Program Management Office (PMO) 101: Is your PMO strategically placed within your organization?
Far too often, PMO groups are misplaced within organizations, and in turn have reduced authority to fulfill their goals and achieve success. To avoid possible dysfunction, a company’s organization chart is key and must be well-defined and recognized company wide. In the absence of this structure, the PMO is already starting at a disadvantage.
Although the head of the PMO will rarely be at the top of an org chart and in the C Suite, the reporting structure will have a significant impact on its success. It even could make or break the PMO’s effectiveness.
While a PMO’s efforts are centered around IT systems, it plays a larger role across the organization by interacting with various departments and teams. Accordingly, many argue that it should be placed under the IT umbrella and report to a CIO. But this myopic designation does not consider the fact that the PMO is often an arbiter on a project, and it often takes on the responsibility of identifying pros and cons and providing recommendations when different groups have competing views on a certain decision. Ideally the final decision would be left to management (executive team, board of directors, etc.).
The PMO must have a level of autonomy similar to Internal Audit (I/A) that usually reports directly to the CFO and/or board of directors. Adequate independence and authority will undoubtedly add to the strength of the PMO’s mission and likelihood of success.
It is Important to recognize when pressing issues arise, it is up to the PMO to escalate the concern and ensure the message is communicated effectively and is properly addressed. If an issue is only relayed to the “owner” or the party responsible for the issue, there is a greater likelihood that the topic at hand is whitewashed — putting the PMO in a defensive posture.
Then what is the best reporting structure for a PMO? When keeping in mind that a common responsibility of the PMO is to manage the IT roadmap (the timing of key projects that align with organizational goals and which touches on all business functions in one way or another) the ability for the PMO to report as high as possible within the organization is ideal. By implementing such a reporting structure, the PMO will receive the necessary autonomy, support at the highest level of the organization, and will be free from internal pressures by one group or department.
One possibility of the PMO reporting to the COO, or whoever within the organization acts in that capacity — a position with authority over the functions that deal with the “product” and drive revenue. CIOs and IT organizations are parallel to the PMO in that they are a service center that supports the “money-makers”. The COO, however, sits in the interesting position of overseeing all the business leads and having the authority to resolve disputes and act as a tiebreaker of sorts in business decision.
There is no shortage of considerations when establishing a PMO, many being unique to each organization. Organizations that remain keenly focused on an efficient reporting structure and ensure the PMO’s independence and efficiency are front and center will introduce an infrastructure that delivers a valuable and impactful PMO operation.
- Date June 30, 2023
- Tags Insights, Operational Excellence Insights, Strategic Growth & Digital Transformation, Strategic Growth & Digital Transformation Insights