Project management office

What it means

A PMO, or project management office, is the unit that sets a company's project management standards, monitors the project portfolio with its budgets, schedules and risks, and supports project managers. It helps leadership decide which projects to start, which to accelerate and which to stop.

PMOs take different forms. A supportive PMO provides templates, tools and training, a controlling PMO enforces the methodology and reporting, and a directive PMO manages projects and project managers directly. In smaller firms the PMO function is often carried out by one person or by management itself.

Its main value is the view of the whole. An individual project manager sees their own project management triangle of scope, time and cost, while the PMO sees all projects running in parallel, the competition for people and money, and how well projects fit the company's strategy.

How it works in practice

A PMO usually introduces a common way of planning and reporting: a project charter, a schedule such as a Gantt chart, a risk register and a regular status report. Leadership then receives comparable information on every project and can step in early.

An important task is the link to finance. Together with controlling, the PMO tracks budget spend, the capitalisation of development or investment costs, and the review of benefits after a project closes. For grant-funded projects it also watches compliance with conditions and deadlines.

In companies working in an agile way, the PMO shifts from controller to coordinator: instead of detailed plans it tracks portfolio priorities, team capacity and KPIs for value delivered. The methodology adapts to the type of project, not the other way round.

What to watch out for

A PMO that produces more forms than value quickly becomes a bureaucratic obstacle, with project managers filling in PMO reports instead of running their projects. The level of requirements must match the size and risk of the projects.

Without backing from leadership a PMO has no real authority, and its recommendations to stop projects are ignored. To work, it needs a clear mandate, access to budget and capacity data and a seat at the table when portfolio decisions are made.