Managing The PMO Lifecycle - 2nd Edition

MANAGING THE
PMO LIFECYCLE
A Step by Step Guide to PMO Set-up,
Build-out and Sustainability
Second Edition
WAFFA K ARKUKLY, PH.D.

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Copyright © 2015 by Waffa Karkukly, Ph.D.

Second Edition — 2015
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1. Business & Economics, Decision-Making & Problem Solving
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DEDICATION
To the Almighty, who guards over me and illuminates the

possibilities throughout the journey of my life.
ACKNOWLEDGEMENTS
I wish to express gratitude to my family, who have helped me accomplish

my dreams through caring, encouragement, and unconditional love.
Further thanks go to all of my esteemed friends and colleagues for their
encouragement, motivation, and support. I also wish to thank all those
volunteers who participated in my survey. Special recognition goes to
the PMO leaders who took time out of their busy schedules to partici-
pate in and facilitate the case studies work in their organizations. Finally,
I would like to thank all those academics and professional experts who
have endorsed my work.
PREFACE
Those who follow the Project Management Office (PMO) news in terms
of the evolution/revolution that PMOs are undergoing will attest that
PMOs are increasing in number and that they are on the rise in status
and influence in many organizations. Many academic and practical
studies show the vulnerability of some PMOs and the transformation
that other PMOs have undergone.
Some PMOs are being shut down while others are being rebuilt. Still
others are being transformed with new capabilities and functionalities.
Finally, virtual or outsourced PMOs offer a new concept in PMO trans-
formation. (This concept emerged a few years ago and continues to rise.)
All in all, the PMO function is undergoing a major transformation as
a result of both external and internal factors. External factors include
the economy, competition, and market demand. Internal factors include
organization restructuring, budget constraints, and time to market.
This book includes a survey of the Project Management Office Lifecycle

(PMOLC) and the roles played by the PMO, executives, and those
organizations looking to achieve success from having a PMO. The
findings are shared in one of the later chapters in this book. The survey
highlights the rise of PMOs in organizations, the complexity model of
the PMOLC, and the skills required to lead a PMO. The book’s main
purpose is to serve as a guide for practitioners, academics, and all those
seeking to learn more about PMO structure and support. To that end, it
also includes templates that provide guidtance to help assess, implement,
and manage a PMO.
KEY TERMS
CoE Center of Excellence

CoP Community of Practice
JIT Just in time
IT Information technology
PMBOK Project management body of knowledge
PMO Project/program/portfolio management office
PMOLC Project management office life cycle
PMLC Project management life cycle
PM Project manager
PMI Project management institute
PO Project Office
PPM Project portfolio management
PRINCE2 PRojects IN Controlled Environments
QRM Quality risk management
RACI Responsible accountable consulted informed
SLA Service level agreement
ABOUT THE AUTHOR
Dr. Waffa Karkukly (PMP, ACP, CMP) is the Principal and Managing
Director of Global PMO Solutions with over 20 years’ experience in
IT, project management, and PMO establishments. Waffa has extensive
experience in project management and particular expertise in establish-
ing practical PMOs and revitalizing and assessing the value propositions
of existing PMOs to ensure alignment with organizational strategy. She
has helped Fortune 100, midsize and, small-sized organizations improve
their project management practices and PMO establishments through
building scalable standards and proven solutions that improve their
delivery process.
Prior to establishing Global PMO Solutions, Waffa held many posi-

tions, ranging from big 5 to small startups, where she was responsible for
establishing PMOs that included portfolio, building governance models,
and benchmark process improvement. She helped organizations achieve
their value proposition through building and sustaining transforma-
tional change management to improve their delivery and performance.
Waffa holds a BSc in Information Systems from DePaul University, an

MIT from Northwestern University, and a Ph.D. from the SKEMA
School of Business. She is a certified Project Management Professional
(PMP), Agile Certified Practitioner (ACP), and Certified Change
Management Practitioner (CMP). Waffa is an author, coach, and active
industry member who has many publications pertaining to project man-
agement, PMOs, and change management. She is a frequent speaker,
presenter, and panelist at the international level at various project man-
agement events and forums.
TABLE OF CONTENTS
DEDICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
PREFACE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
KEY TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
ABOUT THE AUTHOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiv
LIST OF FIGURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv
LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PMOs Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Virtual/Outsourced PMO. . . . . . . . . . . . . . . . . . . . . . . 7
The Agile PMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Chapter Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
CHAPTER 1:
THE PMO LIFECYCLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Chapter Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PMO Types and Roles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Understand the “P” in PMO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Project-based PMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Program-based PMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Portfolio-based PMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Identify the Right Level of PMO Authority . . . . . . . . . . . . . 24
The Correlation Between
Levels of Authority and
Different Types of PMO Functions. . . . . . . . . . . . . . . . . . . . . . 25
MANAGING THE PMO LIFECYCLE [ ix ]
Project/Program Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Project Manager Development vs. Project Manager
Training. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Project Repository. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Project Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Common Functions to All Levels of PMO Authority. . . 28
Project Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Project Reporting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Project Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Identify the Right PMO Scalability Model . . . . . . . . . . . . . . 31
Organization Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
External Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Internal Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Business Process Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Strategic Need. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Geography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Reporting Line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Responsibility for Project Delivery. . . . . . . . . . . . . . . . . . 38
Number of Projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Number of Project Managers . . . . . . . . . . . . . . . . . . . . . . . 38
Global PMO vs. Enterprise PMO. . . . . . . . . . . . . . . . . . . . . . . . . 39
Other PMO Functions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
PPM Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
QRM Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Overall PMO tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Keep It Simple . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Get Your Priorities Straight . . . . . . . . . . . . . . . . . . . . . . . . . 43
Scalability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Executive support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
CHAPTER 2:
PMO SETUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Newly Created PMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Existing PMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
[ x ] WAFFA KARKUKLY, PH.D.
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
CHAPTER 3:
PMO BUILD-OUT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Newly-created PMO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Existing PMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
CHAPTER 4:
SUSTAINABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Sustainability Principles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Human Resources Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
Customer Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Risk Management Factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
HR Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Customer Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Risk Identification Triggers. . . . . . . . . . . . . . . . . . . . . . . . . . 86
Risk Undertaking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
PMO Sustainability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Newly created PMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Existing PMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Sustainability Toolkit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
PMO Communication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
PMO Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
PMO Knowledge Repository. . . . . . . . . . . . . . . . . . . . . . . . 102
PMO Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
PMO Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Process and Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Project Managers’ Skill Level. . . . . . . . . . . . . . . . . . . . . . . . 104
Project and Portfolio Tools. . . . . . . . . . . . . . . . . . . . . . . . . . 104
Establish Best Practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
CHAPTER 5:
PMO SURVEY RESULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
MANAGING THE PMO LIFECYCLE [ xi ]
Survey Setup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Survey Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section One. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Section Two. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Section Three . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Analysis of Categorical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Categorical Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Descriptive Analysis of Continuous Data. . . . . . . . . . . 112
Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Summary of Survey Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
CHAPTER 6:
CONTROVERSIAL PMO TRENDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
PMO or Project Management? . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Temporary or Permanent?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Make It Temporary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Make It Permanent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Insource or Outsource . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
PPM or PMO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
CHAPTER 7:
PMO CASE STUDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
General Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Specific Case Studies Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . 144
The Case Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Aviva Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147
Invest&Wealth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Interac. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
McDonald’s Restaurants of Canada Ltd. . . . . . . . . . . . 165
G&E—Game & Entertainment. . . . . . . . . . . . . . . . . . . . . . . 171
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
[ xii ] WAFFA KARKUKLY, PH.D.
CHAPTER 8:
PMO TOOLKIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
Template Descriptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
PMO Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
PMO Assessment Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
PMO Job Family—Career Level . . . . . . . . . . . . . . . . . . . . . 179
PMO Functional and Interaction Model . . . . . . . . . . . . 179
PMO Roadmap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Template Details. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
PMO Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
PMO Assessment Survey. . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
PMO Job Family—Career Level . . . . . . . . . . . . . . . . . . . . . 186
PMO Functional and Interaction Model . . . . . . . . . . . . 188
PMO Roadmap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
CHAPTER 9:
THE AGILE PMO,
A NEW AREA OF FOCUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Lean and Agile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
What is Lean, and Why Lean?. . . . . . . . . . . . . . . . . . . . . . . 196
What is Agile and Why Agile?. . . . . . . . . . . . . . . . . . . . . . . 198
HR Management in Agile Source . . . . . . . . . . . . . . . . . . . 200
The Thesis of Leagility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Implementing Lean and Agile in Organizations. . . . 202
Sustaining PMO Performance by Achieving
Leagility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Case Study and Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
About the Case Organization. . . . . . . . . . . . . . . . . . . . . . . 206
The Organization’s Challenge. . . . . . . . . . . . . . . . . . . . . . . 206
The Role of the PMO as a Champion. . . . . . . . . . . . . . . 207
Why Lean and Agile in Combination? . . . . . . . . . . . . . . 208
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
MANAGING THE PMO LIFECYCLE [ xiii ]
CHAPTER 10:
PMOS WHERE TO?
GOING BACK TO BASICS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Functional Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Matrix Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Projectized Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
PMOs and Organizational Structure. . . . . . . . . . . . . . . . 216
Going Back to Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
APPENDIX A:
WEB-BASED SURVEY LETTER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
APPENDIX B:
WEB SURVEY QUESTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 237
APPENDIX C:
CASE STUDIES INTERVIEW QUESTIONNAIRE . . . . . . . . . . . . . 245
LIST OF FIGURES
Figure 1.1 Overall PMO lifecycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Figure 1.2 Summary of the PMOLC phase description. . . . . . . . . . . . . . . 14
Figure 1.3 Summarizes the focus of project-based, program-based, and
portfolio-based PMOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Figure 2.1 PMO lifecycle – Setup. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Figure 2.2 Sample of PMO services and its
relevant outputs to other business units. . . . . . . . . . . . . . . . . . . . . . 54
Figure 3.1 PMO lifecycle – Build-out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Figure 3.2 Conceptual model of Possible Project Governance model
within an organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Figure 4.1 PMO lifecycle – Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Figure 4.2 HR value factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Figure 4.3 Customer value factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Figure 4.4 Summary of value add dimensions, factors, and influencing
triggers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Figure 4.5 Sample organization structure model . . . . . . . . . . . . . . . . . . . . 101
Graph 5.1 Sex. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
Graph 5.2 Type of PMO Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Graph 5.3 Does your organization’s PMO deliver projects?. . . . . . . . . . 122
Figure 8.1 Sample PMO job family. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Figure 8.2 A Sample of a PMO’s functional model. . . . . . . . . . . . . . . . . . . 189
Figure 8.3 A sample of PMO services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Figure 8.4 A Sample of PMO services’ outputs . . . . . . . . . . . . . . . . . . . . . . 191
Figure 8.5 A list of PMO opportunities and challenges . . . . . . . . . . . . . . 192
Figure 8.6 A Sample of PMO Roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
Figure 8.7 Another sample PMO roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . 194
Figure 10.1 Functional Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Figure 10.2 Matrix Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Figure 10.3 Projectized Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
LIST OF TABLES
Table 1.1 Types of PMOs and their role definitions . . . . . . . . . . . . . . . . . . . 18

Table 1.2 Illustration of PMO authority and related
types and functions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 1.3 Illustration of PMO authority and related
types and functions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 1.4 Example of a program or portfolio PMO . . . . . . . . . . . . . . . . . . . 33
Table 1.5 Example of a CoE PMO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table 2.1 PMOLC – Setup Phase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Table 2.2 PMO type and possible PMO
functions under an authoritative PMO. . . . . . . . . . . . . . . . . . . . . . . . 52
Table 3.1 PMOLC – Build-out Phase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Table 3.2 Example of PMO function inputs and expected output . . . 67
Table 4.1 PMOLC – Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Table 5.1 Geographic location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Table 5.2 Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
Table 5.3 Number of PMOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Table 5.4 PMO Resides in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Table 5.5 PMO Reporting line. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Table 5.6 Management Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Table 5.7 PMO’s Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Table 5.8 PMO Leader’s Skills. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Table 5.9 Role in PMO Setup and Build-out. . . . . . . . . . . . . . . . . . . . . . . . . . 116
Table 5.10 Role in PMO Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Table 5.11 PMO Complexity Ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
Table 5.12 Challenges in setup and build-out. . . . . . . . . . . . . . . . . . . . . . . . . 119
Table 5.13 Challenges in Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Table 5.14 Executive buy-in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Table 5.15 Change Management and Project Management
Adoption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
[ xvi ] WAFFA KARKUKLY, PH.D.
Table 5.16 PMO-Managed Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Table 5.17 PMO Maturity Level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Table 5.18 PMO Functions Performed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Table 5.19 PMO’s Benefits to Executives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
Table 5.20 PMO Challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Table 5.21 Project Managers Report to. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Table 7.1 Organization case descriptions and participants. . . . . . . . . . . 143
Table 7.2 Summary of the four practices in each organization . . . . . . 146
Table 7.3 Summary of Aviva Canada Organization (Canada). . . . . . . . 148
Table 7.4 Summary of Invest&Wealth Organization. . . . . . . . . . . . . . . . . . 154
Table 7.5 Summary of the Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Table 7.6 Summary of McDonald’s Restaurants of Canada Ltd.. . . . . . 167
Table 7.7 Summary of G&E Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
INTRODUCTION
This book is a culmination of years of collective effort to highlight what

goes into the setup, build-out, and sustainability of Project Management
Offices (PMOs). In addition, it provides the drivers, the benefits, and
the know-how.
The book’s main purpose is to be a reference guide for practitioners

investing in setting up, building-out, or supporting PMOs by providing
a practical, step-by-step guide and case studies. In addition, the book
addresses various audiences on the corporate ladder to help them under-
stand their roles and contributions to PMO success.
Finally, this book is a guide for students seeking a career in the project
management profession, allowing them to gain practical knowledge in
the domain, and for those writing their thesis, so they can leverage the
insights of the literature, surveys, and case studies.
If you are:
• An executive in an organization looking to build a new PMO or

revitalize an existing one, this book will give you guidelines.
• A new PMO head and in charge of building a PMO, rebuilding a
PMO, or sustaining an existing one, this book will provide practi-
cal knowledge.
• A functional (business unit) head who is asked to work with the
PMO in your organization and would like to understand how to
interact with the PMO and what to expect, this book will help you
and your organization maximize the benefits of your interactions.
[ 2 ] WAFFA KARKUKLY, PH.D.
• A project manager looking to understand what it means to be

reporting to the PMO, this book will help you understand your
career options within a PMO.
In addition, if you are:
• A student looking to become part of a PMO organization and

wanting to know roles, responsibilities, and how the PMO works
with other functions, then this is a must read for you.
• A researcher seeking reference, literature review, and guidance on
PMO surveys, this book is a must read for you as well.
Background
The majority of PMO research thus far has focused on investigating
issues like: the PMO; understanding the PMO and its various functions,
structure, types, roles; the multi-structure of a PMO; and the PMO’s
performance (Aubry and Hobbs 2007, Crawford 2002, Karkukly 2010).
As PMOs evolve and the expectations for them increase in line with the
demand on organizations to do more with less, the need to understand
the PMO’s lifecycle and how it evolves allows organizations to maximize
the efficiencies gained from having a PMO.
The concept of a PMO originated in the 1950s, when its role was mainly
in the military or in delivering critical projects with specialized project
staff to ensure completion. Its purpose was to control specific projects
and be closer to the customer (Kerzner 2004).
The journey since 1960 has changed the PMO in terms of operation and
both user and management expectations. While project-based industries
(e.g. IT, construction, and defense), profited from project manage-
ment, they had a level of project maturity and were the first to establish
project offices to monitor their project progress. Industries that were not
MANAGING THE PMO LIFECYCLE [ 3 ]
project-based were measured by their functional product line. Hence,

project management maturity was slower, as was the adoption of the
project management office (Rad and Levin 2002).
Although a majority of organizations have adopted project management

to solve problems, project-driven organizations should adopt a broader
application of project management disciplines and new models to make
themselves more effective (Gareis 2005). Some of the formal PMO defi-
nitions are:
An organizational body or entity assigned various

responsibilities related to the centralized and coordi-
nated management of those projects under its domain.
The responsibilities of the PMO can range from provid-
ing project management support functions to actually
being responsible for the direct management of a project
(PMI 2004, p. 369).
A project management office (PMO) is an organiza-
tional body or entity assigned various responsibilities
related to the centralized and coordinated management
of those projects under its domain. The responsibilities
of a PMO can range from providing project manage-
ment support functions to actually being responsible for
the direct management of a project (PMI 2008, p. 11).
The PMO is a centralized unit within an organization
or department that oversees and improves the manage-
ment of projects (Grey and Larson, 2006, p.561).
PMOs can act in the capacity of mentors or centers of
best practice, as a Project Director may mentor PMs
through a project. Their functional purpose is frequently
to improve project management capabilities within an
organization. (Stewart, 2010, p.21)
My definition is as follows: The PMO is a critical organizational entity

that adopts a variety of roles and structures but which should focus on
adding value to an organization and its customers to achieve the desired
organizational performance.
Other authors have offered various perspectives on the exact nature of

the PMO’s function. Kerzner (2005) describes how the project man-
agement office acts as the guardian of the project management intel-
lectual property. Other organizations established PMOs initially to cut
costs, but then they evolved into organizations to manage a single large
project, provide guidance, methodologies, tools and techniques, and
(most recently) become centers of excellence that manage groups of
projects (Kerzner 2004).
Bates (1998) believes that the PMO establishes project management

methods, defines and implements processes and procedures, provides
project structure, deploys supporting systems and tools, and provides
project manager development and training.
Rad (2000) describes the PMO as a function that includes formaliza-

tion and consistency in selecting projects, more effective coordination of
multiple projects, and improvement in project performance in terms of
the triple constraints (cost, schedule, and scope), thereby improving an
organization’s profitability.
Santosus (2003) describes the PMO as a function that may enable

consistency of approach across projects. As organizations sought more
efficiencies and increased performance from projects, they turned to
establishing PMOs to instill the needed discipline of project manage-
ment. In some cases, early PMOs were created to focus on one major
project, such as Y2K (Crawford 2002).
The PMO is becoming an important vehicle within organizations to

provide project management services that support the organizations’
project delivery and contribute to an organization’s performance through
standardized processes and practices. The functions and services of PMOs
vary depending on an organization’s strategic objectives. In some organiza-
tions, PMOs are viewed as the central point for instituting project man-
agement practices throughout the organization. Other organizations view
their PMO’s role as more peripheral and an enabler to project managers
and project management tools and techniques. Some PMOs are separate
entities, like finance or marketing departments, reporting to the organiza-
tion’s executive management, such as the COO, CIO, CFO, and so on.
Other PMOs are embedded within divisions or other functions within
the organization, reporting to the director of IT, the senior manager of
product development, or to a business unit.
PMOs existed initially as a means of collecting and distributing project

management practices and project knowledge throughout an organiza-
tion. While the success rate of Y2K transitions created the initial oppor-
tunity, many organizations continued with PMOs and extended their
mandate and increased their activities to include analysis, communica-
tion, and decision-making support (Desouza and Evaristo 2006).
Alongside the PMO is also another structure that is gaining popular-

ity and offers a strategy to support both project managers and the host
organization. This is the Center of Excellence (CoE).
Some organizations call their PMO the Center of Excellence. These

PMOs have specific elements that need to be satisfied. Bolles (2002)
identifies four necessary elements for a successful CoE. First, an effec-
tive CoE provides authorization. It assists the organization to align its
resources with its strategic objectives. In addition, it also identifies, cat-
egorizes, and prioritizes projects.
A PMO provides a means to manage projects and assists an organization

to advance its project management maturity. It does this through:
• Standards: establishes standard tools, templates, and methodolo-

gies to be applied to all projects within an organization
• Education: provides training and education with respect to project
management to all concerned within an organization. This is a key
component of the cultural change that is often required to imple-
ment the authority and the standards of a methodology.
• Readiness: establishes a project’s readiness to proceed through the
required methodologies and may include an evaluative aspect or
pre-project assessment as to the likelihood of success for a project.
This can involve a pre-project assessment of critical success factors
or a preliminary risk analysis.
Perhaps the most important PMO benefit is the link it can provide
between corporate governance—connecting global strategy and goals—
project management/individual project success, and results through an
effective portfolio management process. In this form, a PMO is all about
results and securing project management as a realistic bridge between
strategy and success (eSilvia and Soares 2008, p.7).
PMOs Today
The Virtual/Outsourced PMO
Information Technology (IT) executives have a growing concern about
project performance and PMO capabilities; hence, trends in project
management are moving toward more contracting and outsourcing. This
means more distributed development organizations and more business
dependence on applications. The drivers of these trends include project
criticality, problems with reliable project delivery, and the new account-
ing guidelines, which requires enterprises to capitalize costs of software
assets developed for internal use.
Many companies are already subscribing to virtual PMO services,

which are the result of outsourcing services, especially within IT. This
leads to PMOs in one geographic location servicing multiple others
(Santosus 2003). According to ESI International, the state of the
PMO report, outsourcing PMO resources is growing continuously to
manage the demand, especially for PMOs in large organizations.
Some companies have created a PM/PPM toolkit solution, which has

proven to be successful in the area of on-demand PM/PMO as well
as helping to expedite PMO setup and providing required tools and
processes. Many companies have benefited from these toolkits to out-
source their PM/PPM systems and, in some case, their entire project
management processes. Some organizations outsource project manag-
ers, methodology, and/or technology. These organizations have either
outsourced the PM function completely to an external party, or some
external party has developed these practices and handed them back to
the organization to save on costs and time in setting up PMO functions
(Nicholson 2005).
It can be summarized from the above that organizations seeking to

control costs, improve project delivery success and standards, and create
business value will invest in creating a PMO. Judging by the rise in
PMO numbers today, there is no doubt that PMOs add value. While
this is mainly true, the costs and the efforts associated with establish-
ing a PMO are being questioned due to increased expectations from
executives. A study by Hobbs (2007) points to the issues associated with
PMO creation, questioning the real value considering the time, effort,
and cost it takes to establish such a function.
While organizations strive to maximize business value for their company

and their clients, many organizations have turned to outsourcing activi-
ties that were traditionally performed in-house for the purpose of cre-
ating greater efficiencies, cost reduction, and improving performance
across the entire organization (Mclvor 2008). To minimize these upfront
costs in establishing a PMO, some organizations outsource some or all
PMO functions or have introduced a virtual PMO that is run by a party
external to the organization.
The Agile PMO

More recently, there has been a huge buzz around the “Agile PMO,”
whether the PMO can be Agile and would support instituting Agile
in the organization. Agile describes a set of principles and practices for
delivering software. For organizations that transformed their methods
into Agile, whether their respective PMO was a champion in leading
the change or the organizational change was led by other entities, the
fact remains that it is the responsibility of the PMO to ensure sustained
practices and performance. While the adoption of Agile may vary by
organization and by department within an organization, the faster
PMOs can adopt the change and help their organization manage the
change, the more visible the value added role of the PMO will be. The
areas of emphasis should include the following:
• Building people: PMOs should establish role-based training pro-

grams, ensuring that all project team members, including project
managers, are well trained in the Agile way of managing projects.
• Building processes: PMOs should help centralize the process and

streamline it across all functional areas while keeping Lean and
Agile methods up to date as part of continuous improvement.
• Implementing supporting tools and technologies: PMOs can
influence and ensure the adoption and standardization of the new
technologies as a result of Agile and Lean. PMOs can also help
by aligning these tools with existing tools to maximize the benefits
and minimize duplication.
• Building measures: The PMO should focus on aligning the right
scorecards at the right level of the organization. The PMO should
update its current dashboard and tracking based on what Lean and
Agile requires.
Chapter Structure
This book is organized into ten chapters as follows:
Chapter 1 explains the various PMO types, the various PMO models
available, and offers the reader a project management office life cycle
(PMOLC) model to illustrate the steps taken during each phase of the
proposed PMOLC. The PMOLC consists of three PMO phases: setup,
build-out, and sustainability. The subsequent three chapters unfold each
phase of the PMOLC. Each phase explains the processes associated with
a newly established PMO as well as those processes associated with the
repurposing or repositioning of an existing function.
Chapter 2 takes readers through the PMOLC setup phase. The setup
outlines the seven-step process required to set up a PMO. It illustrates
what is involved internally and externally (in those cases where the orga-
nization may be outsourcing the setup).
Chapter 3 walks through the steps required in the PMOLC build-out

phase. This chapter takes into consideration how to follow the roadmap
established in the setup phase and differentiates between an enterprise

and global PMO.
Chapter 4 goes through the PMOLC sustainability phase. This chapter

includes sustainability definitions, sustainability elements, and the steps
required to sustain an established PMO.
Chapter 5 analyzes the results of a global web-based survey of PMOs

and provides statistical findings to illustrate key issues during the PMO
setup, build-out, and sustainability phases. It analyzes these findings
further to provide lessons for those seeking to establish a PMO.
Chapter 6 takes on some emerging topics, such as virtual PMOs, PPM

practices, and outsourcing. These practices are reflected on further in
through organization case studies.
Chapter 7 presents case studies from well-known organizations that shed

light on existing and emerging practices based on the concepts intro-
duced in Chapter 6.
Chapter 8 presents a PMO toolkit with some popular, ready-to-

use templates.
Chapter 9 takes on the new Lean and Agile concepts and the role of the
PMO in supporting Lean and Agile culture and offers a case study on
how a PMO can lead a Lean and Agile transformation.
Chapter 10 explains the impact of organizational structure and culture

on PMO success and offers five simple guiding principles for orga-
nizations that stick with the basics when the objective of their PMO
is unclear.
Chapter Summary
In this chapter, we presented the aim and objectives of this book. This
chapter also introduced the format and organization of the book, pro-
viding a summary for each chapter to allow the reader to follow the flow
as well as refer to the sections needed. The book can be read sequentially
or dipped into at random as a reference.
CHAPTER 1:
THE PMO LIFECYCLE
Chapter Overview
This chapter will explain the various PMO types, the models available,
and their functions. It introduces the reader to the PMO lifecycle and
its phases: setup, build-out, and sustainability. Figure 1.1 describes the
three phases at a high level, illustrating the main activities required to set
up, build out, and sustain PMOs. In subsequent chapters, the complete
PMO lifecycle will unfold, and every step in each phase of PMO setup,
PMO build-out, and PMO sustainability will be explained in detail. All
three major phases in the PMOLC are described and can be seen in
Figure 1.2.
1. PMO Setup: Otherwise known as the “assessment phase” or the

“discovery phase,” the purpose of this phase is to define the orga-
nization’s objective in creating a PMO, identifying the goals and
determining the short-term and long-term plan in the form of a
detailed roadmap.
2. PMO Build-out: This phase may also be referred to as the “deploy-
ment” or “implementation” phase of a PMO. It involves establishing
a plan for implementing the approved roadmap activities, which
include building the required functions leading up to a PMO rollout.
3. PMO Sustainability: This phase may be referred to as “continuous
improvement,” which describes the ongoing support of the PMO
functions to sustain the performance of the PMO and contribute to
the success of the PMO within the organization.
Figure 1.1 Overall PMO lifecycle

Figure 1.2 Summary of the PMOLC phase description

The first two phases can be grouped together and treated as a single
project. In other words, the setup and build-out of the PMO can be
treated as a project within the delivery of a PMO roadmap, execution
plan, proposed functions, and so on. The sustainability phase may be
seen as the operationalization of the PMO (i.e. running the day-to-day
activities) and addressing continuous improvement.
In each phase, whether setup, build-out, or sustainability, an iterative

three-step process will ensure continuous flow between assessment,
implementation, and support.
The PMOLC consists of four major stages:
1. Identify the PMO requirements: Work with the organization’s

executive team and senior management to establish short-term and
long-term goals. What is the PMO’s vision? What is the budget?
What are the parameters for success?
2. Establish the PMO roadmap: Based on the requirements gathered
from executives and senior managers and the objectives required
from the PMO, there is agreement that there should be a roadmap
document that details how the PMO will be established, the costs,
resources, and a timeframe for the build-out.
3. Execute the PMO roadmap: Establish the functions described in
the roadmap. The PMO may have as many or as few functions as it
needs depending on the organization’s direction and its constraints.
The build-out is an execution of the approved roadmap.
4. Operate the PMO roadmap: During this phase, the PMO estab-
lishes all of the supporting services that allow for development and
continuous improvement and the feedback loop that incorporates
an organization’s voice into these improvements.
Prior to unfolding the details of each phase, I provide information per-

taining to PMO types and roles, differentiate the PMOs based on their
authority and structure, and provide the various functions PMOs have
been tasked to do.
PMO Types and Roles

The literature suggests that not all PMOs are created equal in terms of
their types and the functions performed. The terms in some organiza-
tions are used interchangeably to refer to activities that a PMO performs.
Some organizations focus their PMO on only basic PMO-type func-
tions; others are more mature with more advanced project and portfolio
functions (Crawford 2004). Basic functions include: project method-
ology, project reporting, project tools, and project training. Advanced
project and portfolio functions include: portfolio analysis and priority,
benefit realization, and quality risk management.
The PMO often has a dual role of ensuring compliance in relation to

using the methodology, tools, and templates while also supporting indi-
vidual business units. The PMO often monitors project progress and
reports on this progress and accompanying risks to the organizations’
senior managers. Another form of PMO finds the office actually manag-
ing projects on behalf of the organization and forming project teams.
In this structure, the PMO typically manages a project from initiation
to closeout and is responsible for achieving successful project outcomes
(Kerzner 2004).
Letavec (2006) suggests that PMOs may work in any of the follow-
ing roles:
1. Consulting Role: advisor to project/program teams on how to

manage their projects and programs through tools and methodology
2. Knowledge Management Role: capturer of project-related infor-
mation, manager and disseminator of this information
3. Compliance Role: set processes, tools, and reporting standards
Light and Berg (2000) suggest that PMOs may have other roles:
1. The PMO as a repository: custodian of the project methodology

and is not involved in the decision-making process
2. The PMO as a coach: provides guidance on projects, performs
project reviews on request, establishes, supports project planning,
monitors and reports on projects but does not order corrective action
3. The PMO as manager: operates as an agent of senior management,
manages the project portfolio, manages the master resource plan,
reviews project proposals and is accountable for the portfolio
Kerzner (2004) detscribes three types of PMOs.
1. Functional PO: addresses functional area needs, such as IT typi-

cally at the departmental level
2. Customer Group PO: handles customer management and can act
as a company within a company
3. Corporate PO: services the entire organization and focuses on cor-
porate strategic alignment
Successful PMOs take on responsibility for different project-related

functions and core tasks related to the development of shared methodol-
ogy and processes for the handling of projects, training, and competence
development within project management, proposing new projects and
quality assurance of projects. The success of a PMO is related to ensur-
ing the necessary authority of the PMO—real organizational authority
as well as academic and social credibility, top management support—
and that the PMO covers true needs in the organization (Anderson et
al., 2007).
Recent studies classify PMOs into two types: single-project organization

and multi-project organization. Within each are different setups, ranging
from a PMO centralized around a single project to a center of excellence
(CoE) that deals with many projects. Table 1.1 below illustrates the
type of functions performed and the expectations based on each type of
PMO. Each author has defined the type of PMO and different functions
from the perspective of an organization’s needs.
Table 1.1 Types of PMOs and their role definitions
PMO
Author Function/Role
Type
Hill (2004) PO Applies effective practices for project performance and

oversight and employs standard life cycle processes when
available
Basic PMO Introduces critical processes and practices of project

management
Standard Establishes and monitors use of a complete project

PMO management methodology
Advanced Enhances content and monitors use of a comprehensive

