This type of PMO is normally equipped with the staffing, processes, methodology, governance and

infrastructure that is capable of supporting multiple programs and projects simultaneously. Not only that
but the Portfolio Management Office serves a greater purpose: it can easily bring programs and projects
back into alignment with the organization's strategy, and even terminate those that appear not to serve the
strategy.
One common pitfall that we have witnessed across multiple organizations is the set up and deployment of
a Portfolio Management Office followed by the set up and deployment of a number of project and
program management offices throughout the organization. This leads to the immediate fragmentation of
program and project management responsibility and a turf-war around ownership. Think of it this way:
the Portfolio Management Office wants to instill governance, and shutdown and initiate/authorize
programs and projects, while the program management office wants autonomy, because they believe they
have a better understanding of their program and its contribution to strategy. As a best practice, the
Portfolio Management Office is most effective when setup as a Tier-Four PMO (see below).
 

Exhibit 3 – Different types, levels, and spans of control of management offices.
In conclusion, though the term PMO applies to more than one organizational setup, it can be derived that
the role of the PMO is evolutionary in that it operates at multiple levels, depending on the maturity of the
organization. We examine such evolution below:
Tier-One PMO: The supportive PMO “Provides assistance, support, tools, templates, and guidelines of
project management to project management teams, provides status reporting and configuration
management” (PMI, 2013a, p. 11). It does not manage or control the project and has a purely consultative
role.
Tier-Two PMO: A Tier-Two PMO performs the functions of a Tier-One PMO, as well as coordinates
project resources; develops methodology, practices, standards; supports a centralized repository;
coordinates project communications; mentors and coaches project managers; centralizes monitoring and
project control; and centralizes project operations. It also provides assurance to senior management that
projects are compliant to standards and procedures and acts as a formal and structured governance body.
It may allocate project and program managers to projects and programs respectively. It consolidates
performance information and reports to senior management.
Tier-Three PMO: A Tier-Three PMO performs the functions of tiers one and two, is usually enterprise-
wide and is situated in the organization at a senior level, independent of individual
projects/programs/departments. It functions at the portfolio level and directs and manages projects and
programs ensuring they are aligned to the organizational strategy and will deliver anticipated benefits. It
has the freedom and autonomy to make decisions on projects, programs, and even portfolios, all in favor
of strategy execution and delivery of change. In performing its duties, the PMO may advise senior
management at the business strategy level.
 

Exhibit 4 – Comparison among the 3 tiers of PMO.

Portfolio and Program Governance through the PMO

One core function in a Tier-Three PMO is the performance of portfolio and program governance.
According to The Standard for Program Management – Third Edition, “Effective governance helps
ensure that the promised value is achieved as benefits are delivered” (2013d p. 41). The PMO may or may
not incorporate the Governance Board, based on the requirements of the organization. While the role of
the Governance Board is to steer and direct the portfolio and its constituent programs and projects, the
role of the PMO is to fully support that process through the creation of decision-making mechanisms and
assigning decision-making authority and accountability, as well as to ensure governance tools, techniques,
and processes are in place and users are well trained and capable of using them.
Governance decisions may include new project proposals and the processes for their evaluation, approval,
prioritization, and rejection; decisions on changes to current projects, programs, or even portfolios; and
suspension or termination of current projects and/or programs if the goals and objectives for which they
have been undertaken cease to exist, or if the strategy or its priorities change. Resource planning and
allocation to meet strategic objectives is also a function of governance.

Ineffective Forms of PMOs

While ineffective cases have been addressed above, in this section we further provide a review of the
different types of organizational setups we have examined and worked with and the extent to which each
of them had contributed to the delivery of results and realization of strategic benefits. While some of the
examples below may be effective in performing other roles, our conclusions are derived solely based on
each model's ability to execute strategy and deliver results:
(a) The multi-PMO organization: In some organizations, multiple PMOs are formed. One of the most
common cases where such practice is undertaken is when an organization would be performing a number
of large, complex programs all at once and each one would require a Program Management Office of its
own to support it. Other cases adopting this model is when an organization decides to build a PMO within
each of its departments performing projects.
The advantages: Each large, complex program—or each department—will have its own “center of
excellence” dedicated to serving it. It will apply the standards, tools, techniques, and practices highlighted
in PMI's standards to the programs and projects, and will provide much needed support to the program
managers or project managers encompassing all management processes and areas of knowledge.
The Disadvantages: Because of the number of PMOs, the organization may struggle with consistency
across the different programs, projects, or departments. In this setup there would not be one single entity
accountable for delivering change and executing strategy. Responsibility would be fragmented among the
multiple PMOs and in extreme cases this may go as far as creating unnecessary rivalry and conflict
amongst the PMOs, in addition to the power struggle mentioned earlier, which in turn becomes
prohibitive to execution of strategy and delivery of results.
(b) The Supportive PMO: This, by definition, performs the role of an internal consultant to projects “by
supplying templates, best practices, training, access to information, and lessons learned” (2013a, p. 11).
Supportive PMOs have a low degree of influence and control over projects.
The advantages: While obvious from the definition of their role, the advantages of these types of PMOs
are limited to having an in-house, dedicated consultant (or consulting organization) that basically
provides information, global best practices, and artefacts to projects. When well equipped, the PMO will
diligently research, identify, adopt, and apply all such artefacts, providing a continuous improvement
platform for the practices and practitioners in the organization, when, if applied thoroughly (note that this
is not within the control of the PMO), will increase the competitiveness of the organization.
The disadvantages: Such PMOs lack the empowerment to deliver. They also lack the ability to influence
or control projects, let alone the organization. This setup will not be able to deliver change or strategic
benefits due to the inherent limitations in authority. Once they have stopped curating best practices, their
roles become redundant. Many organizations cannot justify the cost of such a PMO after they have
provided the initial setup of methodologies and processes.
(c) The Controlling PMO: As described by PMI in the PMBOK  Guide – Fifth Edition, the Controlling
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PMO provides support and requires compliance, “by adopting project management frameworks or

