White Paper: What is a PMO and How Do You Know If You Need One?

Project Manager Makes a Presentation for a Young Diverse Creative Team in Meeting Room in an Agency. Colleagues Sit Behind Conference Table and Discuss Business Development, User Interface and Design.

If your technology department’s projects run behind schedule, over budget, or do not bring the value to the organization that was intended, you are not alone. According to a survey by McKinsey & Company, on average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted.

Quite stunningly, 17 percent of IT projects go so far off track that they can threaten the very existence of a company. A project management office (PMO) can help you avoid these issues or address them if they’re already being faced.

A PMO is a team within an organization that defines the processes, best practices, methods, and tools used during project execution and drives projects to completion. PMOs can also assist project prioritization and recommend and implement options to help ensure on-time delivery.

A PMO typically consists of two layers of resources that guide project execution.

The first is a team of employees within the PMO that includes project managers, business and functional analysts, change management experts, and others directly involved in project execution. The leader of this group is generally a technologist with very strong business aptitude as well as project management aptitude. The second layer is made up of stakeholders that surround the PMO—product managers, engineering managers and business and technology leaders. This group oversees and is ultimately responsible for the projects underway and the consequences to the organization when projects fail.

Some organizations resist implementing PMOs because they worry that tasking a team to oversee projects will slow down the pace to an unacceptable level. It’s true that PMOs must balance forward momentum with proper checks and balances to ensure project and organization health, but although slowdown can be a concern, PMOs help organizations in a variety of ways that are critical to success.