Organizing for Project Portfolio Management Within an Organization Custom Essay

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Stanosus (2003) argues effectively that PMOs are fast becoming a preferred route for improving execution of projects and achievement of value via standardization, dissemination of best practices and adoption of a knowledge based approach to project execution. The author further argues, that the establishment of a PMO should reflect the organizational context and culture within which it will operate. This should consider the types of projects and portfolios, organizational maturity level and also resource availability.
The first step in the establishment of a PMO should be the development of a business case for implementing this type of organizational change. As Kerzner (2010) argues, developing a clear case for the establishment of the PMO establishes the rationale, expectation and bounds within which the office will operate. The author goes further to argue, that this step is essential in establishing the strategic fit of the PMO within that of the organization and thus avoid the cycle of restructuring and reorganization cited in Hurt and Thomas (2009) as an inevitable consequence of poor design. Benchmarking and identifying best practices (industry specific) would also provide a strong basis for the business case.
The second step is building a coalition of support amongst the stakeholder groups. This should primarily involve senior management (particularly identifying and enlisting a senior project sponsor as argued by Andersen, Henriksen and Aarseth, 2007) but also extended to the level of functional managers and project managers that will feel threatened by perceptions that some of their authority will be ceded to the PMO.
Andersen, Henriksen and Aarseth (2007) also report a three stage framework for PMO establishment which in my opinion follows from the two mentioned above. The authors while recognizing the situational nature of the establishment argue that first project managers should be trained, the PMO launched and then operationalised through active project participation. A key point made by the authors is the need for staffing the PMO with capable resources to ensure peer level acceptance and also pursuing a slow-roll out. This is essential in building internal capacity as well as allowing early successes to act as ?selling points?.
PMO Types and Selection Criteria
Kerzner (2010) identifies three PMO archetypes, the work of Andersen, Henriksen and Aarseth (2007) indicates a broad level of agreement regarding these three types which can be regarded as strategic, tactical and operational PMOs. Roberts (2007) view however, is that the PMO essentially acts as a support and assurance function and consequently the species of the office depends on where the support is provided. However, the authors division of PMO types into project specific, portfolio specific and cross-organizaitonal tallies with the earlier strategic, tactical and operational definitions.
Corporate (Strategic) PMOs: These types of PMOs typically perform a more strategic function in setting in place organizational processes and policies governing project, program and portfolio management. The focus is more or best practices and knowledge sharing rather than in-depth facilitation of individual projects.
Segmented (tactical) PMOs: This type of PMO provide support and assurance functions to a cluster of related or interdependent functions. For example, this may be in support of geographical regions, a particular portfolio or similar product lines. The core function in this type is coordination and resource management to ensure optimal allocation and utilization.
Functional (operational) PMOs: These are more typically referred to as project offices because they exist to support narrow functional areas. Focused on resource management as well as directly facilitating the execution of individual projects.
The choice of the type of PMO as argued before is highly dependant on the organization. For example, the deployment of IBM?s Center of Excellence (Kerzner, 2010) clearly followed a mixture of strategic (the EPMO) PMO to drive the organizational change towards a more effective PM process and also operational PMOs that support direct project execution and ensure the roll-out of best practices and organizational PM methodologies to individual groups. This works particularly well for IBM due to its geographically distributed operations and also wide range of products and services that need support.
The choice of PMO type will also be determined by which functions it is expected to serve (as defined in the business case). Gareis in Morris and Pinto (2007) lists several PMO services and the mix of services will determine the positioning. For example, a PMO that is expected to provide project level assurance (meeting rooms, ICT tools etc..) is incompatible with the strategic type. While a requirement to provide policy development, training and an organizational PM career path is incompatible with the tactical and operational levels.
Six Sigma and PMOs
As Roberts (2007) argues, the core function of a PMO is to act as a support and assurance center for projects. Within this context, the Six Sigma methodology provides an excellent tool for continuously improving project performance via extensive data gathering and analysis. As Kerzner (2010) shows, Six Sigma is considered to primarily be a process improvement tool, and if the PMO is concerened with the establishment of best practices and guidelines to govern PM process, then the scope for Six Sigma application via PMOs should be obvious.
For PMOs, the focus as Kerzner (2010) shows should be in developing reliable means of gathering accurate data regarding the organizational execution of projects. Establishing benchmarks for project performance based on this data could also be considered to be a central application of Six Sigma by PMOs.

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