Benchmarking of Project Management Office EstablishmentExtr.docx

Benchmarking of Project Management Office Establishment:
Extracting Best Practices
Bjørn Andersen1; Bjørnar Henriksen2; and Wenche Aarseth3
Abstract: This paper deals with best practices in establishing,
developing, and implementing project management offices
�PMOs�. First,
a brief overview of the theoretical background for PMOs is
presented. The research approach is described, along with an
overview of the
benchmarking partners used. In the main part of this paper,
various aspects of a PMO’s life cycle are discussed based on
observations from
the benchmarking partners. Through the benchmarking study,
we have discovered that although the PMO design differs
greatly, certain
key characteristics, responsibilities, and tasks are very similar.
Successful PMOs take on responsibility for different project-
related
functions and core tasks related to development of shared
methodology and processes for handling of projects, training
and competence
development within project management, proposing of new
projects, and quality assurance of projects. The success of the
PMO is related
to ensuring the necessary authority of the PMO, real
organizational authority as well as academic and social
credibility, top management
support, and that the PMO covers true needs in the organization.
DOI: 10.1061/�ASCE�0742-597X�2007�23:2�97�

CE Database subject headings: Project management; Bench
marks; Best management practice; Change management; Life
cycles.
Introduction
Many organizations, especially above a certain size and with an
extensive degree of project work, have taken the step to
establish
centralized project management offices �PMOs� to take on
responsibility for project-related functions and coordinate
project-
related activities. There are large variations in terms of
organiza-
tional location of such PMOs and the responsibilities/tasks they
hold.
This gap in perceptions of PMOs and their impact led several
companies we continuously work with to ask the question “what
seems to be best practice in this area?” These companies were
all
in the process of establishing a PMO or redefining/formalizing
existing project support functions in a PMO, and thus saw the
need for some kind of roadmap for designing and implementing
a
project management office. As a result, a comparative bench-
marking study was undertaken, using a sample of companies
who
had accumulated experiences in this field as data sources. The
purpose was to identify any common factors, positive and nega-
tive, that seemed to dictate the success rate of a PMO.
Theoretical Background
Historical Background and Development

Project offices have for quite some time been used as a means
for
administrating large projects, based on the need for an overall,
coherent approach. Project offices were established to
coordinate
portfolios of projects, and these offices facilitated experience
transfer and benchmarking among the projects. In addition, such
project offices often functioned as a “project monitor” that re-
ported directly to senior management about problems or devia-
tions from plans. They might even intervene and adjust projects
going astray �Winters 2000�. Even before such offices came to
be
called “project management offices,” they were in some
pioneer-
ing organizations termed program management offices, for ex-
ample in NASA. In the early days of such support offices, the
program management offices resembled closely what we today
term project management offices, but later on, they have been
given somewhat different meanings, as is explained later.
In terms of impact, studies by the Gartner Group indicate that
organizations with a well-functioning project management
office
will experience half the cost and time overruns as those without
one �Gartner Group 2000�. The Standish Group found that
espe-
cially the information technology �IT� industry has been less
than
proficient in managing its projects �Crawford 2001�.
Considering
how widespread IT projects have become, this is an ominous
trend. One particular study showed that 46% of all IT projects
ran
over budget and schedule, with 28% of them construed as fail-
ures. Other organizations, e.g., Robbins–Gioia, Inc., have found

similar statistics; 90% of all IT projects underestimated the size
and complexity. Almost half of them, 44%, had cost overruns in
the magnitude of 10–40%, whereas only 16% consistently
stayed
true to the project plan.
In response to this, many organizations turn to solutions like
project management offices. One question still remains; can it
be
proven that a PMO is the right solution to these problems? The
trend seems to point in the direction of a higher project success
1Professor, Dept. of Production and Quality Engineering,
Norwegian
Univ. of Science and Technology, NO-7491 Trondheim,
Norway.
2Researcher, Productivity and Project Management, SINTEF
Technology and Society, S.P. Andersensv. 5, NO-7465
Trondheim,
Norway.
3Researcher, Productivity and Project Management, SINTEF
Technology and Society, S.P. Andersensv. 5, NO-7465
Trondheim,
Norway.
Note. Discussion open until September 1, 2007. Separate
discussions
must be submitted for individual papers. To extend the closing
date by
one month, a written request must be filed with the ASCE
Managing
Editor. The manuscript for this paper was submitted for review
and pos-
sible publication on February 7, 2006; approved on June 8,

