can be costly – missed deadlines, burdensome red tape, low moral, and high overhead costs.
The definition and responsibilities of an Enterprise Project Management Office (PMO) and a traditional Project Management Office (PMO) are convoluted. While some duties clearly belong to one, many more can be assigned to either group. Here is a brief comparison of the two entities from my perspective and experience working with many clients.
The Enterprise Project Management Office
An Enterprise Program Office (EPMO) is typically outside of any operational business unit, and reports directly into the CEO or CFO. As the name suggests, the EPMO is responsible for all programs and projects across the enterprise. It maintains a top-down view of an organization’s portfolio of projects.
The EPMO assists executive leadership in deciding which programs and projects should be undertaken. To accomplish this, it must maintain a clear vision of the companies near and long-term strategy. EPMOs often facilitate some form of committee, which reviews business unit proposals and approves new initiatives.
With visibility across the entire organization, the EPMO can coordinate efforts among business units ensuring projects are aligned and in no way conflicting. This organizational visibility allows the EPMO to assist with demand forecasting and resource planning.
An effective EPMO includes accounting and analysis skills, enabling it to evaluate return of investment (ROI) for proposed projects. EPMO leadership and team members should have strong business knowledge, and are typically less technical than business unit project managers.
The Enterprise PMO should be strategic, while the business unit Project Management Office is tactical.
The Project Management Office
A Project Management Office (PMO) is usually aligned with a business unit – often within IT, reporting to the CIO or CTO. There is a wide variety of PMO ‘flavors’, but they generally adopt one of three models.
- Supporting PMO – The supporting PMO is not directly accountable for project work, but exists to support project managers within other business units. Supporting PMOs will provide methodologies, procedures, best practices, training, and other resources.
- Directing PMO – A directing PMO will establish methodologies and best practices, and then ensure project managers adhere to these standards through monitoring performance metrics. The directing PMO will report results to management.
- Controlling PMO – The controlling PMO is responsible for directly managing projects. It typically hires, manages, and trains a core group of PMs who are then responsible for project management.
PMOs can also operate with one of three levels of oversight.
- Project Management Office – A Project Management Office is primarily focused on successfully delivering individual projects (schedule, scope, and budget).
- Program Management Office – Program Management Offices are setup to mange one or more programs. A program is typically a longer-term initiative comprised of several smaller projects.
- Portfolio Management Office – A Portfolio Management Office is responsible for many concurrent projects that comprise a portfolio. The portfolio of projects can be organization wide, or within a single business unit.
PMs within the PMO have project management technical skills and training, and usually have some level of subject mater knowledge based on their parent business unit. Effective PMs also possess strong soft skills and good personal relationships within their groups.
While the EPMO is typically concerned with which are the right projects, the PMO is focused on the right way to deliver projects.
EPMO and PMO Overlap
There are several areas of responsibility that may fall under the EPMO or PMO, depending on company culture, goals, and other factors. Often, responsibilities for these are shared between the groups. In this case, the EPMO typically defines methodology, tools, metrics, etc., and the PMO is responsible for implementation. Areas of responsibility that may overlap include:
- Project Management Methodology (PMM)
- Portfolio and Project Management (PPM) tools
- Project performance metrics
- Best practices
- Resource management
When they work well together
An EPMO and PMO work best together when there is a distinct definition of objectives for each. Both should have a clearly defined mission, vision, and goals, while limiting overlap and ambiguity. Roles and responsibilities can then be defined, and aligned with the teams’ objectives. Everyone within the organization should be aware of each group’s purpose and responsibilities.
The EPMO and PMO should work in support of each other. The EPMO determines which projects should be undertaken, based on company strategy and project value, while the PMO is responsible for successfully managing each project.
A PMO is most effective when it is directly accountable to the business leadership it is servicing. A ‘dotted line’ report into the EPMO is also appropriate, to ensure the PMO is reporting necessary status and metrics, working on the appropriate projects, and following any standards set by the EPMO.
When they might conflict
Establishing and maintaining an effective EPMO and PMO within the same organization can be tricky. If not setup properly, there will be competition and redundancy between the groups. Rather than helping advance company goals and objectives, the two groups may hinder project execution when not in alignment.
It is critical for senior leadership to equally support both the EPMO and PMO, while providing clear delineation of responsibility between the groups. I have seen multiple clients where executive leadership establishes an EPMO and IT creates a PMO, without effectively collaborating. Both groups were confused as to their mandates, and eventually began to compete for attention and resources.
Where to place the project managers can also be a point of contention. Some of my past customers have had project managers in both the EPMO and PMO, without defining roles and responsibilities. I have worked with a few companies that assigned two PMs to every project – one from the ‘business’ EPMO and one from the IT PMO. This rarely works effectively.
Where I have seen success
Successful EPMOs are laser focused on company strategy and ensuring the right projects gets approved – projects that align with organizational goals, culture, and strategy. They are small teams of senior, business knowable individuals, and aligned closely with senior leadership. The EPMO might be responsible for establishing high-level project management best practices, and perhaps tools. It typically collects project status and metrics, and reports overall portfolio health to senior management.
Effective PMOs are staffed with experienced, professional project managers, with some subject matter knowledge. They have mature methodologies, align well with company culture, and are viewed as adding value by their customer business units. Highly productive PMOs focus on the project deliverables and meeting business expectations (the destination), not on the process (the journey).
One size does not fit all. EPMOs and PMOs should be tailored to fit within company structure and culture. Start with your organizational goals (i.e. reduce costs, increase project success rate, selecting the right projects), and then evaluate how best to meet these goals given your culture. Too many companies build PMOs based on academics and best practices, without taking into account their own context.
I recommend taking small steps towards implementing an EPMO or PMO. Develop a long-term vision and strategy, based on your organizational goals. Then, develop a plan that aligns with your strategy and plan. Rollout the PMO in phases, making adjustments to the plan based on feedback and lessons learned. Be sure to have executive buy-in, and over communicate along the way. Everyone involved should understand the PMOs purpose, how it adds value to the company, and why it is good for them.