PMO methodology
Center Of Analyzes project management methodology and examines

Excellence process variation in business units
(CoE)
Rad and Project or Supports a single project or a group of related projects

Levin Program
(2002)
Division PMO Establishes standards and methodologies to follow in

project management, reviews and audits projects that
are underway, and provides mentoring support to project
professionals
Enterprise Concerned with the enterprise of selection, prioritizing,

PMO and monitoring the value from the organization’s project
portfolio
PMO
Author Function/Role
Type
Crawford Level 1 - PCO Typically handles large, complex single projects (such as the
(2002)w Y2K project). It is focused specifically on one project, but
that one project is so large and so complex that it requires
multiple schedules, which may need to be integrated into
an overall program schedule.
Level 2 - The value of a level 2 PO is that it begins to integrate

Business resources at an organizational level. The organizational level
Unit PO is where resource control begins to play a much higher
value in the payback of a project management system.
Level 3 - Only a corporate-level organization can provide the coor-

Strategic PO dination and broad perspective needed to select, prioritize,
and monitor projects and programs that contribute to
attaining corporate strategy, and this organization is the
strategic project office.
Kendall Repository The PMO serves as a source of information on projects,

and Rollins methodology, and standards. This model occurs most often
(2003) in organizations that empower distributed, business-centric
project ownership or those with weak central governance
Coach An extension of the Repository Model. It assumes a

willingness to share some project management practices
across functions and uses the PMO to coordinate the
communication.
Enterprise This model usually implies a much larger investment and,

therefore, usually has a stronger mission, charter, and
support than the previous two models. The most consoli-
dated version of this organizational model concentrates
senior project management expertise and execution within
the PMO. Some or all project managers are staffed within
the shared service model and consigned to projects as
needed. This model assumes a governance process that
involves the PMO in most projects, regardless of size.
Deliver now This model emphasizes delivering measurable value to

the executive team within each six-month period. At initial
startup, the PMO’s resources focus on accelerated project
deliveries across all major projects. This model has sponsor-
ship at a very high executive level (CEO or senior vice
president). Its metrics are tied directly to senior manage-
ment performance
Understand the “P” in PMO

As a starting point, it is helpful to establish what type of PMO your
organization requires, whether it is a project, program, or portfolio man-
agement office. Figure 1.3 summarizes the focus of each PMO type
Project-based PMOs
The focus of a project-based PMO is on project-level deliverables: how
to initiate, plan, execute, monitor, control and close out a project.
Attention is paid to project details pertaining to specific project mile-
stones and deliverables. Areas of focus include:
• Building the project management methodology

• Promoting standard project management templates and tools
• Ensuring standardization in project delivery
• Improving project delivery and performance
• Allocating and assigning project resources
• Planning the project budget as well as tracking variances
• Monitoring project risks and issues
• Project status reporting, dashboard, and KPI (Key
Progress Indicator)
Project-based PMOs can be local or national, IT-based or business-

based. In some organizations, IT reports to a business unit. For example,
in some industries every business unit has its own IT function, while in
other organizations IT is considered a business unit, much like finance
or marketing. In large organizations, many project-based PMOs can
be found embedded in departments responsible for direct delivery of
projects. Some organizations that have multiple PMOs will have an
overarching PMO with a specific governance role to ensure that overall
corporate standardization, communication, performance assessment,

and measurements are consistent.
Program-based PMOs
The focus of program-based PMOs is, as the title suggests, on program-
level outcomes, how to integrate projects and sequence them, resource
management, stakeholders change impact management, and rollup of
groups of projects. Attention is paid to program deliverables, including
business case and program base benefits. The areas of focus include:
• Promoting standard program management methodology

• Ensuring standardization in project delivery across dependent and
independent projects
• Performing project benefits as well as looking at program
benefit realization
• Budgeting and tracking program level cost/value and ROI
• Addressing resource planning across multiple projects with the aim
to ensure appropriate allocation
• Monitoring risks and issues at the program level
These PMOs can be local but are more frequently national- or enter-
prise-level. They are most common in large organizations where various
projects are either cross-geographic or cross-departmental and there are
strong dependencies between these projects; including securing delivery
as part of a specific program. Hence, a PMO may run single or mul-
tiple programs.
Portfolio-based PMOs
Because of the way some organizations are structured politically, some
portfolio-based PMOs encompass a project and program delivery
component while others retain a portfolio function only. These kinds
of PMOs may have various names if they function separately from the
PMO (e.g. Enterprise Strategy, Corporate Strategy, Strategic Portfolio
Office, Corporate Portfolio Office, or Portfolio Management Office).
These PMOs focus on portfolio-level outcomes and how to align orga-
nizational strategic initiatives to realize benefits. Areas of focus include:
• Creating an organization portfolio process

• Promoting standards across PPM selection, monitoring,
and controlling
• Evaluating and prioritizing all initiatives against strategic key indicators
• Performing demand management
• Aligning an organization’s budget requests and approvals along
with PPM initiatives
• Implementing ongoing governance models to monitor and control
PPM health checks
• Performing benefit realization and monitoring KPIs and reporting
• Monitoring risks and issues at a portfolio level
These PMOs operate predominantly at the national or enterprise level.

Many of them can be found in large organizations in which each business
unit has a delivery-based PMO that oversees the execution of multiple
projects or programs. While delivery-based PMOs are involved in car-
rying out projects, they report to the portfolio-based PMO. This PMO
has oversight at the macro level of all initiatives generated by the various
business units and their objectives to more of a portfolio oversight for
selecting and prioritizing projects across the entire organization as well
as tracking benefit realization.
Figure 1.3 Summarizes the focus of project-based,

program-based, and portfolio-based PMOs.
Identify the Right Level of PMO Authority

If your organization is ready to create a PMO, some prerequisites exist to
ensure you set up the right type of PMO. The assessment can be made
by your PMO head or through a consulting firm hired for this purpose.
PMO types and the level of authority they have need to be vetted before
embarking on the creation of the PMO function. For example:
• Consulting/services: Proposes, advises teams on how to run

a project
• Knowledge management: Manages, archives project details and
lessons learned
• Compliance: Creates and sets project management standards and
monitors and controls adherence to these standards
These levels of authority need to tie in with the PMO types outlined
in Table 1.1 (i.e. PO, basic PMO, advanced PMO, CoE). While all of
these authority types can share similar PMO models and create similar
functions, the level of authority a PMO has determines its ability to
influence change management and project management adoption
within an organization.
The author’s research indicates that PMOs given the level of authority
required to implement change management and encourage project man-
agement adoption within an organization have produced higher results
in encouraging project management adoption. In other words, the less
empowered the PMO, the less its influence it has on change manage-
ment and project management adoption. Table 5.7 in Chapter 5 shows
the results of the correlation of level of authority in project management
and change management adoption.
The Correlation Between

Levels of Authority and
Different Types of PMO Functions
Project/Program Delivery
For the consultative- and knowledge-based PMOs, project delivery is
rarely a primary function (see Table 1.2.) While nothing prevents an
organization from creating any type of PMO under any level of author-
ity, the fact remains that there is a stronger correlation between some
types of PMOs and their level of authority (see Table 5.15, Table 5.16,
and Table 5.17 in Chapter 5). For example, enabling a project delivery
function in a consultative- or knowledge-based PMO without giving the
PMO the authority to run or kill projects will not work in the consult-
ing services context.
The success in driving project delivery and building a culture that

is accountable to delivery depends on how empowered a PMO is to
oversee planning and execution of projects and enforce rigor that allows
sponsors to make a decision on whether to kill or continue a project. If
a PMO lacks the authority to take action, the PMO’s recommendations
will be ignored. Therefore, the best type of PMO is an authoritarian
PMO to ensure that projects that are not delivering are being monitored
closely. Project delivery can still be run under a consultative- or knowl-
edge based PMO. However, the mandate of these types of PMOs is not
to oversee delivery.
These types of PMOs will be challenged to have the authority to oversee

projects. They cannot hold the project owners accountable and are likely
to be challenged, which creates tension between the PMO and the busi-
ness units in terms of accountability. Consequently, the PMO’s delivery
responsibility will be at risk.
Project Manager Development vs.

Project Manager Training
In some organizations, project managers are contracted to work as con-
sultants for specific projects, and they are expected to have the required
industry standards and maybe the hiring organization’s standards. Hence,
investing in project manager training may not be required. For those
organizations that have full-time project managers on staff, investing
in their project managers’ professional development is a feature that is
looked upon quite positively when project managers make career moves.
Some organizations may view project manager development and train-

ing as synonymous. This is a mistake. Project manager training is a func-
tion that is most suited to consultative- and knowledge-based PMOs,
because in the consultative role, training is assumed to keep project
managers abreast of standards. The PMO provides training on tools,
methods, templates, and the rollout of any updates, but is not neces-
sarily responsible for career progression for the project manager. In the
case of a compliance-based PMO, where project managers have a solid
reporting line into the PMO, the PMO is accountable for defining the
project manager career path (i.e. project manager development).
In some organizations, there is a function within the PMO—project

manager development—that is responsible for training, providing a
career path, and bridging any skill gaps for all project staff. This can only
happen when the PMO has the authority and the funding to spend and
provide on-the-job or advanced certificates to develop its project manag-
ers’ skills. When the PMO has the authority and the required funding to
develop programs tailored to project managers’ career paths, the PMO’s
level of authority correlates with how much of an influence it has over
the education, mentoring, and guidance of project management within
an organization.
Project Repository
All PMOs, regardless of type, need to maintain project data for report-
ing and auditing purposes. While the project repository function is a
core function of knowledge management PMOs or compliance PMOs,
it is not a core function of consultative PMOs. Knowledge PMOs are
accountable for storing all sorts of project artifacts, such as project
schedule data, cost data, resource allocation, methods, KPIs, and lessons
learned, for the purpose of providing organizations with data that
turns into knowledge to assess and benchmark project performance.
Compliance PMOs are accountable for the delivery of projects. Hence,
understanding past performance and current project performance allows
the prediction of future performance, leveraging data from lessons
learned to improve project delivery time, quality, and expectations.
While consultative PMOs are accountable for providing project man-
agement standards, methodology, and templates for other departments
to use, this type of PMO is expected to maintain some data on which
decision-makers base their decisions.
Compliance PMOs can influence lessons learned, actions taken, and

project audits and evaluations. This may be difficult in knowledge and
consultative PMOs, because the PMO is not fundamentally responsible
for project delivery, nor is it required to maintain the level of knowledge,
such as lessons learned, KPIs, project performance, and so on. In these
cases, the business unit or the department responsible for delivery main-
tains project data.
Project Portfolio
The project portfolio function might exist within consultative PMOs,
but it is best suited in authoritative PMOs. Authoritative PMOs assume
ownership for organization projects selection criteria, priority, and
resources. They has the ability to audit practices based on suggested
benefit assurance, which no other type of PMO can perform due to the
role these types of PMOs play, which includes no PPM oversight. Table
1.2 summarizes PMO authority, types, and functions.
Common Functions to All

Levels of PMO Authority
Project Methodology
All PMOs are required to build methodology or methodologies based
on some industry standards. A common methodology is important,
since it provides a consistent method for performing the project work.
This, in turn, enables the PMO head to measure and benchmark success
and failure effectively and on an objective and shared basis. In North
America, PMI PMBOK is the most common methodology used to
manage projects. In the UK and Europe, PRINCE2 provides the most
common standard. Both methodologies have spread beyond their coun-
tries of origin to be used on projects around the world. Defining one
methodology might fit a small organization but may not fit a large one
that has various delivery standards. The support of multiple method-
ologies becomes crucial for flexibility and long-term sustainability. This
translates into a rapid execution of the strategy, where incremental wins
(deliverables) are released at least every quarter no matter how large of a
transformation program organizations are leading.
Project Reporting
Project reporting is an essential function that all PMOs share and must
undertake from the early stages of PMO implementation. Although the
details of what type of information is reported, the frequency of report-
ing, and how it is reported might differ, all project reporting reflects
project progress and highlights the parameters influencing project
success. For example, successful PMOs should implement some or all of
following set of reports:
• Standard project status reports that speak to project accomplish-

ments, schedules, budgets, risks, and issues. The PMO should also
prepare an action plan if any project has derailed.
• Program-level reports that look at independent and interdependent
projects and the impact of these initiatives on program success.
Indicators include budget, scope, accomplishments, and tracking
of program benefits.
• An executive dashboard or scorecard. The real time visualization
tool Kanban is one popular method. Although it has existed for
some time, organizations are using Kanban to determine just in
time (JIT) progress of projects. Another popular method is Key
Progress Indicator (KPI), which companies often publish on their
entire project portfolio for the whole company, where all perform-
ing and underperforming projects are visible and transparent for
all teams.
• An organization-wide transparency report that goes out as part of
annual C-level accomplishments to all those involved. It provides
time to reflect on results and lessons learned.
Reporting frequency should be weekly, monthly, or annually and should

be transparent and understood by the various levels of the organization.
Keeping it simple is the key to success.
Project Tools
For some organizations, introducing project management tools is the
last step to address in the people-process-technology paradigm. Other
organizations use technology as an enabler to promote collaboration and
teamwork. To allow teams to collaborate in real time and share their
thoughts, recent tools enhance productivity and measure progress. These
tools are becoming sophisticated enough to be used on mobile devices
(e.g. smart phones and tablets) to allow employees flexibility regard-
ing when and how to provide project progress, resource updates, and
share project artifacts. Regardless of how basic or sophisticated tools are,

they all need to be able to provide the PMO and the organization with
standard measures on project health checks, project progress reporting,
resource allocation, cost analysis, and so forth. Furthermore, a tool is
required to provide executives with a project dashboard reflecting the
entire portfolio and to provide project managers with automated and
effective ways to report on project progress, alleviate the burden of
manual effort, and provide efficiency and team collaboration on project
artifacts. Some of the most used tools today (not listed in any special
order) are: Microsoft Project, Clarity, Microsoft Project Server, HP
Project and Portfolio Management, and Plainview. More details on tool
implementations and options can be found in Chapter 3.
A summary of all PMO types, authority, and functions is shown in

Table 1.2. Common functions across the various authority levels
are highlighted.
Table 1.2 Illustration of PMO authority and related types and functions
Identify the Right PMO Scalability Model

Scalability is important in technology and in business. The underlying
foundation is the same: the ability for an organization to increase its
volume without negatively impacting its bottom line or disturbing its
performance. Scalability may include perspectives like functional scal-
ability and geographic scalability. The categories provided are used to
guide PMO leaders when determining the size of a PMO. The model is
not meant to be prescriptive. These are guidelines that will be explained
in detail, allowing the PMO leaders to use a combination of them to
determine their PMO scalability.
Project management is no different from technology or other business

domains. It requires scalability definitions and measures to understand
the level of structure and rigor required to enable both small and large
organizations to succeed in the area of project management.
Table 1.3, Table 1.4, and Table 1.5 show three examples of scalability
criteria and the sizing proposed to determine whether the PMO is large,
medium, or small and to help in the assessment and guide the scalability
ranking for a PMO within an organization.
Table 1.3 is an example of a project or program PMO mainly at a local

or national level. In other literature, it is also called a “basic PMO” or a
“standard PMO” (Kerzner 2004). This kind of PMO can serve a small
organization of 100–300 employees. The impact on business processes is
low, and it is mainly tactical in nature and tends to be local in geography.
This kind of PMO may or may not have project managers reporting
directly to it and has a limited number of projects.
Table 1.3 Illustration of PMO authority and related types and functions
Table 1.4 is an example of what is described as an “advanced PMO”

(Kerzner 2004) but which is a program or a portfolio PMO in nature.
This kind of PMO is expandable to a national and international geo-
graphic setting and serves medium-sized organizations of roughly 300–
1000 employees. The impact on business processes is high with external
impact to clients. This kind of PMO tends to report to a senior executive
within the organization and has direct responsibility for delivering proj-
ects. The number of project managers can be anywhere from 11–25, and
it may or may not have project managers reporting directly to them with
a limited number (20–100) of projects.
Table 1.4 Example of a program or portfolio PMO
Table 1.5 is an example of a CoE, which is also known by many other

names, such as “strategic PMO” or “enterprise PMO.” This kind of
PMO is large and serves organizations of over 1,000 at the international
or global level. The impact on business processes is high with an internal
impact to the bottom line and external impact on the client. This kind
of PMO tends to report to a senior executive or a C-level within the
organization and have direct responsibility for delivering projects. The
number of project managers can be anywhere above 25, and it may or
may not have project managers reporting directly to it with the number
of projects falling between 20–100.
Table 1.5 Example of a CoE PMO
After the three examples, each of the scalability categories will be defined
and explained separately. Note that none of these categories has meaning
in isolation. It is the combination of all these categories that determines
the PMO scalability model. A PMO identified as small may not stay
small. The guided scalability model needs to be revisited as part of PMO
sustainability to ensure that expansion of a PMO is portable into the
next levels. Below is a definition of each of the scalability categories.
Organization Resources
While the number of employees is not the only measure that deter-
mines how large or small an organization can be, it is certainly one of
the factors. Often, in demographic surveys that seek to find out where
participants come from and the size of the organization, a range is pro-
vided. For example, an organization with between 100–300 employees
is classified as small, while an organization with between 300–1000

employees is considered medium, and an organization with over a 1,000
employees is considered large. The scalability of a PMO is dependent on
this category and how many employees the PMO will support.
External Impact
The external impact refers to the impact on the organization’s clients
and how this affects the organization’s relationship with them. In some
cases, there may be a direct impact; such as when the client contrib-
utes directly to the product or services of the project organization. In
other cases, there may be an indirect impact, because the client is a con-
sumer of the organization’s products or services and thus benefits from
improvements to them. In other cases, the PMO may have no mate-
rial relevance to your working relationship. The scalability of a PMO is
dependent on this category and whether it will support external clients’
initiatives directly or indirectly. It does this directly by interacting with
a client’s PMO, if they have one, or working with the project teams in
collaboration. A PMO does this indirectly by supporting the projects for
its organization only, with other organizations providing updates.
Internal Impact
The introduction of a PMO may be designed to have a direct impact on
the organization’s bottom line, such as: performance, financials, brand,
and reputation. The scalability of a PMO is dependent on this category
and whether it will manage internal initiatives directly or indirectly. For
example, a PMO managing internal initiatives directly means the PMO
is employing project managers that report to the PMO and, as a result,
will have an impact on the way the projects are run internally. When
projects are managed indirectly, it means projects are managed by the
business units as they may have been before, and the PMO might have
less of an impact on internal project delivery.
Business Process Change

It is important to assess the impact of having a PMO on the organi-
zation’s business processes. One of the scalability elements of a PMO
is dependent on this category and whether the change in business pro-
cesses will be minimal, such as impacting how business units interact, or
substantial, such as an overhaul to current practices or introducing new
business units or consolidating other business units. In small or medium
organizations, the PMO creation or the PMO revitalization will have a
major impact on the resources, processes, and alignment of other orga-
nizational functions. These organizations may need to reestablish their
interaction model and current business processes. In large organizations,
the PMO creation or the PMO revitalization may or may not have a
major impact, depending on the type of PMO.
If the PMO is at the enterprise level, then the creation or the revitaliza-
tion of the PMO will impact the entire organization where the interac-
tion and functional model of the other functions will be influenced by
the type of work the PMO will carry out. If the PMO is at the depart-
mental or business unit level, then the creation or the revitalization of
this PMO might impact the particular business unit in which the PMO
resides with minimal impact on the overall organization, such as a large
organization with an enterprise PMO and a newly created business
unit PMO.
The enterprise PMO serves as the standard setter and the governance
monitor. The business unit will be delivery in nature supported by the
main enterprise standards, and whatever specific business unit changes
are required to run that particular business may be unique with minimal
impact on the overall organization. The enterprise PMO should assess
the degree of deviation from enterprise standards and advise the business
unit PMO with the required alignment if a misalignment exists.
Strategic Need
Organizations need to determine if the PMO is required to fulfill stra-
tegic directions or specific directions. Strategic PMOs include oversight
of portfolio management, strategic alignment across various business
units, and oversight regarding resource capacity. Specific PMOs can be
built around one project, for example, or to oversee and improve project
execution. In a small PMO, the need for strategic oversight is limited,
and the PMO may exist to solve delivery issues. In a large PMO, which
is targeted at the program or portfolio level, the strategic reach of the
PMO is high and is required to ensure a wide portfolio selection for the
organization and prioritization and alignment across all business units.
Geography
In terms of geographic reach, a PMO can be local, national, or interna-
tional. The geographic domain is an element of scalability that includes
a cultural complexity dimension that needs to be taken into account.
For example, a small PMO will support one department or a local office
within a company, while a national PMO will cross boundaries within
one country with oversight over all project work within the various
national branches of a company. International or global oversight can
happen only in large organizations where the PMO becomes the strate-
gic partner that goes across boundaries and influences the scalability of
a PMO. In some companies, the PMO starts as national, and then the
success is replicated and scaled up to a global level.
Reporting Line
Every organization needs to determine the PMO’s reporting line. A
PMO can report to a business unit lead, to a higher up executive, or to
a C-level executive, such as a CIO, CFO, or COO. The reporting line
reflects the PMO’s strategic reach and influence. For example, a small
PMO embedded in a business unit may have limited authority over or
impact on the organization versus a PMO reporting to a strategic office

or a CIO, which will have completely different authority and influence.
Responsibility for Project Delivery

It is important to determine the responsibility of the PMO and whether
a PMO will have direct responsibility for project delivery, such as assign-
ing project managers and overseeing the project, or indirect responsibil-
ity for project delivery, as in process ownership and reporting on project
health checks.
Number of Projects
The number of projects within an organization signifies the size of that
PMO. While the number of projects is not the only measure that deter-
mines how large or small a PMO can be, it is certainly one of the factors.
In PMO surveys, a range of project numbers is provided to find out if a
PMO should classified as small, medium, or large. For example, a PMO
that handles anywhere between 1–20 projects is classified as small, while
a PMO that handles between 20–100 projects is considered medium.
Finally, at over a 100 projects, a PMO is considered to be large. The scal-
ability of a PMO is dependent on this category and how many projects
the PMO will deliver.
Number of Project Managers

The number of project managers needs to be determined, since it ties
in with the PMO responsibility for direct project delivery. Knowing the
number of project managers ranks the PMO as small, medium, or large,
because the PMO has to manage project managers’ careers and assign-
ments of projects based on skillset.
For example, a PMO that oversees anywhere between 1–10 project man-
agers is classified as small, while a PMO that handles between 11–25
project managers is considered medium. Finally, at over 25 project man-
agers, a PMO is considered large. The scalability of a PMO is dependent
on this category and how many projects managers to whom the PMO
needs to assign projects, support, and train.
Global PMO vs. Enterprise PMO

“Global PMO” and “enterprise PMO” are two terms that have been
used interchangeably. While some organizations refer to their PMO as
the “enterprise PMO,” others refer to it as the “global PMO.” However,
the two are not totally synonymous. A global PMO must be at the
enterprise level, while an enterprise PMO need not necessarily be at the
global level. Some organizations describe their PMO as an enterprise
PMO, because it reports directly to the CEO or a C-level executive and
may be part of the CEO office. In other organizations, the PMO crosses
geographical boundaries, which implies that a PMO is both global and
enterprise-wide. A global PMO determines the geographic outreach,
while an enterprise PMO determines the level of the PMO relevant to
the functions and its position within the organization chart.
Similarities
Global and enterprise PMOs are both large, which implies cross-
functionality, and are often compliance- or audit-driven. Project man-
agers report to the PMO directly or under a sub-function within the
PMO that may be called “resource management” or “resource CoE.”
The resource management function assigns project managers based on
project type, size, project manager skillset, workload, and availability.
Differences
An enterprise PMO can be local within a geographic boundary. It can

also exist within one branch of the organization. A large company that
has branches might have multi-level enterprise PMOs serving different

goals and management lines as well as various budgets and portfolios.
Other PMO Functions

A number of other functions may be included or excluded from the
PMO depending on the needs of the organization. These include quality
risk management (QRM) and project portfolio management (PPM).
PPM Function
Portfolio management is a dynamic process that involves an organization
identifying the development projects that need to be executed for the
benefit of the business. This includes selection, prioritization, monitor-
ing, and changes based on any unforeseen opportunities that may arise.
The process encompasses periodic reviews and comparisons of historical
projects and requires go/no go decisions on an ongoing basis to allow
businesses to achieve their strategic goals (Cooper et al. 2006).
The benefits of adopting a disciplined approach to portfolio manage-

ment include:
• Optimizing the realization of benefits through the management of

initiatives as an integrated portfolio
• Valuing individual projects in the program portfolio against the
benefits they will yield to the business
• Resolving program conflicts with reference to the business strategy
• Prioritizing and allocating resources on the basis of trade-offs
between the business priorities
• Monitoring all active and proposed projects within a single
overall framework.
The two important PPM sub-functions are:
1. PPM submission and prioritization: When project submissions

and requests are gathered from various departments, these projects
are prioritized across the organization using previously defined cat-
egories to rank which projects to execute.
2. PPM monitoring and control: Once the initial submission and
prioritization has taken place, a process of monitoring and control
is required. This part of PPM involves ongoing project submission,
reprioritization, and benefit tracking. PPM change management
and financial control is crucial at this stage to identify stage gates
to projects and funding of each phase, to stop projects, or to repri-
oritize them on the PPM list of projects on the basis of changes in
strategic direction or economic factors.
QRM Function
The QRM or project audit is a function that assesses the quality of
project management deliverables and the processes, templates, and tools
used to secure these deliverables. It is an audit function involving the
content and the process that guided how the specific deliverable was
chosen or articulated. The QRM function often gets involved in the
lessons learned or performs quality checks based on the quality standards
that are already instituted.
Ideally, the audit function should be independent from the PMO so that
there is no conflict of interest in evaluating the PMO’s work. For smaller
organizations without an independent QRM function, the role may be
performed by an individual who is independent from the delivery func-
tion (i.e. someone who is not involved in the day-to-day project).
In summary, a PMO may vary in the number of functions it performs

depending on its complexity and maturity. Some of the main functions
expected of a PMO are:
• Project delivery
• Project manager education, training, and development
• Establishment of methodologies, processes, and supporting tools
to facilitate training and development
• Linking strategy with execution through portfolio management
Some of the benefits of a PMO are also worth repeating and emphasizing:
• Predictability
• Repeatability
• Measurability to track project progress
• Realization of portfolio benefits
Overall PMO tips

Whether you are working with a business-driven PMO or IT PMO,
whether it is enterprise-wide, local, or global, there are a number of basic
guidelines in the setup and build-out.
Keep It Simple
There is no harm in starting with a grand vision, but keep the execution
simple. In a number of cases, the PMO setup and build-out becomes
so complex that it is difficult to show immediate or incremental value.
If positive results take longer than executives expect, the PMO will
struggle to sustain the build-out. Aiming too high or building too fast
may prevent change from being instituted appropriately. Clearly, some
organizations will be able to take on more than others. Therefore, under-
standing the culture, environment, and success criteria of your organiza-
tion is key.
Get Your Priorities Straight

Start with people and culture, then processes, and finally the tools. A
number of PMO consultants sell “PMO in a box.” Assuming your PMO
can be a “plug and play” process is a mistake.
The human aspect (in terms of buy-in, education, and skillset at all levels
of the organization) is the primary key to a successful PMO setup and
build-out and ensures sustainability. The processes are the second key
element to successful build-out. Keep them small, and look for oppor-
tunities to grow and scale up. Tools are important to generate reports,
automate processes, ensure consistency, measure KPIs, track progress,
and collaborate on sets of templates and processes built. However, they
have limited value in managing the human factor and the early stages of
design and build-out.
Scalability
PMO creation should be scalable. Start small, but be alert to the need
to build on every component. Leverage the scalability model provided
earlier in this chapter as a guide to scalability criteria. The key to success
is to start small and keep building until the desired state is reached, start-
ing from PMO setup, PMO processes, tools, staffing needs, and ongoing
sustainability plans.
Executive support
Executive buy-in and ongoing support is pivotal to PMO longevity. The
survey in Chapter 5 shows how PMOs benefit from executive support.
In the survey, conducted as part of my Ph.D. study, one of the questions
was, “What are the reasons for PMO failures?” One of the top three
answers was “Lack of executive support.”
Chapter Summary
In this chapter, the reader was presented with the various types and
models of PMOs. Further, it covered the understanding between
project, program, and portfolio PMOs, the type of PMO authorities in
the industry, and the scalability models and their associated categories.
Other functions, such as PPM and QRM, were covered, and the overall
PMOLC was introduced. The chapter ended with some PMO tips for
the reader to consider.
CHAPTER 2:
PMO SETUP
Chapter Overview
The PMO setup phase involves a seven-step process. This chapter
explores the setup of a brand new PMO or the repurposing of an exist-
ing PMO, whether these are being completed as internal projects or with
the help of external consultants. The setup phase defines the organiza-
tion’s objectives in building a PMO, which are expressed as an approved
PMO roadmap that describe the activities and steps required to build
the PMO. This phase can be referred to as the “identification” or “assess-
ment” phase. The creation of a new PMO (e.g. in an organization that
does not have a PMO) requires that all PMO elements be identified
in order to establish the PMO roadmap. The assessment of an existing
PMO (e.g. in an organization that has a PMO but is looking to revital-
ize it) requires that all PMO elements be reevaluated to confirm current
elements or identify changes required by the organization’s leaders. Table
2.1 summarizes the steps required to set up a new PMO and an existing
PMO. Each of these steps will be discussed in depth.
Figure 2.1 PMO lifecycle – Setup

Table 2.1 PMOLC – Setup Phase
Newly Created PMO

The previous chapter explored PMO types and models, the differences in
PMO authority, and the potential functions for each type. In this context,
it is very important to understand the PMO reporting line, because this
will influence the setup process.
Step 1: Identify PMO Sponsorship