2006. This
paper is part of the Journal of Management in Engineering, Vol.
23, No.
2, April 1, 2007. ©ASCE, ISSN 0742-597X/2007/2-97–
104/$25.00.
JOURNAL OF MANAGEMENT IN ENGINEERING © ASCE /
APRIL 2007 / 97
rate. When the Standish Group investigated software projects,
only 16% were successful in 1994 with regard to time, budget,
and technical specifications. This rate had increased to 26% in
1998 �Crawford 2001�. In the book The Strategic Project
Office,
three main reasons given for this development are:
1. The project size tends to decrease, thus making the projects
less complex;
2. Better project management; and
3. More extensive use of standard project procedures, for ex-
ample as a consequence of the implementation of a PMO.
A survey from the Gartner Group �2000� showed that:
• 40% of project-oriented larger enterprises have established a
project management office;
• Organizations with effective PMOs will reduce overruns by
50% �cost, time, and resources�; and
• Project management offices represent best practice regarding
project execution success.
PMOs at Different Levels

One of the aspects we studied in our research was practices and
requirements with regard to PMOs at different organizational
lev-
els. From our definition of a PMO and from practices observed,
it
seems clear a PMO can be, but need not to be, a physical office.
It can also be a virtual unit consisting of people with a special
interest and expertise in project management, promoting good
practices on behalf of the entire organization. This makes it
easier
to separate the PMO from a less productive discussion on its
location in the organizational hierarchy and chart. However,
there
have been attempts at defining types of PMOs depending on the
organizational level they are linked to �Crawford 2001�:
• Level 1—Project control office or project office. This type of
PMO handles the management of large and complex indi-
vidual projects, with a focus on control and monitoring of
schedule, budget, and other more administrative aspects.
• Level 2—Unit project office, for example an IT project office.
This type of PMO can also be used in managing individual
projects, but the overall objective is to integrate all projects in
a unit into one or more portfolios of projects.
• Level 3—Strategic project management office, for example a
corporate project office. Level 3 office is located at the corpo-
rate level, enabling the senior management to take part in the
prioritization of projects, to support the goals of the
organization.
Associated to Level 3 of project management office, we find the
concept of program management office. The distinction might
be

dismissed as an unnecessary semantic exercise but we believe it
merits attention as they often have different aims and roles in an
organization. Russ Martinelli and Jim Waddell �Intel and Tek-
tronix, respectively� described important distinctions
�Kendrick
2005�: “Program and project management are related but
distinct
disciplines. It is important for everyone within the organization
to
fully understand the distinctions between the two, as well as the
differing roles and responsibilities of program and project man-
agers. In general, the greatest difference between program and
project management is that program management focuses on
achieving business results to create a competitive advantage
while project management focuses on planning and executing
the
work required to deliver the end product.”
Programs often consist of several projects and a project man-
agement office might be a part of the program management
office.
Kendall and Rollins �2003� described important issues on the
enterprise/program mission level by focusing on portfolio man-
agement and the process to do that effectively.
In line with Crawford’s understanding of the different levels of
PMOs, Rad and Levin �2002� suggested the following as
suitable
levels:
• PMO for individual projects or a program of related projects;
• PMO at the divisional level; and
• PMO at the corporate level.
Although there seems to be consensus about this issue, we will
revert to it later when discussing our findings.

Establishing a PMO
There is of course no exact approach prescribed for establishing
a
PMO. The approach will depend on the size and structure of the
organization, the purpose of the office, and so on. Some recom-
mendations have been made, for example, Perry and Leatham
�2001�, suggesting a three stage process:
1. Training project managers;
2. Launching the PMO; and
3. Deployment through active project consultation.
There is little empirical data available on implementation pro-
cesses for PMOs, but Rad and Levin �2002� provided some
rules
of thumb for implementation times:
• Project level PMO, 3 months–1 year;
• Division level PMO, 1–3 years; and
• Corporate level PMO, 3–7 years.
Beyond these sources, we have uncovered very little literature
that bears on the issues we set out to study.
Research Approach
The research project had the following main objective: “Estab-
lishing insight into good/best practices in establishing and oper-
ating project management offices in larger organizations.”
By large, we did not specify a minimum size limit, but the
research included organizations of at least 1,000 employees,
very
often also organized in different units and/or geographical loca-
tions. Given this data material, we think the results are not valid
for smaller organizations, i.e., with less than 500 employees.
The
chosen research approach combined literature review with an in-
terview survey and a process benchmarking study:

• Literature review: To the extent relevant literature or other
types of documentation was available, this was examined for
any answers to this research question.
• Interview survey: A survey was conducted in the organizations
that represented the “customers” of this project. The survey
focused on understanding the needs of project managers and
participants in terms of PMO functionality.
• Benchmarking: A process benchmarking study was undertaken
to identify any common denominators in PMO practices. The
benchmarking study was based on a stepwise model called the
benchmarking wheel �Andersen 1995�.
More specifically, the purpose was to analyze the PMO imple-
mentation processes in the benchmarked companies to
understand
whether generic recommendations could be identified. The
approach is typically qualitative in nature, with a sample of
benchmarking partners too small to allow any type of statistical
analysis. Thus, the reliability of the results is limited by the
benchmarking partners included in the sample. However, repre-
senting a cross-section of different sectors and types of
organiza-
98 / JOURNAL OF MANAGEMENT IN ENGINEERING ©
ASCE / APRIL 2007
tions, the results should be widely applicable. Many of the
bench-
marking partners, and indeed also the companies participating
as
discussion partners in the research project, represent large engi-

neering companies. Engineering companies aiming to establish
or
change existing PMOs should use the results from our work as
guidelines when planning their change processes.
Empirical Data
The empirical data collected in the study originated partly from
the interview survey of the participating organizations, partly
from the studies of the benchmarking partners.
Internal Interview Survey
The interview survey took place in the organizations
participating
first hand in the research, conducted by the research team
together
with a representative from the respective organization.
The most important findings from this study are presented in
the following:
• Armed forces: Have already implemented a project manage-
ment office with certain responsibilities. The main support
expected from the PMO is strategic portfolio management,
coordination among projects, being a resource base for the
projects, having “mentors” to offer aid, monitoring the
projects’ performance, harmonizing approaches and tools be-
tween the projects, and competence development.
• Oil company: Does not have one centralized PMO but rather
project organizations within each business unit. These perform
project analyses for the business units, and handle harmoniza-
tion of approached and tools. In the future, PMO customers
expect clearer links to the project customer, coordination of
project resources, shared methodologies, resource allocation

support, training, “super project managers” for hire, and some
kind of best practice sharing.
• Telecom operator: Several of the subcompanies have estab-
lished PMOs, servicing projects as “stimulants” of good
project practices throughout the project duration. They also
handle training of project management personnel, while future
expectations from the projects are supplying them with people,
creating value for the projects, comparing projects and trans-
ferring experiences, shared methodologies, and ultimately
making the project managers perform better.
• Defense contractor: A PMO was established just before the
survey was undertaken, with the PMO having only a consult-
ing authority toward the projects. Expected, prioritized func-
tions of the PMO are maintenance of, training in, and support
for the project management process, coordination of project
management approaches, support to projects in the start-up
phase, auditing of projects, and establishing arenas for experi-
ence exchange.
External Benchmarking
The search for benchmarking partners was directed at organiza-
tions known for successful PMO operation. In the end, the fol-
lowing were used in the study:
• Lego, the Danish toy company, to which a site visit was con-
ducted with interviews with both the person responsible for
developing the PMO and a project manager.
• Danish Oil & Natural Gas �DONG�, interview conducted
with
the person responsible for developing the PMO.
• Dyno Nobel, the Norwegian branch, interview conducted with

the person responsible for developing the PMO.
• Fiat, experiences in PMO development exchanged over e-mail
with the person responsible for developing the PMO.
• BHP Billiton, telephone interview conducted with the PMO
manager.
• SunTrust Bank, telephone interview conducted with the person
responsible for developing the PMO for IT projects �who had
previously developed similar PMOs in Coca-Cola and the in-
surance company Aflac�.
The main findings from the benchmarking partners are
presented
in Table 1.
Analysis
The following questions formed the basis for analysis and
discussion:
• Is it possible to identify a pattern of organizational-dependent
factors, its challenges, and its projects that dictate the type of
project management office that is suitable and how it should
be implemented?
• What typical responsibilities does a PMO have, and which are
normally not included in the functionality of a PMO?
• What objectives are pursued in establishing a PMO, and what
stakeholders and what needs does it attempt to satisfy?
• Will a PMO display a dynamic development over time, i.e.,
have some kind of a life cycle?

