Setting up a PMO is a major decision for any business. But did you know you can gain the advantages of a PMO without risking significant time, money and organisational focus to get there?
A key way to achieve this is through outsourcing, sometimes known as “PMO-as-a-service”.
Why outsource? There are five core advantages to leveraging outside resources:
- If you’ve done your due diligence, you will surface potential partners with extensive expertise in implementing and running PMOs. You may also find niche capabilities specific to your business. Look for a range of project management professionals to draw from.
- Running a PMO full-time versus, say, a per-project basis, might be a far more cost effective option for many companies. Another cost advantage here is that resources can be drawn in or pulled back according to real-time project needs and cadences. There is little risk of over-engineering solutions and processes.
- If running successful projects is not yet a core competency for your staff, there are options beyond taking the time to build it up. By outsourcing project excellence, you can save that focus for your existing competitive advantage.
- A managed PMO can be established with strong service-level agreements in place to bolster success.
- This is especially important if you are calling in a third-party to recover failing projects. Their outsider status can help tremendously when internal controls have failed or infighting has taken over.
When offering PMO-as-a-service, the top-line goal should be to alleviate the usual challenges of setting up, expanding or running project environments while remaining nimble enough to apply these skills throughout multiple contexts. Here are a few conceptual PMO models as defined by the Project Management Institute that are useful to consider:
- Supportive PMO. This is akin to having an experienced project leader at your disposal at all times. A good choice for those who need on-demand expertise in a limited, low-cost fashion.
- Governance PMO. This model, says the PMI, is ideal for “organisations where there is a desire to rein in the activities, processes, procedures, documentation…” It’s not without risk. Be sure there is enough executive support for the new direction.
- Directive PMO. Here the PMO supplies project management support directly, running projects as needed.
PMO service level agreements
Your outsourced PMO should be a beacon of objectivity and accountability. This should be reflected in the service-level agreements (SLA). Here are a few key factors that should appear in a solid SLA between a managed PMO service and the company contracting for those services:
- Consider a PMO needs to do two core jobs: incentivise efficiency and effectiveness. Doing things faster only works if the results are aligned with the overall business strategy. Be sure the goals and expectations for the PMO are understood.
- What are the levels of interactions expected between the two companies? Some outsourced PMOs will be deeply embedded, directly training staff and offering tailored project/programme management, while others might be slightly more removed. Responsibilities between parties. Any agreement should be clear on shared and individual responsibilities. Don’t forget to also detail what will be monitored and maintained by the PMO service provider.
- Resolving disputes. Plan for the worst and expect the best, they say. Include some language around escalation or other methods for dealing with potential disagreements.
PMO maturity benchmarking
Whatever path you decide, whether creating a PMO in-house or acquiring equivalent services through a third-party partner, you’ll want to start with a strong maturity benchmark.
For example, when engaging with clients, we at PM-Partners take care to define the current state of strategic alignment. What’s working and what’s not? Are the right people and processes in place? This is the baseline that will allow everyone to reliably measure growth in the future.
Risks with this model
Outsourcing is often the most cost-effective and quickest way to get a PMO up, running and providing tangible value. But, as with most things, there are risks to be understood. One excellent recommendation by the PMI that could mitigate much risk is to focus on players that get your business.
Also, have a plan to capture and socialise all the value these subject matter experts are bringing to the table. A great PMO provider will level-up the tools, project knowledge and best practices in a way that can provide value beyond a defined engagement.
There is no one-size-fits-all when it comes to PMOs, especially as a managed service. For that reason, remember the overarching goal that brought you to this consideration in the first place — a flexible solution that frees up your talent base to focus on business priorities while delivering on-time projects that are fully aligned and within budget.
By choosing a partner with deep experience running PMOs across a variety of industries you should be able to get all this and more. For more information on how PM-Partners can assist your organisation with setting up a PMO, contact us today on +65 6818 5771.