the newsletter of tbd consultants - 1st qtr 2013

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In this Edition

What is a PMO?
Budget Management
Project Managing the Economy

Construction Management Specialists

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What is a PMO?

The PMO, normally referred to as the Project Management Office and sometimes as the Program Management Office, has its basic goal of defining the project controls, or the standards and procedures for managing projects within an organization. It is sometimes referred to disparagingly as the Project Management Overhead, but it should lead to consistency and efficiency in project implementation.

PMOs come in almost as many types and flavors as there are companies utilizing them, but there are three basic levels at which they can operate.

Firstly, and most basic and essential to their role, is that of cataloger or librarian of the practices, procedures, rules and metrics related to project management within the organization. Those practices and procedures are often based around best practices published by the institutes related to the industry the organization is in, and may also be governed by legislation, such as the Sarbanes-Oxley act.

Secondly, taking the role a bit further, the PMO may be involved in training and monitoring compliance with the organization. This is where the PMO office can get a bad name, with the staff being referred to as the PM Cops. This writer has a copy of a Dilbert cartoon where one of the characters is saying “Is it just my imagination, or are all of our rules designed for the sole purpose of being huge inconveniences?” Avoiding having rules for the sake of rules, and not imposing too much structure that serves no useful purpose, can sometimes be a problem. Different people have different ideas of where to set the line. Having an established methodology within an organization can improve productivity, but sometimes flexibility is also important.

At the third level, the PMO may be actually involved in the project management work itself. Sometimes that is at the strategic management level, but it can also be at the actual project implementation level. At this point the PMO staff are the ones using the rules and regulations they have set up, so they have added incentive not to make them too onerous.

It is frequently said that the PMO is not a profit center, and that validating its cost-effectiveness within an organization can be a problem. When it is effective the projects that the organization have should show a higher level of success, which should lead to a more profitable organization. If the PMO is effective it should lead to greater accuracy in the estimation of project costs, improved accuracy in scheduling, and result in more consistent levels of satisfaction for all those involved in the projects.

The PMO staff may be in-house employees, or consultants. Especially during the initial stage, when establishing the documentation and standards, it may be useful to bring in consultants to work with the organization’s project managers to set up a system that works for them. Also, for particular projects it may make good sense to the organization to bring in consultants rather than employing additional staff only to lay them off after the project is complete.

PMOs will vary in size, structure and responsibilities, and finding the right format for a particular company can often be a major project in itself. Starting out with pilot projects and getting input from project managers should help determine the appropriate type.

It has been estimated that only one in three PMOs is actually effective, so the PMO needs to be monitored as well. But those that are working tend to result in projects being more effective the more years the PMO has been in existence. It is said that it takes about three years for a PMO to show its benefits, although visible benefits can accrue before then.


Budget Management

One important aspect of project management is budget management, and in this article we look as some of the areas that budget management encompasses, from the initial concept through to the completion of the project.


Project Managing the Economy
Geoff Canham, Editor

Dare to do some risk management on the economy? In this short article our editor looks at some of the potential risks and rewards that might affect the economy during the new year and beyond.



Design consultant: Katie Levine of Vallance, Inc.