• How are PMOs typically organized, what size do they have,
and how should they be staffed?
• How can one ensure that a PMO has the necessary authority in
the organization to have a real impact on the projects, and
what role does top management support play in this?
• To what extent is the success of a PMO influenced by the
existence of an individual with a true passion for the PMO,
and how to ensure the transition from one person’s pet project
to regular operations?
• What competence requirements must be fulfilled by a PMO
and its employees?
The analysis section of the paper is thus structured accordingly.
Classifying PMOs Based on Organization Type and
Other Aspects
An, albeit unscientific, observation many in the research team
made during the interviews was that the project management of-
fices seemed to be “colored” by the person who had been the
obvious driving force behind its establishment. If this person
was
inclined toward IT solutions, the PMO focused on selecting and
implementing project management systems, while an HR person
would direct the attention of the office toward competence
devel-
opment. This observation certainly belongs to the heading of
sponsor influence, but it also led us to ponder the question
about
how different a PMO is from organization to organization.
After some discussion, we still concluded that they are basi-
cally quite similar. Their status and use can depend somewhat

on
the sponsor, also their size, organizational level, and how they
are
staffed. However, the key characteristic, the responsibilities and
tasks they have, are often surprisingly similar, if not identical.
This led to the formulation of our definition of a project
manage-
ment office: “A systematic coordination and unified handling of
key project-related tasks, as an enterprise-wide responsibility.”
From this definition, the actual physical manifestation of the
“office” is of less importance as long as it assumes a systematic
APRIL 2007 / 99
Table 1. Findings from Benchmarking Partners
Benchmarking
partner Rationale for PMO implementation Tasks handled by the
PMO PMO success factor and evaluation
Lego Lego is in a market where about 70% of the revenues
each year are generated by new products of that year,
giving rise to an extreme need for speedy product
development. The average product development time
has been reduced from 36 months to about 24, with the
target being 12 months. This was also really the
triggering factor in the establishment of Lego’s PMO,
an office that even “owns” a group of close to 20
project managers.
• Defining and improving business processes across the
organization • Providing project managers to projects •

Supporting planning and support systems • Training
project managers
Co-location of the project teams is a very important
success factor, and the project manager interviewed
considered the PMO a large success. It was seen as a
unit representing the project managers toward the rest
of the organization, as opposed to being a tool to
“teach the project managers to behave” as is the
case in many other organizations.
DONG The PMO is located inside the Exploration and
Production �E&P� division, and was established as a
response to a need for more standardized project
execution.
• Offers the projects support and reports from the
project to the senior management • Methodology
standardization • Portfolio reporting • Coordinates the
resource portfolio • Trains project managers • Conducts
peer reviews and project evaluations • Aids project
start-up processes
A success factor has been the inclusion of senior
project management competence in the PMO to give
it credibility, while pitfalls seen are that the PMO
becomes too static and bureaucratic or introduces
too advanced systems.
Dyno Nobel
Europe
The PMO is a staff function with only one employee,
established following a reengineering process in the
company.

• Project management methodology • No decision
authority • Training of project managers
Being able to redo the process, the financial depart-
ment would have been more closely involved, simply
because financial aspects are an integral part of projects.
BHP Billiton The PMO consists of 16 persons and was
established
following a series of very poorly managed projects.
The PMO is not a centralized project organization,
but rather a support unit distributed across the
different locations.
• The project governance process • Reviewing projects •
Training in project management • Benchmarking • Project
management software • Analyzing the company’s project
Today, the large projects are well under control,
and the focus ahead is on medium-sized projects.
SunTrustBank Established a PMO, to move away from a
situation
where the divisions worked in “silos” and prioritized
projects motivated by the priorities of the divisions,
not the company as a whole. The PMO mainly
handles the bank’s IT projects, and is a separate unit
reporting to a member of the top management team
�giving it weight and authority�.
• Developing methodology and tools for project
management • Implementing quality assurance
• Portfolio management • For each project, a scorecard is
developed and monitored continuously
The PMO has produced benefits like more effective