In some cases, it may already be apparent to whom the PMO reports.
In others, the head of the PMO or the expert involved is asked to assess
where the PMO reporting line should be. To ensure success of the
PMO mandate, it is important to have a sponsor for the PMO that will
support the PMO mission, resolve problems, and facilitate resolutions.
Executives have several options for setting up and building a PMO. For
example, they may choose to hire a full-time team to create the PMO
with one internal executive champion to oversee the setup process.
Alternatively, they may invite a consultant to assess the PMO setup
and build-out or hire new, experienced PMO staff to build it. A third
option is to employ an external specialist company who can set up, build
out, and run the PMO as a virtual PMO. There is no right or wrong
approach. All are viable options, and it is important for the organization
creating a PMO or the external entity assessing the organization for a
PMO to understand the culture, the drivers for creating the PMO, the
expectations for it, and the elements of success required.
Internal Hire
Organizations may decide to hire a PMO expert as an internal resource
to establish the PMO function or promote some of the current project
managers to help run the PMO function. The advantage of this
approach is that an internal project manager promoted into the role can
help shorten the learning curve in terms of understanding the organiza-
tion’s culture and structure. The disadvantage is that the skillset of the
individual, who may be a high-performing project manager, might not
match that required to build a PMO. Even amongst those who build
PMOs, there are those who are builders by nature and those who are
operational. Ideally, the two skills of building and operating should be
combined. This comes through years of experience in building PMOs as
well as a personal interest in doing both jobs.
The PMO setup can be projectized. However, the person working on

the PMO setup needs to have deeper skills than simply project man-
agement. Setting up a PMO requires someone who has worked at the
senior level of an organization, understands strategy and planning, is
well versed with the organization’s profit and loss, and has a number
of years of experience in setting up PMO practices. If someone within
the organization does not have these skills, then the organization can
either hire someone with these skills to lead the PMO setup or engage
an external consulting firm that has the requisite experience.
External Consulting
Organizations might not have any experience in PMO setup or build-
out and be unsure of what they should expect out of a PMO at first.
Therefore, there is an advantage to inviting a consulting firm to assess the
needs of the organization and provide the organization with market per-
spective, education, and the requisite options. An organization can use
the assessment to better understand what benefits they can obtain from
having a PMO and hire someone to set up and build it, or they may
invite the consulting company to proceed with the setup and build-out.
The main advantage to using consultants is the expertise they can

provide, which will help your executive team decide what is strategically
and financially feasible. Another advantage of working with consul-
tants is that it encourages an organization to focus on the needs and
issues within the organization with expert advice on the appropriate
PMO setup.
One real disadvantage when working with some consulting experts

is that an organization may find the sheer volume of paperwork and
analysis overwhelming. Organizations need to manage expectations and
oversee the consulting experts’ delivery to ensure what the organization
gets is aligned with the organization’s needs and that internal staff are
trained to manage and operate the PMO after the consultants complete
their work.
A times, organizations need the rigor that a PMO can bring but have
neither the capacity nor the skillset (and possibly not even the interest)
to create a PMO. These organizations may opt for a virtual PMO (i.e.
outsourced PMO services), which is different from external consulting.
While in external consulting, final operationalization remains in the
organization’s hands, outsourced PMO operationalization is done by the

vendor contracted to set up, build out, and run the day-today operation
of the PMO. The next section discusses advantages of virtual PMOs and
when that type of PMO is a viable option.
Virtual PMO
A virtual PMO is what is referred to in the literature as the “outsourced
PMO.” Outsourcing is being employed increasingly to achieve perfor-
mance improvements across the entire business. For example, one par-
ticular growth area has been the externalization of information technol-
ogy, with a recent report showing companies outsourcing 38% of their
IT functions to external providers (McIvor 2005).
Outsourcing has expanded beyond IT (and manufacturing) to include

project management and project management offices. Many companies
are already subscribing to Virtual PMO services, which are the result of
outsourcing services, especially within IT, which leads to PMOs in one
geographic location servicing multiple others (Santosus, 2003).
A virtual PMO option has particular advantages when the PMO is

outside of the core organizational functions or the organization does not
wish to take on full-time employees to provide the PMO service. One
advantage is cost reduction for smaller organizations that do not wish
to invest in infrastructure or resources. Another advantage is allowing
the organization’s internal resources to focus on core competencies and
the ability to coordinate various skills and integrate them into multiple
organizational streams.
One disadvantage of outsourcing is the reduction of staff in the main

organization, creating unemployment and transferring the jobs to the
outsourcing partner. Another disadvantage is the quality of work pro-
duced, although some organizations have gone around that and created
service levels and strategic alliances to ensure quality expectations

are met.
Step 2: Identify PMO Type and Authority

Chapter 1 explained the types of PMO and the authority associated
with each. One of the first critical steps in establishing a PMO involves
identifying the specific type of PMO and the functions associated with
it. Arriving at this definition requires an assessment of the organization’s
culture, because this will play an important part in the acceptance or
rejection of the subsequent PMO. This assessment should consider how
project management aligns with organizational strategy (i.e. the role of
project management within the business). It should also consider the
level of organizational adaptability to change, the organization’s pri-
orities and, most importantly, the clarity of their goals and the correla-
tion between these and the benefits of the PMO. By way of example,
Table 2.2 includes a compliance PMO and its proposed PMO types
and functions.
Given the decision to establish a PMO, an earlier assessment of the orga-

nization’s goals should have identified the need for the PMO and the
priorities it needs to address. For example, improving project delivery,
enabling better organization alignment of projects to organization goals
across all departments, or improving consistency of work between func-
tions, require an authoritative PMO. That authoritative PMO might be
a division PMO reporting to a particular department (e.g. an ITPMO
or a product PMO), or it might be at the enterprise level and have over-
sight and authority to make decisions on staffing, processes, methodol-
ogy and tools, as well as enforce compliance. To highlight this example,
Table 2.2 offers an example of PMO types and various functions they
can run under an authoritative PMO.
Table 2.2 PMO type and possible PMO

functions under an authoritative PMO
Step 3: Identify PMO Functions

After identifying PMO sponsorship, the next step involves defining what
functions are needed and the relative priority of these functions. Some
functions need to be built sequentially while others can be built in paral-
lel. An example of sequential function build is project methodology. The
methodology must be in place before project managers can be trained
to use it. An example of parallel function build is building the project
delivery process at the same time as building the reporting capabilities.
Step 4: Identify PMO Staff

Identifying PMO staffing needs should be done from both a short- and
long-term perspective. Eventually, the PMO will need a mixture of
staff, such as project analysts, process analysts, portfolio analysts, project
tools specialists, and project and program managers. For a start, a PMO
leader needs to be identified either by direct hiring, by promoting senior
program managers or portfolio managers internally, or consulting with
experts who are knowledgeable in PMO setup. A process and methodol-
ogy specialist will be needed immediately to help build or support the
processes and methodologies needed in the early stages. In later stages,
as the breadth of projects is identified, more project managers need to be

hired, as well as a project tool specialist who can support project manag-
ers in the use of tools and generate required KPIs.
Step 5: Identify Project Managers’

Reporting Structure
This step requires understanding the organization landscape. Should
project managers report to the business units only, to the PMO only, or
to both? The survey questions in Chapter 6 report that 30% of organiza-
tions’ project managers reported to the PMO while another 70% are split
between business and the PMO in different variations. To determine the
best reporting structure, it is important to ask the organization leaders
where they believe better alignment will be, ask the project managers
where they fit in terms of career advancement, and to understand the
PMO’s type. Only then can an organization determine where the project
manager‘s reporting structure should be. Smaller organizations tend to
have project managers within the PMO, because they are too small to
spread the project managers across the organization. Larger organiza-
tions have a mix of project managers reporting to the PMO, and these
work on the larger, cross-functional projects, while the business unit’s
project managers work on the departmental projects that are contained
within the business unit.
Step 6: Identify the PMO Interaction Model

It is important to understand how the new functions of a PMO will
interact with the rest of the organization. Some functions may view
the PMO as competition, threatening to take away responsibilities or
authority or dictate work processes. Setting the right expectations and
identifying the interactions between the PMO and other business units
facilitates better adoption of the PMO. Other functions understand how
the PMO will work and interact with other functional departments.
For every interaction, inputs and outputs are expected from each party.
These are summarized in Figure 2.2. For example, a PMO requires as
input the list of all initiatives from every business unit. In return, the
PMO outputs a consolidated list of all the organization’s initiatives.
Another example: business units input resources to staff a project, while
the output from the PMO is resource allocation and potential resource
constraint. The output from the PMO can be used as input to the busi-
ness units to reassign resources and reprioritize workload to achieve
resource allocation balance.
Figure 2.2 Sample of PMO services and its

relevant outputs to other business units
Step 7: Establish the PMO Roadmap

This step can only occur after all of the previous steps have been com-
pleted. The PMO roadmap should include all the assessments of the
current state, identify gaps in capabilities and the impact of these gaps,
and offer a proposals for solutions related to the identified gaps. A word
of caution: A PMO roadmap is bespoken to a given organization. There
may be useful elements and features that you can glean from other orga-
nizations and their experience of the PMO function. However, there is
no generic blueprint for this process. The PMO roadmap should detail
the structure of the PMO, the type, model, and various functions to be
built for the short and long term. It is also important to establish the
required reporting structure for supporting staff and project managers
and to define how the new function will interact with other existing
functions. Once approved, the roadmap will become the source for
enabling the plan through build-out and then execution. To see a sample
PMO roadmap, refer to Appendix B.
Existing PMO
Some PMOs grow stale and stop adding value, or the value declines over
time. If so, the PMO leaders or the PMO sponsor need to step back and
assess what went wrong and take corrective action. If assessment is done
frequently, organizations can avoid drastic overhauls to their PMO.
When these assessments are neglected, PMOs are often shut down,
transformed, or marginalized. Therefore, the steps for the existing PMO
are meant to go over the PMO authority, functions established, project
managers’ reporting structure, and the effectiveness of the current PMO
interaction with the organization. It can start by creating a survey to
get the pulse of the organization. If the feedback is marginal or people
are generally satisfied with the PMO, then no changes are required.
However, if the results are negative, the assessment is required. Checking
the pulse of the organization should be a structured, standard, and fre-
quent practice.
Step 1: Assess the Current PMO Sponsorship

An organization may already be running one or more PMOs. The assess-
ment outcome may call for the consolidation of PMOs that might be
redundant or the improvement of the current alignment between the
existing PMOs. Taking corrective action, along with the organization
changes, is the responsibility of the PMO sponsor, who needs to cham-
pion the flow of information to inform the PMO of changes in direction.
While assessing the current sponsorship is important in order to deter-

mine whether the PMO still has the support it needs to be vital to the
organization, sometimes changes in the direction of the organization
or to the role of the sponsor can impact PMO support negatively. The
PMO sponsor must be effective at all times by providing organiza-
tion feedback to PMO leaders to continue improving and supporting
the PMO’s mission in the organization. If strategic direction changes
the way the PMO should operate, the PMO leader needs to be made
aware so he or she can make the required adjustments. In the absence of
direction and guidance (i.e. sponsorship), a PMO can become stale and
disconnected from organization leaders. There are times when aligning
with the current sponsor might not be good for the longevity of the
PMO due to organizational changes. Hence, the PMO leader must be
front and center rallying for sponsorship from the executive committees
to ensure proper alignment and support.
Step 2: Assess Effectiveness of

Current PMO Type and Authority
The objective of this assessment is to determine if the current PMO type
and level of authority is still effective and, if not, what the proposed
action plan should be. The assessment can happen through hiring exter-
nal consultants to get a neutral view of the organization. In that case,
they need the PMO roadmap. In the absence of one, they need to survey
the organization executives, those that the PMO supports, and to whom
it provides services.
The assessment can be internal, where the PMO lead plays a survey role
and gauges his audience to see if the PMO, as it is today, is still viable.
If changes need to be made, then the recommendations should indi-
cate what type of PMO the current PMO needs to transfer to and what
authority changes need to be made. For example, upon assessment, the
outcome might be that the authority given to the PMO is making the
PMO more like a policeman with the authority to scrutinize all work
efforts, which is creating animosity. If so, the PMO needs to look into
becoming more consultative or more like a coach. The opposite may be
true, and the results show the PMO is not enforcing some of the stan-
dards. This requires that the PMO take a more authoritative tone toward
enforcing standards through rewards or other measures.
Step 3: Assess the Current PMO Functions

All of the current PMO functions need to be reviewed against the origi-
nal expectations. The assessing party, whether external or internal, needs
to compare the actual to plan to what is anticipated with each function.
For example, if the PMO roadmap called for three functions—process
development, project manager training, and project reporting—the
assessment should look at whether these functions exist and, if they do,
how they are performing. If one of the functions was overlooked—for
example, project manager training—it will have an impact on adopting
the processes and reporting accurately. This may impact the PMO per-
formance negatively. There may be times where the current functions are
working as expected but need to expand into new areas, such as develop-
ing automated capabilities to allow teams to collaborate. The PMO needs
to provide mechanisms to prioritize projects that are indicative of the
readiness of the organization to take on more through having the PMO
expand and perform the next set of expected functions. These functions
may not necessarily be on the roadmap or can be performed as part of

another phase, which this current assessment might be expediting.
Step 4: Assess PMO Staff Skillsets

Full assessments of all PMO staff need to take place to determine the
performance of each individual and skillset gaps across the same level
and across various levels. To achieve this assessment, an organization
needs to take an inventory of current staff skillsets (along with staff
aspirations), looking for evidence of staff past performance and profes-
sional development and assess if the staff has been delivering as expected
against the role expectations and relevant to the PMO roadmap require-
ments. Second, there needs to be validation whether the number of staff
supporting the PMO is sufficient and whether the skillsets available are
diverse enough to address the different types of projects.
The result of this assessment is rewarding performing staff and taking

corrective action with those who are not performing. The assessment
will result in defining the job family for project managers and PMO staff
as well as highlighting the career path progression. Employee satisfac-
tion is an area that requires frequent assessment. Neglecting to do so
will risk staff turnover and the stability of the performing employees in
the PMO.
Step 5: Assess Project Managers’

Reporting Structure
While step 4 recommended assessing project managers’ individual
skills, this step requires a completely objective assessor to determine the
effectiveness of the current reporting structure. The reason for a third
party assessor is that the PMO lead might be biased toward having the
project managers report to the PMO while other leaders with their
divergent agendas keep project managers reporting to their functions.
One organization may have started with all project managers report-
ing to the PMO while another organization may have started with all
project managers reporting to their business units. Some organizations
have hybrid models, whereby some project managers report to the PMO
while others report to their business units.
The assessment of an already established PMO needs to investigate

whether the current structure is still effective or propose a change in the
existing structure. If the organization structure is decentralized so that
business units run their own projects and each of these units has their
supporting technology and other related services, then the expectation
will be to have project managers report to these business units. If the
organization structure is projectized and all business units collaborate
to deliver products and services and the project managers manage across
the business units, then a centralized structure where project managers
report to the PMO is more appropriate. If the organization structure
shifts at any point, the assessment of the project managers’ reporting
structure needs to be revisited to ensure alignment effectiveness.
Step 6: Assess Effectiveness of

Current PMO Interaction Model
In this step, the assessment of the interaction model effectiveness should
be under review in an existing PMO. This assessment will include going
through all inputs, outputs, and defined interactions with other business
units and validating whether the practice in place is valid or requires an
update. Sometimes, organization transformations introduce new busi-
ness units or eliminate existing business units. This impacts the PMO’s
interaction with these new business units, and the PMO will risk effec-
tive support if the services are not reassessed.
Step 7: Reestablish the PMO Roadmap

The PMO roadmap involves documenting all the assessments and all the
results to establish the guidance to carry on and execute. The objective
of the assessment is not to carry out the work, but to ensure agreement
on the assessment results and confirm required changes. The difference
in this roadmap from the newly developed PMO is that the roadmap
resulting for assessing an existing PMO needs to take into consideration
the current practice, identify the gaps, and recommend an execution
plan (i.e. an action plan) that is carried out in the build-out phase.
Chapter Summary
This chapter explored the setup of a brand new PMO or the repurposing
of an existing PMO, whether these are being completed as internal proj-
ects or with the help of external consultants. The setup phase defines the
organization’s objectives in building a PMO, which are expressed as an
approved PMO roadmap that describe the activities and steps required
to build the PMO.
CHAPTER 3:
PMO BUILD-OUT
Chapter Overview
The build-out phase will, by definition, depend on the success of the
delivery of the setup phase. The setup phase can be treated as planning
the work, while the build-out phase is executing on the planned work.
Since the PMO helps the organization structure projects and deliver
them, the PMO build-out needs to be planned and executed as if it were
a project. The complexity of the PMO build-out is such that, although
it needs to be treated like a project, an operational plan as part of the
project plan will also be needed. In other words, as PMO functions are
rolled out, the organization should already have a plan and be taking
action to support its ongoing improvement, support, and sustainability.
Setup and build-out of the PMO are ongoing rather than discrete pro-
cesses. Table 3.1 summarizes the steps required to build out a new PMO
or reestablish an existing PMO. Each step will be explored further in
this chapter.
Figure 3.1 PMO lifecycle – Build-out

Table 3.1 PMOLC – Build-out Phase
Newly-created PMO
Step 1: Create the PMO Execution Plan

This is the first step in the build-out phase, which links to the roadmap
that was the output of the last step in the setup phase. While the roadmap
depicts the blueprint for a PMO build-out, the execution plan depicts
the implementation plan with all the activities that need to be identified.
The execution plan identifies how these components will be built and
the timeframe it will take to complete, validate the resource needs, and
manage the cost of the build-out. As the execution plan is taking place,
as part of executive status reporting, the head of the PMO must always
confirm the direction and the validity of what is being delivered with
the PMO sponsor and the executive team that have funded and sup-
ported the PMO’s existence. The head of the PMO must have insight
into the changes going on within his or her organization and how they
may impact the PMO build-out. Organization executives must also be
aware of any new industry trends and challenges that could affect PMO
implementation, either positively or negatively. For example, if the orga-

nization is building a PMO that has consolidated business functions as
part of realignment and organization transformation, it will impact the
interaction model of the PMO, which needs to be revisited to determine
what was documented in the setup and whether it still holds or needs to
be changed.
Step 2: Build a Methodology

The overall goal of building a methodology is to provide consistent and
standardized methods for the project lifecycle in terms of how projects
are planned, executed, monitored, and closed and, further, to establish
governing policies and procedures required for a PMO to measure and
ensure compliance. One of the core roles of a PMO is to establish and
adopt a standard methodology that contains all of the required templates
and guidance to allow improved project delivery.
In a newly established PMO, and depending on to whom the PMO

reports, the PMO may need to develop and support a number of meth-
odologies. Starting with an industry standard project framework, such
as PMIs, five process areas (initiation, planning, execution, control, and
close) will offer significant benefits. Having an industry standard saves
reinventing the wheel and offers an industry benchmark against which
the organization can measure itself.
Templates need to be developed only after methodology has been

selected to ensure alignment with the methodology requirements.
Starting small is a major win. Many PMOs try to achieve too much, too
fast and end up stumbling on rollout and measuring results. As a result,
it takes longer to wait on all methodologies to be in place to start execut-
ing. In order for those building methodologies to construct an essential
foundation and then build on it for success requires pilot group imple-
mentation, especially for large organizations, where it is important not
to disrupt projects in the midst of execution. An operation plan/action
plan needs to be in place to ensure what is being built can be used, con-
sumed, and measured. It is important to focus on the use of templates
and their contents and the quality and applicability of the templates
and their contents with frequent revisions for updates corresponding to
changes in processes and procedures.
Step 3: Build Processes

The overall goal of building processes is to complement the methodologies
in place and to provide step-by-step instructions on how to use and run
those methodologies. An organization may end up with a set of processes
complementing the many methodologies of choice. For example, if an
organization uses PMI methodology, the process will be different from an
organization that is ITPMO in nature that chooses to adopt RUP. One of
the roles of the PMO is to build processes and their associated procedures
and sub-procedures. For example, the process for change management
should include the type of change documented, the template to hold the
change and the escalation procedure, including iterations, reviews and
sign-offs associated with it.
An operation plan/action plan needs to be in place to ensure what is

being built can be used, consumed, and measured. A more in-depth
discussion on operationalizing processes will be covered in Chapter 4.
Step 4: Implement Tools

The overall goal of implementing project and portfolio tools is to auto-
mate and support the methodology and process adoption through the
implementation of tools that will support portfolio management and
project management efforts. The PMO’s role in portfolio and project
management tools implementation is to define, implement directly or
through vendors, coordinate internal efforts, train organization staff,
pilot the tools before mass rollout, and finally, plan the ongoing opera-
tion of tools for portfolio, project, and resource management.
Baseline and standards requirements must be achieved to determine

what work is required (this includes technology needs, such as hardware,
software, and licenses), and how it will be performed (this refers to the
configuration and how much of the tool will be used when, planning
all activities in a project schedule). An organization must have its pro-
cesses and methodologies established before implementing any project
tool. Many tools today are at an advanced level for project and portfolio
maturity and come with a tailored implementation plan that can act as
a catalyst to change within an organization (i.e. influence process align-
ment, enhance reporting, and improve collaboration).
Two assessments need to be performed. First, identify the readiness of

the organization project management processes and the maturity of
the methodology and success criteria requirements to implement the
tool. Second, identify requirements pertaining to resources (hardware,
software, infrastructure, network, and security) and the types of tools
required, since there are a variety on the market, and finally the ongoing
operation support. Whether the work will be performed internally or
externally to the organization, SME with expertise in tools deployment
and process alignment are keys to successful implementation and assur-
ance to smooth, ongoing operational support.
Example of well-known tools include MS Project, a widely known project

scheduling tool, in addition to other collaboration tools, like Enterprise
risk management, reporting tools, and document repository. These tools
should be flexible and serve the various organizational needs. Some orga-
nizations may choose to implement and host the solutions with support-
ing staff from technology and vendors. Other organizations may choose
a SAAS (software as a service) model, which allows organizations that
lack the capacity to have their solution supported by a third party. The
decision whether to host tools internally or externally is dependent on
the organization’s security, budget, structure, and resources.
Step 5: Build Other PMO Functions

This step executes the functions that have been identified during
the setup phase in addition to the main functions shown in the steps
above—process, methodology, and tools. Further, it builds what other
functions the PMO is required to build and in what timeframe. For
example, if one of the required functions is project manager develop-
ment, then the PMO head must identify the inputs and outputs, as in
Table 3.2. Further, the PMO must execute the development plan by
improving the baseline skillset, progressing project managers’ careers,
and retaining them through work assignments that reward their profes-
sional advancement.
Table 3.2 Example of PMO function inputs and expected output
The overall goal is to encourage continued development and improve-

ment in the core skills and competencies of project managers to achieve
a higher performance, thus helping to ensure a successful project man-
agement career path. The PMO’s role for people is to build a career path
for project and program managers by defining required competency
profiles at the various maturity levels of a project manager. Additionally,
the development of the PMO’s capabilities can help determine how
the PMO can use these profiles to evaluate and predict performance
of all project and program managers as part of an organization’s

annual appraisals.
An assessment of the project managers’ skills can be achieved through

understanding their background, their current work assignments, and
their previous project management experience, certifications, interests,
career goals, and so on. Whether through structured meetings, surveys,
questionnaires, or even a combination of these approaches, an organiza-
tion should establish an inventory of its human assets. This assessment
will provide an understanding of the strengths and weaknesses of each
individual and provide the organization with the necessary informa-
tion to determine the areas for improvement and the steps that need to
be taken to increase the individual’s skill level so as to improve project
performance. Once an assessment is complete, the PMO produces an
operation plan for improvement.
Step 6: Build the Interaction Model

While in the setup phase, the interaction model should have been
identified. This step ensures that the interaction model is implemented
and acted upon. The build-out task is to execute on the defined model
and ensure that the flow of information and services from each and
every business unit into and out of the PMO, including all inputs and
outputs, are happening as per the agreed upon interaction. For example,
the PMO interacting with the finance unit will need input on the annual
project portfolio budget allocation and classification and whether it is
capital or expense. The PMO and finance department should collabo-
rate on classification of these initiatives in terms of organization ranking,
resource requirements (internal and external), financial constraints, and
the timeliness of PMO reporting. The outputs from the PMO consist
of project financial control on actual spending in terms of hours and
cost, priority of execution, and whether projects have been cancelled or
terminated, to assess financial benefit realization. For a detailed copy of
the interaction model template, refer to Appendix A.
Step 7: Build the Governance Model

The overall goal of establishing a governance model is to provide organi-
zation transparency to the decisions being made. Governance structure
ensures that directions are provided to guide the decisions that need to
be made and outlines who is responsible for making these decisions and
the process of approval or hierarchy that is required to ensure a decision
was made after all levels of reviews were complete. Governance is defined
as the creation of a project’s organizational structure (Carver 2000).
Doughty and Grieco (2005) use the term “governance” to refer to

control processes and procedures used to control and direct the actions
of an organization and to determine who is held accountable for these
actions. Selig and Waterhouse (2006) view governance as a collection of
management, planning, and review processes as well as the associated
decision rights that enable the organization to determine and establish
performance metrics, thus formalizing and clarifying their responsi-
bilities of oversight and accountability. Klagegg et.al (2008) show that
establishing governance frameworks are important to securing transpar-
ency and control and clarify the role of the sponsor.
Governance, as it applies to projects, should be structured in a way that

aids the organization’s decision-making pertaining to projects. The flow
of information regarding status, issues, accomplishments, and outstand-
ing tasks should be guided through defined layers, as in the example
in Figure 3.2. At the bottom, Figure 3.2 shows the most fundamental
layer of project delivery, which consists of project work streams led by
project managers, leading to the middle tier, which may consist of the
PMO, the project steering committee(s), and organization product or
service delivery in charge. Then, in the top tier, is representation at the
organization level, depicted by strategic oversight, which may represent
the C-level in some organizations or other senior executives that may
consist of various boards.
Figure 3.2 Conceptual model of Possible Project

Governance model within an organization
Existing PMO
Step 1: Create a PMO Execution Plan

This is the first step in the build-out phase, which links to the roadmap
that was the output of the last step in the setup phase. While the
roadmap depicts the blueprint for a PMO build-out, the execution plan
depicts the implementation plan with all the activities that need to be
carried out. The execution plan identifies how these components will be
built and the timeframe it will take to complete these activities, validate
the resource needs, and manage the cost of the build-out. While execu-
tion is taking place and the various functions are being built and staffed,
the head of the PMO must always confirm the validity of what is being
delivered with the PMO sponsor and the executive team that funded
and supported the existence of the PMO. The head of the PMO must
have insight into the changes occurring within his or her organization
and how they may impact the PMO implementation. He or she must
also be aware of any new industry trends and challenges that could affect
PMO implementation positively or negatively. For example, if the orga-
nization building a PMO has consolidated some business function as
part of an overall realignment and organization transformation, it will
impact the interaction model of the PMO, and the activities between
these functions and the PMO will need to be revisited to determine the
deviation from what was documented in the setup phase.
This first step ensures that the outputs from the PMO reassessment in
the setup phase have been approved and agreements on updates and
changes have been confirmed. A new implementation plan is needed to
carry out all approved activities. There is no difference in terms of the
structure and expectations from the execution plan perspective between
a newly established PMO and an existing one. While in the newly estab-
lished PMO the execution plan is laying the foundation and building
a function, in the existing PMO, it is changing a particular practice by
adding, changing, or eliminating a component.
Step 2: Update Methodology

The first step involves ensuring that a standard methodology is in place.
Then, an assessment is required to determine whether the current meth-
odology that is in place is sufficient for what needs to be accomplished. If
the outcome of the assessment is that the methodology used is not ideal;
it may be more appropriate to rebuild the methodology. For example,
if a PMO has a mandate to build an organization methodology, which
in this case is PMI PMBOK, and the role of the PMO has expanded to
include IT delivery, a new methodology, such as Agile, will be required.
The PMO needs to take on the methodology if it is already in place
and assess embedding the various methodologies and how will it support
them. For example, if Agile is requested but has not been implemented,
it is a bigger task. On the one hand, the PMO needs to look at imple-
menting the new methodology and follow the steps of a new build-out
of a methodology. On the other hand, the PMO still needs to assess how
to manage the suite of methodologies going forward and the mecha-
nisms in place to support each methodology. The outcome may result
in Agile SME resources building and supporting the new methodology,
training for IT staff on the new methodology, and expanding resources
to support and coach in Agile methods.
Step 3: Update Processes

In this step, after an assessment of process group gaps, the changes
and updates to these processes should be identified, prioritized, and
implemented. The PMO should be the place that houses the processes
that capture the information flow and describes the steps to executing
a workflow. Examples of main process areas that need to be examined
include: risk management processes, lessons learned processes, and
change management processes. For example, if the change management
process is to be updated, an assessment is needed to determine whether
change management is documented formally and relevant templates
and guidance are available. Also, determine whether this process is fol-
lowed, and identify the gaps in documenting or in following the process.
Finally, it needs to be determined whether failure to follow the change
management process is due to lack of education and understanding or
resistance. Depending on the assessment, an action plan needs to be put
in place to address these gaps. This may require executive support in
enforcing compliance with set standards, or it may simply require more
education and training on the use and expectation for the change man-
agement process.
Step 4: Improve Effectiveness of Tools

In this step, assessment of current tools is required to take place after
assessment of processes to ensure that change in the process will impact
the tools usage and not the other way around, where a change in tools
capabilities would result in process group gaps. Tools improvement
happens in two ways:
• First, the tool’s implementation is integrated tightly with the pro-

cesses; hence, the magnitude of flexibility is lost, and changes in
the tools are disruptive and discouraged. If the opposite is true, and
the tool is open-ended without any protocol policies and proce-
dures that govern the checks and balances of its use and standards
and conformance to standards, it can be an issue.
• Second, the way the tools are being used to generate effective
reports, risks, issues, timesheets, resource demands, and so forth.
There are a large number of tools on the market, each with its
advantages and disadvantages. A great advantage would be a tool or
tool set that integrates and interfaces with other applications and
with organization processes. Assessment of the current tools in use
is crucial to understanding and fully exploring tools’ capabilities to
be able to extend, expand, or build upon.
Step 5: Realign Other PMO Functions

This step defines how other functions line up with the methodology,
process, and tools. For example, if the project manager development
function exists, the PMO should ensure a regular and ongoing assess-
ment is performed. An assessment of the project managers’ skills can be
achieved through understanding their background, their current work
assignments, and their previous project management experience, certi-
fications, interests, career goals, and so forth. Whether through struc-
tured meetings, surveys or questionnaires, or a combination of these
approaches, an organization should establish an inventory of its human
assets. This assessment will provide an understanding of the strengths
and weakness of each individual and provide the organization with the
necessary information to determine the areas for improvement and the
steps that need to be taken to increase each individual’s skill level so as to
improve project performance.
If this function doesn’t exist, it might be prudent to look into creating

it to ensure that it fits into the current PMO structure, organizational
culture, and funding support required for the PMO. Similarly, other
functions within the PMO need to be assessed and may require realign-
ment if these functions exist and reassessment if they are introduced as
a result of PMO expansion, evolution, and if improvement needs to be
considered. For example, a PMO might be lax on reporting. This means
reports have to be established, as well as understanding of KPIs to allow
the various layers of the organization to make decisions. In another
example, a PMO might be missing transparency or visualization of some
reports, or maybe the reports go to executives but not to senior directors
below the executive level, or vice versa. As a result, realignment of the
reporting function requires identifying who needs these reports, when
they need them, and what decisions and actions result from the report-
ing function. Once an assessment is completed, the PMO produces an
operation plan for continuous improvement.
Step 6: Revitalize the Interaction Model

This step requires revisiting the current interaction model. First, an
assessment is needed to determine whether the interaction model has
been active and the PMO has been operating based on the defined
inputs, outputs, and required elements in place. Second, it must be
determined whether the interactions and collaborations between all
business units and the PMO have been taking place according to the
documented interactions and if any required changes due to organiza-
tional change have been reflected and acted upon.
In either case, the assessment will determine how wide or narrow the
gap is between interaction flow and current inputs and outputs. If a gap
exists, then a plan is required to address the revitalization exercise, where
buy-in from other departments is vital. Approval on interactions and
commitments and accountability exchanges is crucial to the success of
the PMO and to a healthy relationship in an organization.
Step 7: Improve the Standards

and Governance Model
This step involves revisiting the current governance model. It includes
the build-out of policies and procedures and the revitalization of current
templates based on organizational dynamics consistent with the estab-
lished organizational structure and culture. Standards and governance
should work hand-in-hand with existing standards, and governance
should enforce the standards. Some of the questions that need to be
asked include:
• Are performance standards in place?

