Projects fail for many reasons. Over the last decade many firms have created an internal project management office (PMO) to try to stem such failure. PMOs try to standardize how projects are managed and make them more predictable and successful.
To succeed, a well-run PMO should only allow projects to proceed that align with an organization’s strategy and promotes the successful completion of projects on time and on budget. Even with a PMO’s oversight, projects can fail, so other layers of management need to be added on top of a PMO to promote success. Typically, the maturity path for many PMO strategies include:
- Project Management Office — This type of organization is typically where most firms start to provide help to project managers to track time and costs, generate relevant status reports, and track deliverables and risks.
- Program Management Office — As a firm grows and project management needs mature, a program management office becomes important. Such an organization orchestrates multiple projects in support of an overall program and provide reports and status to senior executives and project sponsors.
- Portfolio Management Office — A group of programs are considered a portfolio of projects. A portfolio management office is usually setup at a department level and ensures department programs and projects align with business objectives.
For decades the above has been a standard maturity hierarchy for organizational project management. In the past few years a new and higher level of project management has emerged — the Enterprise Project Management Office (EPMO).
What is an EPMO?
An EPMO exists outside of any particular department and reports directly to C-level officers such as the CEO, CFO or Managing Partner. An EPMO manages programs and portfolios across the entire enterprise and provides a high-level view of the organization’s portfolio of projects.
An EPMO provides visibility across departments within an organization and can more effectively coordinate strategic alignment of projects. Such lofty visibility can provide a more strategic and organizational view for return on investment (ROI) evaluations, demand forecasting and resource planning, without departmental bias.
An EPMO is different than traditional project, program, and portfolio PMOs. The traditional PMOs are more tactical and operational, while an EPMO provides a strategic umbrella to these PMOs. It enhances and aligns their work but does not eliminate them, leading the overall project organization apparatus to achieve strategic business goals.
With such increased project success rates, it’s not surprising that EPMOs are gaining attention of organizations large and small.
Benefits of an EPMO
Project management offices, whether we are talking about projects, programs, or portfolio offices all have some problems in their operations. Very often PMOs are not strategic enough — project and program PMOs operate at a functional level and portfolio PMOs are often only tactical in their view. But, an EPMO can go beyond project, program or portfolio management strategies. It can help pull other PMOs together and provide some unique benefits:
- Standardization — Standard PMOs in a large organization will have grown out of various departments, business units, or locations. As such, they may have very different maturity levels and use disparate frameworks, tools, and reporting mechanisms. The creation and influence of an EPMO will require these various PMOs to centralize their standards and operations to meet strategic needs.
- Executive Visibility and Involvement — Since an EPMO operates at a strategic level within an organization and reports directly to the high-level executives, projects, programs and portfolios often get better executive visibility. With an involved and presumably more interested executive team, aligned projects will have a greater chance for success.
- Better Alignment with Strategic Goals — Because of its high level of operation within an organization and executive visibility, an EPMO can more readily ensure projects are aligned with the organization’s strategic goals.
- Coordination in Global Operations — If an organization has offices around the world, a centralized EPMO can help bring together PMOs that are geographically dispersed or departmentally separated, allowing for collaboration and support of cross-functional projects.
- Broader Focus — Traditional PMOs often only operate at a department level. PMOs from different departments will have different views of what is important and will typically lack a wider or more strategic view of active projects, programs, and portfolios throughout an organization. EPMOs can help bring together disparate departmental PMOs and provide strategic alignment and executive-level exposure.
- Demand Management — A good EPMO will capture project demand from across an organization and help to effectively manage demand-forecasting. An EPMO will presumably have no departmental bias, which means it can more easily help prioritize resources to meet organizational demand.
- Value Management — With a broader vision across the organization, an EPMO can also be well positioned to evaluate the value and ROI of projects for the organization.
- Streamlined Effort — An EPMO will have a view of project management across multiple departments or business units, hopefully helping to eliminate any duplication of project management efforts.
- Stronger Project Organization — An EPMO enhances the role of project, program, and portfolio management, providing an overarching level of management that can contribute to the success of projects. According to a 2017 Project Management Institute report, organizations that have established an EPMO reported that 38% more projects meet their original goals and business intentions, and 33% fewer projects failed.
Start Building a Successful EPMO
While the benefits of an EPMO to a large organization may seem obvious, an EPMO can be a powerful influence within any organization, crossing departmental and geographic boundaries with high visibility with executive management. Implementing an EPMO should be done with careful consideration, such as:
- Every organization is different with unique needs, so an EPMO needs to be carefully tailored to fit both company and culture.
- Every organization has a different project management maturity level with varying degrees of processes, governance, policies, and methodologies implemented. An EPMO can be more easily introduced into an organization with a mature project management infrastructure.
- As with any project that impacts the organization as a whole, the organization should seek executive support before building an EPMO and use that executive input to create a long-term vision for the EPMO.
- Use your organization’s project goals (such as lower costs, higher success rates, etc.) as a starting point then work to figure out how to build an EPMO to meet these goals. Do not build a textbook EPMO based on nothing but best practices and standard methodologies; it must be built to meet your goals within the context of your organization’s structure, culture, and needs.
- Set up an effective means to communicate EPMO progress as the implementation proceeds.
- Develop an implementation plan that aligns with your organization.
- Implement slowly, in phases. Evaluate each phase and make adjustments as needed. A good EPMO takes time; embrace slow but effective growth.
An EPMO is a new and unique addition to project management strategy and is fast becoming part of large global organizations. It’s not hard to understand the appeal of an EPMO as it provides a new means for such organizations to gain control of strategic insight in projects, programs, and portfolios from across the enterprise.