projects, that the right projects are prioritized, and
less project failures.
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responsibility for a set of important tasks related to the
execution
of projects. Considering this set of tasks, there are only minor
differences among the observed PMOs. The next logical
question
then was: Are there aspects of the organizations, e.g.,
challenges
they are facing or their projects that dictated the design of the
However, no such pattern could be found in our data. This topic
has not been covered in existing literature either, supporting the
interpretation that this is not an important topic.
PMO Responsibilities and Tasks
From the benchmarking data, we found that the following repre-
sent the core of tasks handled by the typical project
management
office:
• Establish, continue to develop, and manage shared methodol-
ogy and processes for handling of projects in the organization.
Very often, a project model lies at the bottom of this, often a
phase model with decision gates. On top of this, there are
usually process descriptions, routines, tools, etc.
• Training and competence development within project manage-
ment, either through offering courses by the PMO itself or
providing external training. In some cases, the office also man-
ages a “competence ladder” or some other form of certification
where project managers gradually and systematically develop
more advanced knowledge.
• Offering support to projects, in the form of, for example,
methodology and tools, participation in meetings, and present-
ing recommendations and consulting. Normally, this is a free
service for the projects. In some cases, it is mandatory for the

projects to use these services, in others it is voluntary. Most
PMOs are also clear about not wanting to act as operative
resources in the projects, but rather to maintain a certain dis-
tance and be “consultants.”
• Contribute to the governance processes of the projects, i.e.,
the
proposing of new projects, ensuring the quality of the decision
basis, and selecting projects. Common for all the PMOs ob-
served is that their role is limited to offering recommendations,
not having formal decision power.
• Quality assurance of projects, at different stages and in differ-
ent ways, from evaluating decision basis documents in the
selection phase to midterm/after-the-fact evaluations, to
facilitating peer reviews. Again, the office normally has no
authority to instruct or stop the projects, only to make
recommendations.
• Offering support to the project owner, i.e., support to the man-
agement of the organization and those in charge of the project
portfolio, as opposed to the single project. This can include
different types of quality assurance, consulting about project
development, competence development, and so on.
Various literature lists several additional tasks handled by
PMOs, and the benchmarking study also uncovered other
respon-
sibilities. However, these were specialized functions handled by
only one or two PMOs and did not represent key functions.
To the extent that the previous list has evolved as a kind of
consensus set of tasks for PMOs, it seems sensible for an
organi-
zation planning to implement one to include these
responsibilities.

They have emerged as a common denominator of a number of
successful PMOs in reputable organizations, and thus represent
much experience about what are suitable tasks for a PMO.
Objectives Pursued When Establishing a PMO
From existing literature and the observed organizations, there
are
a number of different triggering factors of PMO implementation
processes. Some examples of objectives pursued are:
• Large differences in how projects are run, thus a PMO is es-
tablished to ensure a more uniform project execution based on
best practice.
• Problems with cost and time overruns in projects, thus aims to
improve this by ensuring a central competence unit within
project management in the organization.
• Lack of qualified project managers, as a consequence imple-
menting a PMO to develop such competence.
• Lack of holistic practices with regard to project selection and
synergies among them. A PMO can then be established to
appoint responsibility for such an overall view on the project
portfolio.
On an overall level, the objective of a PMO will always be to
realize the given definition of a project management office, i.e.,
to
ensure a systematic handling of key project management related
tasks. One question we asked ourselves was whether the chal-
lenges motivating the decision to implement a PMO decide how
the PMO is designed. We have found this to be true to a certain
extent, combined with the influence of the interests of the
sponsor

of the PMO. However, no matter what objectives are initially
defined, we have observed that a gradually emerging goal is to
develop a PMO that is really in demand, that answers to a need
in
the organization and which will be missed should it be closed.
Many of the interviewees pointed out the danger that a PMO
could end up being one more bureaucratic element incurring
more
disadvantages than support for the projects and their managers.
Developing a PMO that is truly needed counters this tendency,
and this can be achieved by performing a thorough stakeholder
analysis before designing the office.
Life Cycle of a PMO
One common trait in most of the PMOs observed is that they go
through a dynamic development over time. This is in accordance
with so-called maturity models that exist within the fields of
qual-
ity management, software development, and indeed project man-
agement. The basic idea is that you must learn to crawl before
you can learn to walk, i.e., starting with simpler tasks and
expand-
ing these to more advanced ones as experience is gained and
competence developed, as shown in Fig. 1. This holds for true
for
many areas, also for a PMO.
For a project management office, we have seen such a dy-
namic development in terms of:
• Responsibilities of the PMO;
• Size and staffing; and
• Organizational location and level of authority.
A classic life cycle goes from initiation via development to
regu-

