How the Enterprise PMO Improves Resource Utilization in Project Management

October 22, 2018 | By Greg Bailey

When it comes to project management, the concept of a centralized office (an Enterprise PMO) that directs simultaneous projects is a comparatively recent evolution. At the turn of the millennium in fact, project management offices (PMOs) were rare. In recent years however, they’ve become the default for large companies running multiple projects to achieve efficient resource utilization in project management.

Where did the PMO come from?

There are many reasons why PMOs have risen in popularity. 21st century project management is bigger, more dynamic, and more complex than ever. There’s no longer just one simple way to plan, execute, and complete a project. Ever-changing technology shifts project management in a new direction on a yearly or even monthly basis. Keeping to your targets and containing scope creep is more difficult than ever.

The strategic PMO evolved as a centralized point from which to oversee, run, and direct simultaneous projects. As the world of project management became more complex, the management systems it favored became more centralized.

The PMO is today’s favored project management strategy for two distinct reasons:

  • It centralizes the management of project resources
  • It deploys them effectively across the project portfolio

PMOs combine these two strategies to create optimal resource utilization in project management.

Bringing resources together

The PMO resource management process

Let’s imagine you run a successful construction company that is running multiple simultaneous building projects. Having one centralized office from which to gather, maintain, and monitor human resources is going to save a vast amount of time and money in the long term.

When hiring dedicated project staff, a PMO can analyze a whole broad sweep of candidates, many of whom will have worked on previous projects. They can consider different project managers, or other types of staff, for different projects – efficiently matching up the requirements of the role to the skills of the individual manager. It also allows them to appraise staff development and talent with a wider understanding of the PMO resource management process.

A project management office can look at five potential projects, and potential project managers and match up the best overall combination of skills across the board. Without this system, each individual project will be managed independent of the interests of other resources, with no overview of how the project management team can integrate to create a wider company strategy.

Deploy resources equally

If scope creep has taught us anything about project management, it’s that a project will always expand to use the maximum amount of resources it can possibly secure. Scope creep refers to the almost inevitable expansion of a project past the financial and time constraints that were originally assigned to it.

PMOs are an essential part of containing scope creep and ensuring each constituent project stays as close to its budget and timescale as possible. Individual projects will always demand the maximum resources they can get their hands on. It’s the role of a strategic PMO to prioritize these competing demands and assign the right resources to the place where they’re most needed.

Each of our five theoretical projects could benefit from 5% extra budget. But which needs it most? Which will use it most effectively? Which project can provide the most value to the overall company with that extra budget? These are questions that only a someone with a bird’s eye view over many projects can answer.

Optimizing resource utilization in project management

The strategic PMO has clearly evolved over the past few years for plenty of good reasons. But they aren’t a means to an end. Even the best PMOs aren’t flawless, and their projects are not guaranteed to succeed.

The best PMOs use the most cutting-edge, contemporary technological resources available to them to leverage the best possible strategies from the information and resources they have.

Today’s most dynamic PMOs need the ability to model project data, analyze eventualities, and make the most risk-free decisions based on that information.

Tempus Resource is this dynamic tool. It’s an all-purpose resource management software that adapts to the unique needs of your organization, analyzing powerful ‘what if’ scenarios to highlight exactly where resources can be best deployed across multiple projects.

Types of PMO

A PMO can become an invaluable resource for your organization, providing guidance and support in various areas. The three different types of PMO offices include:

Supportive PMO

The Supportive PMO acts as a repository to all the projects that have been started or are currently being worked on by utilizing project templates, training resources with best practices so you’re never left wondering what’s next. For organizations looking for help but don’t want their work limited too much it may be worth considering a supportive PMO who will consult without limiting creativity (especially those with Functional or Weak Matrix type of Organizational Structure).

Directive PMO

As the name indicates, this type of PMO has the authority to Direct Projects. It has a very high degree of control or full control over the project by providing resources and support to manage the project. Project Managers are assigned to project’s by and report to this type of PMO.

Directive PMO helps in achieving a high level of consistency across the projects because of the single authority and reporting structure. It is best suited for organizations with Strong Matrix or Project-based Organization structure.

Controlling PMO

A Controlling PMO is a hybrid of the Supportive and Analytic-type PMOs. It has the power to enforce compliance with organizational policies, as well as making recommendations for best practices in an organization’s environment. This type of PMO works best when there are projects that need more oversight than others or organizations utilizing Balanced Matrix style structure.

Why PMO fails

The typical reasons why PMO fails in an enterprise falls into three areas:

  1. Establishing the PMO for a wrong reason (“Our projects are failing; let’s set up a PMO”)
  2. Improper setup (lack of vision or planning), and mismanagement (PMOs with staff that has little project management experience) 
  3. Insufficient authority or organizational buy-in. 

Tempus Resource PMO software can transform the high failure rate of PMO into PMO success stories that drives highly optimized resource management and resource utilization.

To learn more about Tempus Resource and how it can help you improve resource utilization for the projects at your organization, get in contact with us today.

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