Critical Insights (13)

The Pmo Is - or Should Be -  a Sub-Committee of the Investment Committee

I worked once adjacent to a PMO that had no authority, it just collected and collated project reports and forwarded them on to the Investment Committee. They knew that many of the reports were misleading or blatantly incorrect, but they had no authority to question them or highlight this to the Investment Committee.

The Investment Committee thought they were receiving ‘validated information’ but were receiving known-to-be-unreliable information. The PMO did not tell the Investment Committee that it was unreliable (they would look stupid for forwarding known-to-be-incorrect information). So the pantomime continued.

This example highlights the danger of having an under-powered PMO.

Conventionally, Portfolio Management Offices (PMOs) have been created by expanding from the project arena, that is, to create a super project management role — to provide oversight and coordination across a portfolio of projects. Consequently, the least valuable PMO role — reporting — is usually the first aspect implemented. However because this role is of relatively low value, it compounds the devaluation of the role of the PMO overall, so that it is not seen as capable or suitable to take on the higher value roles.

If, however, you see the PMO as a sub-committee of the Investment Committee with the attendant authority, the PMO can now really make a difference. It can:

  • question the status of projects.
  • Validate business cases to ensure the projects are viable and feasible.
  • Track scope changes over time to identify shortfalls or clashes across the portfolio.
  • Take on the management of common risks to reduce the individual programs’ workload.
  • Promulgate policies and procedures/methodologies to make the project delivery process more effective and less work.

In our â€˜six streams of project delivery model’, I recently swapped the placement of the PMO from below the Project Governance role to above it as the PMO should also track and monitor the performance of governance teams and sponsors.

In Conclusion

The PMO is (or should be) the eyes and ears of the Investment Committee, enabling the Investment Committee to fully understand the nature and dynamics of the portfolio and how to optimize it for the maximum return.

Otherwise, it just becomes a promulgator of misinformation.

Which type of PMO do you want?


Post your comments below

Learn more about the strategic portfolio management role

DOWNLOAD OUR BOOK Understanding Strategic Portfolio Management

Topics: Strategic Project Portfolio Management, Fifteen Critical Insights


[1] ...

Revision History

First published: Simms, J. (Apr 2009) as "Critical Insights (13) - The PMO Is A Strategy Role"

Updated: Chapman, A. (March 2020), Revisions and Corrections