lar operations and perhaps finally to closing, and is probably
also
relevant for a PMO. Partly inspired by some of the observed
Fig. 1. Phases of a PMO
APRIL 2007 / 101
PMOs, a more specific model consists of three phases:
1. Development of common approached and tools for project
management;
2. Introduction of governance processes and quality assurance;
and
3. Implementing true project portfolio management.
As the PMO progresses through these phases, the maturity in-
creases both in the project office and in the organization as a
whole, and the focus of the PMO changes. Typically, the
“object”
in focus evolves as follows:
1. Support to individual projects;
2. Support to project owners of individual projects; and
3. Support to the accumulated project portfolio and senior
management.
These phases are also in line with other studies of PMOs and
their
evolution, for example Rad and Levin �2002�.
PMO Organization
At the start of this research project, we assumed that the

question
of organization of the PMOs would be a key topic, influencing
the
level of success of the offices. Throughout the work, we have
indeed seen several approaches to PMO organization, but
without
being able to correlate this with the level of usefulness for the
organization, and we have also revised our own perception of a
PMO, from a physical office to a virtual function. Thus, the top-
ic’s importance has been downgraded, but we have seen some
interesting solutions, and it seems that the most preferred
organi-
zational alternatives are:
• An integrated staff function, either on a high hierarchical level
and reporting to senior management, on a lower level of the
organization, or both, i.e., having several offices with differen-
tiated areas of responsibilities.
• A staff function, not integrated into one unit, but rather com-
posed of resources located throughout the organization.
• A looser, distributed network of persons with a special interest
and competence in project management who collectively
handle the functions of a more traditional integrated PMO.
Most existing literature in the field describes the first of these
as the typical PMO organization, while some hint at the distrib-
uted staff function. We have not come across sources describing
the network type of PMO organization. It is, however, more dif-
ficult to uncover a pattern in terms of which types of organiza-
tions and in which situations opt for one or the other approach.
It
seems rather as if the choice is more dependent on where in the
organizations changes or project management practice standard-
ization are desired.

Ensuring the Necessary Authority of the PMO
No matter what tasks are placed with the PMO, one of the main
purposes is that it should contribute to changing the project
man-
agement practices of the organization. To achieve this, such an
office and its resources are dependent on both real
organizational
authority as well as academic and social credibility. Our
findings
indicate that the extent to which this is achieved does not so
much
depend on the organizational solutions, but is rather defined
through:
• The respect the PMO enjoys in the organization through the
competence and seniority the office and its resources possess.
To establish a PMO staffed with fresh graduates will likely not
be very effective toward seasoned project managers.
• The type of “attitude” the PMO displays. If its focus is on
controlling the projects more than offering services and sup-
port, the perceived benefits produced could be scarce and the
PMO could lose its authority. Mapping the future users of a
PMO and their needs and expectations is thus essential.
• The support enjoyed by a PMO from senior management, both
in the establishment phase and later in its life span. This of
course depends on senior management’s seeing a need for the
PMO. Accordingly, the PMO must prove its worth by creating
effects and documenting these, perhaps by undertaking bal-
anced performance measurement of the project portfolio.
• The official mandate given to the PMO and the processes it

practices.
Most of these are in line with existing literature, but few
authors
have discussed the need for the PMO to represent an answer to
true needs in the organization. All of the benchmarking partners
mentioned this as a key issue.
Importance of a Sponsor
An observed common trait of many of the PMOs in our data
material is the existence of a sponsor either initiating their
imple-
mentation, putting pressure on senior management to make such
a
move, or has been hired from the outside to undertake the
establishment. One obvious question has therefore been the sig-
nificance of such a sponsor in ensuring a successful PMO devel-
opment. This is of course very difficult to assess objectively,
but
our interviews seem to confirm that these sponsors have been
extremely important in crafting the PMOs’ vision and managing
their implementation and pushing them forward in the face of
difficulties.
Competence Requirements for a PMO and Its
Resources
To which extent a PMO manages to carve out a role for itself,
both in the establishment and operational phase, does of course
also depend on the competence it possesses. We have previously
mentioned seniority as one requirement. Beyond this, we have
uncovered the following important competencies required:
• Obviously, solid insight into the craft of project management;
• Holistic understanding of the organization and its projects;
• Communication skills;

