The Services and Value-add of PMOs: Part One

This blog was updated May 2025

A good deal has been written about Project Management Offices (PMOs) in terms of the services they provide and the associated governance structures that go with them. I’ve seen the suggested types of PMOs range from as few as three to as many as twelve in my travels. Masha Nehme from Software Advice wrote a blog earlier this year that lists five PMO types and the reasons for adopting them. To help make some better sense of this, I’ve always kept a nine-structure model in mind, using the level within the firm that the PMO operates at on the y-axis and the level of project management practitioner ownership on the x-axis, as shown in the figure below. When you use three levels within each axis, it’s easy to draw boxes around the nine different combinations. While the actual names assigned to the PMOs may vary from firm to firm, I have found that just about every PMO—or firm considering implementing one—fits into one of these boxes.

The closer the PMO is to the lower left, the greater the focus is on individual projects, while the closer the PMO is to the upper right, the greater the focus is on the entire portfolio of projects. The top two rows, boxes 4 – 7, are permanent PMOs, whereas the bottom row, boxes 1 – 3, are temporary PMOs established for a particular project or program. Back in the late 1990s, many firms established temporary PMOs to provide project controls and report to top management about their Y2K initiatives. In some cases, the Y2K PMO was disbanded after the new millennium began, while in other cases, the company realized the advantages of having a permanent PMO and re-chartered it for that purpose.

Historical Uses and Current Trends of PMOs

When I was asked to start up a PMO for the first time in the mid-1990s, most were called Project Offices (“Management” wasn’t routinely added to the name until the 2000s), probably because most of them focused on project controls, processes, methodologies, tools, and training; they also provided Project Controllers, Project Schedulers and/or Project Administrators but rarely had direct line responsibility for any Project or Program Managers. Most of the POs operated at the divisional/departmental level, which meant that type (or box) 4 was the most popular model.

When Y2K came along, a Y2K Program Manager and possibly multiple Y2K Project Managers were added to the mix, shifting the PMO into one of the upper right of the graph (boxes 5, 6, 8, or even 9). After Y2K, some PMOs were shut down, while others retained or increased their areas of responsibility, along with ownership of Project and Program Managers. Even though the majority of firms across multiple industries since Y2K have established a PMO somewhere in the organization, only the most visionary firms went all the way and adopted a type 9 PMO, which operates at the enterprise level and owns all of the project management practitioners. Even though the Project Management Institute has been a proponent of the “projectized” organization (see Chapter 2.1, Organizational Influences on Project Management, in A Guide to the Project Management Body of Knowledge, 5th Edition), most firms are still stuck with their functional or weak matrix organizational structures; some became flatter in terms of management layers, but the basic structure was still intact. This was done for political reasons (i.e., retention of control within the functional silos); concerns about added overhead cost; the lack of understanding of the value that a projectized organization could bring to the firm; and simple fears about changing to something that was largely new and unproven. Many companies—especially in manufacturing—jumped on the Six Sigma bandwagon over a decade ago after Jack Welch popularized and institutionalized it at General Electric, but no similar evangelist existed for full-service, enterprise-based PMOs, so they never became the Next Big Thing in the business world.

The economic recession that began in 2008 and which still persists to a lesser extent today has shifted the thinking about PMOs considerably. Many companies realized the added overhead of maintaining functional silos and took the opportunity to restructure their organizations while simultaneously laying-off employees to cut costs. What is left is a corporate America that is leaner and meaner than it ever has been in its history—which has also had the effect of making it more projectized by default, thus putting its projects and programs under heavier scrutiny. In 1995, it was the oddball company that cared about project portfolio management (PPM), but now, few firms can afford to keep avoiding it. The biggest driver behind PPM is often demand and resource management at the portfolio level. The project volume (demand) has generally increased, while the capacity to execute those projects (resources) has, in many cases, decreased—especially with full-time employees, as more and more project work has become the domain of temporary/contract-based resources and outsourcing.

What hasn’t changed about PMOs is the constant pressure to demonstrate the value they add to the organization. If anything, the pressure has increased and will continue to escalate as leadership teams are constantly under the gun to do more and more with less and less. The three biggest areas that concern most leaders about PMOs lately include the following:

• How well is the PMO helping to transform the organization at a strategic level from a disruption and innovation perspective?
• What is the PMO doing to help ensure the highest rate of adoption and utilization of the transformational changes?
• What is our return on investment for the PMO?

PMOs that make the jump from a divisional/departmental level to the enterprise level not only have to focus on these concerns in general but have to deal with them as a direct consequence of making the jump itself. PMOs have to start thinking and behaving strategically, not just tactically. Organizational change readiness and adoption are huge issues for any PMO that will begin operating for the enterprise for the first time. Most of all, once at the enterprise level, the bright lights and microscopes of top management become much more intense and powerful. All PMOs—and especially enterprise PMOs—must continually justify their existence so they aren’t disbanded at the first sign of an economic dip that prompts mass layoffs.

Our newest research, The State of the PMO 2025, report takes an even closer look at the state of PMOs, where they're going, and how organizations can adapt.

FAQs

What is the primary purpose of a Project Management Office (PMO)? 

The core purpose of a PMO is to standardize project management practices and provide guidance, support, and governance across projects and programs. A well-functioning PMO aims to improve project success rates, ensure consistency, optimize resource allocation, and ultimately deliver value-added program management by aligning projects with strategic goals and enhancing organizational efficiency.

What are some common types of PMOs that organizations might implement? 

Organizations implement various PMO types, ranging from supportive PMOs that offer templates and best practices to directive PMOs that control project management methodologies and assign project managers. The nine-structure model discussed highlights the spectrum based on organizational level and practitioner ownership, each designed to provide a specific level of value-added program management.

How does a PMO demonstrate its value to the organization’s leadership?

PMOs demonstrate value by showcasing improved project delivery metrics (on time, on budget), enhanced portfolio alignment with strategic objectives, better resource utilization, and increased stakeholder satisfaction. Quantifying these benefits and linking them to organizational goals is crucial for demonstrating the value-added program management provided by the PMO and securing its long-term sustainability.

What are the key challenges faced by PMOs in today’s business environment? 

Today’s PMOs face challenges such as the need to adapt to agile methodologies, demonstrate strategic alignment and contribution to innovation, ensure high adoption rates of changes, and constantly prove their return on investment. Overcoming these hurdles is essential for the PMO to continue providing value-added program management in a dynamic landscape.

How can an organization determine the right type of PMO for its needs? 

Determining the right PMO type involves assessing the organization’s strategic goals, culture, project management maturity, and the level of control and support required. Considering the desired level of value-added program management and the organization’s capacity for change are also critical factors in selecting the most suitable PMO structure.