In summary of the prior posts in this topic series, if you are embarking on creating a PMO, you need to treat it like a project. This means appointing a Project Manager and following the usual best practices.

Here are the topics I wrote about in the prior posts:

• Part 2 – The Business Objectives – define the results you want after the PMO is up and running. Establish the mission and clear and measurable metrics to measure PMO performance.
• Part 3 – The Project Objectives – define the PMO organization chart, job titles and descriptions, policies and procedures.
• Part 4 – The Stakeholders – identify who will help establish the PMO and who is affected by the PMO (normally, everyone in the organization).
• Part 5 – The Scope – from the Business and Project Objectives and the Stakeholders, list the major activities needed to establish the PMO.
• Part 6 – The Timeline and the Budget – these are two things that may be constraints on the hiring process.
• Part 7 – Risks, Constraints, Dependencies – understand what can go wrong and have mitigation and contingency plans; know and work within your constraints; identify what other initiatives can affect this one.

Having a PMO is a key step to organizational growth and improvement. Establishing a PMO with a clear mission and measurable objectives is critical to its success.

Continuing the series of posts on establishing a Project Management Office, I’ll address some possible Risks, Constraints and Dependencies.

Risks

As always with identifying risks, ask yourself “What worries me about this?”. Here are a few possible risks. You will likely have more, depending on your unique situation.

• Not finding qualified people (ones that match the experience, people skills and project vision)
• We find qualified people but their salary demands exceed our budget
• Some departments in the company may see this as an intrusion on their project authority
• Creating “too much” documentation
• Creating a Project Management Methodology that is “too rigid”

When you have identified your initial risks, you will apply the usual Risk Management practices (identifying triggers, assessing probability and impact, creating mitigation and contingency plans. assigning a risk owner).

Constraints

Every project has constraints, which are conditions that limit the solution. In establishing a PMO, here are a few possible constraints:

• Staff size
• Staff budget
• Work location
• PMO “up and running by” date

Dependencies

Some possible external dependencies that could delay the establishment of your PMO:

• Budget approval
• Establishing work location (may need an addition or remodel)
• Getting projects approved to justify the hiring

The Timeline

The PMO Sponsor must decide which priority is the greatest: Getting the PMO up and running by a specific target date or making sure the hiring (especially for the PMO leader) matches the desired traits as closely as possible. If there is a date that cannot move, it is possible some compromises will be made in the hiring process.

Once that is determined, the timeline can be fleshed out as with any other project. You do a work breakdown on the key deliverables (hiring staff, establishing policies and standards, creating/assigning work space, executing the organizational change management plan). Assign the tasks, estimate the durations, and determine dependencies. Mix all of these together and the result is your schedule for establishing the PMO.

The Budget

The budget will also be a key factor in the hiring process. The bulk of the budget for a PMO will be the salaries. The level of talent attracted will be directly proportional to the assigned salary ranges. It is possible that this, like the timeline, can also generate compromises in the hiring process.

Hiring the right people is the most important aspect of establishing a PMO. The manager of this project must do their best to convince the Sponsor to minimize compromises in the hiring process. The people you bring on board must be in alignment with the Sponsor’s vision of the PMO. In fact, a good PMO leader might also enhance the vision and show the Sponsor how the PMO might evolve over time.

Other budget factors might be established for the following:

• Annual PMI member dues
• Ongoing education for PDU’s
• PM software such as MS Project
• Subscriptions to PM related peridicals

The scope of the project to establish a PMO may be produced in a variety of ways. In this post I will list my preferred methods, which happen to be the same methods I use for most any project.

Here is how I would establish the initial scope:

1. Work backwards from the Project Objectives – The Project Objectives contain the products, services or results of a project that survive and are maintained after a project has ended. For each objective, define the steps needed to accomplish it.
2. Construct a Context Diagram – (If you don’t know what a Context Diagram is, you can search this blog using that term). Define who your “Suppliers” and “Customers” will be and how you and the PMO will interact (what data will be exchanged). Things such as “Request for Project Management Services” or “Project Status Reports” are examples of interactions with these entities.
3. List the Processes – Once you have a Context Diagram, you can then create the list of internal PMO processes needed for every interaction. Some or all of these may also have been defined in the Project Objectives. If you missed any in the Project Objectives, add them in as you discover new ones. You may also have processes that are triggered by events that are not from “Suppliers” or “Customers”. They may be based on time (e.g. “Produce Monthly Portfolio Report”) or the state of data (e.g. “When there are more current project requests than PM’s, notify PMO Sponsor”). Define the steps needed to accomplish these additional objectives.
4. Review the Stakeholder List – All of your Stakeholders (the ones affected by the product, service or result of your project) should appear on the Context Diagram. Review your list of Stakeholders to confirm this. If any are missing, add them and any interactions and internal processes associated with these Stakeholders.

