PMO (Project Management Office): definition, roles and tools

If your business sells projects, you've probably heard of the PMO before. But what is a PMO, concretely?

In this article, we will define what exactly a PMO is, its different types, their objectives, and all the existing tools to maximize the efficiency of all the processes of a project in such a way as to become a real value entity in the business environment.

What is a PMO?

PMO: definition

A PMO is an entity responsible for planning and organizing projects to maximize profitability.

Therefore, we can define these concepts as the department or person responsible for the proper management of projects in relation to the set objectives.

What is the difference between a project manager and a PMO?

The project manager is the person who sets the goals and provides the resources to achieve them.

The PMO is responsible for managing its resources effectively, by setting up an organization that improves the KPIs initially established.

What is the role of the PMO?

In order to determine the functions of a project management office, it is important to know the key metrics to measure the success of your projects.

Based on these indicators, you can establish the following functions: 

• strategic governance planning;
• standardization of processes;
• effective resource management;
• budget monitoring.  

Towards governance and strategic planning

The first of these functions is strategic planning andgovernance in order to choose the right projects. The company's strategy, vision, and values must be considered, as well as the resources actually available.

Knowing how to say no to certain projects, due to doubts about their profitability or due to a lack of alignment with the company's culture, is also a function that the PMO must fulfill in this section. In addition, he is also responsible for carefully monitoring risk management in order to be able to alert on projects already underway. 

Finally, the Project Management Office is responsible for communication with management. He must indeed serve as a mediator by summarizing the progress of a project through various reporting tables. These will allow management to impose trade-offs or limits. 

Standardization of projects

The project management office must also train its human resources to equip them with the knowledge, tools, and processes necessary to achieve the objectives.

By adopting clear and structured project methodologies, the PMO ensures that the teams responsible for delivering the project are aligned with the processes. This greatly streamlines workflows and maximizes employee productivity. Here, the PMO is therefore responsible for providing reusable templates and all other tools to apply the required methodologies, but also for their proper understanding by employees.  

Optimized resource management

PMOs need to manage human and technical resources to increase efficiency and productivity.

Provisional load planning in Stafiz

With a schedule that takes into account both current and projected loads like Stafiz's, your resource allocation decisions will always be based on accurate and up-to-date data. It is impossible for you to staff someone who is not available, either because he is busy with other projects or because he is on vacation.

Cost-effectiveness monitoring

Finally, the PMO must ensure the profitability of its portfolio of projects. It must constantly monitor deviations from the initial budget.

This is to ensure that the project you are working on will not only be profitable on paper, but also in practice and that it will be delivered on time through project financial accounting. To monitor cost and deadline variances throughout the project, it is essential to monitor indicators such as earned value management or simply the ratio between the remaining work to be done and the budget already consumed.

What are the different types of PMOs?

There are three main types of PMOs: 

1. the supporting PMO;
2. the control PMO;
3. the directive ODP.

These different types of PMOs represent different axes of authority that evolve according to the maturity of a company, and its organizational needs. 

What is the Supporting PMO? 

It is a consultative project management office method, and therefore less authoritarian. The PMO distributes resources (tools, templates) to the teams that guide the smooth running of the workflow. This type of PMO generally comes as a first stage of maturity in a company.

The level of control is low: the PMO guides and supports without imposing any real constraints. In particular, 2 functions can be assigned to the support PMO.  

The Evaluation PMO

This is the office or person responsible for monitoring a project. It monitors key KPIs to alert if there is a risk of non-compliance of any of them. 

Support for the PMO

It is about providing support in any part of the project. Whether at the strategic level or at the level of monitoring, re-organization of resources or any other issue that needs to be strengthened for the achievement of objectives.

What is the control PMO?

This is the office or person responsible for ensuring that all defined settings and policies are applied appropriately. This project management department model imposes a more rigid framework in terms of the methodologies to be followed, the choice of tools, and the validation process at a standardized level. He ensures compliance with the rules and reports any incompatibilities that may affect the execution of tasks as planned.

Here, the PMO imposes the framework on the teams without intervening in the project management.

This PMO model is the most prevalent in IT Services of intermediate size. It offers a good balance between the autonomy of project managers on their missions and the coherence of the portfolio.

What is the directive PMO?

The PMO takes direct charge of project management. The project managers report to him hierarchically. This is the model with the highest level of control — and therefore the most demanding in terms of organizational maturity.

It is mainly found in large structures or in organizations where the complexity of the projects justifies a strong centralization.

The directive PMO is responsible for two main missions. 

The overall PMO

This is an office or person that encompasses some or all of the functions described above.

If the structure is sufficient, an overall PMO would be the top of the hierarchical pyramid. It is at this level that all the parameters on which the previous types of PMOs depend are monitored, with the aim of coordinating them while maintaining the company's values and ensuring that the main common KPIs are met. 

The strategic PMO

Based on the above information, the most appropriate strategic and organisational decisions are taken to correct the deviations likely to lead to non-compliance with the objectives set (projects to be prioritised and prioritised, skills and human resources to be targeted and recruited, pricing to be adjusted, etc.).

Other functions of the PMO

As part of its project management, a company may decide to organize its PMO in different ways, by insourcing or outsourcing, and may also have to deal with a crisis PMO. 

Internal or external PMO? 

Depending on the size of the company or the volume of projects, management offices can be a department in their own right within organizations. 

In a make or buy approach, some companies may choose to use an outsourced PMO. These are project management consulting firms that can provide their expertise as suppliers on a recurring or ad hoc basis.

The choice between internal or external PMO depends mostly on organizational needs, not on a level of authority.  

The crisis PMO

This is a team or professional who specializes in crisis situations.