• Are the performance measures adequate?
• Does the existing governance model support and enforce the
set standards?
If the answer to any of these questions is “no,” then standards need to

be redefined or measures need to be addressed. Perhaps the issue is not
in the set standards but in the authority to enforce these standards (i.e.
governance). The governance model needs to take into consideration
enforcing the organization standards even if it means changing bad
habits and dealing with behavioral issues. The PMO should have execu-
tive support to set the standards and the ability to enforce them.
Chapter Summary
This chapter explored the build-out phase of a brand new PMO or the
rebuilding of an existing PMO, whether these are being completed as
internal projects or with the help of external consultants. While the
setup phase was to plan the PMO roadmap, the build-out phase executes
on the planned roadmap. The complexity of the PMO build-out is such
that, although it needs to be treated like a project, an operational plan as
part of the project plan will also be needed.
CHAPTER 4:
SUSTAINABILITY
Chapter Overview
The build-out phase depends on the success of the setup phase.
Similarly, the sustainability phase is dependent on the success of the
build-out phase. The success in creating a function or a department is in
the longevity of that function and the value this function adds through
day-to-day operation to ensure sustainability. The journey of setting up
and building a PMO is half of the work. The rest of the work is in opera-
tionalizing these functions with day-to-day work, ensuring continuous
improvement plans leading to sustainability of the PMO organization.
This chapter will explore what it means for a PMO to sustain opera-
tion and continue the improvement journey. PMOs are concerned with
delivering the right projects and delivering these projects correctly. For
that to happen, the PMO needs to have a plan demonstrating to its
executive sponsors and the broader organization that improvements are
throughout time.
Figure 4.1 PMO lifecycle – Sustainability

Sustainability Principles
Sustainability principles call for social-oriented, economical, and eco-
logical systems. These systems can be for the midterm or the long term
and can span from local to global. The most notable is the notion of
value-based, which is considered the foundation for sustainable project
management (Gareis et. al 2011). Another definition for the PMO that
emphasizes value add is as follows: “The PMO is a critical organizational
entity that adopts a variety of roles and structures but should be focused
on adding value to an organization and its customers to achieve the
desired organizational performance” (Karkukly 2010, p. 55).
From the definition above, the PMO should be adding value to its orga-
nization and the organizations it services, i.e. customers’ organizations.
A more formal definition of value added is that: “Value added refers to
‘extra’ feature(s) of an item of interest (product, service, person, etc.)
that go beyond the standard expectations and provide something ‘more’
while adding little or nothing to its cost.”1
Bowman and Ambrosini (2000) introduce two dimensions to value

add. First, that human resources is a dimension of an organization and
how employee performance contributes to organization profit/success.
Second, that customer perception of the received value is based on the
value capture.
To focus on establishing value add dimensions, the human resources

value add and the customer value add will be explored along with the
various elements that ensure sustainability in each dimension. Further
consideration will be given to the risk-management factors that influ-
ence the customer and HR value add measures.
1 “Value add,” Wikipedia, accessed date, wikipedia.org/wiki/Value_add. June 2014

Human Resources Value

Following Maslow’s theory, human resources are motivated differently
depending on the stage of value hierarchy that can be summarized into
food, shelter, social, economical, and finally self-actualization. Employees
are motivated through financial incentives and achieving self-fulfillment
through challenging assignments, the employer’s respect, and career pro-
gression. Ultimately, to generate performance improvement with indi-
viduals, employees need to be motivated, and this motivation reflects in
improving their work by minimizing issues and improving efficiencies,
leading to continuous improvements. These performance improvements
involve HR factors, portfolio factors, and delivery factors, all of which
are described below:
Human Resource Factors

• Trusting employees to share organization leaders’ goals
• Empowering employees to execute on these goals
• Improving employee skillsets
• Promoting and rewarding for value-add work
Portfolio Factors (Initiative Alignment)

• Align and prioritize initiatives based on organization’s value
• Define projects with value add criteria
• Communicate the value add to the organization
• Embed the value add (especially for a project-based organization)
into goals and objectives
Delivery Factor
• Improve estimation through standardization
• Monitor and control scope and schedule

• Identify delivery success criteria, as seen by the organization leads
• Identify value add from delivery as seen by customers
Figure 4.2 HR value factors
An example of combining the HR factor, delivery, and portfolio, leading

to performance success, starts by ensuring the human resource aspect is
provided with the tools and standards required to help it. Invest in train-
ing the project managers in the project management profession as well as
on the job, and allow these project managers to lead projects that align
with their skills and experience. Hold these project managers account-
able to using the set standards in place. In absence of set standards,
reward those who standardize and facilitate the work for the project
team. Embed the value add measures within a project by identifying

what is required from these project managers to consider the project
successful (i.e. identify success criteria of what is considered as meeting
expectation, exceeding expectation, or below expectation). Embed
these measures into their performance evaluation, stating the reward
for meeting or exceeding expectations as well as the penalties from not
meeting these measures. This is not a one-time exercise. Improving on
it and reflecting on how to motivate the human resource dimension
more effectively reflects on continuous improvements for the PMO and
increases the performance of the individuals and of the function.
Customer Value
(Hoque et al. 2005) introduced Michael Treacy and Fred Wiersema who
have developed a model that defines leading companies and their rela-
tionship with their customers that focuses on three types of disciplines:
• Customer intimacy: being close to the voice of the customer and

having intimate knowledge of their needs, which drive customized
solutions to each that gain their loyalty
• Operational excellence: focusing on providing customers with a
combination of quality and low price and being able to maintain
services 365 days a year
• Product leadership: achieved though innovation and develop-
ment of products that elevate performance limits.
The PMO will need to align with its organization on the type of cus-
tomer value model the organization is required to satisfy. To measure
the value add, both quantitative and qualitative measures are required.
Quantitative measures can be achieved through customer relationships
and measuring their satisfaction through customer surveys, one-on-one
meetings, and town hall meetings that address wider customer needs.
Qualitative measures can be achieved through ensuring that the company
is customer-focused and that these customers are receiving the quality

factor, the time delivery factor, and the cost factor, as described below:
Quality Factor
• Ensure delivery of product or service is error-free
• Ensure quality measures and improvements are in place
• Ensure commitment to quality when issues arise
Delivery Factor
• Receive product and service on time
• Submit requests to change on time
• Communicate delivery success criteria to set correct expectation
• Identify value add from delivery
Cost Factor
• Receive cost-effective product or service
• Ensure the cost of running product and service is competitive
• Value is demonstrated through cost but also by fixing errors or
improving current offering
• Assess cost of changes and improvement in product or service
Figure 4.3 Customer value factors
An example of combining the quality factor, the delivery factor, and the
cost factor leading to customer satisfaction starts with setting and com-
municating the right expectations to the customer. Over promising and
under delivering will impact the delivering organization’s reputation.
Delivering a product with errors and unavailability of timely support
will jeopardize the relationship and lead to unsatisfied clients. Being
competitive on cost and ensuring that the organization’s customers are
getting more value out of the product or service relative to the cost
will give customers a competitive edge in their market. The PMO that
understands how to improve its sustainability journey will understand
these three customer value factors and will ensure immediate focus on
them, whether the customer is internal to the organization, external, or
both. Improving timeliness and quality of delivery and monitoring and
controlling the costs are key areas that the PMO will help its organiza-
tion to achieve, a value-add service that reflects in customer satisfaction.
Risk Management Factor

It is prudent to give further consideration to the risk management
factors, because they have impacts on the HR and customer value add
measures, either negatively or positively. Positive impacts will be received
well. Nevertheless, the organization should document the triggers and
outcomes to ensure repeatability. The negative impact, however, needs
to be considered carefully through identification and analysis of these
risks and having a plan to address them in order to sustain the HR and
the customer value add. Below are the risk factors that influence HR and
customer value.
HR Risk Factors
• Business model risk: Ensure that the PMO model in place is
robust and addresses organizational needs.
• Alignment risk: Ensure alignment of project resources to the set
processes and standards regardless of whether employees or depart-
ments report to the PMO or not.
• Integration risk: Ensure integration of processes across the orga-
nization through understanding current interaction model.
• Governance risk: Ensure governance that guarantees a timely flow
of information and enables timely decision-making.
Customer Risk Factors

• Competitive risk: Provide a product or service that is a leader in
its kind, offering the customer organization and product organiza-
tion a competitive advantage in the market.
• Investment risk: Ensure investments in products and services align
with customer needs and that the outcome is cost-competitive.
• Governance Risk: Ensure governance is in place through CRM

and SLA to improve response time and ensure timely information
is reached from, and to, the customer’s organization. It is impor-
tant to note that internal governance should be structured in a way
that it is a foundation for customer governance and that one does
not conflict with the other.
The second focus will be on the risk triggers that are associated with these
factors. These are summarized below in two categories: identification and
action taken. Regardless of risk factor, the risk identification and action
plan process will be similar.
Risk Identification Triggers

• Ensure that risks are identified, classified, and prioritized
• Assess and address the risks and assign a severity and impact, e.g.
low, medium, high
• Know whether the impact on the HR or customer value add is
direct or indirect
Risk Undertaking
• Define alternatives to address the risks and their impact
• Define mechanisms for escalation and reporting
• Take action and execute to ensure there is minimal impact to HR
and customer value add
Figure 4.4 Summary of value add dimensions,

factors, and influencing triggers
PMO Sustainability
The sustainability phase involves a seven-step process from start to
completion. The process considers the sustainability after or during the
build-out of a brand new PMO or takes into consideration the sustain-
ability of an existing PMO. This phase can be referred to as the “opera-
tionalization phase,” “ongoing support,” or “continuous improvement.”
Table 4.1 summarizes the steps required to sustain a PMO. Each of these
steps will be discussed in depth.
Table 4.1 PMOLC – Sustainability
Newly created PMOs

Step 1: Sustain Reporting Performance
This step assumes that reporting functions have been built already. Any
effective PMO reporting function contains the following two elements.
Process
This includes how often and when reports are generated, what form they
take, who receives them, how the reports influence the organization’s
decision-making processes, and how they enable action. The focus is on
measuring the process itself and how it is being followed to achieve the
end result, assessing its level of complexity, and adapting the right action
to ensure its effectiveness.
Content
This includes what data is needed to be captured and why and how it is presented
Projects are notorious for the amount of data they generate, so it is
important to find ways to streamline information on the project statues
with an appropriate dashboard for executives and well-considered KPIs.
Since organizations and their requirements change, KPIs cannot be
“one-size-fits-all. Therefore, it is important to anticipate mechanisms for
changing and adapting the organization’s reporting function and plat-
forms, as required
For the PMO to achieve continuous improvements, KPIs need to

present various details and levels of information catering to all organi-
zation layers, detailed KPIs when needed, and high-level KPIs at other
times, striking a balance through identifying initial reporting needs, and
more so, the ability to keep updating it based on evolving needs.
Step 2: Sustain Support of PMO Tools

This step assumes that project and portfolio tools have been built already.
Any effective PMO tools support function is comprised of the following
two elements.
Usability
The easier the tool is to use and navigate and the greater the availability
of guidance and support, the more often the tool will be used. In other
words, the tools should provide project managers, team members, and
PMO administrators with ease of use and the ability to interact with
these tools with minimal system issues. Tools usability is correlated with
the level of adoption of these tools. Successful PMOs know the key to
adoption of a particular tool is the ability of that tool to be user-friendly
and have simple interfaces that provide power users (project managers
and PMO administrators) and casual users (other project stakeholders
and project sponsors) with the ability to pull the right information,
interact and prioritize, and collaborate on all levels.
Stability
The ability to maximize a tool’s uptime and also to improve operational
support are two important elements to ensure stability. This includes:
hardware capacity, network bandwidth, security access, availability, and
so forth. Other components, such as scheduling system maintenance,
outages, and upgrades outside of core work hours, are needed to mini-
mize interruptions. Further, learning when to turn tool features on, as
users of the system mature in their practice, is a key to ensuring stability.
Just as organization reporting needs evolve, the need for robust tools also
increases in importance. For example, as the needs of analytical reporting
increase, the PMO will need a robust tool for gathering business intel-
ligence and trend data about the project and program function and the
general performance of the business over time. A key to success lies in
integrating current tools into a comprehensive delivery framework and
assessing additional tools, if needed, to improve project performance.
Step 3: Sustain Training and Mentoring Programs
Step 4: Sustain PMO Staff Skills and Structure

These two steps are combined due to overlap between them. While step
3 considers the ongoing training programs, the types of training, and
producing training programs at the various layers of the organization,
step 4 is concerned with career paths, keeping skills current, providing
career paths for project managers, and tracking their certifications and
credentials. The training in an organization should address the various
layers. Some types of training include:
• Executive-level training, such as seminars and workshops where

the organization’s executives learn about the PMO and how the
project-based management works
• Business unit manager-level training, where the managers collabo-
rating with the PMO better understand the PMO and how project
managers work, helps set the right expectations, and increase syn-
ergies across all business units
• Project managers’ training and project team member training on
organizational processes, methods, and tools
• Ad hoc training, including one-on-one training for those requiring
refreshers with a central training repository to which those indi-
viduals can refer at any time
There are three parts to sustaining project managers’ skills. This process
starts in the setup phase after an assessment of a project manager’s skillset
takes place to understand the type of skill training, on-the-job training,
and career path growth.
The first part of an action plan allows project managers to train at the
basic level (organization methodology and process). By starting all levels
of manager training with the core basics, project managers become
grounded with the required methods and procedures that their organiza-
tion considers critical for the successful delivery of a project. Specialized
training for the various levels of project management is essential to
expand their skills, develop their knowledge, and keep them challenged
for the next level of responsibility.
The second part of an action plan is to have a career path for the PMs
to increase their competencies, which will help ensure they progress to
more senior project management roles. This crucial step can be achieved
through working with the HR business unit and the PMO to set the
career levels, performance criteria, and so forth for all project managers.
The third part of an action plan provides diversity in their assignments

and work on projects that vary in size, type, and complexity, sharpen-
ing their skills across subject areas and business functions. This gives
the PMO the opportunity to use the project managers’ experience and
skillset to the fullest extent.
Step 5: Sustain Executive Commitments

This step is a continuation of early stages that build on executive support.
The definition of the executive role and the governance authority should
be defined in the early stages. The PMO executive sponsor should play
an ongoing, active role in the PMO sustainability and contribute to
providing inputs and direction to the PMO, taking away output and
performance improvements to the realm of executives in the organiza-
tion to show value and obtain commitment for PMO longevity. The
key to helping the PMO executive sponsor stand behind the PMO’s
mission is the PMO showing continuous value add in the HR and cus-
tomer value dimensions and minimizing risks. Executives can identify
with the powerhouse of information provided by the PMO to enable
their decisions and facilitate open discussions. The value has to be seen
by all management layers. If the perception is that the PMO is adding
value and enabling all layers of management within an organization,
then the support and commitment will grow stronger. If, on the other
hand, any management layer perceives the PMO as a burden or adding
more process work, the commitment will decline, and it may lead to
PMO failure.
Step 6: Sustain a Continuous Feedback Loop

The continuous improvement journey starts with a self-assessment and
a 360-degree assessment of the PMO. The PMO needs to be transpar-
ent about annual goals and deliverables and the improvement journey.
The PMO needs to enforce standards, quality, and measures; thus, it can
be ranked and benchmarked against them. The PMO should institute
soliciting feedback from executive management, other business unit
functions, and project managers. PMO leaders need to build informal
and formal channels for feedback.
Some of these formal channels include:
• Satisfaction survey that touches various levels within

the organization
• Benchmark practices based on industry standards in an organiza-
tion with similar industry practices
• PMO mailbox for Q&A and anonymous suggestions
• Goals and objectives that are transparent about the results and
improvement plan
Some of the informal channels include:
• Soliciting informal feedback from project managers, executives,

and functional managers
• Engaging project managers in soliciting feedback from their team
• Meeting with the project sponsors to solicit performance feedback
Step 7: Sustain an Improvement Action Plan

All of the above work should be confirmed in a PMO action plan (a.k.a.
“execution plan”). This is a documented PMO commitment to carry on
with the continuous improvement cycle, defining the quality benchmark
through a continuous feedback loop that allows for itemizing required
improvements, setting priorities, and approval as part of the PMO sus-
tainability plan.
A sustainability action plan should be a value-based action plan where

the focus is on bringing value internally and externally, acting on the
defined interaction model, and updating the interactions, if required,
after consulting with organization executives.
Some large organizations have a separate department of quality bench-

mark to ensure an external audit of the PMO and allow the measure of
sustainability efforts made by the PMO against their set goals and objec-
tives. Whether the approach is a self-audit or an audit by another entity,
the audit criteria has to be built based on goals approved by organization
executives. Quality criteria and success criteria are set in the early stages.
• Some of the PMO value measures can be summarized as follows:

• Metrics the PMO collects and uses for making decisions
• Methodologies and processes that are balanced to allow the right
rigor for the right maturity stage
• Delivery improvement as a result of planning and gover-
nance structure
• Learned effectiveness and how it reflects on improving similar issues
• Improving transparency and collaboration at all levels of
the organization
Existing PMOs
Step 1: Realign Reporting Performance

This step assumes that the current reporting performance is not adequate
or requires improvement or that executive expectations have changed
and the perception that the reports being generated to enable executive
decision-making need to be assessed and realigned with the new expecta-
tions. The PMO needs to revisit the current process and the content
provided as well as the frequency of data distribution and make changes
to either the process, the content, the frequency, or a combination of
all three.
From a process perspective, the questions that need to be asked are

as follows:
• What types of reports need to be generated, or which existing

reports need to be updated?
• Is the audience receiving these reports in the same way or has
something changed?
• Does the reporting frequency need to be updated?
• Is a new reporting mechanism required (new tool or new method
to obtain data)?
From a content perspective, the questions that need to be asked are

as follows:
• Have the data capture requirements changed?

• Do the presentation and layout of the data require updates?
• Is the current project data sufficient for enabling execu-
tive decisions?
The reporting function is essential to the organization’s ability to make

correct decisions at the right time. Focusing on the required flow of
information and understanding the organization’s requirements allows
the PMO to remedy any reporting needs immediately.
Step 2: Realign Support of the PMO Tools

To maintain the ongoing support of PMO tools, the PMO has to
support issues; request project scheduling tools, project collaboration
tools, and knowledge management tools; and improve tool usage and
capabilities. This crucial step encompasses two other steps:
• Ensure stability of current functions as well as a measurement

system that allows the PMO to measure itself against the quality
delivered and ensure a strategy for improvement. This may entail
a set of dashboards that reflect project progress, program progress,
and portfolio progress.
• Improve the usability of a tool and interaction of tools, offering
ongoing support and minimizing user issues by addressing bottle-
necks and improving their interaction experience to ensure con-
tinuous improvement in scheduling, collaboration, and knowledge
management sharing.
A key to success lies in integrating current tools into a comprehensive

delivery framework and assessing the migration to other tools or expand-
ing on current tools for improved performance. Some PMOs become the
center for various tools, and usage becomes cumbersome, so it may end
up having an adverse effect on the PMO in terms of standardizing tools
and compliance. Therefore, as a rule of thumb, tools should automate
good processes in place. Although tools are used at times as catalysts
to enforce change, they need to be implemented with the right future
process vision. They are never the answer to a broken process. Part of
the ongoing journey of existing PMOs is to refrain from becoming bur-
dened by tools and to leverage what’s not based on how the organization
can maximize benefits from it. An example is a nice mobile application

that connects teams and summarizes their project tasks can be a helpful
tool for geographically disbursed teams and teams on the go. It may not
have the same impact on teams that are collocated.
Step 3: Realign training and mentoring programs
Step 4: Realign the PMO Staff skills and structure

These two steps speak to realignment of existing functions. Realignment
assumes that a function has deviated from the set path or that gaps
have been found in the current practices that require assessment and
subsequent action plans to carry out the realignment activities. Action
plans will vary in length and scope depending on the depth and breadth
of the needed improvements, the organization’s culture and structure,
and whether the project managers are part of the PMO. For example,
the type of training can enhance the project managers’ skills as well
as provide general informational training to the non-project audience
within the organization to heighten the awareness of project manage-
ment and improve understanding in general. Similarly, tools usage
training is an important aspect of successful compliance in using the
tools and allowing users to maximize the benefit of the tools in use and
understand the impact of efficient use.
Training does not have to take a “big bang” approach; it can be incre-
mental and ongoing to ensure it touches all levels of the organization.
Similarly, all material pertaining to process, methodology, and tools
needs to be kept current with evolving standards. There is a different
type of training that doesn’t pertain to an immediate need, such as tools
training or skills training. It contributes to the project manager’s career
path. The category is education; as in earning a degree to be a differen-
tiator that can be industry-based or a discipline-based to allow project
managers to navigate through the ranks in the organization.
Learning through efforts to monitor performance against the plan and

learning from deviations allows the PMO to embed learning into action.
Further, it is important that the PMO understand shifts in external
markets that demand shifts within the organization. Adjustments to
these changes are required to ensure that the PMO is not lagging behind
and is agile enough to take on adjustments and changes without disrupt-
ing the PMO flow or organization performance.
Step 5: Realign Executive Commitments

Executive commitment may be lost for many reasons. For example, the
PMO has not executed on the roadmap or the PMO did not contribute
to adding value in the HR or customer value dimensions. At times, the
PMO may not seek direction from the executive level, hence value add
may drop or perception of it may change. On the other hand, executive
support may wane over time, which drives the PMO to drop in value.
Regardless of what caused the lack of commitment and support, the
realignment and renovation of commitment is required and needs to be
reestablished on set objectives that can be measured and achieved.
Step 6: Reestablish the Continuous

Feedback Loop
If, for any reason, the PMO has stopped collecting feedback, or engag-
ing the entire organization audience in the maturity stage, action is
required to reestablish a self-assessment and then an executive assess-
ment that ensures executive commitment, as in the previous step, and
allows project managers to reflect on and provide feedback on the use of
the templates, tools, and processes. Reestablishing feedback can happen
through various mechanisms, surveys where anonymous feedback is col-
lected, one-on-one interviews with executives, and a general perception
that the PMO is acting on the feedback.
Step 7: Reestablish an Improvement Action Plan

Reestablishing the improvement action plan means looking at the previ-
ous action plan and assessing what is still valid and what needs to change
or be taken out. The reason the improvement plan may need to be
reestablished is that some plans are monitored and controlled to ensure
adoption and continuous improvements are being executed; hence, the
improvement may not take place as planned. The plans should be value-
based action plans, where the focus is on bringing value to the HR and
customer dimensions.
Sustainability Toolkit
Whether you are setting up a new PMO or reestablishing an existing
function, it is vital that a PMO establish a means to demonstrate consis-
tently and appropriately (a) the value of the PMO and (b) the flexibility
and adaptability of the PMO in the face of ongoing business change.
Four elements have been defined to ensure the PMO’s sustainability
journey is successful.
PMO Communication
Well-balanced communication starts with transparency. This involves
defining a process to determine what information is communicated, the
media used, the frequency of the information flow, and the intended
audience. Communicating project progress, portfolio progress, and
PMO sustainability progress are important and discrete elements of any
communication plan. This may include summary reports describing the
KPI representing project, program, and portfolio health check. Other
reports might include detailed financial analysis or various representa-
tions of resource allocation broken down by project, department, and
title. Consideration of the planning media is important to determine
how much information may be delivered by a “push” medium (e.g.
newsletter, email, blog, or report) and how much may be delivered to
self-service platforms, such as intranets, or a “pull” medium (BI tools

that enable real time data analysis). Training the PMO audience on how
to use these reports and perform analysis will allow them to become
more educated about KPI and measures and improve their reporting
requests. As a result, decisions will be improved.
PMO Governance
It is expected that a PMO will build a governance model, improve exist-
ing governance, and enforce the required gates to ensure compliance.
Well-structured governance will include the various levels of function
and define their roles, responsibilities, and what decisions they are able
to make. Governance ensures that the overall corporate standardization
and performance assessment and measurements are consistent. Figure
4.5 provides an example that shows organization structure that embeds
governance based on organization hierarchy. While the PMO reports to
the CEO in this example, the PMO is at the same level as other busi-
ness units in the organization. The project team at the work stream level
is comprised of the functions that report to these business units. It is
important to define the governance model based on organization culture
and depending on to whom the PMO reports. Furthermore, the gov-
ernance structure should be revisited as part of annual refinement and
realignment, if needed.
Figure 4.5 Sample organization structure model

PMO Knowledge Repository

Regardless of what type of PMO an organization has adopted, whether
consulting, authoritarian, or knowledge-type, it has the potential to
become a powerhouse of information, a business intelligence mechanism
that takes all types of project data (e.g. resource efforts, budgets, time,
and deliverables) and turns it into valuable information that can be used
at various management levels within an organization.
It provides team members with a repository of available training, cer-

tification requirements and availability, a shareable lessons learned
database from all projects, case studies, and industry links to up-to-date
information that can be used for professional progress and job improve-
ment. It provides business unit managers with resource information to
allow them to improve resource planning and forecasting and lessons
learned from their resources, which will help resource managers allocate
the matching skill for the type of project. Finally, it allows executives to
implement reporting capabilities and improve existing ones as well as
improve analytics and dashboard reporting to enable decision-making.
For PMO leaders, the availability of data and tools to present the infor-
mation at all levels and enhance performance measures is one of the
greatest benefits of building the knowledge repository.
PMO Performance
One reason for creating a PMO is to guarantee consistency of approach
across projects. As an organization seeks more efficiencies and increased
performance from projects, it turns to establishing project management
offices (PMO) to instill the needed discipline of PM (Santosus 2003).
The PMO is a function within an organization that provides project
management services to support an organization’s project delivery and
contribute to the performance of the organization through standardized
processes and practices.
Performance can be defined as the success in achieving predefined goals

and objectives for an organization to achieve financial and non-financial
rewards. Performance management is a branch of performance that
focuses on performance of the organization, a department, or processes
to build a product or services, employees, and so on (Paladino 2007).
The essence of performance is creating value for an organization produc-
ing goods and/or services so that it stays in existence for the organiza-
tion’s clients. Hofer (2006) and Porter (1985) describe the important
functions for performance as value creation and competitive advantage.
Value creation, as we explored in the previous chapter, happens through
customer value and resource value, allowing the organization to produce
quality products and services for its customers and allowing the organi-
zation to motivate and improve employee performance. . Competitive
advantage happens when a company maximize the value creation that
has been achieved to outperform its competitions.
PMO Challenges
Just as there are four elements to ensure the PMO’s sustainability journey
is successful, four major challenges can impede a PMO’s sustainability
journey if not given careful consideration.
Process and Methodology

While it is great to have processes and agreed upon standard methodolo-
gies in place, it is very counterproductive when processes become the
center of the work and are done for the sake of processes but do not
serve the organization as a whole. For example, following the same rigor
of procedures or protocols, templates, and guidelines without consider-
ation to the efforts involved and the size of project will cause employees
to regard the PMO as overkill. Soon, the PMO will lose credibility
among both project managers and the organization’s leadership team.
To overcome this challenge, the PMO needs to start small and focus on
the main areas. This is much more effective than building everything at
once and then tripping in the rollout due to the level of the maturity
of the organization, unless the organization, from the PMs up to the
leadership team, is ready to take on a large magnitude of change. It is
important to remember that, first and foremost, the reason for method-
ology and processes are to allow for improvements in both effectiveness
and efficiency, not to create bureaucracy for project managers and the
organization as a whole.
Project Managers’ Skill Level

Another challenge for the PMO is failure to assess the project manag-
ers’ skillsets correctly. The PMO head will be caught by surprise when
ready to roll out the processes and/or methodologies, only to be faced
with a huge gap between a PM’s skillset and his or her knowledge of
the methodology, tools, and so on. The gap in the skillset may delay
or prolong methodology rollout and/or adoption. Some of these gaps
might be due to a previous practice that is not necessarily wrong but
which does not work within that particular organization. Or perhaps
someone is merely new to his or her position. Perhaps a project manager
used to run projects like a maverick and does not understand the need
to comply with the new rules. To overcome this challenge, creating a
methodology and assessing and educating the PMs needs to happen in
parallel. While creating methodology, existing PMs and new PMs or
promoted PMs, should be assessed in terms of maturity and skill level to
determine the education required to bring all to approximately the same
level of performance.
Project and Portfolio Tools

In any new function implementation, it is the function, then the people,
then the process, and finally the tools that make the PMO and any other
function efficient. Implementing any tool before having the earlier two
(people and process) in place is a recipe for failure. Even if the processes
are simple and the methodology is not completely polished, there should
be a process in place that governs the use of the tool and identifies the
outcome the PMO is trying to achieve. Any new PMO should be careful
about imposing a project and/or a portfolio tool set before having people
ready and processes established. The tools are far more sophisticated now
and don’t just serve the PMO. They are a complete platform of applica-
tions that will allow for project building, tracking, budget monitoring,
document collaboration, and analytics and reporting. It all goes back to
understanding the organization’s requirements and what is required of
the tool. Relying on a third party to tell the PMO what they will get out
of a tool is fatal. Being educated and understanding the organization’s
requirements when approaching a project or portfolio tool and treating
it as you would treat deploying any organizational system, such as CRM
(Customer Relationship Management) or ERP (Enterprise Resource
Planning), is critical.
Establish Best Practices

