Why Do You Want a PMO? Questions to Ask When Setting One Up 

Introduction

“Why do you want a PMO?” 

The question received blank stares. This potential client wanted to create a centralised project management department in their quickly expanding company. They had a few project managers, but each ran projects differently, and there had been some management frustration over the different approaches and attitudes of the project managers themselves.  They believed a PMO was the solution and were puzzled as to why I, a Project Management Office (PMO) consultant, would ask this question, given their prior statement of wanting one. 

However, I found it necessary due to their unsound reasoning. Their responses so far have ranged from “I read somewhere that…” to “Someone told me we should…” Those aren’t good reasons to start a PMO.  

I had a list of questions jotted down to ask the leadership team. As they answered, things became clearer. Yes, they had read about a company in the same industry that stood up a PMO and was successful. Yes, they talked to a peer who recommended that a PMO be created. Eventually, we boiled it down to one word: Compliant. As a newly minted Medicare provider, they needed processes created to stay compliant with Medicare regulations. Standardising the project management approach would help in that area. So, our “Compliance Ready!” PMO was born. 

Key Questions to Ask Before Setting Up a PMO

Let’s look at the facts:  

• 50-75% of PMOs fail within the first 3 years (it’s so bad even the statisticians can’t agree!) 
• 57% of PMOs never meet their potential of delivering value to the company 
• Stakeholder dissatisfaction and frustration over PMOs being “process police” and not delivering expected value to the organisation 

Dismal. Sounds like sunk costs to me.  

Do I feel that PMOs can add value? Yes. Does every company that’s maturing its project management practices need a PMO? No. In the scenario above, we were successful. In another, I was employee #2 in a newly created M&A PMO. It was set up because Finance, which had previously owned M&A integration, wanted help. We lasted two months before Finance took it over again. Turns out they needed some training and fine-tuning of their processes. PMO=fail. 

Lessons Learned from Failed and Successful PMOs

In my career, I have led, started up, revamped, and been a team member of several PMOs. Each had its own unique capabilities and services. Each also taught me valuable lessons, including how to ask the right questions early on in a PMO’s life. Answers to these questions can be used to create a business case/charter for the department. Below are questions I’ve noted over the years. Some are more high-level organisational questions. Others boil down to what a PMO means to the team requesting it. These can and should be asked cross-functionally (the more input, the better). I’m hopeful these will help you in your next PMO endeavour. 

• Where does the power live in the company (owner, exec level, middle layer, other)? 
• What is the existing organisational makeup/hierarchy?  
• Is there an organisational strategy, and if so, are employees aware of what is vital to the company? 
• What KPI’s do you measure? Which KPI’s keep you up at night? 
• How would you define the culture of the company and your individual department? 
• How well do you feel the company is adapting to change? 
• How are decisions made about what projects to pursue?  Any policies or controls in play today?  
  • If yes, what? 
  • If no, why? 
• What is your vision of a PMO? 
• What “services” would a PMO provide to the company? 
• Has a PMO, including human capital, training, and tools, been budgeted? 
• Have you tried a PMO or similar structure before, and if so, what happened? 
• What is your definition of a successful PMO?  Are there recognised incentives for having one? 
• Do stakeholders understand the role a PMO plays in the company?  Do they know their role? 
• What templates and tools are used, and how are they utilised? 
• How is project management viewed in the company? 
• What is working today and what’s not as it relates to project management? What other functions aren’t working as expected? 
• What is the maturity of the project managers? 
• How are you kept informed of project progress/status?  Do you know how many projects are in progress? 
• What are the top 2-3 reasons you think projects fail at this company? 
• Do you REALLY think a PMO will solve the issues discussed, or is there some greater driving force? 

This last question should be one of the previous ones you ask your sponsor/management team, and it’s a biggie! This question came from another consultant who asked it of a potential client during a pre-sales meeting. After the 30 minutes of Q&A, the client said no, culturally, a PMO wasn’t a good fit right now. Smart move. 

Conclusion

Whether you’re asked to start a new PMO, revamp one that’s in trouble, or take over an existing one that’s humming along, don’t hesitate to ask some tough questions. I’m hopeful these questions will get you pointed in the right direction, especially if you’re standing up or revamping a PMO and need to create a business case/charter to support it.