• Business understanding;
• A sense of innovation; and
• Competence within other areas besides the core of project
management—a blend of personnel should cover all the com-
petence areas of the PMI body of knowledge.
Analysis Summary—Recommendations and Success
Criteria of a PMO
Table 2 summarizes is based on the questions this chapter aimed
to shed light on, and presents the main answers from the
analysis.
At the conclusion of this analysis, we have attempted to summa-
rize the most important factors that we have identified
throughout
this study as predicting the level of success of a PMO. These
are
based on the analysis presented above and take the form of
factors
to emphasize or avoid:
• Ensure top management support;
• Cover true needs in the organization to ensure that the users
see the benefits of the services of the PMO, based on conduct-
ing a stakeholder analysis prior to designing the PMO;
ASCE / APRIL 2007
• Employees in the PMO should be service-minded but also
avoid becoming secretaries for the projects;
• Let the services of the PMO be free of charge for the projects;

• Do not automatically turn to an organizational form of a cen-
tralized staff unit, but design the office based on the objectives
and needs of it;
• Allow time for the progression of the PMO through the life
cycle, starting slowly with some core tasks;
• Create some distance to and independence from the
projects—be a support for, not a resource in;
• Man the PMO with senior project managers and other people
with broad skills and project experience;
• Do not develop the PMO into a bureaucratic control unit;
• Focus on improved project management practices; and
• If possible, find a sponsor to support or run the
implementation
process, but do not become too dependent on this one
individual.
Conclusions
The sample of organizations, both for the internal interview
survey and the benchmarking study, has been relatively small.
Furthermore, all of these organizations are large entities, albeit
representing a highly diverse set of business sectors. A valid
ques-
tion is thus to what extent the results generated are valid for
other
types of organizations than those represented in this sample?
This question of extending research findings beyond the
sample used is always difficult to answer. In this case, we are
confident the recommendations will be valid for organizations

above a certain size. It is difficult to define a size limit, but per-
haps in the area of 500–1,000 employees. For organizations
smaller than this, we believe the challenges will be quite
different,
the need for centralized coordination less pronounced, and the
logic of organization and communication different. There are of
course also smaller organizations in charge of large projects,
projects that could involve hundreds of people from contractors
and other partners in the project. However, also in such cases,
there is not the same type of need for a PMO to coordinate the
project management practices across the organization. We thus
choose to view our findings as relevant for larger organizations
and assume they are of less relevance for smaller ones.
The recommendations presented come in the shape of “good
advice.” How to proceed making use of these is another
question.
Devising a general stepwise approach is impossible, but we be-
lieve the following are some generic issues to keep in mind:
• Undertake a stakeholder analysis internally in the organization
to understand the needs and expectations toward a PMO and
its responsibilities. Make sure to include in this analysis both
the management of the organization, the project managers, and
project participants.
• Based on the stakeholder analysis and a general knowledge of
the challenges of the organization, especially with regard to its
projects, define a clear objective for the PMO establishment
Table 2. Summary of Analysis Findings
Analysis question Tasks handled by the PMO
PMO design dependent on organization and project type • Size,
staff type, and organizational location can vary

considerably • The main function of the PMOs are still very
similar, independent of organization type or organizational
characteristics
PMO responsibilities and tasks • Common core tasks are project
management methodology,
training, project support, governance processes, and quality
assurance
Objectives pursued when establishing a PMO • Ensure a
systematic handling of key project management
related tasks • Shared concern that the PMO must not
become an extra bureaucratic element in the organization
The life cycle of a PMO • Most PMOs evolve through phases of
gradually taking on
more advanced responsibilities • The phases typically
progress from support to individual projects to support to
project owners to support to project portfolio owners and
senior management
PMO organization • Typical ways to organize a PMO are as an
integrated staff
function, as a distributed staff function, or as looser network
of qualified persons throughout the organization
Ensuring PMO authority • Cannot be simply “designed” into the
PMO • Is a function
of competence and seniority of the PMO staff, the PMO’s
attitude toward acting as a controlling element as opposed to
a support function, the senior management support to the
PMO, and its official mandate
Importance of a sponsor • A common trait of the
benchmarkingpartners is the
existence of a powerful sponsor

