PMO Meaning (With a Definition and Business Benefits)

By Indeed Editorial Team

Published 2 August 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A project management office (PMO) is a department in an organisation that provides administrative, strategic, management and resource scheduling services to project teams. The purpose of a PMO is usually to maintain project quality, optimise resources and develop strategies to ensure a standardised approach to project activities. Reviewing the benefits of a PMO can help you determine if this management process can help the business improve its project operations. In this article, we define the PMO meaning and the types of PMOs, explain the typical role of a PMO within an organisation and list several of benefits of a PMO.

PMO meaning

The PMO meaning refers to a project management office. A PMO is a group or department comprising professionals who review, monitor and manage project cycles in an organisation. These project management offices may incorporate varying professionals, depending on their scope and size. PMOs can include project directors, project managers, administrative assistants and instructors. A PMO monitors many aspects of an organisation's projects, from progression and employee performance to budget usage and project timelines. The PMO typically creates reports to send to executives and senior management by monitoring these project elements.

The reports created by a PMO can help an organisation analyse its project procedures and methodologies. Depending on the performance of the project teams, the PMO might receive a directive from executives outlining changes to the organisation's goals and targets. The PMO may develop and implement project governance strategies that provide a standardised framework for project teams to follow. This standardised framework helps project teams approach activities in a productive and efficient method. Through the development and implementation of this strategy, the project teams may achieve the organisation's new goals and targets.

Related: How to Be a Successful Project Manager: Skills and Qualifications

Types of PMOs

There are typically three types of PMOs that serve a similar purpose in an organisation, although they may have varying management approaches. The type of PMO that's beneficial for an organisation usually depends on several aspects, such as the organisation's workforce expertise, policies, operation and leadership styles. Below, you can explore the three common types of PMOs and how they differ from one another:

Supportive PMO

This PMO style usually incorporates the least amount of project intervention. A supportive PMO essentially serves as a resource centre that project teams utilise when they require assistance and direction. This PMO rarely enforces project frameworks, but it can provide them when projects require support. This style of PMO is usually beneficial for operations where projects are successful in a loosely controlled environment.

For example, creative projects might not incorporate a strict framework of procedures, as it might suppress the creative approach of team members. These project teams may still benefit from the support provided by a PMO.

Controlling PMO

An organisation usually introduces a controlling PMO when there's clear evidence that projects require additional support to meet their deliverables. A controlling PMO is relatively similar to a supportive PMO in the resources it provides, such as templates, methodologies and governance frameworks. The primary difference is that utilising these resources is an organisational requirement, meaning it's not optional for project teams.

A controlling PMO reviews project performance and develops frameworks and strategies that project teams utilise to improve their performance. The PMO may regularly monitor project progression to ensure the resources are effective.

Related: What Does a Project Controller Do? (And How to Become One)

Directive PMO

This is typically the most direct approach to governing projects and involves direct intervention. A directive PMO essentially assumes command of a project. This PMO style is usually rare and only necessary when a project struggles to improve with additional resources and assistance.

In a directive PMO environment, the project receives the expertise of a senior project manager or project director within the PMO. This additional expertise in a project team aims to improve productivity, ensure consistency and provide expert leadership. A directive PMO is typically more common in large enterprises, with many projects and an extensive PMO team.

7 common roles of a PMO in an organisation

Below, you can explore seven typical roles of a PMO within an organisation:

1. Developing project governance structure

A project governance structure is usually the framework that provides rules for approaching projects. These rules often refer to the roles and responsibilities of project stakeholders. The governance structure outlines the responsibilities of each individual project member. Developing and implementing this framework may be one of the most crucial roles of a PMO. This is because an effective project governance structure can result in effective budgeting, accurate performance forecasts, improved project productivity and ensured goal alignment. Project team collaboration and teamwork usually improve when project team members understand their responsibilities and decision-making capacities.

2. Creating management reports

For an organisation that involves many projects, a PMO usually serves as a central point in the organisation for information gathering and reporting. A PMO may review each project and create reports detailing their progression, performance, achieved milestones, budget consumption and expected timeline. Executives can utilise these reports to make informed business decisions. PMO reports can improve the transparency and communication between project teams and senior management. This usually leads to more timely decision-making, ensuring teams complete projects before their deadlines.

Related: What Is a Project Leader? (Duties, Skills and Salary)

3. Ensuring projects meet strategic objectives

Organisations usually have strategic objectives and goals, such as a specific quota of completed projects in a given period. A PMO reviews the organisation's strategic goals and ensures its governance structure can achieve them. For example, a PMO may develop a framework for project teams to utilise that ensures they complete their projects before a specific deadline. This can improve the likelihood of the organisation reaching its quota of completed projects.

Related: 7 Examples of Strategic Direction (And How to Set One)

4. Allocating resources

PMOs typically review the progression of a project and identify its performance. If a project is lagging behind its deadline, the PMO might determine it requires additional resources. This allocation of resources can be extremely important for managing project budgets. Projects that perform well might have a resource surplus, which means those surplus resources might be more beneficial in a different project. Wasted or under-utilised resources directly impact the budget, which can influence project progression and deliverables.

Related: What Is Project Cost Control and Why Do Projects Need It?

5. Forecasting project requirements

Some business operations are relatively dynamic in that the market or environment might change frequently. For these dynamic environments, PMOs typically forecast the expected requirements of projects. For example, a PMO might forecast that a current project may require a 20% increase in resources to match its current efficiency in one year. These forecasts allow PMOs to plan accurate budgets, develop pre-emptive governance structures and identify likely organisational strategic objectives.

Related: What Is Project Scope Management? (And How to Create a Plan)

6. Automating processes

Automation is a popular process in large organisations that can save substantial time and money in conducting daily operations. A PMO usually identifies project procedures and processes that they can automate. A PMO may likely utilise specific management software to automate tasks and procedures. For example, through management software, the PMO may automate the collection of employee information, resource requisitions, workflow allocations and project prioritisation.

Related: What Is a Project Management Information System (PMIS)?

7. Training project teams

Large organisations with extensive project teams usually incorporate training procedures provided by the PMO. These training procedures help project teams understand new methodologies and governance structures. For example, a PMO might implement a new template outlining the procedure for resource requests. The PMO then provides training to project teams that ensure they understand the new resource request procedure.

Related: How to Get Employees Excited About Training: 12 Top Tips

Common business benefits of a PMO

Here, you can explore the typical benefits of a PMO:

  • Achieves business objectives: A PMO usually implements specific governance structures aimed at achieving the organisation's goals. This can be extremely beneficial for large organisations with many projects, as a governance structure can standardise the approach to projects.

  • Ensures project visibility: Rather than executives receiving reports from individual project leaders, they can receive a single report from the PMO, outlining all project performances. This usually improves project visibility for an entire organisation, which might lead to an increase in communication and collaboration.

  • Improves project productivity: Through PMO governance, project team members typically understand their role in the team. When team members understand their responsibilities and decision-making capacities, the overall productivity of the project team typically increases.

  • Allows for efficient decision making: The reporting and governance framework of a PMO usually improves transparency in project teams. This improved transparency usually helps executives efficiently identify project progression and performance, allowing for timely decisions.

  • Optimises resource allocation: PMOs typically review the progression and performance of projects, which helps them identify necessary resource requirements. They can determine if a project has a resource surplus or deficit, allowing them to allocate resources effectively.

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