PMO Services Explained: Mandated and Non-Mandated Services

The Project Management Office (PMO) serves as the backbone of an organization, supplying the necessary guidance, oversight, and resources to ensure the implementation of effective project management practices. The PMO plays an important role by offering various services that help the organization handle projects better.

According to the Association of International Project Management Officers (AIPMO), a PMO is defined as an organizational entity operating independently or with other PMOs, offering mandated services and non-mandated services with responsibilities relating to the delivery and management of those services.

The subsequent discussion delves into a comprehensive understanding of both mandated and non-mandated services. Moreover, it concludes with a look at the typical problems PMOs encounter when they take on two roles -that of a compliance/assurance provider and a project delivery entity.

Essential (Mandated) PMO Services

Mandated PMO services refer to the set of core services relating to compliance, assurance, and contracted services that are required for the functioning and effectiveness of a PMO in an organization. These services are often aligned with standards, regulations, and good practices in project, program, and portfolio management (PPM). Mandated services are ones that typically only the PMO can offer and not the project teams.

Compliance, Assurance, and Contracted services

• Compliance refers to the process of ensuring that a company or a project is following a set of predefined rules or guidelines. These rules might come from external sources such as laws, regulations, or industry standards, or they might be internal policies or procedures established by the company itself. Compliance is about adhering to these rules and being able to demonstrate that adherence, often through documentation or reporting.

• Assurance, on the other hand, is about providing confidence that a company or a project is operating effectively and as expected. Assurance services often involve independent reviews or audits designed to assess the performance of the organization or project and verify that it’s meeting its objectives. Assurance can apply to many aspects of a business or project, including financial performance, operational processes, quality of outcomes, risk management, and more.

• Contracted services are services detailed in the form of a contract where all parties have decided that the PMO should offer these services instead of some other entity.

Compliance PMO Services

PMO compliance services refer to a set of services designed to ensure that a PMO’s customers comply with established standards, regulations, procedures, and project management best practices. These services may include:

• Regulatory compliance: Ensuring that projects comply with applicable laws, regulations, and industry standards.

• Project management framework development: Setting up a standardized project management approach, including project lifecycle models, project roles, and responsibilities, templates, and procedures.

• Methodology compliance: Ensuring that all projects are in alignment with the established project management methodology. This can include Agile, Waterfall, or a hybrid approach.

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• Project governance: Setting up decision-making structures and processes for project approvals, resource allocations, and project prioritizations.

• Risk management compliance: Ensuring all projects are following the organization’s risk management procedures, including risk identification, analysis, response, and monitoring.

• Training and development: Providing training to project managers and team members on project management standards, tools, and best practices.

• Project audit: Conducting project audits to verify compliance with project management standards and procedures. This may include financial audits, process audits, or risk audits.

• Change management compliance: Ensuring adherence to established change management processes, including change requests and change control.

• Benefits management: Ensuring alignment of projects with strategic goals, and tracking of project benefits realization post-project completion.

• Portfolio management: Ensuring alignment of the project portfolio with the strategic objectives of the organization, and adherence to portfolio management best practices.

Assurance PMO Services

PMO assurance services are designed to provide confidence that projects are being managed effectively and following established project management standards and best practices. These services are often carried out through a series of reviews, audits, and checks throughout the project lifecycle. Here is a list of some PMO assurance services:

• Project health checks: Regular reviews or “health checks” to assess the current state of a project and identify any areas of concern.

• Quality assurance reviews: Checking that the quality of the project’s deliverables and processes meet the required standards.

• Risk management assurance: Providing assurance that risks are being identified, assessed, and managed effectively.

• Governance assurance: Ensuring that the project’s governance structures and processes are working as intended.

• Compliance assurance: Checking that the project is compliant with applicable regulations, standards, and internal procedures.

• Project audits: Conducting in-depth audits of project management processes, procedures, and outcomes to identify areas for improvement.

• Change management assurance: Ensuring that change management processes are being followed and that changes are being managed effectively.

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• Benefits realization assurance: Tracking and verifying the benefits delivered by the project to ensure they align with the project’s objectives and the organization’s strategic goals.

• Performance assurance: Monitoring project performance against key indicators such as budget, schedule, and scope, and providing reports to stakeholders.

• Resource management assurance: Checking that resources are being managed effectively, including staff, budget, and assets.

• Stakeholder management assurance: Providing assurance that stakeholder expectations are being managed and that communication with stakeholders is effective.

• Project closure assurance: Checking that projects are being closed properly, including finalizing deliverables, conducting post-project reviews, and releasing project resources.

These assurance services can help the PMO provide transparency and confidence to stakeholders, and help identify and address issues before they become major problems.