Competence requirements • Seniority of the PMO staff seems
very important • Other
competences include solid project management skills, holistic
organizational understanding, communication skills, business
understanding, and sense of innovation
APRIL 2007 / 103
and make sure this is understood throughout the organization.
This way, unrealistic expectations are avoided.
• If possible, try to identify a sponsor that can assume responsi-
bility for driving the process ahead and be the person to
represent “the face” of the office toward the rest of the orga-
nization. Preferably, this person should come from within the
organization, but can also be recruited or hired from
externally.
• Compare the needs for PMO tasks uncovered in the stake-
holder analysis with the list of typical responsibilities of such
an office. Functions that are rarely handled by a PMO should
be kept outside the office’s coverage, as there probably are
good reasons why few PMOs encompass these.
• Plan a gradual development of the PMO, in line with the life
cycle outlined in this paper, to ensure that the office does not
take on too many or too complex tasks before it is ready for
the challenge.
• Do not be too concerned with “boxology” of organizational
and physical location when planning the PMO. Many respon-
sibilities of the PMO could benefit from a different design than

the traditional integrated, physically co-located group of
people.
• Staff the PMO with the number of people and competence that
seems required, and choose the people with care. Make sure
the PMO represents senior project management experience
and enjoys respect throughout the organization.
• Launch the PMO formally, making use of both promotional
events and perhaps “missionary work” in the organization.
Make sure the PMO becomes well known among its potential
customers.
References
Andersen, B. �1995�. “The results of benchmarking and a
benchmarking
process model.” Ph.D. dissertation, Norwegian Institute of
Technol-
ogy, Trondheim, Norway.
Crawford, K. �2001�. The strategic project office, a guide to
organiza-
tional performance, Center for Business Practices, New York.
Gartner Group. �2000�. “The project office: Teams, processes,
and tools.”
�www.techrepublic.com� �Dec. 2005�.
Kendall, G. I., and Rollins, S. C. �2003�. Advanced portfolio
management
and the PMO: Multiplying ROI at warp speed, J. Ross
Publishing,
Fort Lauderdale, Fla.
Kendrick, J. �2005�. “Project and program management

offices.”
�http://www.p2c2group.com/apr05nws� �Dec. 2005�.
Perry, S. S., and Leatham, L. �2001�. “The case for a full-
function project
office.” �www.bizforum.org/whitepapers/kanbay001.htm�
�Dec.
2005�.
Rad, P. F., and Levin, G. �2002�. The advanced project
management
office: A comprehensive look at function and implementation,
St.
Lucie, Boca Raton, Fla.
Winters, F. �2000�. “Ensuring success: PMOs bring it
together.”
�www.gantthead.com� �Dec. 2005�.
ASCE / APRIL 2007
Readings
From the readings, you will learn and understand how project
management developed from the basic framework and structure
into more complex and evolved models as shown in portfolio
management and the establishment of project management
offices (PMOs).
Articles
Use the Capella University Library to read the following:
· Andersen, B., Henriksen, B., & Aarseth, W.
(2007). Benchmarking of project management office
establishment: Extracting best practices. Journal of Management

in Engineering, 23(2), 97–104.
. This journal article discusses the pros and cons associated
with the establishment of a PMO office in a large organization.
· Bates, W. S. (1998). Improving project management.IIE
Solution
s, 30(10), 42–43.
. This article defines the responsibilities and structure of the
PMO office.
· Bommer, M., DeLaPorte, R., & Higgins, J.
(2002). Skunkworks approach to project management. Journal
of Management in Engineering, 18(1), 21–28.
. This addresses the need and method of forming a separate
PMO team.
· Cogliandro, J. (2014). Adding dimensions to portfolio
management.Industrial Engineer, 46(7), 28–33.
. This describes a PMO method that uses tools such as net
present value (NPV) to calculate the value of a proposed
project.
· Coulson, M. (2015). A strong PMO is more crucial than ever
before. Policy & Practice, 73(1), 34–35.
. This author describes the importance of having an
organizational PMO.
· Jusko, J. (2008). Portfolio management: Setting
priorities. Industry Week, 257(2), 68–69.

. This article discusses the factors involved in maintaining a
profitable portfolio.
· Nicholls, G., Lewis, N., & Eschenbach, T.
(2015). Determining when simplified agile project management
is right for small teams. Engineering Management Journal,
27(1), 3–10.
. This identifies the difference between agile and traditional
planning methods for small projects.
E-Books
Use the Capella University Library to read the following:
· Project Management Institute. A Guide to the Project
Management Body of Knowledge (PMBOK® Guide)—Fifth
Edition. Newtown Square. PA. 2013.
. Chapter 1, pages 1–18.
10/9/2019 Discussion Participation Scoring Guide
https://courserooma.capella.edu/bbcswebdav/institution/MBA/M
BA6237/190400/Scoring_Guides/discussion_participation_scori
ng_guide.html 1/1

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materials.
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materials correctly, using examples or
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