This type of PMO brings together characteristics of support, re-planning of resources, sources of funding, agile or scrum methodologies and any tool that facilitates the rapid resolution of situations that could jeopardize a project.

This is a temporary mode of operation, not a structural type. Any type of PMO can go into crisis mode if a project requires it.

What are the most used tools in a PMO?

PMO software is a tool for managing projects as well as the project portfolio as a whole more efficiently. This system makes it possible to centralize management, consolidate data and thus allow efficient management. 

The challenges for companies around project portfolio management to which PMO software must provide an answer are diverse.

• Visibility: have a real-time and predictive view of all consolidated business data to better plan and anticipate.
• Human resources management: Holistic management across the project portfolio is needed to better allocate resources. With the context of the war for talent, the logic of engagement in the matching of projects and employees must be a key element.
• Responsiveness and adaptability: as the unexpected is always present, it must be possible for you to observe the deviations and the financial and operational impacts of the changes envisaged or planned in order to make better decisions
• Analysis: a PMO tool should give you the keys to understanding your projects, the reasons for successes and failures with good granularity.
• Collaboration and confidentiality: a PMO tool is a real mediator of information and decision-making: it must provide the right level to each employee.

Real-time visibility and collaboration

A first essential element for a PMO tool is to deliver information in real time and with adequate levels of access and therefore rights. 

The visibility that a PMO tool provides lies in its ability to consolidate information in real time.

🔎 Which tools offer such a level of visibility?

Some tools like Monday respond well to this challenge of collaborative visibility : its customizable dashboards, Gantt and Kanban views and automations make it an accessible solution for monitoring the operational progress of several projects simultaneously. On the other hand, the consolidation of financial data and the forecast view of the portfolio remain limited.

Project definition: budgeting and planning

The definition of project budgets is the first essential functional building block for a PMO tool. This brick should allow you to cost and plan your projects in order to verify and validate its financial and operational viability.

This budget will serve as a benchmark for the continuation of projects under direct management .

🔎 What tool offers such budgeting accuracy? 

Stafiz responds to the key issues of this phase by remaining flexible: 

• taking into account all costs and revenues (rebillable or non-rebillable expenses, etc.);
• budgeting according to your operation: grades, people, tasks or phases;
• scripting from the commercial opportunities and their quotes (pre-resource planning…).

Resource Management

Resource management is the heart of your service organization: it is imperative to manage resources from a strategic but also an operational point of view.

At the strategic level, a PMO tool will have to manage capacity in forecasting, i.e. meet the needs of the company (demand) with relevant and available talent (supply).

It will also be necessary to manage the operational aspect, i.e. the planning and organisation of the load with flexibility. To ensure good management, indicators such as utilization rate must be clear and available.

🔎 Which tools optimize resource management? 

In this area, Monday.com offers a workload view to visualize the workload per employee, but its capacity planning capabilities at the portfolio level remain basic.

Smartsheet is more advanced: it integrates predictive capacity management and allows you to visualize resource requirements across all projects. These two tools remain generalist platforms and do not cover the logics specific to service companies, such as the management of intercontracts or the matching of skills and assignments.

Stafiz offers all these features and more. Resource capacityplanning enables you to organize your needs - i.e., your profile searches for your entities/BUs - in a collaborative way.

Your employees can indicate their interest in a mission or to work on a given skill directly on the interface. Finally, our algorithms present you with the most suitable profiles based on your criteria: skills, appetites and availability. Efficient and fast.

To anticipate your resources, keep an eye on your capacity forecast with dedicated reports.

Learn more about the resource planning with Stafiz

On the operational management side, resource allocation is simple and fast in Stafiz.

You can staff, shift, modify and transfer schedules easily. This gives you a clear and always up-to-date view of the workload to better allocate your employees.

Finally, the reports allow you to track the utilization rate By team, employees, zones or any entity of your choice: all this is fully customizable.

Progress and performance monitoring

Monitoring progress and performance is one of Stafiz's differentiators and strengths. The teams can follow, with the right degree of confidentiality, the progress but also and above all the financial impacts of the current situation of the project, including in forecasting.

Empower your project managers and field teams to deliver your projects on time and on budget.

You benefit from general key indicators and in-depth views in order to analyze progress by employee, tasks or phases, grades, etc. Identify deviations from the initial plan at a glance, in addition to being alerted by email.

Discover project management in Stafiz

To go further, analyze your data in depth: visualize your data by tasks/phases, grades, employees, etc.

Identify your leftovers and adapt if necessary: modify your resource planning, renegotiate with your client, cost your projects more accurately... You have the decision-making tool you need.

Strategic reporting and project portfolio monitoring

Finally, a PMO tool must provide a consolidated and cross-functional view of your project portfolio: it must make it possible to monitor the profitability and risks weighing on your portfolio.

This will allow you to better select your projects and make better management decisions on a daily basis.

🔎 Which PMO tools facilitate PPM reporting?

Smartsheet is recognized as a tool of choice for this issue: it automates project intake, prioritization, validation workflows and portfolio reporting, with real-time dashboards configurable by level of responsibility. 

Monday.com also offers portfolio monitoring dashboards, with a synthetic view of the health and budgets of each project, although with less analytical depth. Both solutions are suitable for SMOs looking to structure their governance, but do not natively integrate the link between resource planning, invoicing and margin, which is central to IT Services.

On the reporting side, Stafiz's strength lies in being able to consolidate all revenues and costs (resource planning, purchases, subcontracting, fees etc.) and to be able to track them by projects, phase/tasks, teams or collaborators, grade: completed vs. budgeted, utilization rate and production, income statement, billing statement...