With newly formed PMOs, best practices are often neglected, either
due to the unavailability of manpower that can be dedicated to that
purpose or because the PMO is working on the next level of expansion
and not taking the time to measure and assess the current state before
proceeding with improvements. The PMO should start gathering best
practices data, whether documenting lessons learned, methodology
improvements, effective tools usage, and so forth. Retaining all of the
best practices work in a centralized, easy-to-access place is vital. Also,
it is important to communicate the updates and changes regularly so
that everyone stays up-to-date with the changes and that it becomes the
library of best practices for the benefit of all levels of the organization.
Chapter Summary
In this chapter, the reader was presented with the PMO sustainability
steps, seven steps required to sustain a newly built or existing PMO.
The chapter also discussed sustainability principles and definitions, the
human resource value add, and the customer value add. The chapter
concluded with the sustainability toolkit, which is comprised of four
elements PMO communication, PMO governance, PMO knowledge
repository, and PMO performance.
CHAPTER 5:
PMO SURVEY RESULTS
PMOs have been taking on a more prominent role in their level of

authority, structure, reporting lines, and mandate. They have been
growing and undergoing change and transformation. Today, the litera-
ture defines PMO types, roles, and functions as well as their impact on
organization performance. The lifecycle journey that PMOs go through
requires attention, since there is little knowledge regarding the PMO
lifecycle (PMOLC) pertaining to setup, build-out, and sustainability.
Due to the evolution of the PMO, there is a need to cover the lifecycle
of the PMO in such a way that those interested in building PMOs can
learn what is required in each phase of the PMOLC, the complexi-
ties associated with each phase, the challenges, and the rewards. The
PMOLC has not been fully explored, nor has it been discussed in detail;
hence, this research makes valuable contributions to the practicality of
the project management field in general and sheds light on the PMO
practices in particular. Further, the research adds valuable insights to the
mechanics governing the establishment of PMOs. The results will lead
us to:
• Determine the PMOLC complexities, shed light on the nature of

each phase and the skills required to build each phase
• Determine similar and different challenges in each phase in
the lifecycle
Survey Setup
A survey was conducted to collect data regarding the setup, build-out, and
sustainability of the PMO. The survey was web-based and used a 5-point
Likert-type scale. It was developed and made available online for PMO
leaders who set up, built, or supported a PMO. These volunteers were pro-
fessional PMO from across various regions and industries. There were 100
respondents to the survey, 67 of whom completed it.
Results from the web-based survey led to the finding that PMO setup
and build-out phases are more complex than the sustainability phase.
Additionally, the findings show the effect of executive leadership support
on an organization and the importance of the PMO leader’s skillset
and role.
Survey Sections
The survey instrument was divided into three sections. Before any sec-
tions, an introduction was provided that stated the purpose of the study,
set expectations, and provided guidance and the deadline to complete
the survey (see Appendix C).
Section One
The first 12 questions addressed PMO setup, build-out, and sustainabil-
ity. This section surveyed the type of PMO, where PMOs reported, the
type of executive level to which the PMO reported, and the skills it takes
to set up, build out, and sustain a PMO.
Section Two
Questions 13–21 addressed PMO organizational issues. This section
surveyed PMO change management, PMO leadership support, and
project managers’ reporting structure to PMOs.
Section Three
General categorical and demographic information (such as gender, age,
and geographic location) is included in this section. Because respon-
dents were required to conform to criteria (Cooper and Schindler 2003)
by not only possessing the specific knowledge of PMOs required but
also leading or having led PMO setup or build-out or supported PMO
initiatives (Biemer et al. 1991), a sampling frame (Simon and Burstein
1969) was created.
The sampling frame was necessary, because randomly selecting elements

from the total population of project management PMO professionals
to solicit judgments from experienced PMO leaders aligns with the
sampling objectives. Preferably, according to Wright and Tsao (1983),
the determination of a sampling frame should consider the following:
objectives of the survey, population of interest, and data to be collected.
With these considerations, I identified and made up the sampling frame,

which consists of the following: PMO Forum, PMI CoP, and PMO
leads through professional networks (Europe, Canada, US, Asia, and
other locations).
A simple convenience sample was taken from the sampling frame, allow-
ing each subject an equal chance of responding to the survey and being
included in the sample (Simon and Burstein 1969). Each group within
the sampling frame was solicited from March 2011 through June 2011.
A web-based tool was used to collect responses and store data (Sekaran
2003). The sampling frame included a total of 100 respondents who
logged on to the survey website from April 2011 to June 2011. Not all
respondents who started the survey completed it. Eight were excluded,
because they did not complete the first question. All remaining respon-
dents who completed only part of the survey stopped at the start of the
second section. Of the 92 who took the survey, 67 completed the survey,
for a completion rate of 73%.
The survey was designed using closed questions (Wheater and Cook
2000) and survey questions for categorical items. Survey questions
for continuous variables were created using a 5-point Likert-type
scale (Likert 1967; Miller 1983). Each question began by presenting
an affirmative declaration of the variable items followed by a 5-point
Likert-type scale anchored on the far left with “Strongly Disagree” or
“Not Important” and on the far right with “Strongly Agree” or “Most
Important” (see Appendix D). N/A was included at the far right of
the scale.
This survey analysis consists of two sections. Section 1 provides the

descriptive statistics of categorical variable data. Section 2 provides
descriptive analysis of continuous variable data.
Analysis of Categorical Data

Categorical Data
The survey instrument collected categorical information for descriptive
purposes. The following categorical data was collected: geographic loca-
tion, age group, and gender.
Respondents came from various geographic locations. The largest

number of respondents came from Canada (35%), followed by the US
(25%). Table 5.1 shows the percentage of these respondents.
Table 5.1 Geographic location
The largest number of respondents (45%) belonged to the 35–44 age

group. The second largest age group (35%) was respondents aged 45–54
years. The results are shown in Table 5.2
Table 5.2 Age
The largest number of respondents (62%) was male, while 38% were
female. Results are shown in Graph 5.1 below
Graph 5.1 Sex
Descriptive Analysis of Continuous Data

The following section provides descriptive statistics of continuous survey
data. The statistics were derived from Likert-type scale responses.
“How many PMOs does your organization have?” The highest number
was 63% for the category “only one PMO,” followed by 28% for the
category “more than 3 PMO’s.” Table 5.3 shows detailed responses to
the question
Table 5.3 Number of PMOs
“Where does your PMO reside?” The highest rating (40%) was for
PMOs residing at the corporate level, followed by 31% residing in IT.
Table 5.4 shows the detailed response.
Table 5.4 PMO Resides in
“Where does your PMO report to?” The highest rating (24%) was for
PMOs reporting to C-level in an organization, followed by 22% of
PMOs reporting to the CIO. Table 5.5 shows the detailed responses to
this question.
Table 5.5 PMO Reporting line
“What level of management leads your PMO?” The highest rating

(34%) was for PMO leaders at the executive level, followed by 31% as
directors. Table 5.6 provides detailed responses to the question.
Table 5.6 Management Level
“How do you define your PMO’s authority/influence in the company’s

hierarchy?” The highest rating (49%) was for PMO authority through
executive, followed by 25% for the PMO being involved at the C-level
discussions. Table 5.7 shows the details to this question.
Table 5.7 PMO’s Authority
“The skills of a PMO head may differ depending on the phase required.
The skills required to build a PMO may differ from the skills required
to run a PMO.” The highest rating was 36%, stating that PMO leaders’
skillsets may differ between phases (setup and build-out) vs. sustainabil-
ity, followed by 24% who said that PMO leaders’ skills would not differ
regardless of the PMOLC phase. Table 5.8 provides detailed responses to
the question.
Table 5.8 PMO Leader’s Skills
“What is your role in the PMO setup and build-out?” The highest rating
(52%) was for those who built non-existing PMO. Table 5.9 provides
detailed responses to the question.
Table 5.9 Role in PMO Setup and Build-out

“What is your role in the PMO’s sustainability and support?” The

highest rating (64%) was for those who supported the PMO they built.
Table 5.10 provides detailed responses to the question.
Table 5.10 Role in PMO Sustainability
“Rank the complexity in the PMO lifecycle phases (setup, build-out,

and sustainability).” The highest rating (44%) was for the PMOLC
being complex in setup-and build-out, opposed to 17% viewing it as
most complex. Table 5.11 provides detailed answers to the question.
Table 5.11 PMO Complexity Ranking
“What type of authority does your PMO have?” The highest rating
(56%) was for compliance/authoritative PMOs. Graph 5.2 provides
detailed answers to the question.
Graph5.2 Type of PMO Authority
“What are the unique challenges in the setup and build-out phase?” The
highest rating (71%) was for buy-in, followed by 69% for leadership
support. Table 5.12 provides detailed answers to the question.
Table 5.12 Challenges in setup and build-out

“What are the unique challenges in the sustainability phase?” The highest
rating (66%) was for continuous improvements, followed by 65% for
reports/KPI. Table 5.13 provides detailed responses to this question.
Table 5.13 Challenges in Sustainability
“In my organization, I can describe the level of executive buy-in as.”

The highest rating (42%) was for medium executive support. Table 5.14
provides a detailed response to the question.
Table 5.14 Executive buy-in

“Do you believe change management and project management adoption

in an organization is correlated to the level of the PMO’s authority?”
The highest rating (76%) was for “The higher the authority, the more
the PMO’s influence in change management and project management.”
Table 5.15 provides a detailed response to the question.
Table 5.15 Change Management and Project Management Adoption

“Does your PMO have responsibility for delivery of projects?” According

to the responses, 68% of the PMOs have responsibility for delivery of
projects. Graph 5.3 provides a detailed response to this question.
Graph 5.3 Does your organization’s PMO deliver projects?
“How many Projects does your PMO manage in a year?” The highest
rating (34%) was for managing 1–20 projects. Table 5.16 provides a
detailed response to this question.
Table 5.16 PMO-Managed Projects
“Please select one of the maturity levels below that best describes your
PMO.” The highest rating (31%) was for “Level 3- Defined level.” Table
5.17 provides a detailed answer to the question.
Table 5.17 PMO Maturity Level

“What functions does your PMO perform today?” The highest rating
(80%) was for project/program governance, followed by 71% for
methodology management. Table 5.18 provides a detailed response to
this question.
Table 5.18 PMO Functions Performed

“What benefits does your executive get out of your PMO today?” The
highest rating (70%) was for consistent project method and delivery,
followed by 69% for improved project governance and change control.
Table 5.19 provides a detailed response to this question.
Table 5.19 PMO’s Benefits to Executives
“What are the challenges that your PMO faces today?” The highest rating
(63%) was for project management maturity, followed by 59% portfo-
lio management alignment. Table 5.20 provides a detailed response to
this question.
Table 5.20 PMO Challenges
“In your organization, project managers report to. . . ” The highest

rating (35%) was for reporting into the business units, followed by 30%
for reporting to the PMO only. Table 5.21 provides a detailed response
to this question.
Table 5.21 Project Managers Report to

Discussion
The survey‘s objective was to investigate the PMOLC, to discover the
phases in the lifecycle, and to provide information that helps PMO
leads, executives, and those internal to a PMO or external to a PMO
to maximize advantages and minimize disadvantages. Some of the ques-
tions that the survey sought to address are:
• Which phase in the PMO lifecycle is more complex?

• What are PMO challenges in each phase of the lifecycle?
• What is the PMO leader’s role in the PMO lifecycle?
• How does the level of PMO authority impact change management
and project management?
Research results from the web-based survey led to the finding that PMO
setup and build-out phases are more complex than the sustainability
phase. Additionally, the findings show the effect of executives’ leadership
support in an organization and the importance of the PMO’s skillset
and role.
Summary of Survey Findings

The survey outcomes lead to the conclusion that the PMOLC is
complex and that the setup and build-out phases are more complex than
the sustainability phase. Additionally, the findings show the effect of
executives’ leadership support in an organization, the skillset and role of
the PMO leader in the various phases, and the level of authority of the
PMO and its impact on project management and change management
in an organization.
The overall results show that the PMO continues to evolve and take
a prominent role in the organization hierarchy. As seen in the survey,
the majority of PMO leaders are at the C-level or report to the C-level,
PMOs report to executive office, and that 34% of those surveyed
reported that projects are managed through their PMO.
PMOLC Complexity
The findings of this research describe the complexity of the PMOLC
and whether one or more of the three PMOLC phases (setup, build-out,
and sustainability) are more or less complex than the other. The survey
suggests that 44% of respondents found the build-out phase the most
complex, while 34% found sustainability to be the most complex, fol-
lowed by 32% for the setup.
PMOLC Challenges
The findings of this research describe the challenges of the PMOLC and
identify similarities and differences based on each phase. While funding,
leadership support, and governance were ranked high as challenges per-
taining to the setup and build-out phases, the survey found continuous
improvement, reporting/KPI, and quality management to be the highest
on the list of challenges pertaining to the sustainability phase. While
cost/value ranked closely as a challenge for all phases, ranging between
29% and 32%, the adoption of methods or tools ranked at the same
level independent of the PMOLC phase ranged from 34% to 36%.
PMO Leaders’ Leadership Skills

The findings of this research describe the various skillsets and leader-
ship qualities required to run the various PMOLC phases. While 36%
of respondents believe that the skillset and leadership required to run
the setup and build-out phases are different from those of the sustain-
ability phase, 24% believe the leadership style and skillset do not differ
in regard to PMOLC phase.
In addition, the survey shows the role of individuals in the PMOLC

phase and those who set up, build out, or sustain the PMO or if each
phase is independent of those who did it. When the PMO leaders were
asked about their role in each phase of the PMOLC, 52% had built a
new PMO while 19% rebuilt or transformed an existing PMO. These
results pertain to the PMOLC phases of setup and build-out.
PMO Authority and Adoption

The findings of this research describe the level of authority of the
PMO and its impact on project management and change management
adoption within an organization. The results show a strong correlation
between the levels of authority the PMO has and the level of change
management and project management adoption. The survey shows that
76% believe that the higher the authority, the more the PMO’s influ-
ence on change management and PM adoption.
In another question that surveyed the types of PMO authority, 56%

of PMOs were authoritative. The overall results show more PMOs are
adopting an authoritarian role, which is having an impact on increased
adoption in change management and project management.
Lastly, the survey shows that the reporting level of the PMO and the
PMO leaders’ title and position in the organization is on the rise. Forty
percent of PMOs reside at the corporate level, and 47% of PMO leaders
at the C or executive level.
Chapter Summary
This chapter presented readers with the results of the PMO survey that
highlighted the complexity of the PMOLC and shed light on the nature
of each phase and the skills required to build each phase. It also illus-
trated similar and different challenges in each phase in the PMOLC.
CHAPTER 6:
CONTROVERSIAL
PMO TRENDS
Chapter Overview
Every discipline is riddled with controversy, and project management
and PMOs are no different. Many controversies surround project man-
agement. This chapter will focus on the following areas: insourcing
and outsourcing, the PMO as a temporary or permanent organization,
whether the PPM should be within the PMO or managed separately,
and whether project management precedes the PMO or if the PMO is
a catalyst to building project management. The objective of this chapter
is to provide insights into the different schools of thought surrounding
each of these areas, allowing readers to benefit from various points of
view and to incorporate what fits their culture, structure, and future
vision. Chapter 8 will present case studies presenting each organization
practice and how they have dealt with these areas to ensure the success of
their setup, build-out, and sustainability.
PMO or Project Management?

Which came first—the PMO or project management? Project manage-
ment is a discipline that has existed for centuries; therefore, project
management as a practice came long before the notion of a project man-
agement office. Although the numbers of PMOs in organizations are
on the rise, some organizations have the project management discipline,
but they exercise a level of governance without having a PMO or other

names for a central function running project management. One size
does not fit all; hence, organizations should look to what is feasible for
them and not to build a PMO just because other organizations are build-
ing then. Some level of project management will always be practiced
within an organization, be it formal or informal. Whether an organiza-
tion acknowledges the practice and formalizes a function that nurtures
it or runs it ad hoc is dependent on organization culture, resources, the
nature of their business, and the manner in which they go about deliver-
ing their products or services.
Today, some believe that an organization should have some level of

project management, even if it is basic, before creating a PMO. They
argue that the requirements of practicing project management need to
be in place before a PMO can exist. Then there are those who believe
that the PMO should come first, and only then should the organization
build a project management discipline.
The advantages of having a PMO first are that project management will
be done based on best practices. Further, it will be based on industry
standards, such as PMI, to ensure availability of templates, processes,
and tools. The advantages of having a project management principles
first is the knowledge that project management is needed and practiced;
hence the PMO can be created with a definite mandate on what is being
practiced and what is being achieved.
The author’s objective is to stir the thinking and allow organizations and
individuals to evaluate the possibilities that will be highlighted further
and elaborated on in Chapter 7 regarding how organizations actually
deal with project management and PMOs.
Some questions organizations need to ask about having a PMO vs.

project management are:
• How mature is the project management practice within

the organization?
• How does the organization organize its portfolio planning?
• Does each department run its own projects or is there a mandate to
have a standard method of delivery?
The answers to these questions should be taken into consideration.

Would an organization invest in a finance department prior to having
finances being run in an organization, or should there be a financial
practice and then an organization that formalizes the practices into a
finance department? This example touches on scale, budget, and the
need to have an informal practice vs. a formalized function.
Temporary or Permanent?
When looking into an organization’s requirements for the desired PMO,
it is important to understand the mandate and objectives of having a
PMO. The decision as to whether the PMO should perform a temporary
or permanent function depends on the organization’s culture, structure,
and future vision. Some think the smaller an organization, the more
temporary a PMO should be, and that only large companies have the
infrastructure to invest in a permanent PMO. The validity of these theo-
ries depends on organization culture, its ability to adopt project-based
processes and adapt to change, and its structure, starting from organiza-
tion structure to governance dynamics to the process of making deci-
sions. Future vision is important; whether the PMO is a core function
in an organization or an in-time function to deliver specific objectives.
Despite the growing number of PMOs, whether the PMO should be a

temporary endeavor similar to a project or a permanent function is still
debated amongst practitioners and theorists, who base their studies on
the realities of organizations.
Make It Temporary
Those who support this notion rely heavily on the premise that project
management is about temporary organization. The definition of project is
a temporary endeavor, as PMBOK suggests, so the organization govern-
ing projects should be dissolved as projects are dissolved. Proponents of
this view also believe that project management should grow organically,
and when it does, some discipline concentrated in a function can help
move project management adoption forward. Once this is established,
the function does not need to exist, and the practice can be carried along
and adopted.
Make It Permanent
Those who support this notion rely on the fact that to run continuous
projects and to support standards and project managers, you need the
support of an organization that provides guidelines and measures for fol-
lowing standards. How else will project management practice evolve and
improve? When the objective for a PMO is to become a CoE to oversee
delivery and project manager training and career path, then it might not
be feasible to have a temporary PMO.
What is misleading in some literature is the timing of some PMOs

being considered temporary, i.e., that PMOs have a lifespan shorter
than three years. Some projects last more than three years in many
industries, certainly in the pharmaceutical industry. Hence, the PMO
that existed to support these projects would last as long as the project
lasts. Organizations implement PMOs for various reasons. One of
the main reasons is that PMOs can be managed cross-functionally;
hence, the numbers of PMOs are on the rise. Others argue that PMOs
transform over time. Hence, they are unstable or temporary in nature.
Many other functions have seen transformations and see transforma-
tion every day between centralizing functions, decentralizing functions,
and revitalization in terms of roles and responsibilities. All of these are
parts of the evolution of functions and the dynamics of organization
and less of a reflection of a particular department or a function within

an organization.
PMOs originated around supporting the single-project organization. As

this organization progressed in the adoption of project management and
the discipline of managing by project, “projectized” became the way of
delivery through managing multiple projects. The issue of PMOs being
shut down or transformed is not any different from the larger organiza-
tion transformation initiative. Organizations may eliminate the title of
a function and have it under another title, but certainly some of the
tasks remaining are carried out by a new function or combined with
other functions. There are pros and cons to having a PMO, however, the
statistics, and most recently, those on the state of the PMO, show that
the PMO is on the rise, with 84% of organizations having PMOs. These
PMOs are strategic partners (ESI International, 2012).
It is important to distinguish between the temporary nature of some

PMOs and the value add that a PMO may or may not provide. A PMO
can exist temporarily to run a massive project and bring a value add
either in the customer value or HR value, while a long-term PMO may
do the opposite and miss out on adding value.
Some questions organizations need to ask regarding the PMO’s state are:
• What are the reasons and drivers for establishing a PMO?

• What are the short-term vs. long-term benefits?
• Is the PMO tactical in nature or a strategic partner?
• Is funding available to create and sustain the PMO?
• Does the PMO have the required executive support?
• How is success defined, and how is it measured to determine if a
PMO is being effective?
Depending on the answers to these questions, an organization can deter-

mine the permanent or temporary nature of a PMO.
Insource or Outsource
When looking at outsourcing and insourcing decisions, an organiza-
tion needs to consider its culture, structure, and vision. Some think
the smaller an organization, the more it will benefit from outsourcing a
PMO and that only large companies have the infrastructure to have an
internal PMO. Such theories depend on organization culture, its ability
to adopt project-based processes and adapt to changes, and its structure,
starting from organizational structure to governance dynamics, to the
process of making decisions. Future vision is important. It is not about
building a PMO today and not being able to sustain it or outsourcing
it and finding that it is not the best way to derives benefits from the
PMO. Insourcing and outsourcing decisions have been made in other
functions, such as IT, call centers, and so on. It should not be an unfa-
miliar phenomenon, and organizations should take advantage when it
complements their culture, structure, and vision.
“Outsourcing is the act of obtaining services from an external source”

(Brown and Wilson 2005, p. 20). Organizations and individuals have
been outsourcing for a long time without knowing it. Outsourcing is
not only sending jobs offshore, as some believe, it is the speed of deliv-
ery and the lower prices what brought the highlights into outsourcing
practices. A job or task can be performed by resources internal to an
organization or external to the organization. Outsourcing has become
popular in recent years due to globalization and companies involved in
various markets seeking to maximize profit and minimize costs, which
is one of the main drivers to outsourcing. Other drivers to outsourcing
have been to access specialized skillsets and a large number of them in a
particular period of time, improving the speed of delivery, and the desire
to focus internal employees on core tasks, which means only non-core
functions are outsourced. What are considered core tasks depends on the
organization. In general, core tasks have to do with a company’s intel-

lectual property, core business drivers that impact their clients and their
competitive edge.
What functions have been outsourced? Outsourcing started in manu-

facturing mainly for cost reduction. Then the trend moved into other
important organizational functions, such as finance, payroll, tax, HR,
call centers, and services (Brown and Wilson 2005).
Some of the advantages of outsourcing are that it provides smaller orga-

nizations with similar skills and reduced costs to allow them stay com-
petitive. Outsourcing also allows organizations to focus on core strategic
initiatives. Some of the disadvantages to outsourcing are loss of jobs at
times and the impact to deliverable quality. Another disadvantage is
potentially jeopardizing security in handling intellectual property.
The question of whether to outsource, insource, or adopt a hybrid model

is not an easy one and must be answered in a different way for each
organization. The key to understanding the balance and trade-offs lies
in an organization understanding its vision, direction, and its definition
of success.
Some of the questions organizations need to ask regarding outsourcing

the PMO are:
• What areas of the PMO should be outsourced?

• What are the pros and cons to outsourcing the PMO?
• When does outsourcing make sense, and when doesn’t it?
• How can the organization maximize the benefit of an outsourc-
ing model?
• What are the selection criteria for the outsourcing partner?
Outsourcing has been popular for non-core activities to allow an organi-

zation’s PMO to focus on core activities and to better support the needs
of the organization and drive the expected value add. Outsourcing tool
sets, applications, and project platforms can be beneficial if an organiza-
tion’s ability to maintain a project’s tools might be more cumbersome
and more expensive to perform than allowing SME host the application.
At the same time, SME hosting the application has to provide compa-
nies with services and support that will assure the agent organization the
appropriate service level, which needs to be documented in service level
agreements (SLA).
Another PMO function that has been outsourced is project managers

and training. When project managers are contracted, this is a form of
outsourcing. This does not suggest that every organization contracts
project managers. Most organizations use a hybrid model, which means
they have full-time project managers and augment these project man-
agers with outsourced project managers. Similarly, training has been
outsourced to companies that can train on project management topics,
including certification and accreditation.
Other companies have outsourced different functions, all dependent

again on if it will allow a company to maximize its benefits, reduce costs,
and focus on core functions.
PPM or PMO
Having portfolio management is a sign of organizational recognition
of linking strategy with execution. Some organizations link strategy
and execution under one function while others separate them into two
functions, one that’s concerned with strategy and the other with execu-
tion. When organizations decide their structure, they should look at
keeping groups close yet ensuring there is no conflict of interest between
these groups.
For some organizations, having a PMO and a PPM together is optimal

because of the close collaboration that is required between team
members. Organizations that choose to combine strategy and execution
under one function represented in the PMO tend to be smaller in size
with a smaller portfolio and budget. PMOs were established to coordi-
nate portfolios of projects from executive boards and facilitate selection,
monitoring, and control of projects (Andersen et al. 2007). In these
organizations, strategy and execution are coupled tightly, and sometimes
the head of the PMO runs both functions.
In organizations that choose to separate the PPM from the PMO, the
focus might be different, and for mainly strategic reasons, such as the
size of the PPM, the focus required for the PPM and the PMO, and the
organization structure. In these organizations, the PPM size is a mul-
timillion dollar one that spans various organizational divisions across
geographical areas. In this case, the PPM must focus on strategy.
Further, in these organizations, the PMO is focused on project delivery,

the execution of the approved and prioritized portfolio, while the PPM
is focused on portfolio management through the annual planning cycle.
In many organizations, this is linked to the fiscal year planning, budget
planning, and strategic roadmap plans. The handover from the PPM to
the PMO and vice versa is crucial to ensure resources and efforts are
focused on the right initiatives.
Chapter 7 references an organization that separated the PPM from the

PMO. In this organization, the PPM head is involved throughout the
PMO lifecycle to understand the value of an initiative and determine
if an initiative needs to stop and be replaced by another and advise the
PMO about that. The PMO head must focus on delivering the assigned
initiative per the priority sequence provided by the PPM process. The
separation in duty, yet the collaboration across the PMO and the PPM,
is synchronized through a governance model that details who, how,
when, and the gates involved between the PMO and the PPM to allow
for the continuous flow of timely information. The need for continuous
dialogue between the two functions is critical to ensure synergy and

optimization of individual project delivery and overall portfolio
benefit realization.
Organizations that choose to separate strategy from execution have

done it based on having a large number of initiatives, multimillion-
dollar budgets, and complexity in organization structure and scope of
work. Generally, these organizations have hundreds of projects with
multimillion-dollar budgets spanning an enterprise or even the globe.
These organizations tend to view the PPM practice or function as linked
closely with executive vision and annual goal setting. For many of these
organizations, the process is tied to the annual budget cycle, business
strategy, and priority of initiatives.
The PMO may be viewed in some organizations as the entity that

oversees delivery of projects and reports results to the PPM function
for benefit realization. Some of the names for these functions might be:
“corporate governance office,” “corporate project governance,” “center
of excellence,” “enterprise strategy services,” or “corporate portfo-
lio management.”
In this controversy, the physical split or consolidation of a function

should not be the main focus. The focus should be on the alignment and
achievement of corporate objectives as well as the handover process and
communication between entities.
Some the questions organizations need to ask when linking the PMO to
the PPM are:
• What is the best strategy to link or unlink the PPM to the PMO?
• What are the short-term vs. the long-term benefits?
• How is handover planned between the two functions?
• Who is responsible for selection, execution, and closing of projects?
Chapter Summary
In this chapter, the reader was presented with some of the PMO contro-
versies: to outsource or insource, whether the PMO is a temporary or
permanent function, and whether the PPM function should reside with
the PMO or be kept separate. In the next chapter, these topics will be
used to illustrate further how organizations deal with these controversies
through case studies.
CHAPTER 7:
PMO CASE STUDIES
Chapter Overview
This chapter will introduce four case studies that will illustrate the points
that were covered in Chapter 6 and look at the practices of participants
in the case studies pertaining in particular to:
• PMO vs. project management

• PMO temporary vs. permanent
• PMO outsourcing vs. insourcing
• The relationship between PMO and PPM
The multiple case studies represent different industries and organiza-

tion sizes.
• The first case is conducted in the financial insurance industry –

Aviva Canada
• The second case is conducted in the financial investment industry
– Invest&Wealth
• The third case is conducted in the financial debit industry – Interac
• The fourth case is conducted in the food and beverage industry –
McDonald’s Canada
• The fifth case is conducted in the game and entertainment industry

– G&E
The analysis is broken down into two sections: general analysis and spe-
cific case study analysis. The general analysis section is targeted to share
a general description of each case, including similarities and differences,
before detailing each case study. The specific case studies analysis covers
details pertaining to the four practices. A total of 10 interviews were
conducted with all case studies participants.
General Analysis
Semi-structured interviews were used to collect initial data on the type,
functions, and expected benefits of the model chosen. Three groups
of questions were included in the interview outline (see Appendix E
for details).
The first group of questions focuses on obtaining general information

on the respective organizations, their practices, structure, background to
project management, and challenges.
The second group of questions address the four practices and inquires
about whether the organization had project management practice before
the PMO or if the PMO created the project management practice,
whether the PMO was a temporary or a permanent function, whether
the PMO was insourced or outsourced, and whether the PPM practice
was part of the PMO or a separate function.
The third and last group of questions address the sustainability elements
and the impact on perceived value add.
Table 7.1 Organization case descriptions and participants

The selected cases have common characteristics, such as multiple

stakeholders with a similar organizational structure. Matrix and project
delivery play a major part in structuring internal cross-functional
initiatives. Further, they all had project management practices, whether
formal or informal, prior to setting up and building their PMOs. The
selected cases differ in the type of industries in which they function as
well as their PMO structure and mandate. Among the many drivers
to building a PMO, the main driver for each company is to improve
standards and consistency across the organization, whether the PMO is
an ITPMO, EPMO (enterprise-wide PMO), and so on. Although the
triggers and drivers might be different, the desired outcomes across all
cases are: improved project delivery, consistency, quality, and value add.
Specific Case Studies Analysis

Following the advice of Yin (1994, p. 128), “a smart investigator will
begin to compose the case study report even before data collection and
analysis has been completed,” each case study will be reported using a
standardized format that loosely follows the flow of the semi-structured
interview as follows:
• Description of the case organization

• Description of the organization’s four practices
• Sustainability elements and value add
• Benefits and summary
The results, which are detailed in the next section, show that all case
studies demonstrate that project management must exist even in its
basic forms and can be informal practice prior to creating a PMO. The
case organizations differ in the status of their PMO. Some PMOs were
created to be temporary while others were created to be permanent.
Some organizations have both temporary and permanent PMOs while
others started as temporary and changed it to permanent. None of the

cases below fully outsourced the PMO function. They ranged between
hybrids to insourced models. Some organizations outsourced some func-
tions and kept other functions insourced. As for the PPM, all but one
case have the PPM embedded in the PMO.
Table 7.2 summarizes the general findings described above. In the next
section, all case studies will be detailed in-depth, using a similar struc-
ture to detail the four practices for each.
Table 7.2 Summary of the four practices in each organization

The Case Organizations
Aviva Canada
Description of Aviva Canada

Aviva Canada is one of the leading property and casualty insurance
groups in Canada, providing home, automobile, recreational vehicle,
group, and business insurance to more than 3 million customers.
The company is a wholly owned subsidiary of UK-based insurance
company. Aviva Canada has 3,200 employees, 25 locations, and
1,700 independent broker partners. Aviva Canada and its employees
invest in positive change through the Aviva Community Fund and
Eva’s Initiatives, Aviva’s partner in its global Street to School program
to help the homeless and other at-risk youth reach their poten-
tial (http://Avivacanada.com/content/member-companies).
At the time of the case study, Aviva Canada had multiple PMOs, with
each PMO potentially duplicating some efforts. Organization leaders
were seeking efficiencies and consolidation of efforts as well as stan-
dardization across all functions. Hence, the concept of the EPMO was
born to denote the start of the enterprise-wide PMO, one unit with one
standard for methodology-building and project delivery. The EPMO
sits under the IT department, reporting to the EVP and the CIO. The
EPMO is about 3 years old. Before the consolidation, they had 4 PMOs.
The EPMO consists of 60 people, including contractors.
The EPMO is structured as a function but operates in a projectized

fashion. All staff members are identified as part of the delivery (PG manag-
ers, PMs, PCs, BAs, and senior project financial analysts) and are assigned
through the organization’s demand and supply of initiatives. Once the
delivery staff is assigned, the program or project manager is assigned to its
executive sponsor and project owner, to whom they report to temporarily
within a project structure. For all escalations, issue resolutions, and their
own respective development and reporting relationship, they continue to

report to their line managers. More precisely: AVP, portfolio management
and delivery for the PG managers, PMs and PCs, then the senior manager
business analysis for the BAs, and then the manager of the EPMO Finance
for the SPFAs.
Initially, the head of the EPMO for Aviva Canada was accountable for
portfolio management, planning, reporting, and delivery, in addition to
enterprise resource pool management, QA and compliance, and port-
folio risk management. All project managers, project coordinators, and
business analysts report to the head of the EPMO.
Table 7.3 Summary of Aviva Canada Organization (Canada)
Organization Characteristics Details
Ownership Public
Industry Insurance
Size Large (3,200 employees)
Organization Matrix with focus on delivery

through project initiatives
Culture Rewards in job security and

benefits for long-term employ-
ment. Niche specialized long-term
projects.
Strategy for growth Two pillars:

A great underwriting company
Committed to the broker channel
Description of Aviva Canada’s Four Practices

Aviva Canada practiced project management prior to having an EPMO.
As a matter of fact, the company had four PMOs, and one of the
EPMO’s mandates was to consolidate the various PMOs. Formation of
the EPMO was also motivated by the need to unify standards in meth-
odology, reporting, and opportunities to better assess demand manage-
ment across the organization.
1. PMO vs. Project Management

Project management was practiced at Aviva Canada prior to having
PMOs. Then separate PMOs were created to promote the delivery of
project management. Finally, the EPMO was created to consolidate and
improve standards of effectiveness.
2. Temporary or Permanent
The EPMO is a permanent function within the organization, as were the
four PMOs prior to it. The drivers for a permanent PMO are the size of
budget, resources, complexity, and ambiguity of indicators. Further, it
also allows Aviva Canada to tailor processes and governance to fit orga-
nization structure and culture. Although the EPMO is permanent, there
are specific PMO mandates around large and complex initiatives (i.e.
programs), where a PMO with the program structure can be required.
This setup also allows for tailoring enterprise assets and processes to fit
each need within agreed boundaries. Just like an initiative that has a start
and end date, the PMO within a program is dismantled once the initia-
tive is completed.
3. Outsourcing vs. Insourcing

The EPMO within Aviva Canada is mainly insourced. PMO outsourc-
ing isn’t considered because of the EPMO’s reach and its strategic nature.
However, the model the EPMO uses to maximize benefits from various
resources and functions within the PMO led to a hybrid model. Project
resource load is assessed and assigned to projects, as required with con-
tractors. The PPM administration hybrid is an example where level 1
requests are outsourced and level 2 requests and above are insourced,
PPM tools are outsourced (SaaS), and contractor management and
sourcing is outsourced. Project managers are insourced, and others are
outsourced. Training and career development is outsourced to career
development as well as in-house on-the-job training programs. Everyone
has a 70/20/10 personal development plan. More precisely, when it
comes to learning, 70% is on-the-job-training through assignment and
involvement in other activities, 20% is provided externally, and 10%
is self-initiated.
4. PPM vs. PMO

The PPM resides within the EPMO and is not a separate function. The
PPM is located in the EPMO to ensure project-to-program to portfo-
lio linkages, leveraging SaaS and offering to streamline planning and
reporting. The PMO assumes the responsibility of PPM planning and
prioritization and reviewing monthly results with executives. The main
drivers for having the PPM embedded within the PMO are based on
the strategic position of the PMO. Additionally, the PMO is set at the
C-level, and there are no other functions that perform similar work and
all described functions report to the head of the EPMO. The benefit is
centralizing the PPM under one governance structure and better col-
laboration on handover between the functions relating to projects.
Sustainability Elements and Value Add

The PMO value add was visible immediately upon closing 35–40
medium to large projects. All initiatives are reviewed and approved by
the executive committee. The portfolio is reviewed on a monthly basis
with a financial view of all initiatives. Tiered governance allows for
smooth decision-making, empowering employees at the various levels to

make decisions. Visible capacity planning and transparency across the
organization are major wins and value adds. The EPMO value base was
visible in the human resources value and customer value as follows:
1. HR factor: Full demand and supply view FTEs vs. contractors

based on the project demand Book of Work (BoW). Tiered gover-
nance allows junior staff to be assigned to initiatives that match their
skillsets and experience. Support career path (i.e. PC to junior PM
to PM to senior PM to program manager). Support company-wide
expense challenge discussions (who is assigned to what—therefore,
which initiative should stop).
2. Quality factor: The BoW is fully visible, transparent, and refreshed
every month. Status and progress rolled up monthly to a portfolio
view—“the steps and rationale to bring back the project status to
Green from amber and red is published and visible. Budget (actual
vs. forecast) is always available, hence, where resources (money,
people, assets) are consumed is always transparent. CAR and PAR
are issued to the project core management team. They are tracked
against employees’ personal objectives and tied in to their respective
bonus structure.
3. Delivery factor: Because of transparency and because employees
can’t work on initiatives that are not approved, the delivery factor
has increased throughout as a result of having reduced “work-in-the-
dark” projects.
The (RAG (Red, Amber, Greem) status is well understood by
everyone. There are four dimensions to RAG—two objective and
two subjective. Objective: The cost is derived from CPI (cost per-
formance indicator), and the schedule is derived from SPI (schedule
performance indicator). Subjective: Resources and scope. Overall
RAG: two ambers, overall amber. One red, overall red.
4. Cost factor: Dollars in budget (actual vs. forecast) is always avail-

able. Hence, where resources (money, people, and assets) are con-
sumed is always transparent.
Benefits and Summary

In summary, the EPMO has achieved its objectives in consolidating
the PMOs, running a successful PPM, and the ability to apply hybrid
models between outsourcing and insourcing where it best fits their
needs. While the EPMO is a permanent strategic function, there are
temporary project functions that run large and complex programs.
Below is a summary of the benefits the EPMO achieved.
1. Quantitative
• Portfolio is able to deliver around 10–15% below budget each
year because of strong financial management, status, and progress
visibility company-wide and reassign FT resources to contractors
(reducing the premium they need to pay as the result of using
a contractor)
• Contractor to FTE ratio is about 1:4, managing their corporate
knowledge as a critical asset (not to go beyond 30%)
• Delivering 35–40 change initiatives per year consistently for the
past three years (inclusive of present)
• Using one managed service provider for all contractor needs has
reduced Aviva Canada’s total contractor spending by 20%.
2. Qualitative
• Benefits realization embedded—on closeout activities, updates
shared with all respective business unit cost center
• Motivated staff, because everyone is aware of the change agenda
• Able to attract talent from throughout the organization, because

people want to be part of the success stories
• Global, countrywide, and regional portfolio roll-ups were avail-
able, creating synergies across the globe on similar initiatives
Invest&Wealth
Description of the Invest&Wealth Organization

Invest&Wealth is a wealth management company. Headquartered in
Toronto, Canada, through its partners and subsidiaries, it has a huge
presence in North America and Europe. Invest&Wealth creates and pro-
vides investment solutions and advisory services for financial advisors,
institutions, corporations, and foundations through its two main busi-
nesses: investment management and financial advisory.
Invest&Wealth operations are carried out through various divisions and

brands, each of which capitalizes on a specific financial services segment.
This specialization allows each division to focus on its strengths while
retaining the flexibility to leverage expertise in other divisions so as to
provide a complete wealth management solution for clients.
Invest&Wealth did not have a PMO until 5 years ago. Prior to that
time, project management was practiced informally and inconsistently.
Organization growth demanded efficiencies and standardization; hence,
the concept of a centralized PMO was born to centralize project man-
agement practices across all IT functions. Today, the Invest&Wealth
PMO has 10 projects managers and 2 project officers and reports to the
investment executive.
The ITPMO is structured as a function but operates in a projectized

fashion. All project managers identified as part of the delivery are
assigned by the ITPMO head through its demand and supply initiatives.
The head of the PMO was hired to set up, build out, and sustain the
operation of the ITPMO. In this new structure, all project managers

who were in the organization and newly hired project managers’ report
to the PMO.
Table 7.4 Summary of Invest&Wealth Organization
Ownership Public
Industry Investments
Size Large (1000+ employees)


benefits of long-term employment.
Competition Other investment firms
Strategy for growth Mergers and acquisitions
Description of Invest&Wealth’s 4 Practices

Project management was practiced informally prior to having an
ITPMO. There was no clear differentiation between the role of a project
manager and a business analyst. The roles were mixed up. The challenge
was clear accountability as well as standard methodology and consistency
across all projects.

Project management was practiced at Invest&Wealth prior to having an
ITPMO. The challenge was lack of consistency or repeatable processes,
which meant success of delivery was dependent on the project managers’
skillset. Then, five years ago, a formal ITPMO was created with the
mandate to set standards, build methodology, oversee delivery, provide
training and establish a formal project manager‘s career path, and to
promote the delivery of project management. It took two years for the
ITPMO to become stabilized.
The ITPMO was set up from the beginning to be a permanent function.
The intent of the leadership and the mandate that the PMO head carried
was to create a CoE in charge of standards, delivery, methodology, and
training. Project management was to become a core skill for IT, and
many other IT functions are encouraged to attend project management
training. Smaller projects, by ITPMO definitions, are those that are con-
tained within a business unit and are often run by the business unit itself,
in which they are expected to follow project management rigor without
having a project manager leading the project. While temporary PMOs
exist, some projects are run outside of the PMO, as mentioned above.

The ITPMO within Invest&Wealth is mainly insourced. PMO out-
sourcing isn’t considered because of the strategic position of the ITPMO
and the fact it is a CoE for the organization. Project managers are mainly
full time, with 15% of them being contractors or on-demand resources
based on specific domain knowledge required or high demand for
project work. Hence, contractors are demand-based and skills-based. In
the setup and build-out stages, an SaaS model was used for the purpose
of immediate centralization and consolidation of project managers and
demand management. After the first stage, an EPM project server was
procured as an internal platform to improve demand management, cen-
tralized project planning, BI reporting, and PPM streamlining.
4. PPM vs. PMO

The PPM resides within the ITPMO and is not a separate function.
The PPM sits in the ITPMO to ensure project-to-program to portfo-
lio linkages. The ITPMO is involved in the executive annual planning
and assumes the responsibility of PPM planning and prioritization
and reviewing monthly results with executives. The PPM was embed-
ded within the ITPMO, because, based on the strategic position of the
PMO, the PMO is a knowledge house and mature entity in the organi-
zation, so it was a logical place to house the PPM planning. The PMO
also ensures that project requests are centralized across all business units.

The PMO value add was visible immediately upon closing almost 18
medium to large projects. The executive committee reviews and approves
all initiatives. The PPM process is reviewed on a monthly basis, as is
consistency in reporting, managing projects, repeatability of process,
improved project quality, and speed of delivery. Visible capacity plan-
ning and transparency across the organization are major wins and value
add. The ITPMO’s value is visible in the human resources value and
customer value as follows:
1. HR factor: Full demand and supply view FTEs allow organization

to plan capacity well and deal with on-demand through contractors.
Continuous training improves adoption and acceptance of the PMO
across the organization. Formalizing the project managers’ role and
establishing a career path and investing in training improve reten-
tion rates and morale. Training and certification improve specialized
skillsets and provide variety on the job.
2. Quality factor: consistency and standardization improve planning
quality, results quality, and process quality. The quality of infor-
mation has improved as a result, which allows for better decision-
making ability. Budget (actual vs. forecast) is always available; hence,
where resources (money, people, assets) are consumed is always

transparent. The ITPMO is the central function for delivering
projects. Business units do not kick off projects until the ITPMO
assigns a project manager
3. Delivery factor: Because of transparency, consistency, qualified
project managers, and predictability, the delivery rate of initiatives
has improved.
4. Cost factor: Dollars in budget (actual vs. forecast) are always avail-
able. Hence, where resources (money, people, and assets) are con-
sumed is always transparent. Total cost savings from good staffing
initiatives with current project managers has tripled the savings,
at minimum.

In summary, the ITPMO has achieved its objectives by running a suc-
cessful PPM, having skilled project managers, and the ability to improve
performance based on a feedback loop to improve in the areas outlined
above. Below is a summary of the benefits the ITPMO achieved.
1. Quantitative:
• Improving portfolio planning 10–15% annually as a result of
strong resource management analysis, financial management, and
visibility of all projects company-wide
• Contractor to FTE ratio, with only 15% contractors. Managing
corporate knowledge as a critical asset (not to go beyond 15%)
• Delivering 35–40 initiatives per year consistently for the past four
years (inclusive of present)
2. Qualitative:
• Benefits realization embedded on closeout activities, updates
shared with all respective business unit cost center
• Motivated staff throughout the organization, because people
wanted to be part of the success stories
• Able to attract talent, because the organization is investing in all
project managers through training and career path development
Interac
Description of Interac Association

Interac Association is a recognized leader in debit card services. Interac
is responsible for the development and operations of the Inter-Member
Network (IMN), a national payment network that allows Canadians
to access their money through automated banking machines and
point-of-sale terminals across Canada. Formed in 1984, Interac is
composed of a diverse group of members, including banks, trust com-
panies, credit unions, caisses populaires, merchants, and technology- and
payment-related companies. Today, Canadians coast to coast associate
the INTERAC® brand with leading electronic payment services that
are trusted, secure, and reliable. The Association is a not-for-profit
organization governed by a 14-member board of directors appointed
annually based on the business sector and the volume of transactions
processed. (More information about Interac Association may be accessed
at http://www.interac.ca.)
Interac, which has grown tremendously in recent years in terms of

budget, number of employees, and number of initiatives, is matrix in
structure. In particular, all business units work in a functional manner
and are organized around major competencies (e.g. product, IT, sales,
legal, compliance and regulations, and so on.). Interac seeks to improve
its product offerings continuously in order to compete with other
payment networks and to offer better service to Canadians. With these

objectives in mind, Interac identified the need to organize its delivery of
new or enhanced product offerings in a projectized fashion to keep up
with increased initiative demand and to deliver on associated commit-
ments. As a result, Interac’s executive management decided to create a
project practice to address these demands, among other challenges and
needs, including increased project load and need to commit to project
delivery, need for increased insight into capacity and demand manage-
ment planning, and the need for objective project prioritization based
on specific measures. Interac also recognized that a lack of standardiza-
tion could lead to unnecessarily prolonged planning cycles, which would
have a negative impact on its credibility and its ability to take advantage
of potential opportunities.
In summary, it became prudent to introduce more rigors to manage both

organization-wide and individual initiatives and to introduce a standard
method of delivery, starting with the right project selection criteria.
Accordingly, the Organization’s executive champion initiated a needs
analysis and assessment of requirements to find the right skills to build a
PMO practice and to obtain buy-in from the executive committee.
Table 7.5 Summary of the Organization
Ownership Not for profit
Industry Financial – Debit payment
Size Small (120 employees)


benefits of long-term employ-
ment. Niche specialized long term
projects.
Competition Other payment networks
Strategy for growth Mainly organic with focus on core

business. Two pillars:
1-Core product growth
2-New business expansion
The new PMO is structured as a function but operates in a projectized

manner with a total of 5 project managers, 2 of whom report to the
PMO, with the other 3 reporting to their respective business areas. There
is also 1 process and tools specialist and the PMO head. The PMO, in
turn, reports directly to the Organization’s enterprise strategy depart-
ment, which reports to the CEO’s office. The PMO reporting structure
was established in this manner, because it allows the PMO to sit at the
corporate level to streamline project delivery and ensures consistency of
this delivery across all other functions. In addition, this structure was
established to ensure no conflict of interest between the PMO and any
particular business unit or units as the enterprise function drives strate-
gic goals for the Organization that touch all business units.
The PMO was set up and built out with the goal of being a centre for
project excellence and a permanent function to serve the Organization.
Prior to establishing the PMO, the Organization did not have formal
project management practices in place, although informal project man-
agement was visible. More specifically, some large impact initiatives were
run as projects and were complemented by consultants and internal
staff. Formalized project practices also existed in the client implementa-
tions area.
Description of the Organization’s 4 Practices:

Project management at the Organization was practiced lightly and infor-
mally, for the most part. Prior to having a PMO, some formal attempts
were made to structure implementations work or requirements work
within one business unit, but sometimes these widened the gap between
business units. The PMO was expected to build project management
practices along with hiring project management professionals and imple-
menting processes and supporting tools. The PMO was also charged
with building strategic initiatives alignment. Since the Organization did
not have formal project management practices, the PMO was formed
to create these practices. Organizations often benefit when they identify
the need to have project management to structure project delivery and
when they are able to formalize it as early as possible. As a result, such
organizations put the requisite practices in place and grow discipline in
a standard manner.

Despite the vague and light project management practice at the
Organization, project management elements did exist. That being said,
the PMO was required to broaden the project management vision and
to formalize the supporting practices. Although the Association is small
in size, its reputation, impact, and reach in the market is substantial;
hence, the need for a sustainable entity to become the custodian of

project management practice.
When the PMO was chartered, the vision was not to have a temporary
function surrounding a particular project but more of a strategic corpo-
rate function to oversee the delivery and alignment of executive initia-
tives based on board direction and internal capacity. The decision was to
have a permanent in-house department reporting to the enterprise strat-
egy department, which, in turn, reports to the CEO. The positioning of
the PMO and the permanent nature of it were the two elements that led
to the success of the Organization’s PMO. First, they ensured neutrality
and executive presence oversight in governance. Second, they ensured
adherence to set processes and standards. Finally, centralized ownership
allowed the PMO to drive and audit the performance of the project
portfolio assets and project delivery. In addition, some of the resistance
and challenges in introducing the PMO function would likely not have
been addressed unless appropriately there was a PMO on the ground
overseeing the project practices and ensuring value add. This resulted in
the Organization making the position permanent to continue with the
sustainability journey.

The setup, build-out, and ongoing sustainability of the Association’s
PMO is owned completely by the Organization. As an essential function
that oversees the Organization’s project portfolio assets, the knowledge
being provided by the PMO needed to stay in house. The PMO was
built as a full-time function to ensure continuity in building and honing
the standards and supporting framework. Establishing the PMO as a
full-time function resulted in better compliance and internal adoption
and ownership. Project managers, however, are insourced and out-
sourced depending on projects and capacity planning. There are also
functional managers who are trained as project managers to manage

certain initiatives.
4. PPM vs. PMO

The PPM practice is a cornerstone of the PMO build-out. Establishing
the PMO at the strategic level meant that the PMO encompassed the
PPM function. It also meant that the PMO was responsible for the
main functions of project delivery, methodology and processes, tools
and training, project resource management, and portfolio management.
The main drivers for having the PPM embedded within the PMO were
the following: the Organization’s small size (based on the size of the
Organization, a separate function was not required); the PMO’s strate-
gic level placement (the PMO was set at the enterprise level), no other
functions did portfolio identification and selection, and all described
functions reported to the head of PMO. The benefits to embedding the
PPM in the PMO included centralizing the PPM under one governance
structure and better collaboration when handing over the associated
functions relating to projects.

The PMO value add was visible in the early stages of setup and build-
out when standards reporting brought in comparable pictures of project
health checks, project traffic light colors, and standard templates, which
helped project managers and stakeholders set the right expectations and
read the information and measures in a similar manner, which, in turn,
improved collaboration and minimized interpretations. The PMO’s
value add was visible in the human resources value and customer value,
as outlined below.
1. HR Factor: Full project demand management. Training and roll

out of standards and processes helped improve adoption. Project
manager career path and centralization of artifacts added value and

contributed to the PMO’s sustainability.
2. Quality Factor: The improvement in quality of data and accuracy of
project planning, tracking of project status, and execution enforced
a higher level of quality that also contributed to the PMO’s sustain-
ability journey. Complete transparency in projects with guidance
on color-coding projects depending on health of golden triangle.
Executives were involved in taking action and holding their teams
accountable to ensure projects stayed on track.
3. Delivery Factor: The PMO sustains performance through annual
goals and objectives from senior leadership. This is translated in the
PMO roadmap and direction, which includes required updates,
additions, and changes. While new components might be inte-
grated, their integration is based on a leadership thought process,
and they are neither radical in nature, nor transformational but built
on a successful foundation from the setup and build-out to ensure
the sustainability and growth of the PMO.
4. Cost Factor: Improving alignment cycle of annual budget planning
and estimation and projection of the cost of initiatives keeps all
project funding visible. This area is still evolving as the Organization
continues to be conscious of time and resources. Recently, cost
has played a major factor in justifying and measuring the success
of projects.

The Organization’s top level initiated the PMO to establish standards
and strategic drive for the Organizations’ initiatives. Hence, the PMO
needed to be insourced. Below is a summary of the quantitative and
qualitative benefits the PMO achieved for the Organization.
1. Quantitative:
• Improved PPM turnaround by a full quarter, closing on all
approved prioritized projects before the fiscal year kick-off
• Improved annual resource estimations and projections by 50%
through alignment of initiative and resources
• Improved project planning by 50% through standard project rigor.
All enterprise initiatives have a charter, project plan, resource plan,
resource planning, and standard report.
• Delivered (and will continue to deliver) 15–25 initiatives per year
with complete transparency to all initiatives
2. Qualitative:
• Improved morale as teams’ awareness of the big picture and proj-
ects continued to progress
• Improved alignment and quantification of business demands and
improved value add to the business
• Improved ability to track and understand the progress of projects
throughout the project life cycle, which resulted in complete trans-
parency into project reporting
McDonald’s Restaurants of Canada Ltd.
Description of the McDonald’s Organization

McDonald’s is the world’s leading food service retailer, with more than
33,000 local restaurants serving over 64 million people in 119 countries
each day. Today, 2.5 million guests visit its restaurants across Canada
every day. With its Canadian franchisees, McDonald’s Restaurants
of Canada Ltd. owns and operates more than 1,400 restaurants and
employs more than 80,000 Canadians coast-to-coast. Approximately
75% of McDonald’s Canadian restaurants are owned locally and oper-

ated by independent entrepreneurs.
McDonald’s Canada is fortunate to be part of the lives of millions of

Canadians in communities across the country, helping to build a strong
workforce, business partnerships, and local economies. When both
direct and indirect employment impacts are taken together, McDonald’s
Canada creates more than 200,000 jobs, generating almost $4.5 billion
in local economic activity annually. McDonald’s Canada is the largest
buyer of ground beef in the Canadian restaurant industry, with annual
purchases of more than 66 million pounds. The company contrib-
utes approximately $75 million in payroll taxes and benefits and $34
million in business taxes nationally. Overall, McDonald’s Canada creates
more than $610 million annually in taxes through the generation of
new jobs and additional purchases of goods and services from other
Canadian businesses.
McDonald’s is a global organization that has multiple PMO’s in various

countries focused on delivery. McDonald’s Canada’s ITPMO is struc-
tured as a function but operates in a projectized fashion to manage the
demand and supply of initiatives.
Table 7.6 Summary of McDonald’s Restaurants of Canada Ltd.
Ownership Public
Industry Food Services – Restaurants
Size Large (77,000 employee)

Culture Employee retention, one of 50 best

employers to work for the past 9
years.
Competition Other coffee shops and restaurants

in similar type of business
Strategy for growth Two pillars:

Increase line of business.
Increase franchisee profitability
Description of McDonald’s 4 Practices:

McDonalds’ Canada practiced project management prior to having
an ITPMO, however, it was informal and only rigorous around large
projects where project management discipline and project managers
were outsourced to perform specific, isolated large projects. However,
the fact project management as a practice existed before the ITPMO at
McDonald’s was what motivated the creation of standards in methodol-
ogy, reporting, and opportunities to better assess demand management
across the organization.

In general, project management was practiced at large prior to building
PMOs. However, project management was recognized formally after a
huge success in a large initiative, namely, the implementation of a gift
card project in 2006. Management and executives recognized the success
was due to project management discipline and realized the internal
need to carry on similar projects, which provided the business case for a
central CoE.
The PMO started out as temporary for a large organizational project,
and not until the success of the gift card implementation in 2006 did
the need for having a permanent function emerge. This temporary PMO
never faded after the project was delivered and became the first delivery
PMO. It resided in IT. The function has since moved from being tempo-
rary to permanent in nature.

The ITPMO within McDonald’s is mainly insourced. PMO outsourc-
ing isn’t considered because of the ITPMO reach and its strategic nature.
However, the model the ITPMO uses to maximize benefits from various
resources and functions within the PMO is led mainly through insourc-
ing, with occasional outsourcing based on supply and demand.
4. PPM vs. PMO

The PPM resides within the ITPMO and is not a separate function.
The PPM sits in the ITPMO to ensure project-to-program-to-portfolio
linkages. The main drivers for having the PPM embedded within the
PMO are based on the strategic position of the PMO. The benefit is
centralizing the PPM under one governance structure and better col-
laboration on handover between the functions relating to projects.
Sustainability elements and value add

The PMO value add was visible immediately upon closing 12–18
executive committee. The PPM process is reviewed on a monthly basis
with a financial view of all initiatives. Tiered governance allows for
smooth decision-making, empowering employees at various levels to
organization are major wins and value adds. The ITPMO value base was
visible in the human resources value and customer value, as follows:
1. HR factor: Full demand and supply view FTEs vs. contractors based
on the project demand. Bridging skillset gaps and looking to retain
FTEs for growth of skills and ensure continuity of key projects.
Tiered governance allows junior staff to be assigned to initiatives that
match their skillsets and experiences and enables their knowledge of
what, when, and to whom they should escalate. Supports career path
and promotes within.
2. Quality factor: Project progress and color status indication project
health have standard definitions. Transparent status reports are
refreshed each month. Simple metrics are put in place to ensure
projects deliver on the quality standards for which they have
been chartered.
3. Delivery factor: Because of transparency, and because of the PMO’s
ability to be involved in strategic planning and assigning PMs for
prioritized projects, there is a focus on employees who can’t work on
initiatives that are not approved. The delivery factor has increased
throughout as a result of having reduced unassigned projects.
4. Cost factor: Manages baseline budget, tracks cost of internal

resources, and keeps vendors on track. Hence, where resources
(money, people, assets) are consumed is always transparent.

McDonald’s Canada’s ITPMO has achieved its objectives by building a
delivery focused PMO that improves transparency, governance, report-
ing, standards, and retaining skilled project staff. Below is a summary of
the benefits the EPMO achieved.
1. Quantitative:
• Portfolio is able to deliver within plan every year because of
strong financial management and status and progress visibil-
ity company-wide.
• Contractor to FTE ratio is about 1:4, managing corporate knowl-
edge as a critical asset.
• Delivering 12–18 medium to large initiatives consistently for the
past 5 years
2. Qualitative:
• Able to attract talent from throughout the organization, because
people want to be part of the success stories
• Global, countrywide, and regional portfolio roll-ups available, cre-
ating synergies across the globe on similar initiatives
G&E—Game & Entertainment
Description of the G&E Organization

G&E is an operational enterprise agency. With its affiliated companies, it
employs more than 5,000 people throughout the country. G&E’s vision
is to be a role model for gaming entertainment worldwide through the
variety of the entertainment options they produce. G&E’s mission is to
make life better for people through entertainment products that gener-
ate substantial employment opportunities and provide services to com-
munity programs, such as health care, and promoting physical fitness,
sport, recreation, and cultural activities.
G&E’s project management background included multiple PMOs

throughout the years. An EPMO was setup many years ago with a focus
on processes as a priority and a secondary focus on delivery. The result
was improved processes, but delivery required more effort to improve as
expected. Therefore, the organization realized that immediate attention
was required to streamline initiatives and focus on delivery. The EPMO
reported to IT as well, which limited the reach to the corporate initia-
tives alignment and limited their domain. As a result, corporate gover-
nance was required to oversee project delivery and portfolio planning
through the corporate governance office (CGO).
The head of the CGO was hired to run the PMO, and the PPM reported
to the C-level executives. Today, the CGO is a mature organization with
over 50 employees, including heads of the PMO and the PPM, project
managers, and project officers. The CGO is about two years old.
The CGO is structured as a function but operates in a projectized

fashion. All staff members are identified as part of the project delivery
and are assigned through organization demand and supply of initiatives.
Once the delivery project manager is assigned, the project adheres to a
structure with a focus on measuring delivery and commitments, holding
the project team and the project sponsor accountable for the milestones
identified. The PPM head is involved throughout the lifecycle to under-

stand the value of an initiative and determine if an initiative needs to
stop and another start, while the PMO head focuses on delivering the
assigned initiative per the priority sequence provided.
Table 7.7 Summary of G&E Organization
Ownership Public
Industry Entertainment
Size Large (5,000 employees)

through project initiative

benefits of long-term employment.
Competition Other entertainment companies,

including online
Strategy for growth Revenue generation that feeds into

community projects and improving
client experience
Description of G&E’s 4 Practices

Project management was practiced prior to having a CGO and included
various PMOs as well as an EPMO. What motivated the creation of the
CGO was the focus on delivery and alignment rather than processes.
In addition to the consolidation of project managers and unification of
standards across the organization, the CGO was accountable for delivery
and centralization of project management activities. Today, the PMO
within the CGO focuses 75% on delivery and 25% on processes, which
provides the PMO the proper ratio to focus on delivery and utilize the
standard process to ensure consistency in measuring delivery success.

Project management was practiced at G&E prior to having PMOs. Then
separate PMOs were created to promote the delivery of project manage-
ment. Project delivery was decentralized, and every area owned its deliv-
ery, which resulted in underutilized resources and budget overruns. The
CGO was created to consolidate and improve standards of effectiveness
and improve corporate delivery as well as centralize project managers
and project management practices.
Throughout the PMOs’ journey at G&E, none of them were built on
the premise of being temporary or built around a specific project. There
were many PMOs and decentralization of delivery; hence, accountabil-
ity was an issue. The CGO is a CoE and a permanent function that
resides at the corporate level. The drivers for a permanent function are
the size of budget, resources, complexity, and ambiguity of indicators,
and further, to allow G&E to tailor processes and governance to fit the
organization’s structure and culture.

The CGO within G&E is mainly insourced. PMO outsourcing isn’t
considered because of the CGO’s reach and its strategic nature. However,
outside contractors are leveraged throughout the organization to balance
project supply and demand. Project managers are mainly insourced
and report to the CGO through the CoE function. Training and career
development are hybrids where they are supported internally for career
development and advancements and on-the-job training. In addition,

some professional developments are outsourced.
4. PPM vs. PMO

The PMO and the PPM are two separate functions at G&E, and both
functions report to the CGO. While the PMO is focused on project
delivery, the PPM is focused on portfolio management throughout the
fiscal year. The handover from the PPM to the PMO occurs between
the two areas when a project in the PPM that is approved is ready to
start. It is handed to the PMO, which runs until completion. In return,
the PMO runs the project, keeping the PPM informed about status
and progress. Another major handoff to the PPM is expected at project
completion for benefit realization.
The main drivers for having the PPM separate from the PMO are based
on the strategic position of the CGO and in order to keep the account-
ability and focus for every area. Additionally, the CGO is set at the
C-level and ensures collaboration and synergy between the PMO and
the PPM functions. The benefit of centralizing the PPM and the PMO
under one governance structure is that it allows for better collaboration
on handover between the functions relating to projects evaluated and
prioritized at the PPM cycle and when they are handed over for execu-
tion and delivery.