Contracted PMO Services

Contracted PMO services can encompass a wide range of capabilities within a contractual agreement. These services are considered “mandated” since they have been formally contracted to fulfill specific requirements. Contracted PMO services can encompass various categories, including assurance, compliance, and other specialized services.

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However, it’s important to note that the flexibility to modify these services can depend on whether the client is external or internal to the organization:

External clients: When external clients wish to assume the responsibilities provided by the contracted PMO services, they have the option to amend the contract. This may involve removing services that are no longer required because of the client’s evolving capabilities or needs.

Internal clients: In the case of internal clients, alterations to the contract may primarily apply to non-compliance and assurance services. These can be adjusted or omitted if deemed unnecessary by the PPM teams, as they can potentially be managed internally.

In summary, compliance is about following the rules, while assurance is about providing confidence in performance and outcomes.

PMO Non-Mandated Services

In addition to the core mandated services, a PMO can also provide a range of non-mandated services. These services may not be essential for every project or organization, but they can add significant value and enhance the effectiveness of project management. Non-mandated services are often customized to meet the unique needs and challenges of the organization or specific projects.

Non-mandated services often involve deeper integration with specific project teams or initiatives and might include:

• Strategic advisory: A PMO can play an instrumental role in strategic planning and decision-making, offering advice on project prioritization, resource allocation, risk management, and other strategic considerations. This could also involve providing insights into the market trends, technological advancements, and strategic alignment of projects with the organization’s mission and vision.

• Capacity building: A PMO can help build capacities within the organization by offering specialized training programs, facilitating knowledge-sharing sessions, mentoring project managers and team members, and fostering a culture of continuous learning and improvement.

• Project management methods, techniques, and tools: The PMO can provide access to, training on, and support for a variety of project management tools, methods, and techniques that are not mandated but can greatly improve project planning, execution, and control.

• Innovation and change management: The PMO can support innovation and change management initiatives, helping the organization to adapt to new technologies, processes, and business models. This may include implementing project management methodologies that foster innovation or developing change management strategies to help employees adapt to new ways of working.

• Stakeholder engagement: While stakeholder management is a part of standard project management practices, the PMO can offer advanced services such as facilitating stakeholder workshops, developing comprehensive communication plans, or implementing stakeholder feedback mechanisms.

• Portfolio optimization: Beyond basic portfolio management, the PMO can offer services to optimize the project portfolio, such as advanced analytics, portfolio balancing techniques, or scenario planning.

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• Resource management: The PMO can assist in developing advanced resource management strategies, such as skills matrix development, resource leveling and smoothing techniques, and resource forecasting.

• Project recovery services: the PMO can offer specialized services to rescue off-track projects, helping to identify the root causes of issues, develop recovery plans, and implement corrective actions.

In summary, non-mandated services provide a substantial opportunity for a PMO to add value to an organization, going beyond the basic compliance and assurance services and supporting the organization’s strategic goals, enhancing project outcomes, and building organizational capabilities.

Risks Associated with Offering Mandated and Non-Mandated Services

Establishing compliance and assurance rules and then implementing them within the same PMO can carry several risks. Firstly, it might lead to a conflict of interest. The PMO is responsible for defining the rules and standards for project management, and if it’s also involved in the implementation, there may be a tendency to overlook or downplay issues to appear compliant. This can result in poor decision-making, project failures, or non-compliance with essential regulations.

Secondly, it can also create a risk of tunnel vision. When the same group sets the rules and executes the projects, there’s a chance they might become less open to alternative approaches or overlook certain risks or issues. This could limit innovation, stifle the diversity of thought, and potentially lead to mistakes or oversights.

Potential solutions for these risks involve checks and balances. One solution with more than one PMO could be to have a separate audit or a review PMO team to the one offering the services. This team would be responsible for auditing project compliance and assurance independently of the PMO doing the work, thereby maintaining objectivity. This would be part of the PMO operating model in the organization where there are many PMOs with different roles and responsibilities.

If there is only one PMO in the organization, then a potential solution is to implement a strong governance structure with clear roles and responsibilities. This could include a steering committee or board that oversees the PMO’s activities and ensures they comply with the established rules. This structure would also facilitate accountability and transparency in the organization.

Finally, encouraging a culture of openness and continuous learning can also mitigate these risks. By actively soliciting feedback, learning from mistakes, and embracing new ideas and approaches, PMOs can ensure they remain effective and continue to deliver value to the organization.

PMO Services – Concluding Reflections

The services provided by a PMO, both mandated and non-mandated, create a holistic project management framework that helps drive organizational success. However, it’s essential to recognize and mitigate potential risks.

By implementing an effective risk strategy, a PMO can ensure transparent, accountable, and effective project management practices, enhancing overall organizational performance and delivering value at every step of the project lifecycle.