Phase 2 – Project Management Office (PMO) Setup: Initiation

The Project Management Office (PMO) starts taking shape once the primary assessment is completed. 

Unlike other departments which have a fixed structure and line of work, the PMO functions in coordination with the project leaders and in sync with the projects and their needs. 

When the organization is convinced that the PMO is needed to streamline various projects and align them with the organizational objectives, it gets the first impetus. The sponsor’s backing propels the PMO forward and into the real action. If you view at the PMO as a building, the assessment stage would be the foundation while the initiation stage would be the pillars on which the whole structure starts taking shape. 

The initiation phase of the PMO is very exciting indeed. It gets the whole machine into first gear and takes it ahead. One must never lose sight of the fact that it is not the process and tools that determine the success of a project (or the company for that matter) but the results and outcomes. 

Here is how the initiation phase typically plays out:  

  1. Drafting the business case for the PMO: Convincing stakeholders about the significance of the PMO is like half the battle won. Why is the PMO necessary in the first case? The business case gives convincing answers to this question. The PMO plays a big role in creating and defining business cases for new and ongoing projects too. 
  2. Setting up PMO hierarchy: People drive businesses and not just machines and systems. Having the right people at the PMO means you’ve already laid the path for a smooth journey. Typically, the PMO comprises of the Director or Head, Administrative staff and the Project managers who work under the PMO. 
  3. Assign roles and responsibilities: Objective here is making it very clear that the PMO’s role is not to overrule the Project leader but to align them all for optimal benefit of the organization. Hence, the PMO head’s job is cut out to be in touch with all projects running, determining, and monitoring their speed, outcomes, requirements and completion as also resource allocation. The PMO may also handle additional responsibilities of communication with stakeholders. As the number of projects grow, the task of the PMO may widen. At times, there would be added responsibilities and expectations. Being clear about the road ahead and how much scope you can accommodate, right from the beginning, helps in the long run in maintaining relevance. 
  4. Chalk out PMO services: All talk of the PMO playing strategic role is good, but what exactly does the PMO do? Ideally, PMO starts by clarifying aims and objectives from projects, providing templates and formats. It centrally maintains all documents and project schedules so that it can be mapped for progress and completion rates. PMO team also offers mentoring to project leaders and teammates. Projects routinely require approvals, permissions and a host of documents for the same which the PMO can facilitate. Setting up metrics and auditing progress is another service which the PMO can offer.
  5. Budgeting for the PMO: The allocation of funds required by the PMO ideally depend on the scope of its role. If the PMO manages project governance, training, staffing, traveling, auditing of projects or creating documents, the team would require adequate funds to manage all of this. The PMO would also require technical tools, including software (over and above the project management software) to monitor and align projects. The budget should also include funds for accreditation and certifications for the PMO which come handy not just in hiring for the PMO but also to keep it sharp and focused with the time.
  6. PMO Roadmap: Define the current state of the business and then select business drivers for each step. That way, you propel the PMO while aligning it to the broader objectives. Defining the future state sets the goal for the PMO, a place which you need to reach. Putting the right stakeholders in place at every step brings in accountability. The roadmap is generally configured for the present, for one year and for three years. Now the only thing left is to define what you would be doing at every step in order to accomplish your objective.
  7. Plan for the Rollout: Not enough to just set up the PMO. It must be rolled out at the right time for it to be super effective. Chances are the new PMO may face quite some storms, after all it’s going to be a monitoring and demanding center. Chances are also that the progress of the projects may see a slight dip in the initial days after the rollout. But the PMO must show its efficiency in the first 60 to 90 days to remain focal and then push the accelerator button. 
  8. Change plan outline: Despite their utility and returns, there is a high probability that the PMO will be changed or outright wound up within a few years. In most organizations, the PMO is changed within 2 years on an average. Many times, the completion of ongoing projects themselves serve as drivers for the PMO to change. 
  9. Plan for Communication: Throughout the lifetime of the PMO, crucial information needs to be disseminated to key stakeholders. A proper Plan for communication involves details about what information to be conveyed to which stakeholders, when, how and at what intervals during the project lifecycle. 
  10. Governance and reporting: To maximize project management capabilities, the PMO requires certain authority and support to exercise that authority. Having in place the PMO charter, roles and responsibilities, communication pathway and reporting structure enables optimizing PMO efficiency. Generally, the PMO reports to the Key Sponsor or the management or both at one end. At the other end is the seamless communication between the project managers and the PMO to produce reports that are then submitted to the sponsor and management. 
  11. Orientation and training: Though most PMOs are staffed with people who have deep experience in project management, managing several projects is a totally different ballgame altogether. The PMO staff needs to be oriented to understand the gravitas of the alignment between projects and the organizational goals while clarifying their roles and responsibilities. Training for the PMO may be required on a regular basis as projects evolve and so do their needs and expectations from the PMO.
  12. Metrics for PMO: While no one denies the significance of a PMO, it still has to prove its worth through metrics. The key metrics for PMO assessment are:

    • Rate of delivery of strategic projects vs total number of projects
    • Operational efficiency: Rate of success in delivering projects on time and within budget
    • Execution: Rate of success and failure of projects
    • Benefits realized against forecast
  13. The Project Initiation Document (PID): It gives the objective, justifies the project, gives the course of activity, roles and responsibilities and also states the time and budget for all stakeholders to know. 
  14. PID workshops for alignment: Ideally done within focus groups in the industry, these workshops help PMO staff and project managers to better understand the significance of adhering to the PID. This can also be incorporated in the Project Startup workshop if possible. 
  15. Disseminate PID to stakeholders: Gaining feedback from key stakeholders and improvising on the PID document even before initiation helps to prevent any glitches once launched. Stakeholders feedback is crucial. 
  16. Identifying Quick Win Opportunities: By identifying and improving on areas and functions that face time and budget constraints. By focusing on the current mode of functioning, these opportunities present themselves in the form of minor hurdles which when deleted, make the entire function smooth since it’s anyway a low hanging fruit within the control of the PMO.
    Submitting the PID document, the Business Case and the budget to the management completes the initiation phase.

After you have assessed the need for establishing a project management office and initiating it, next is the phase of establishing it.


To learn more about the next phases in setting up a successful project management office, check out the articles below: 

Phase 3 – Project Management Office (PMO) Setup: Establish the PMO

Phase 4 – Project Management Office (PMO) Setup: Implementing the PMO

Phase 5 – Project Management Office (PMO) Setup: Improving the PMO


Recommended reading: 

Practical Guide for Setting up a successful Project Management Office (PMO)

Phase 1 – Project Management Office (PMO) Setup: Assessment and Strategy

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