The PMO value add was visible immediately upon closing almost 40
the executive committee. The PPM process is reviewed on a monthly
basis with a financial view of all initiatives. Tiered governance allows for
smooth decision-making, empowering employees at various levels to
organization are major wins and value adds. The EPMO value base was
visible in the human resources value and customer value as follows:
1. HR factor: Full demand and supply view FTEs vs. contractors based
on the project demand and supply. Tiered governance allows junior
staff to be assigned to initiatives that match their skillsets and experi-
ences. Support career path (i.e. PC to junior PM to PM to senior
PM to program manager). Allow resources to understand organiza-
tion project load through transparency in initiatives. Further, project
managers know who’s assigned to what and when and why initia-
tives should stop.
2. Quality factor: The PPM is fully visible and transparent and
updated monthly. Status and progress are rolled up monthly to a
portfolio view: “Step to Green” for Amber and Red initiatives are
published and visible. Budget (actual vs. forecast) is always available.
Hence, where resources (money, people, assets) are consumed is
always transparent.
3. Delivery factor: Because of transparency, and because employees
can’t work on initiatives that are not approved, the delivery factor
has increased throughout as a result of having reduced “work-in-the-
dark” projects. Further, with 75% emphasis on delivery and 25%
on process, the mantra for the CGO is to use the process, not just
follow the process. This has improved the visibility, accountability,
and the end result is that more projects are delivered.
4. Cost factor: Dollars in budget (actual vs. forecast) always available.
Hence, where resources (money, people, and assets) are consumed is
always transparent.

In summary, the CGO has achieved organization objectives through
focusing the two areas into specific accountability, while the PPM works
the portfolio priority, monitoring, and control. The PMO is focused
on executing on these prioritized initiatives. The CGO is a permanent

in-house function with occasional outsourcing for skills and talent to
manage resource utilization based on project supply and demand. Below
is a summary of the benefits the EPMO achieved.
1. Quantitative
• Portfolio is able to deliver around 20% below budget each year
because of strong financial management, status, and progress vis-
ibility company-wide. It is also able to reassign FT resources to
work normally performed by outside contractors (reducing the
premium paid as a result of using a contractor).
• Delivered 35–40 change initiatives per year consistently for the
past 3 years (inclusive of present)
• Biggest win was the increased number of milestones in a 3-month
duration from 22% to 72%
2. Qualitative:
• Benefits realization embedded on closeout activities, finance busi-
ness partners update respective business unit cost center
• Portfolio roll-ups available; created synergies across the various
business units on similar initiatives
• Ability to improve accountability and focus across the PPM and
the PMO
Chapter Summary
In this chapter, the reader was presented with five case studies that illus-
trate the results of the PMO survey that highlighted the complexity of
the PMOLC and shed light on the nature of each phase and the skills
required to build each phase. Further illustrated were similar and differ-
ent challenges in each phase of the PMOLC.
All case studies have shown that project management must exist even in
its basic forms and can be informal in practice prior to having the need
to create a PMO, while the case organizations have differed in the status
of their PMO. Some PMOs were created to be temporary while others
were created to be permanent in nature. Some organizations have both
temporary and permanent PMOs while others have started as temporary
and moved to permanent. None of the cases were fully outsourced. They
ranged from hybrid to fully insourced models. As for the PPM, all but
one case has the PPM embedded in the PMO.
CHAPTER 8:
PMO TOOLKIT
Chapter Overview
This chapter will introduce popular PMO templates for PMO profes-
sionals’ use. The templates can be customized to every PMO’s need. The
first section contains a description of every template and its use. The
second section provides the actual templates.
Template Descriptions
PMO Checklist
The PMO checklist allows PMO heads and those who report to them
to check the PMO deliverables and questions to confirm against each
phase to ensure success in the PMO setup and implementation and to
serve as a measure of PMO deliverables and to set expectations.
PMO Assessment Survey

When looking to set up a PMO, it is important to establish a baseline for
the organization drivers and challenges and how they present at various
levels. Providing an assessment survey is one of the ways to gauge your
stakeholder and sponsor requirements, interests, and priorities. Some
areas covered in the survey strategic alignment include PMO model and
type, PMO reporting structure, number of projects the PMO is expected
to oversee, and so forth.
PMO Job Family—Career Level

This grid takes into consideration a variety of roles in project man-
agement, such as project analysts, project managers, program manag-
ers, portfolio managers, and heads of PMOs. The grid establishes the
required certification, experience, and qualification that guide the
organization’s HR department, department heads, executives, and the
PMO head to differentiate between project management roles. The grid
helps tremendously in writing job descriptions when seeking resources
at certain level and title.
PMO Functional and Interaction Model

Once an assessment of a PMO is complete and a roadmap has been
presented and approved, defining the PMO functions, services, and
interactions with the other organization functions becomes essential.
This template offers a sample structure of suggested functions that can
be updated, identifies the services for each function, and determines the
expected interactions between the PMO and each department within
the organization.
PMO Roadmap
The roadmap template provides PMO management, organization man-
agement, and the sponsor of the PMO with a roadmap that results from
the survey assessment and analysis of organization gaps and opportu-
nities. The roadmap identifies the current state of affairs, opportuni-
ties and challenges, and proposes future states around methods, tools,
governance, standards, and methodologies. The roadmap should be
time-based and have a budget and resources required to achieve the
deliverables proposed.
Template Details
PMO Checklist
The PMO checklist allows the PMO heads and those who report to the
PMO to set expectations, to check the PMO deliverables and questions
to confirm against every phase to ensure success in the PMO setup and
implementation, and to serve as measure of the PMO deliverables.
Organizational
areas to be Deliverables Questions to confirm
checked
1 Assess • PMO charter • Why is the organization

• Establish mission • PMO business case creating a PMO?
and vision • Did the organization have
• Identify exec sponsor an approved business case?
• Provide justification
2 Assess • PMO roadmap • Is the PMO roadmap a

• Ensure an approved • PMO staff plan multiyear plan or only an
budget to build a PMO • PMO skill assessment annual plan?
• Obtain approval on • Does the yearly planning
PMO staff include budget, staff, and
• Assess all PM skillsets expected deliverables from
• Assess required the PMO?
functions • What type of PMO model?
What functions will be
established?
3 Implement • PMO model defined • What model was adopted?

• Build the approved • All functions detailed • What PMO functions
PMO model • Governance model were approved?
and functions in place • Are staff hired, contracted,
• Hire and staff the PMO or hybrid?
• Build governance
model to manage the
PMO
4 Implement • Training curriculum • Are training needs scaled to

• Implement reports • Standard reports the various audiences?
and metrics • Executive dashboard • Are reports easy to read
• Implement execu- and updated frequently?
tive dashboard
• Institute training to all
levels of organization
5 Manage • Templates and • Is the organization

• PMO framework is in process are in place in compliance with
place and being kept • Feedback mecha- the framework?
up to date nism is in place • Is an established a feedback
• KPIs and metrics loop in place?
in place?
• Feedback loop in
place for continuous
improvement
PMO Assessment Survey

When looking to set up a PMO, it is important to establish a baseline for
the organization drivers, challenges, and how is it viewed at the various
levels within the organization. Providing an assessment survey is one of
the ways to gauge your stakeholder and sponsor requirements, interests,
and priorities. Areas covered in the survey are PMO model and type,
PMO reporting structure, the number of projects the PMO is expected
to oversee, and so forth.
Section 1: Strategic Alignment
1. Our organization has a clear vision and mission? Y/N

2. Our organization has a strategic roadmap
• We don’t have a strategic roadmap.
• We have a strategic roadmap.
• Our roadmap translates strategy and maps execution.
3. What unique challenges is your organization trying to resolve?
• Leadership alignment
• Initiative cost/value rationalization
• Business case development
• Project and portfolio governance and standards
• Quality management/measurement
• Project recovery
• Methodology adoption
• Other – please specify
4. What does your organization seek from a PMO?
• Improve initiative alignment

• Improve project planning
• Improve project execution
• Improve standards
• Improve collaboration
• All of the above
5. Where in the organization chart do you envision your PMO
to report?
• Corporate level
• Enterprise strategy
• Finance
• IT
6. What level of PMO management should the head of the PMO be?
• C-level
• Executive (someone who reports to C-level)
• Director
• Manager
• Consultant
7. How do you envision your PMO being involved in the organization?
• PMO is involved in the highest C-level discussions.
• PMO is involved through an executive who represents the

PMO in C-level discussions.
• PMO is only involved at the business unit level (departmental).
8. What services would you like the PMO to provide for you?
• Consulting/Services – Proposals, advise teams on how to
run projects
• Knowledge management – Manage and archive project
details and lessons learned
• Compliance/authoritative – Create and set project manage-
ment practices standards and monitor and control adherence
of these standards
• Strategic partner – Create alignment between strategic initia-
tives and their execution
Section 2: PMO Model and Execution

9. In my organization, I can describe the level of executive buy-in as:
• 100% – High
• 80% – Medium
• 50% – Low
• Less than 50% – Very low
10. How many projects does your organization complete in a year?
• 1–20
• 21–50
• 51–100
• More than 100

11. Please
select one of the maturity levels below that best describes your
project management practices.
• Ad hoc and chaotic, relies on the competence of individuals
and no standards in place
• System and structure and some standards are in place
• Established structure and standards is widely known
• Advanced project management culture, standards,
and structure
12. What functions do you envision your PMO will perform? (select all
that apply)
• Portfolio management
• Methodology management
• Tools implementation
• Project/program governance
• Project/program standards
• Project manager training
• Resource capacity planning
• KPI and reporting
• Project/program assessment and quality check
13. In your organization, to whom will your project managers report?
• PMO only
• Business units only (includes IT)
• 50% PMO, 50% business unit

PMO Job Family—Career Level

This grid takes into consideration a variety of roles in project manage-
ment, such as project analysts, project managers, program managers,
portfolio managers, and PMO heads. The grid establishes the required
certification, experience, and qualifications that guide an organization’s
HR department, department heads, executives, and the PMO head to
differentiate between project management roles. The grid helps tremen-
dously in writing job descriptions when seeking resources at a certain
level and title. Figure 8.1 provides a sample PMO job family grid.
Title Project Project Program Portfolio Manager Manager - Manager - Director / VP of
Analyst/ Manager Manager Manager PMO - Tools PMO PMO PMO
Coordinator and resources
/ PCO Methods
Role
Summary
Competency
Responsibilities (Baseline
for all PMOs)
Responsibilities (PMO Area

Specific)
Figure 8.1 Sample PMO job family
MANAGING THE PMO LIFECYCLE
Qualifications
[ 187 ]
PMO Functional and Interaction Model
Instructions:
1. Start by identifying the functions within the PMO, as shown in

Figure 8.2.
2. Identify the services the PMO provides for each of the identified
functions, as shown in Figure 8.3.
3. Identify the outputs expected from these services, as shown in
figure 8.4.
4. Map the expected interaction with each department in
the organization.
Figure 8.2 A Sample of a PMO’s functional model

Figure 8.3 A sample of PMO services

Figure 8.4 A Sample of PMO services’ outputs

PMO Roadmap
Instructions
1. Start by identifying the current state.

2. List all opportunities and challenges, as shown in Figure 8.5.
3. Propose future state.
4. Provide fiscal year or annual roadmap with the relevant details, as
shown in Figure 8.6 and Figure 8.7.
5. Provide estimated timeline and budget.
Figure 8.5 A list of PMO opportunities and challenges

Figure 8.6 A Sample of PMO Roadmap

Figure 8.7 Another sample PMO roadmap
Chapter Summary
In this chapter, the reader was presented with popular PMO templates
for PMO professionals’ use. The templates can be customized to every
PMO’s need. The first section contained a description of every template
and its use. The second section provided the actual templates.
CHAPTER 9:
THE AGILE PMO,
A NEW AREA OF FOCUS
Objectives
Recently, academic literature and practitioners have focused on seeking
answers pertaining to the performance of PMOs and what differenti-
ates high-performing PMOs from those that underperform. One critical
item in PMO performance, upon which most of the literature agrees, is
the notion of building value add through adopting sustainable practices.
Lean and Agile are two such prominent, sustainable practices that PMOs
can leverage to ensure success and longevity as well as the sustainability
of the organization they support.
Lean and Agile concepts, methods, and practices are not really new.
IT-focused organizations in particular have been implementing a
variety of standards for development, Agile being one of them, while
non-IT organizations have been practicing Lean for some time now.
Organizations in search of continuous improvement have learned to use
these two methods, though they were often spoken of separately.
The Lean and Agile journey requires structure, champions, processes, as

well as an appropriate change management approach in order to ensure
successful adoption and attainment of the promised goals.
There is a need to explain in more detail the adoption of Lean and Agile
and what each entails so as to allow students and practitioners to learn
more about the applicability of Lean and Agile. Further, this will allow
IT managers or organizations interested in adopting Lean and Agile
to understand clearly what is required to implement Lean and Agile
approaches and thus achieve what is called “Leagility.” Understanding
the applicability of the Agile and Lean standards, as well as understand-
ing what results we can expect from them, will contribute to the practi-
cality of the project management field in general. It will also shed light
on how these standards can sustain PMO performance.
Additionally, this chapter presents a case study of an organization in the

Canadian financial industry that achieved Leagility through the adoption
of Lean and Agile. While their IT department adopted Lean, the busi-
ness side of the organization adopted Lean methods in order to achieve
the desired transformation of its delivery model. Thus, what constituted
the product function of the organization was aligned with the software
development function and the PMO, creating a unified model that
achieved Leagility through the benefits of both Lean and Agile.
Lean and Agile

Organizations are able to deliver value add through Lean and Agile.
PMOs in some organizations can be the champion of Lean and Agile
implementation and can be the entity that sustains Lean and Agile
practices for value add. Before we explore the value add resulting from
Lean and Agile and introduce our case study on how one organization
was able to achieve value add, we’ll introduce what exactly Lean and
Agile are.
What is Lean, and Why Lean?

Lean is an approach that identifies the value inherent in specific products,
identifies the value stream for each product, supports the flow of value,
lets the customer pull value from the producer, and pursues perfection.
“Lean is doing more with less”. Use the least amount of effort, energy,
equipment, time, facility space, materials, and capital—while giving cus-
tomers exactly what they want (Womack and Jones 2003)
Lean thinking focuses primarily on customer satisfaction through quality

and speed and secondarily on improving processes through minimizing
defects. Transforming to a leaner organization involves moving the orga-
nization through major stages of change. However, becoming Lean is
not a final destination but rather a way of approaching and delivering
service. It becomes integrated into the organization’s culture by fostering
a high trust environment through transparency and reducing the need to
rely on bureaucracy to make decisions. Lean thinking focuses primarily
on customer satisfaction through quality and speed and secondarily on
improving processes through minimizing defects. Lean focuses on value
stream mapping through VOC (voice of the customer) and process flow
(Forrester 2011).
Origins of LEAN
Lean exists to simply get the best out of limited investments with the
understanding that you only build what is needed, eliminate anything
that does not add value, and stop if something goes wrong (Harvey
2004). (Womack and Jones 2003) distilled these Lean principles down
to five essentials:
1. Specify the value desired by the customer.

2. Identify the value stream for each product that provides that value
and challenge all of the wasted steps (generally nine out of ten) cur-
rently necessary to provide it.
3. Make the product flow continuously through the remaining value-
added steps.
4. Introduce pull between all steps where continuous flow is possible.
5. Manage toward perfection so that the number of steps and the

amount of time and information needed to serve the customer
falls continuously.
Lean Today
Toyota, the leading Lean exemplar in the world, also stands poised to
become the largest automaker in the world in terms of overall sales. Its
dominant success in everything from rising sales and market share in
every global market stands as the strongest proof of the power of Lean
enterprise. Today, there is such a huge interest in Lean that there are
literally hundreds of books, articles and papers exploring Lean.
As Lean thinking continues to spread across organizations around

the world, leaders are also adapting the tools and principles beyond
manufacturing to logistics and distribution, services, retail, healthcare,
construction, maintenance, and even government. Indeed, Lean con-
sciousness and methods are only beginning to take root among senior
managers and leaders in all sectors (Womack and Jones 2003).
What is Agile and Why Agile?

Agility is the ability to both create and respond to change in order
to profit in a turbulent business environment. It is also the ability to
balance flexibility and stability (Highsmith 2002).
Agile describes a set of principles and practices for delivering software.

Agile business objectives are: continuous innovation, product adapt-
ability, improved time-to-market, people and process adaptability, and
process adaptability. Every effort should be taken to automate all stan-
dardized and repetitive processes and tasks. Agile focuses on innovation,
product adaptability, improved time to market, and supports business
growth and profitability. Agile organizations possess the processes and
structures to support a convergent business and technology model that
requires the management of business requirements and technology capa-

bilities as one, thus resulting in greater collaboration and responsiveness
to business needs.
Origins of Agile
Agile started in the 1960s–1970s with the United States Department of
Defense (DoD) and NASA’s Iterative and Incremental Development. In
the 1980s, it evolved to include new product development. In the year
2000, the foundation of Scrum laid (Scrum is not an acrynoum, it refers
to a move in Rugby in which a team packs together and they all act
together to get the ball from one end of the field to another end of the
field.), and IBM Rational Unified Process (RUP) became more visible.
Finally, the Dynamic Systems Development Method became the catalyst
for the Agile Manifesto in 2001 (Sliger and Broderick 2008).
Benefits of Agile
Goncalves and Heda (2010) outline six main benefits of Agile
• Adaptability: Project weight distributed equally throughout all

phases of the project
• Innovation: Forces teams to focus on business goals
• Enforces Tactical Management: Self-organizing and self-manage-
ment encourages teams to find solutions for their obstacles
• User commitment: Customer is part of project and feedback is
sought throughout
• Knowledge transfer: Focus on communication and collaboration
encourages learning from each other
• Improved team morale: Teams are empowered to work under
minimal supervision, and management trusts they will deliver
HR Management in Agile Source

The Agile approach to HR management is to focus on establishing
cross-functional, self-organizing teams with mutual accountability.
These teams consist of coders, testers, analysts, architects, and project
leaders, and scrum masters. A scrum master is someone who leads the
Agile projects. Agile Scrum Masters create cross-functional teams that
are fully dedicated to the project for its duration (Sliger and Broderick
2008). The advantage in this model is having the self-organized team
share knowledge, which allows for mutual accountability. The Agile HR
management provides a guide to the Agile teams roles and responsibili-
ties, expectations, and interactions
• The team self-organizes as a result of regular check-ins and analysis

of how the team wishes to continue.
• The total ownership by the team of the planning, execution, and
review of both the product and the process leads Agile teams to a
high level of self-directed performance.
• Agile scrum masters still need to address the issues of planning,
acquiring, coordinating, and managing human resources on an
Agile team.
• Having dedicated cross-functional, self-directed teams requires
delicate management of project human resources.
• Agile scrum masters do not create staffing plans at the initiation of
a project that specifies who will be needed when.
• These types of staffing plans never work out as planned because
of the inherent changes occurring on projects: late deliveries, new
features, and existing features taking longer than expected.
The Thesis of Leagility

Both postponement and information decoupling have been considered
as relevant initiatives in making the Agile supply chain a reality. It is
commonly argued that the two can be combined into “Leagility,” which
is the combination of Agility and Lean capabilities within one supply
chain. Based upon a one-year study of Agility in the supply chain, if the
Agility approach is to work, it is required to fit within a purely Agile
supply chain strategy rather than a purely Lean approach. Thus, it is
concluded that the Agility thesis does not fundamentally challenge the
Agility concept (Hoek 2000). The thesis of Leagility rests on four prin-
ciples: management framework for strategy, paradigm for business-IT
alignment, Agile processes and champions, and enabling technologies
and infrastructure (Forrester 2011).
• Management framework for strategy: This is concerned with the

HR factor and with how to foster a culture where people take charge
and improve as a result of alignment of work to business goals.
Establishing metrics and measures that tie into business success
criteria, and, most importantly, instituting change management.
• Paradigm for business-IT alignment: This is concerned with the
process, the alignment of the business portfolio to IT. The outcome
is a decision around how the business initiative will be understood
by IT as well as determining the archetype for delivery.
• Agile processes and champions: This is concerned with the HR
factor again, where hiring the right talent that contribute positively
to Leagility adoption not only within the development team in IT
shops but more prudently across the entire organization to ensure
Leagility is thought through from the early stages of ideation
through to development and implementation.
• Enabling technology organization: This is concerned with the
focus on tools enablement to ensure process alignment and HR
efficiency that drive toward unifying platforms and infrastructure
or introducing new technologies that support IT and business
alignment in order to enable decision-making.
Implementing Lean and Agile in Organizations

In implementing Lean and Agile, the focus should be first and foremost
on having a structure for the implementation. A structure is important,
because it ensures that areas of focus are identified and priorities are
addressed in the right order. The structure should identify the following
3 areas, in order:
• Building people: Training and investing in the HR factor. This

is not limited to one level of HR in the organization. Education
should be targeted bottom-up and top-down, where the message
and the content of training may differ but the objective remains
the same. And that is, getting the organization buy-in and mini-
mizing resistance due to lack of knowledge in the matter. Training
of the senior management of an organization should focus on ben-
efits and outcome while training for middle management should
focus on the techniques to manage through Lean and Agile as
well as on the benefits to them and their teams. Training for cross-
functional teams within a department or within a project should
focus on the new collaboration techniques, estimation techniques,
and learning through retrospectives. Training should vary from
JIT to group training, to hands-on. The diversification of training
allows different audiences to align better with specific objectives
and improves adoption.
• Building processes: Charting the Lean and Agile process. This can
be achieved either by looking at existing practices, which may have
some Lean and Agile aspects to them, and better aligning them to
the foundations of Lean and Agile. It is also possible to build a fresh
process that encompasses the new way of doing business through
Lean and Agile. The process should focus on building checkpoints
through gates. For successful gate implementation, success criteria
should be identified for each gate. For example, the governance of
members involved in the gate review and the expected outcomes
for a go or no go decision. Last, incorporate retrospectives as a fun-
damental learning step in the process, in order to allow the teams
to reflect on what is working from a process perspective, as well as

on the content being delivered as a result of the new process.
• Implementing supporting tools and technologies: As men-
tioned above, emphasis should be put on retrospective and on visu-
alization tools, such as Kanban, where the flow of work and trans-
parency are key elements that allow teams to focus on breaking
down work and reducing variability. Utilizing Agile poker games
for estimation incorporates fun while allowing teams to collaborate
and learn how to estimate better.
• Building measures: Building the right scorecards at the right
level. Expectations in the early adoption stage should focus less on
measuring performance and throughput and more on measuring
collaboration and adoption. This can be achieved through team
self-assessment rather than guided success criteria. In later stages,
the expectations will be to measure performance of delivery,
throughput, speed, and efficiency through improving estimation
via the “poker game,” weekly burn down charts, completed work,
and remaining work.
Sustaining PMO Performance

by Achieving Leagility
For organizations transformed into Lean and Agile, whether their respec-
tive PMO was a champion in leading the change or the organizational
change was led by other entities, the fact remains that it is the responsi-
bility of PMOs to ensure sustained practices and sustained performance.
As seen in the previous section, the Lean and Agile journey requires
changes in all aspects of an organization’s operations, most importantly
the HR factor. While adoption levels may vary by department, the faster
PMOs can adopt the change and help their respective organization in
managing the change, the more visible the value add role of PMOs will
be perceived. The areas of emphasis should be as follows:
• Building people: PMOs should train their project managers in

the ways of managing projects in Lean and Agile. This includes
process training and tools training and provides project manag-
ers with the opportunity to learn by shadowing those with more
Agile experience or by allowing them to manage projects and
have Lean and Agile coaches support them. Having coaches on
hand has helped organizations successfully navigate the adoption
period, where people—project managers included—know there
is a resident expert to whom they can go and ask questions to
improve their understanding and application of the Lean and Agile
practices. Since the PMO has the cross-functional team’s reach,
it should leverage that ability into conducting cross-functional
training to allow teams to be trained on various collaboration tech-
niques. The PMO can help build and list the new competencies
required for project managers to run Lean and Agile projects and
partner with HR to support organizations in building competen-
cies around Lean and Agile for all other functional areas within
the organization.
• Building processes: In some organizations, the Lean and Agile
way of delivering can be housed in the PMO, where the PMO
becomes the custodian of all processes pertaining to delivery in the
organization, allowing other functional areas to focus on content
and deliverables. In that case the PMO can lead the charge in
ensuring processes are streamlined across all functional areas and
that Lean and Agile methods are kept up to date as part of con-
tinuous improvement. If the PMO is not in charge of the entire
process leading to delivery, at the very least it needs to update its
current practices to embed Lean and Agile foundations through
planning, execution, monitoring, and controlling. The focus
should shift from the usual triple constraints of scope, time, and
budget to value, quality, and constraints. The PMO can help by
being the facilitator and leading the gate reviews to provide neutral
assessment, thus allowing executives to make a go/no go decision.
• Implementing supporting tools and technologies: In addition

to introducing some of the tools that will require project managers
and project teams to work together, the PMO can also assume the
role of trainer. The PMO can set policies around the new ways
of status reporting and communication structure (team stand-
ups) that have already been adopted from SCRUM stand-ups.
Expanding the concept to core project teams allows the entire team
to collaborate and provide status but in shorter time horizons and
focusing more on action and less on the task list reporting.
• Assigning action: This can be enhanced further by the use of
Kanban boards. This adds a visualization aid, which allows teams
to follow the flow and to take immediate action and post it on
the board as an update. The PMO can facilitate the retrospectives
where the project managers and project teams can be neutral part-
ners in addressing the question of how the project performed.
• Building measures: The PMO should focus on aligning the
right scorecards at the right level of the organization. The PMO
should update its current dashboard and tracking based on what
Lean and Agile requires. Updated PMO templates should cor-
respond with the Lean and Agile structure. For example, long
project charters covering all phases of a project might be difficult
to write. Therefore, allow project managers to have scaled charters
that address the current phase only and limit planning to either the
current phase or to a time box to which the team has agreed. The
PMO can help set up and establish these policies as well as monitor
their execution.
In summary, the PMO can adopt the Lean and Agile principles and
further their adoption by their organizations in a number of ways. First,
by building people and then products by means of education and oppor-
tunities for people to put into practice and be supported in what they
have learned. Second, by building processes tailored to the organization
that encompass all delivery cycles monitored through gates and with a
focus on delivery flow, elimination of waste, and empowering teams.
Finally, by fostering a high-trust culture through transparency, reducing

the need to rely on bureaucracy to make decisions, and introducing tools
and technologies as enablers and coaching people to do the right thing
before they are measured on the outcome.
Case Study and Results

About the Case Organization
As noted earlier in this book, Interac Association is a recognized leader in
debit card services. Interac is responsible for the development and opera-
tions of the Inter-Member Network (IMN), a national payment network
that allows Canadians to access their money through automated banking
machines and point-of-sale terminals across Canada. Formed in 1984,
the Association is composed of a diverse group of members, including
banks, trust companies, credit unions, caisses populaires, merchants, and
technology- and payment-related companies. Interac Association is a
not-for-profit organization, governed by a 14-member board of direc-
tors, appointed annually based on the business sector and the volume
of transactions processed. (More information about Interac Association
may be accessed at http://www.interac.ca.) Today, Canadians associate
the INTERAC® brand with leading electronic payment services that are
trusted, secure, and reliable.
The Organization’s Challenge

The organization faces external and internal challenges. External chal-
lenges include the fact the payments landscape is evolving at a fast pace
as Canadian consumers increasingly adopt newer mechanisms to pay
for products and services. The second challenge is the need to improve
speed-to-market for new products and services. The final challenge is the
need to increase offerings and integrate with external partners, which
increases project complexity
Internally, the organization is challenged to deliver faster, better, and to

produce quality results. Second, increasing emphasis is being placed on
process alignment and achieving better efficiencies as Interac seeks to
achieve continuous improvement and to reduce waste. The final chal-
lenge is the need to ensure alignment across the 3 lifecycle models that
Interac employs in the various elements of its business and operations.
The Role of the PMO as a Champion

Reflecting on the role of the PMO within Interac, we found that the
PMO sat at the enterprise level, helping the organization’s C-level plan,
optimizing their business portfolio, and connecting with the organiza-
tion’s strategy and the annual corporate objectives. At the same time,
the PMO oversaw the execution of projects through streamlined pro-
cesses and standard methodology. The PMO was not involved in either
product development or IT build, which made the Interac EPMO the
perfect candidate to be a champion, since the function has vested inter-
est in helping the organization’s functions streamline, optimize, and
speed delivery through the adoption of Lean processes and improved
Agile practices. Additionally, the Interac EPMO benefitted from the
fact they were fairly mature in terms of both their practice and their
processes. This circumstance enabled them to lead a huge organizational
transformation while being flexible in approach in order to achieve the
desired results.
The PMO led the initiative as a major change to the organization and
structured the project in a manner that ensured governance at various
levels and an effective C-level steering committee that included the areas
that drive content (as in the product group and IT group), where ideas
translate into IT builds. The importance of having an effective C-level
steering committee played a huge role in removing roadblocks, since
they were at the center of the decision-making mechanism—a fact that
facilitated successful results.
Why Lean and Agile in Combination?