These four categories should produce a good high-level scope. You can flesh out additional information when you get to he “Detail Requirements” stage.

So far in this series of posts where the project is establishing a PMO, we have defined the Business Objectives (business outcomes we expect by having a PMO) and the Project Objectives (the things we need to accomplish to state we have now established a PMO). Now we will take a look at the Stakeholders.

Stakeholders fall into two broad categories:

1. Those affected by the process of executing the project
2. Those affected by the business and project outcomes of the project

Stakeholders in the first category are typically those who will work on the activities needed to accomplish the Project Objectives. They will do things such as document the organization structure, create the job descriptions, do the hiring, write processes and policy, etc.

Stakeholders in the second category, in this case, will mean everyone in the organization! Why? Because the PMO can manage or oversee projects in any area. If the PMO is around long enough they will interact with every department and many of the personnel. With so many people to inform, a careful Organization Change Management Plan will need to be documented and agreed upon. Having a PMO will be a huge change for most organizations. Some areas may even object to having one. Formal Change Management will be critical to the success of your PMO. I can’t stress this enough. If your PMO gets off to a bad start due to lack of Change Management, it may not survive for long.

If you search this blog for “Organizational Change Management”, that series of posts will provide you with guidance for this discipline.

In the prior post, I talked about defining the Business Objectives (outcomes) for the PMO. Once these are known and agreed upon by the PMO Sponsor, you can move on do defining the Project Objectives, with the project being the establishment of the PMO.

I list here some considerations for setting Project Objectives for the PMO. It is not meant to be a complete list, but it will give you a good idea of what to consider.

• Budget – What will be the budget for the PMO? Consider salaries, benefits, ongoing education, funding for professional organizations such as PMI, paying for certifications such as PMP, and travel.
• Organizational Structure – What will be the level of the top of the organization (Officer, Sr. VP, VP, Sr. Director, Director, etc)? Will there be multiple levels below this? Will you have different levels of PM’s? How many full time employees? Will you use consultants?
• Offices and Locations reserved
• Job Descriptions – Once you have an Organizational Structure defined, you will need Job Descriptions and pay ranges for each defined job. These will be used as guides in the interview and hiring process.
• Hiring – Starting with the top of the PMO organization. Once hired, this person will be largely responsible for hiring the rest of the team.
• PMO Charter – This will contain the “rules of engagement” for the PMO. Things like how projects will be assigned, the roles the team will play, the project life cycle for this organization, the definition of when the PMO engagement on a project ends, etc.
• PMO Processes and Templates – These will be the standards and practices for all steps of the project life cycle.

Your Project Objectives for establishing the PMO should be approved by the PMO Sponsor before moving on to the next step.

If you have been following this blog you will recognize a common theme in almost everything you want to do: know your outcomes (aka “Business Objectives”). Before establishing a PMO, you need to understand the PMO Sponsor’s vision of what problems they are trying to solve and/or what opportunities they wish to exploit.

Here are some possible problems your business may face that can be mitigated by having a PMO. You may have one or more of these to solve:

• We aren’t maximizing our Return On Investment (ROI) from our portfolio of projects.
• Our project mix is not aligned with our long and short term business goals
• We don’t have control on our project request process
• We have key resources frequently overloaded causing project bottlenecks and delays
• Our projects are usually late
• Our projects are usually over budget
• We under-deliver on the agreed upon scope
• Our projects often have the scope expanded without knowledge or approval
• Our project quality is frequently lacking
• We take on too much risk
• We don’t take on enough risk

Depending on the problems you wish to solve, here is just a sample of the measurable business outcomes you can obtain my investing in a PMO:

• Regular financial analysis reviews showing the ROI on the current active project portfolio and the ROI on alternative combinations of projects
• No resource bottlenecks; Resources obtained and deployed in the most effective manner
• Deliver projects on or under the approved schedule and budget
• Deliver on the approved scope
• Control how much risk we are taking on (possibly by regular review of the risk/reward matrix of the current portfolio of projects)

In the next post I will present some possible Project Objectives for the establishment of a PMO.