methodologies, using specific templates, forms and tools, or conformance to governance”(2013a, p. 11).
This gives it a policing role in the organization.
The advantages: In addition to those of the supportive PMO, this setup provides the organization with
assurances of consistency, telling senior management whether or not the organization is performing their
projects the right way. It also provides consistency and visibility across all projects and programs. The
disadvantages: The drawbacks are still the same as the supportive PMO: it simply does not have the
power, authority, resources, or ability to deliver change or execute strategy. Moreover, because of the
nature of its role, this type of PMO will struggle with resistance from project managers as well as teams
performing the work on the projects. When projects fail, the blame is usually bounced between the PMO
and the project teams, each accusing the other of the reasons for failure.
(d) Departmental PMO: As opposed to the Multi-PMO organization, this is a case where a PMO is set
up within a specific department, delivering projects and programs that are within the domain of its host
department, for instance, an “IT-PMO” or a “Design-PMO.”
The advantages: Combined advantages expressed elsewhere, in addition to building the capabilities of
the department to deliver projects.
The disadvantages: This type of PMO is influenced and tightly constrained by the work of its host
department and the leadership of that department. It does not typically have the authority or ability to
influence the organization or perform duties as required outside of the department, even if it possesses a
very high level of maturity. While this PMO will deliver the projects of the department, it will not have
the ability or influence to deliver the strategy of the organization at large. Once matured and performing,
the departmental PMO struggles to integrate with the rest of the organization, as its maturity surpasses its
peers.
(e) The Halo PMO: The Halo PMO may also be identified or labeled as the “Technical PMO.” This
setup occurs when senior management ‘promotes’ its best technical expert into a PMO management role,
and staffs and sets up the PMO accordingly. This also applies when the organization chooses a member of
senior management who is not knowledgeable, certified, and well-versed in Portfolio, Program, and
Project Management to lead their PMO. This is a very common—though very dangerous scenario, as
explained below.
The advantages: None except for the motivational impact on the resources promoted/selected.
The disadvantages: The PMO is staffed and operated based on strong technical knowledge in one or
more areas of application or in general management skills, but in many cases the importance of
project/program/portfolio management knowledge, experience, standards, and methodology is
undermined or seen as of secondary or lower significance and importance. This leads to the PMO
transforming itself into a technical office (and eventually entering into conflict and power struggles with
the technical office where one originally exists) as opposed to being a project management center of
excellence. Any change initiatives, or strategic objectives that do not resonate with the technical
background of the PMO are likely to be side-tracked, ignored, or not delivered entirely. In short, this is a
clear manifestation of the Halo effect, whereby the organization would lose one or more of its highly-
skilled technical resources and gain an incompetent PMO.
 
Exhibit 5 – Most common causes of PMO failure.

What type of PMO can Deliver Strategy and Results?

The PMBOK  Guide – Fifth Edition states that “The specific form, function, and structure of a PMO are
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dependent upon the needs of the organization that it supports” (2013 a, p. 11) For the purpose of this
paper, we identify such needs of the organization are (a) Execution of Strategy and (b) Delivering Results
and Change, both seeking to take the organization from an ‘As-is’ status quo to a desired ‘To-be’ state.
PMI's, Managing Change in Organizations: A Practice Guide states that strategic planning “can no
longer be an annual, top-down process, [and that] organizations need to embrace and adopt change in
their strategy to compete and to ensure long term success” (2013b, p. 9). The practice guide further
specifies that “Organizations need to react to change internally with the same intensity as they react to
changes in their external environments” (2013b p.9). Put in context, this presents organizations with
significant levels of complexity.
In the past, organizations would conduct their strategic planning once and strive to deliver the
constituents of that plan for the rest of the year while maintaining focus on business as usual. The new (or
rather current) approach to strategic planning requires organizations to be more flexible and agile in their
formulation and delivery of strategy. Influencers from outside or inside the organization can emerge at
any time, requiring attentive response and immediate action. The challenges associated with strategy
formulation are not part of the scope of this paper, but the challenges associated with the responsiveness
to such changes and the ability to create, terminate, suspend, or change projects and programs are, and we
advocate that they are best addressed through a centralized, accountable, and authorized PMO.
Exhibit 6 – Traditional approach to strategic planning.
 

Exhibit 7 – Contemporary approach to strategic planning

The following exhibit is excerpted from Managing Change in Organizations: A Practice Guide,
demonstrating the relationship between strategy, change, and projects (whereby the boxes labeled XXX
represent projects and programs) in taking organizations from As-is to To-be (2013b, p. 45):