For Interac, Agile was already being practiced within the development
team, but it was not accepted or adopted widely. To ensure further adop-
tion within IT as a whole, other areas within IT, apart from develop-
ers, needed to be brought in and educated on the value of Agile, more
specifically the business analysis group, the quality assurance group, and
the implementation group. While the reason for adopting Agile could
be understood by IT in general, once they were fully briefed on its value
to them and on how to use it, the outstanding challenge was the busi-
ness unit. They understood Agile well but considered it an IT process
and were concerned about process overlap and what it might generate in
terms of waste, how to align their resources with IT, and how their two
teams should interact in general.
At this point, it became imperative to bring in the concept of Lean and to

make its primary focus the elimination of waste, the building of quality,
and the alignment of teams. So, with both IT and business needs in
mind, the Interac PMO charted both Lean and Agile as one initiative of
transformation to the delivery model of the organization. The approach
required the buy-in of executives, which was obtained through training,
where SMEs on both concepts presented their respective value.
Once buy-in and funding support became available, middle manage-

ment was engaged for bottom-up buy-in, and they, in turn, leveraged
champions with background and experience with either Lean or Agile to
become messengers of why the transformation into Lean and Agile was
needed. As soon as the buy-in on Lean and Agile was in place, the next
step was to determine the approach to carry out the change.
The Approach
The approach was a 3-step process that took into consideration people,
processes, and then technology. It consisted of:
• Building people and then building products

• Formal education on the value of Lean and Agile and their benefit
to the organization at all levels, starting from senior management
and going down to the team members
• Providing time and support for teams to participate in Lean and
Agile tours and conferences
• Building a process tailored to the organization that encompassed
all cycles, from product ideation to operationalization, all of it
monitored through gates
• Providing various tools to implement and measure people perfor-
mance and process performance
Managing the Change

The approach started as early as the initiative, which started through
identifying a vision, validating the vision, and then taking action, which
meant either pivoting and changing direction or pressing on and acceler-
ating adoption. The approach covered five core areas:
• Cultural and behavioral change

• Leadership alignment and communication
• Process adoption, including ennoblements, capabilities, and tools
to help adoption
• Starting the adoption through champions and pilot initiatives
before mass rollout
• Continuous evaluations and reflection on pilot performance and
adoption of teams
The Learning
The success of Interac’s PMO in leading the implementation of Lean
and Agile resulted in the following:
• A high trust culture fostered through transparency, reducing the

need to rely on bureaucracy to make decisions
• A focus on education, resulting in better buy-in and minimizing
the fear of change
• Inclusion of the organization’s various layers in process design and
leaving tools to the end
• Building enough slack to deliver quickly instead of maximiz-
ing utilization
• Moving forward with imperfect information instead of waiting for
the perfect plan
Chapter Summary
Lean and Agile are two of the many sustainable practices that PMOs
can leverage to ensure their own sustainability and the sustainability of
their organizations.
Lean and Agile are not new concepts. Organizations that seek con-
tinuous improvement have been using these methods for some time.
However, these two concepts are often thought of separately. Most
recently, there has been a huge buzz about Lean and Agile, to the point
that now one is not mentioned without the other. The Agile and Lean
journey requires structure, champions, processes, and a well thought-out
change management approach in order to ensure the success of the Lean
and Agile adoption.
This chapter explained what the Agile and Lean standards are, their
applicability, and the results that these standards can contribute to
organizations and their PMOs. Further, we have shown how PMOs that
adopt Lean and Agile sustain their performance.
Additionally, this chapter presented a case study of an organization in

the financial industry in Canada that achieved Leagility through their
adoption of Lean and Agile, how their PMO was a driving force behind
the implementation and adoption of Lean and Agile, and how this fact
sustained both the PMO and the organization as a whole.
CHAPTER 10:
PMOS WHERE TO?
GOING BACK TO BASICS
Objectives
In the race for excellence and increased expectations of PMOs, some
organizations have been setting up their PMOs for failure either through
lack of understanding of what a PMO does or should do or by asking
too much of their PMOs to get from 0 to 100 based on the performance
of other PMOs. Prior to having PMOs, organizations tried to solve their
organizational challenges (e.g. lack of collaboration, lack of structure,
lack of delivery) through implementing various organizational structures
(e.g. functional, divisional, matrix, and projectized); a projectized struc-
ture is a great notion of a project base organization. These organizational
structures have an impact on how PMOs are setup and managed.
This chapter aims to explore the impact of organizational models on

PMOs, and challenges and issues surrounding the ignorance of PMOs’
abilities or asking too much of the PMO. The chapter includes an expla-
nation of what it means to go back to basics and offers a simple five-step
guiding principle for organizations to consider when they embark on
building a PMO.
Organizations are structured in a variety of ways that help them achieve

their objectives and maximize their value. The structure of an organiza-
tion influences the ability of its PMO to achieve its the desired objectives.
The “cultural norms” include: the common understanding, approach to
executing, what is acceptable or not, and who influences decisions (PMI

2008). “Organizational structure is an enterprise environmental factor
which affects the availability of resources, and influences how projects
are conducted” (PMBOK 2008, p. 28). If organizational structure
shapes how projects are conducted, then most likely it will shape how
the PMO function will deliver these projects.
As of today, PMOs exist in a variety of organizational structures, and

while there is no perfect structure, each of the structures has its advan-
tages and disadvantages. Organizations should maximize the advantages
of a specific structure that works for their business and ensure the type of
PMO required fits their organization’s structure.
Organizational Structure
An overview of these organization structures and their advantages and
disadvantage will serve as a background to how organizations operate
and will help illustrate how PMOs fit into these structures.
Functional Structure
Figure 10.1 refers to the functional structure, where functions are cen-
tralized around their vertical strength, whether this is IT, finance, mar-
keting, and so forth. Advantages of such a structure include focusing on
the subject matter expertise in one area, providing economies of scale,
and ensuring a clear line of authority. Disadvantages of this structure lie
in its inflexibility, poor communication between functional areas, and
low decision making abilities.
Figure 10.1 Functional Structure
Matrix Structure
Figure 10.2 refers to the matrix structure, where organizations have a
functional view as well as a product/project view. PMBOK (project
management body of knowledge) describes the matrix as weak matrix,
strong matrix, and balanced matrix (PMI, 2008). In all its varieties,
the differences between strong, weak, and balanced are where the scale
tips toward functional or projectized. Advantages of the matrix struc-
ture include increased flexibility and responsiveness, improved resource
sharing, and enhanced problem-solving, cooperation, communication,
and resource sharing. The disadvantage of this structure is that it may
create frustration among employees who have dual lines of authority,
increased coordination and communication, and conflicts of interest.
Figure 10.2 Matrix Structure
Projectized Structure
Figure 10.3 refers to projectized structure, where team members are co-
located and most of the organization resources are involved in project
work and project managers exercise the highest level of authority.
Advantages of this structure include a focus on project delivery as the
way of the organization, increased level of decision-making at the project
team level, and authority for project managers to influence outcome.
Disadvantages include loss of control for some functional managers and
fear of being perceived as less valuable.
Figure 10.3 Projectized Structure
PMOs and Organizational Structure

PMOs have existed in many organizational structures, but organiza-
tions rarely correlate the type of PMO to the type of organizational
structure. The studies have been mainly on types of PMOs and where
they might fit in, whether at the enterprise level or departmental level,
and whether they are IT-centric or business-centric. The State of PMO
(2012) makes reference to high-performing PMOs, and statistical data
showed that PMOs at the enterprise level have been highly performing
PMOs regardless of the type of organizational structure. PMOs in high-
performing organizations are more likely to carry out a wider variety of
functions than PMOs in low-performing organizations.
Impact of Organizational Structure on the PMO

PMOs embedded in a functional structure and operating at the
departmental level will have a difficult time succeeding, because the
fundamental advantage of a PMO is in harmonizing and working across

the functions, and this is simply not going to happen by virtue of the
functional structure. The organization is not set to be cross-functional if
it chooses a functional structure as its model and if it chooses to operate
every function in a silo, based on the advantages of the functional model
(e.g. clear line of authority and employees report into one function).
PMOs embedded in a functional model at the enterprise level (i.e.
reporting to an executive) may have a better chance of influencing out-
comes than PMOs that are embedded in a department, but influence
will be limited, as will the number of functions the PMO carries out.
PMOs embedded in a matrix structure will have a better chance of

operating cross-functionally, especially if the structure is a strong matrix,
because these types of organizations are more comfortable with a dual
reporting structure and a resource manager line of authority. At the
same time, having a project manager running the project and tasking
individuals from across the organization uses their skills and expertise
to deliver on a project’s objectives. Some limitations will possibly occur
when operational activities collide with project delivery activities. The
pendulum on priority will swing based on whether the structure is a
weak or a strong matrix and whether the organization has a formal
process identifying resource needs and allocations.
PMOs in a projectized model enjoy the most liberty and freedom to

operate. The PMI suggested that project managers will exercise the most
authority in that model, and so will the PMO, assuming the project
managers report to the PMO. PMOs flourish best when an organiza-
tion model and culture are supportive of delivery through projects and
the PMO is a pivotal entity in helping the organization sort that out. A
PMO that is embedded in IT or in a specific department will still have
limitations in prioritizing projects outside the PMO’s realm of authority.
Therefore, in a projectized model, PMOs ought to be at the enterprise
level to drive the full benefit and alignment to achieve value by working
on the right projects from the portfolio perspective and working projects
right from the execution perspective to achieve organizational objectives.
Major Challenges Faced by the PMO

Two additional higher level challenges impede the PMO’s success in
some organizations.
• Executive level ignorance: When executives decide to build

a PMO without knowing what the PMO can and can’t do, they
open a door for interpretation from internal resources who poten-
tially have their own agenda or subject themselves to consultants
selling them on the build of the PMO based on a standard boil-
erplate to set up functions regardless of the organization’s need.
Another major issue occurs when the champion or sponsor of
the PMO lacks the knowledge of the PMO. Then the measure of
success for the PMO will be vague, and anyone in the organization
can interpret the success and failure the way they see fit based on
their agenda and limited knowledge of what the PMO should or
shouldn’t do.
• Trying to achieve too much too soon: Creating a PMO requires
a huge change in management and a transformation of the way
organizations do business. If the change is not carried out with
care and regard for the impact on individuals, departments, and
the organization as a whole, it will set itself for failure. Some eager
executives want their PMO to go immediately from 0 to 100,
because someone sold them on the idea that that is the only way
to get the reward expected of a PMO. The journey of establishing
a new function needs the right elements and the right support-
ive structure.
Going Back to Basics

With all the hype about PMOs and their functions and about what type
and structure should be in place, the key for success is going back to
basics. Regardless of the art and science upon which the PMO model is
built, the following five simple guidelines will keep the organization in
check. This is true for executives looking to build a new PMO or refresh
an existing PMO, PMO heads looking to revitalize an existing PMO,
or consultants looking to assess whether an organization needs a PMO.
1. Right sponsorship: Identifying the sponsor is a key element for

success. It does not mean if a leader in an organization would like to
champion a PMO, that the PMO should be under his/her authority.
The idea of looking at PMOs as solutions to organizational chal-
lenges is the right idea, but where the PMO should reside and who
the long-term sponsor of the PMO should be is a different matter.
For example, maybe the short-term sponsor should be different from
the long-term sponsor. Whatever the case might be, the sponsor or
champion needs to be neutral and have no conflict of interest in the
process or content of the work being delivered.
2. Right people: Hiring the right caliber of staff to work and run
the PMO is the second priority after establishing the right spon-
sorship. The balance has to exist for the PMO to succeed. Having
great people but not having the correct sponsorship is demoraliz-
ing for those PMO talents who may end up leaving or being let
go. Also, having the right sponsorship and not having the right staff
that can align with the vision and mission will be a problem for
PMO longevity.
3. Right size: Start small regardless of how big the organization is that
the desired PMO is looking to support. The notion of the right size
refers not only to the actual size of the PMO in terms of number of
support staff, project managers, etc., but also to the functions per-
spective. The start of any function should focus on small wins. Then
it is easier to scale up. Further, even in building processes and adopt-
ing methodologies, starting small and building upon early wins is
always a sound strategy over a big bang approach or too much rigor
too soon. The organization needs to absorb the change and reflect
the learning.
4. Right feedback loop: Multiple checkpoints and retrospectives are

held at various levels of an organization to ensure that the PMO
functions and to ensure the sizing of work and the number of staff
are in accordance with the champion’s expectations. Further, while
the feedback and direction is from organization champions and
executives, the PMO should not focus on getting feedback from
the top layer only. A process should be built to ensure a continuous
pulse check from the users and consumers of the new methods being
established. Having a 360-degree feedback loop helps ensure early,
continuous improvement and demonstrates the ability of being
open to change based on value to the organization.
5. Right support: Executive sponsorship upfront is not a one-time
exercise, and building the PMO isn’t the end of the job. It is during
the sustainability and continuous improvement stages where support
from leadership is needed most. The ongoing support of the cham-
pion is to shield the PMO from the politically charged agendas that
start to surface after the early days of the PMO’s existence. The right
support lies in setting up the expectation, guiding and directing the
progress, and finally defending the cause and ensuring the success
is seen by all PMO stakeholders. Only then can the PMO main-
tain longevity.
In all five guiding principles, the word “right” was stated at the beginning
of each principle: right sponsor, right size, right people, and so forth. The
word “right” is subjective, and the reason it was used is because the right
fit for an organization might not be the right fit for another. The role of
a PMO head is to define what is “right” for the organization, and that
has to be approved by the champion or the powers that be to ensure
support and compliance. While all of these principles apply to all types
of organizations looking to have a PMO or those looking to revitalize
their PMO, only the organization can determine the “right” value.
Chapter Summary
This chapter surveyed the various organizational models and explored
the impact of these organizational models on PMOs and which one of
these models might be better suited for PMOs, although PMOs have
existed in all types of models. It argued that two major challenges sur-
round PMOs and that going back to basics will assure that organizations
do not take on too much too soon. The chapter explained what it means
to go back to basics and offered five simple guiding principles to ensure
that organizations look into these principles before embarking on build-
ing or revitalizing a PMO.
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INDEX
A
Agile
vii, 71, 195, 196, 198, 199, 200, 201, 202, 203, 204,
205, 207, 208, 209, 210, 211, 223, 224, 227
align
alignment
22, 73, 95
assess
assessment
v
audit
27, 39, 41, 232
authority
authoritative, authorization
17, 24, 25, 30, 32, 114, 121, 127, 228, 231, 239
B
benchmark
benchmarking
vii
build-out
1, 12, 15, 42, 43, 77, 115, 116, 117, 119, 127, 228, 232, 238
C
case
case study, case organization
iv, 27, 182, 223, 238, 245
categorical
109, 110
champion
48, 56, 159, 196, 203, 218, 219, 220
change management
24, 41, 121, 127, 232, 239
CoE
vi, 6, 24, 34
Compliance
16, 24, 184, 238
customer
2, 17, 245
D
delivery
deliverable
vii, 5, 15, 20, 21, 22, 25, 27, 38, 41, 42, 122, 125, 166, 239, 241
E
EPMO
144, 147, 148, 149, 150, 151, 152, 170, 171, 172, 175, 176, 207
execute
20
Executive
29, 43, 63, 71, 91, 114, 125, 129, 147, 150, 156, 169,
174, 181, 183, 217, 220, 230, 231, 239, 240
F
factor
43, 81, 83, 84, 86, 151, 152, 156, 157, 164, 169,
170, 175, 201, 202, 203, 213, 245
finding
127
framework
40, 64, 90, 96, 162, 181, 201
function
166
G
gaps
26, 55, 60, 72, 73, 97, 104, 169, 179
Global
vii, 39, 226
goal
64, 65, 67, 69, 139, 161
governance
vii, 20, 22, 36, 69, 75, 85, 86, 92, 94, 100, 106, 124, 125, 128, 131,
132, 135, 138, 149, 150, 151, 162, 163, 169, 170, 171, 173,
174, 175, 179, 181, 182, 185, 202, 207, 232, 240, 241
H
human
43, 68, 73, 79, 80, 81, 106, 151, 156, 163, 169, 175, 200
I
implementation
12, 15, 28, 63, 64, 65, 66, 70, 71, 73, 104, 168,
185, 196, 201, 202, 210, 211, 240
improve
improvement
vii
Insourcing
135, 149, 155, 162, 168, 173
interaction
interaction model
68, 74
L
Leagility
196, 200, 201, 203, 211
Lean
195, 196, 197, 198, 201, 202, 203, 204, 205, 207, 208, 209, 210, 211, 224
lesson
lesson learned, lesson learning
24, 184, 238
Lifecycle
v, 12
M
maintain
27
Matrix
144, 214, 215
methodology
16, 17, 20, 21, 27, 28, 51, 52, 64, 65, 66, 67, 71, 73, 91, 97,
103, 104, 105, 124, 147, 149, 154, 155, 163, 167, 207
methods
4, 26, 27, 64, 72, 91, 92, 128, 179, 195, 196, 198, 204, 210, 220, 225
O
Office
v, vi, 22, 222, 223, 225
Organizational Structure
213
outsource
245
Outsourcing
50, 135, 136, 137, 149, 155, 162, 168, 173, 222
P
performance
vii, 2, 4, 5, 12, 20, 21, 27, 31, 35, 50, 57, 58, 67, 68, 69, 74, 75, 79,
80, 81, 82, 88, 90, 92, 93, 95, 96, 98, 100, 102, 103, 106, 107,
157, 162, 164, 195, 200, 203, 209, 224, 238, 241, 245
Permanent
132, 149, 155, 162, 168, 173

PMO
166
portfolio
16, 17, 22, 23, 29, 30, 32, 37, 40, 42, 44, 52, 65, 66, 68, 80, 81,
89, 99, 105, 125, 132, 137, 138, 139, 150, 151, 156, 157, 162,
163, 168, 171, 174, 175, 179, 182, 186, 201, 207, 217
PPM
22, 28, 40, 41, 44, 130, 137, 138, 139, 140, 142, 145, 150, 152, 155, 156,
157, 163, 165, 168, 169, 171, 172, 174, 175, 176, 177, 243, 245
process
vii, 15, 16, 17, 22, 29, 38, 40, 41, 43, 45, 47, 52, 55, 57, 64, 65,
66, 67, 69, 72, 73, 86, 88, 89, 91, 93, 95, 96, 97, 99, 104, 132,
135, 138, 139, 156, 160, 164, 169, 173, 174, 175, 181, 197,
200, 201, 202, 204, 207, 208, 209, 210, 217, 219, 220
Program
vi, 20, 21, 29, 33, 147, 224
Project
v, vi, vii, 1, 3, 20, 25, 26, 27, 28, 29, 30, 31, 39, 40, 42, 66, 68, 70, 73, 91,
104, 130, 139, 147, 148, 149, 150, 154, 155, 161, 162, 163, 168, 169, 172,
173, 182, 185, 199, 222, 223, 224, 225, 226, 228, 238, 239, 240, 241, 244
projectized
48, 134, 147, 153, 159, 160, 166, 171, 212, 214, 217
project manager
2, 4, 26, 39, 48, 53, 67, 73, 97, 154, 155, 156, 157, 171, 217
Q
QRM
Quality, Quality Risk Management
vi, 40, 41, 44
qualitative
82, 164
Quality
vi, 40, 83, 94, 151, 156, 164, 169, 175, 182, 208, 238, 245
quantitative
82, 164, 224
R
RACI
vi
repository
17, 27
revitalize
1
risk
risk management, risk analysis
16, 25
roadmap
12, 15
S
scalability
31, 37, 43, 44
set-up
1, 12, 15, 42, 43, 77, 115, 116, 117, 127, 228, 231, 232
sponsors
sponsorship
25, 77, 93
Stability
90
stakeholders
21, 90, 144, 163, 220
standards
RUP, COBIT, ITIL, agile
vii, 16, 22, 24, 26, 28, 41, 184, 185, 232, 238, 240
steps
step by step
45, 51, 55, 60, 61, 67, 68, 72, 74, 88, 91, 96, 97, 106, 197, 198
survey
web survey, survey results
iv, v, 43, 55, 56, 93, 108, 109, 110, 112, 127, 128,
129, 176, 178, 179, 182, 228, 242
Sustain
sustainability
88, 89, 91, 92, 93, 94
sustainability
1, 12, 15, 43, 77, 115, 117, 120, 127, 223, 228, 231, 232, 238, 245
T
templates
v, 16, 20, 26, 27, 41, 43, 64, 65, 72, 75, 98, 103, 131, 163, 178, 194, 205
Temporary
132, 149, 155, 162, 168, 173
tool
toolkit
30
U
Unified
199, 241
Usability,
90
V
value
value DD, value-add
vii, 4, 21, 42, 43, 55, 77, 79, 80, 81, 82, 83, 84, 85, 86, 92, 94,
98, 99, 103, 128, 134, 138, 151, 156, 163, 164, 169, 172,
175, 195, 196, 197, 204, 208, 209, 212, 217, 220, 245
virtual
virtualization
183, 230
volume
31, 49, 158, 206
APPENDIX A:
WEB-BASED
SURVEY LETTER
Dear Participant,
Today, Project Management Offices (PMOs) have been going through

a transformation and changing how organizations view project manage-
ment. PMOs have been taking on a more prominent role in their level
of authority, structure, reporting line, and mandate. It is because of the
evolution of the PMO that I am interested in having you share your
thoughts with me about the changes you have witnessed throughout
the years.
My name is Waffa Karkukly, and I am conducting a research project

regarding the PMO life cycle and what goes into the setup, build-out,
and sustainability of PMOs. All answers will be anonymous, and you
will have a chance to proofread the results you provide. In addition,
I will provide you with the overall results so you can compare your
situation to others and learn about similar and different success stories
and challenges.
The survey will take about 15 minutes and must be completed in one
session. Upon survey completion, you will have the opportunity to
provide your e-mail address to receive the overall research summary
once it is complete. I wish to gather all survey responses prior to May
20, 2011.
Thank you in advance for your help. If you would like more informa-
tion, please contact me at info@globalpmosolutions.ca
Sincerely,
Waffa Karkukly, Ph.D.
APPENDIX B:
WEB SURVEY QUESTIONS
Section 1: PMOLC Questions
1. How many PMOs does your organization have? (select one)

• Only one PMO
• 2-3 PMOs
• More than 3 PMOs
2. Where does your PMO reside? (select all that apply)
• Independent organization (outsourced or virtual PMO)
• Corporate level
• BU (Business Unit)
• IT
• Others (Please specify)
3. To whom does your PMO report? (select one)
• CEO
• CFO
• CIO
• C-level executive under the CEO
• Executive under C-level business side
• Executive under C-level IT side

• Others (Please specify)
4. What level of management leads your PMO? (select one)
• C-level
• Executive (someone who reports to a C-level)
• Director
• Manager
• Consultant
• Others (please specify)
5. How do you define your PMO authority/influence in the com-
pany’s hierarchy?
• PMO is involved in the highest board’s C-level discussion
• PMO is involved through an executive who represents PMO in
C-level discussions
• PMO is only involved at business unit level (departmental)
• Other (please specify)
6. What was your role in the PMO setup and build?
• I built a new PMO.
• I rebuilt an existing PMO.
• I was hired to replace a previous PMO head.
• I was contracted to build the PMO only.
7. What was your role in the PMO sustainability and support?
• I support the PMO I built
• I support a previously existing PMO.

• I was contracted to support a built PMO only.
8. Rank the complexity in the PMO lifecycle phases (setup, build-
out, sustainability) on a scale from 1–5 (1-least complex, 2- not as
complex, 3- no difference, 4-complex, 5-most complex) Complexity
= time and effort it takes to get the phase established.
• PMO setup (includes buy-in, funding, assessment, and pro-
posed build)
• PMO build-out (includes setting of the PMO functions, standards,
governance, etc.)
• PMO sustainability (includes ongoing support, continuous
improvement, training, etc.)
• PMO change management regardless of a lifecycle phase
• PMO quality/audit compliance regardless of a lifecycle phase
9. The skills of a PMO head to build a PMO may differ from those
required to run a PMO. Select the role of the PMO lead in the
PMO lifecycle phases (setup, build-out, and sustainability)
• PMO head skillset differs only between (setup, build-out)
vs. sustainability
• PMO head skillset differs only between setup vs. (build-
out, sustainability)
• PMO head skillset differs only between (setup vs. build-out
vs. sustainability)
• PMO head skillset does not differ regardless of a phase
• PMO head skillset differs regardless of a phase
10. What type of authority does your PMO have? (select one)
• Consulting/Services – Proposes, advises teams on how to

run projects
• Knowledge Management – Manages, archives project details and
lessons learned
• Compliance/Authoritative – Creates and sets project manage-
ment practices standards and monitors and controls adherence of
these standards
11. What are the unique challenges in the setup and build-out phases?
(select all that apply)
• Funding
• Buy-in
• Leadership support
• Cost/value
• Business case
• Skillset
• Governance
• Methodology adoption
12. What are the unique challenges in the sustainability phase?
• Continuous improvement
• Reports/KPI
• Quality management/measurement
• Cost/value
• Standards
• Project performance
• Project recovery
• Tools adoption
Section 2: PMO organizational questions
13. Do you believe change management and project management adop-

tion in an organization is correlated to the level of a PMO’s authority?
• The higher the authority, the more the PMO’s influence in change
management and PM adoption.
• The lower the authority, the less the PMO’s influence in change
• The level of authority doesn’t impact PMO’s influence in change
14. In my organization, I can describe the level of executive buy-in as:
• 100% executive support – High
• 80% executive support – Medium
• 50% executive support - Low
• Less than 50% executive support – Very low
15. Does your PMO have responsibility for delivery of projects? (Y/N)
16. How many projects does your PMO manage in a year?
• 1–20 projects
• 21–50 projects
• 51–100 projects
• More than 100 projects
17. Please
select one of the maturity levels below that best describes
your PMO.
• Initial Level – Ad hoc and chaotic; relies on the competence of
individuals and no standards in place
• Repeatable Level – Systems and structures are in place based on
previous experience
• Defined Level – Standard system and structure organization wide
of performed activities
• Managed Level – Established and measured processes against orga-
nizational goals. Deviations are identified and managed.
• Optimizing Level – The entire organization is focused on continu-
ous improvement
18. What functions does your PMO perform today? (select all
that apply)
• Portfolio management
• Methodology management
• Tools implementation
• Project/program governance
• Project/program standards
• Project manager training
• Resource capacity planning
• KPI and reporting
• Project/program assessment and quality check
19. What benefits does your executive get out of your PMO? (select all
that apply)
• Improved project standardization

• Improved standardization of operations
• Unified decision making across the enterprise
• Faster access to quality information
• Better capacity planning (resource planning)
• Consistent project method of delivery
• Improved project governance and change control
• Improved project performance
20. What challenges does your PMO face today? (select all that apply)
• Project management maturity
• Portfolio management alignment
• Adoption of methodologies
• Adoption of tools
• Leadership support
• Lack of project manager skillset
• Cost control
21. In your organization, project managers report to:
• The PMO only
• Business units only (IT is included as a business unit)
Section 3: Demographic Questions
22. What is your geographic location? (select one)

• US
• Canada
• Latin America
• Europe,
• Australia
• Asia Pacific
23. What is your gender?
• Female
• Male
24. Enter your name and email if you wish to receive the survey results
APPENDIX C:
CASE STUDIES INTERVIEW
QUESTIONNAIRE
The first group of questions focused on obtaining general information

from participants regarding their organizations, their practices, their
structure, and their challenges.
General Questions
1. Please provide a brief background about your company in addition

to what can be found on the company’s public website.
2. Please provide some brief some background about yourself.
3. Please provide some background about your organization’s structure.
4. Please provide a brief background about your project manage-
ment practices.
5. What is the main challenge your company is addressing by having
a PMO?
The second group of questions inquired about whether the participants

had project management practice before the PMO or if the PMO
created the project practice, whether the PMO was temporary or perma-
nent, whether the PMO insourced or outsourced, and whether or not
the PPM practice was part of the PMO.
Project Practices
6. Please provide brief details pertaining to the following:

a. Was project management practiced before having a
PMO? (Y/N) Describe what was happening prior to
having your PMO.
b. If yes, how long did it take until a PMO was place and
what motivated that decision?
c. If no, was the PMO created to establish project prac-
tices? What other functions were expected of the estab-
lished PMO?
d. Do you believe a project management practice should
exist before a PMO or the other way around? Why?
e. Some believe that a PMO is temporary; others believe it
is permanent. Please provide details about the following:
f. Is your PMO a permanent practice in the organization
or was it set up temporarily for a specific manage-
ment mandate?
g. What was the driver of your decision/the organization’s
decision to make the PMO temporary or permanent?
h. What is the benefit of having the PMO the way you
have it? Could you see it being otherwise?
7. Please provide brief details pertaining to PMO insourcing
or outsourcing:
a. Is your PMO purely insourced, outsourced, or a hybrid?
b. Whichever your answers may be, please provide details
to the functions insourced or outsourced, and whether
all project managers are insourced or outsourced.
c. If you or your organization does not already outsource,

would you consider doing it? Why or why not?
d. If you would outsource, what tasks would you outsource?
8. Please provide details pertaining to your PPM and PMO practice:
a. Is your PPM practice separate from your PMO? (Y/N)
b. In either case, please provide what drove this decision
and the benefits derived from it.
c. In case PPM is not part of the PMO, how do you ensure
the flow and handover between the two functions?
d. Do both functions report to the same head or depart-
ment? If so, which department? If they report to sepa-
rate heads or departments, which ones?
The third group of questions addressed the sustainability elements, most

notably value add, and the impact on perceived human resources value
add and customer value add.
Sustainability Elements and value add
9. Do you think your PMO function provides a value add? (Y/N)

10. If yes, please quantify from the perspective of
a. HR factor
b. Quality factor
c. Delivery factor
d. Cost factor
11. How do you sustain performance?
12. Does your mandate change frequently? How do you describe your
function’s adaptability?
13. Would you be able to share some benefits, either quantitatively or
qualitatively?

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MANAGING THE

WAFFA K ARKUKLY, PH.D.

Copyright © 2015 by Waffa Karkukly, Ph.D.

All rights reserved.

No part of this publication may be reproduced in any form, or

1. Business & Economics, Decision-Making & Problem Solving

Distributed to the trade by The Ingram Book Company

To the Almighty, who guards over me and illuminates the

I wish to express gratitude to my family, who have helped me accomplish

This book includes a survey of the Project Management Office Lifecycle

CoE Center of Excellence

Prior to establishing Global PMO Solutions, Waffa held many posi-

Waffa holds a BSc in Information Systems from DePaul University, an

ABOUT THE AUTHOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiv

LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Survey Setup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

Figure 1.1 Overall PMO lifecycle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table 1.1 Types of PMOs and their role definitions . . . . . . . . . . . . . . . . . . . 18

Table 5.16 PMO-Managed Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

This book is a culmination of years of collective effort to highlight what

The book’s main purpose is to be a reference guide for practitioners

• An executive in an organization looking to build a new PMO or

• A project manager looking to understand what it means to be

In addition, if you are:

• A student looking to become part of a PMO organization and

project-based were measured by their functional product line. Hence,

Although a majority of organizations have adopted project management

An organizational body or entity assigned various

My definition is as follows: The PMO is a critical organizational entity

Other authors have offered various perspectives on the exact nature of

Bates (1998) believes that the PMO establishes project management

Rad (2000) describes the PMO as a function that includes formaliza-

Santosus (2003) describes the PMO as a function that may enable

The PMO is becoming an important vehicle within organizations to

PMOs existed initially as a means of collecting and distributing project

Alongside the PMO is also another structure that is gaining popular-

Some organizations call their PMO the Center of Excellence. These

A PMO provides a means to manage projects and assists an organization

• Standards: establishes standard tools, templates, and methodolo-

Many companies are already subscribing to virtual PMO services,

Some companies have created a PM/PPM toolkit solution, which has

It can be summarized from the above that organizations seeking to

While organizations strive to maximize business value for their company

The Agile PMO

• Building people: PMOs should establish role-based training pro-

• Building processes: PMOs should help centralize the process and

Chapter 3 walks through the steps required in the PMOLC build-out

established in the setup phase and differentiates between an enterprise

Chapter 4 goes through the PMOLC sustainability phase. This chapter

Chapter 5 analyzes the results of a global web-based survey of PMOs

Chapter 6 takes on some emerging topics, such as virtual PMOs, PPM

Chapter 7 presents case studies from well-known organizations that shed

Chapter 8 presents a PMO toolkit with some popular, ready-to-

Chapter 10 explains the impact of organizational structure and culture

1. PMO Setup: Otherwise known as the “assessment phase” or the

Figure 1.1 Overall PMO lifecycle

Figure 1.2 Summary of the PMOLC phase description

In each phase, whether setup, build-out, or sustainability, an iterative

The PMOLC consists of four major stages:

1. Identify the PMO requirements: Work with the organization’s

Prior to unfolding the details of each phase, I provide information per-

PMO Types and Roles

The PMO often has a dual role of ensuring compliance in relation to