What is the value of a PMO in portfolio management?

Your organization manages a large number of projects, using an equally large number of resources. The project managers are competent, the teams mobilized... So why add a PMO (or Project Management Office)?

Contents : 

• What is business portfolio management?
• Who is responsible for resolving these problems?
• Several of the PMO's missions justify a maximum perimeter for its sphere of influence
• BONUS: PMO Guide: structure and equip your project office

What is business portfolio management?

As a quick reminder, the aim of managing a portfolio of activities is to :

• Select the most useful activities for the company
• Scheduling activities to meet constraints
• Provide a periodic overview of activity progress

These objectives may seem simple to achieve, but in reality the conditions for success are difficult to meet. Controlling delivery times, solution quality and budget is the challenge of every project. But this requirement must be extended to the entire portfolio of activities.
This means putting in place mechanisms to manage the sharing of resources. The most critical variables are skills, people's availability periods, and budgets allocated to activities.
Even with the best project managers, many structural obstacles stand in the way of successful projects:

• An organization ill-suited to the exchange of resources
• Roles and responsibilities whose definitions don't match (e.g. between IT and user representatives)
• Annualized processes (such as budgeting) sometimes difficult to reconcile with multi-year management of major projects
• Overly rigid budgetary rules prohibiting or slowing down the granting of additional resources to departments with chronic resource shortages.

Added to this are methodological difficulties, which are less serious, but which must be resolved and assimilated by all project managers. Here are just a few examples:

• Estimated expenses
• Business planning
• Progress monitoring
• Risk management

BONUS - PMO Guide: structure and equip your project office

Our guide will help you define the PMO's place within your organization and make it more effective!

Download the PMO practical guide

Who is responsible for resolving these problems?

The PMO, of course! - The PMO (Project Management Office) is the activity portfolio management office. This PMO function will promote standardization and the deployment of common practices. For this, a specific function needs to be created and attached to the hierarchical level ensuring a good audience.
The important question is the limit of the PMO's scope of responsibilities:

• Should it prescribe operating rules for all departments involved in projects?
• Does it have to act in the same way towards CIO and the business divisions?

Several of the PMO's missions justify a maximum perimeter for its sphere of influence

• Improved projectmanagement , encompassing both business and IT aspects
• Projectselection assistance , based on business criteria
• Projectscheduling assistance : scoring and time positioning
• Recovering the benefits of projects, which are periodically measured by indicators implemented in user departments
• Thesetting up of committees enabling business divisions to decide jointly with CIO on the future of their activities.

Finally, even if the above conditions are met, the business portfolio management processes still need to be put into operation. These processes are demanding, and require someone to be responsible for their proper execution. The PMO's cross-functional position within the organization, its role as a catalyst between the business divisions and CIO, and its expertise in steering mechanisms, give the activity portfolio management the best chances of success.
Of course, this does not include advanced analysis, arbitration, etc., which are the responsibility ofad hoc bodies.