PMO – Standard Operating Procedures

In addition to the Project Management methodology, the PMO needs a set of policies and procedures for proper functioning. I call these the PMO's Standard Operating Procedures (PMSOP). The difference between these policies and procedures and the methodology is of scope: the methodology refers to one project, while the standard operating procedures are covering all projects and the relationship between the PMO and the rest of the organization, as described below:

Standard operating procedures and the project management methodology

In addition, the policies and procedures customize a methodology that can be too general to the particularities of the organization which owns the PMO, defining the various roles involved in decision-making processes, the tools used and the timing of activities. A set of such processes and procedures, without claiming to be exhaustive, is presented below:
  • The transition process from business case or offer to project execution – when the project is entering the PMO. If the bidding process or the elaboration of the business case does not happen in the PMO, then you need a clear procedure for the Project Manager assigned to the project to acquire all the information and artifacts that have been defined. If the Project Manager was not involved in the construction of the project, it is quite likely that there will be differences of opinion between the originally proposed approach and the vision of the Project Manager who will implement the project. The Project Manager will identify and attempt to correct the problems prior to starting the project, such as clearly defining scope and project objectives and budget re-estimation. Therefore, the recommendation is that the Project Manager should be involved from the phase of the tender or business case, to avoid these changes and differences. It is even recommended that the same Project manager who will implement the project is involved in the construction of the project, but due to lack of predictability that can occur when approving the project, it is difficult to achieve this in practice;

  • Project Managers recruitment procedure provides assessment criteria to interview people involved in assessing candidates, compensation and benefit scales for different levels of seniority;

  • Capacity planning procedure for the PMO is based on income forecast for organizations that run projects for external clients, or on the business plan of the year for internal projects;

  • The procedure for allocating and communicating project managers' allocation within the organization. Strict allocation rules are difficult to define, but I've seen being used these four approaches:

  • an allocation based on the technical expertise of the Project Manager
  • - is an approach I do not use because I work for an integrator that has all kinds of solutions in portfolio, that could'nt possibly be all covered by the Project Management department;

  • an allocation based on business expertise in the beneficiary’s activity
  • – in my opinion, this is the best approach because only by understanding the business objectives, will the Project Manager be capable to set the correct direction of the project, to support the deliverable to the customer and to determine appropriate corrective actions;

  • an allocation based on personal relationships between the team and the Project Manager assigned
  • - although not a very strategic approach, this can also constitute an important factor to the project's success. If a team is already formed and the risk of conflict is low, all forces will be directed towards achieving the project objectives;

  • an allocation based on availability
  • - is not good idea in theory but in practice is the most used although the results are often disastrous. A competitive business environment that does not allow for spare capacity often forces the PMO managers to make such decisions. Therefore, it is important for the project managers to quickly adapt to different project domains: to have a solid technical base, to understand business administration and to quickly catch the specificity of the client. The management style of the Project Manager must also be flexible, in order to allow them and work with diverse people and adapt their management style on different personalities. Project managers with all these qualities are obviously hard to find and very expensive.
    • The procedure for reviewing and approving the budget and project deadlines in PMO - which would bring accountability to the Project Manager assigned to the budget and time limits. As explained above, if the project was approved following a business case that includes project objectives and a budget and time allocated, it is likely that a newly appointed Project Manager will not fully agree with how the project was initiated. In theory, the project manager has the right to review all these premises and to require a new baseline, usually with a larger budget and / or a longer time, fundamenting the requirement. This is the condition for a Project Manager to be 100% convinced that the project can be successful. In practice, the pressures to fit in the originally approved budget and time will be huge. The project may come from an offer already accepted by the client, which can not be withdrawn and was created to fit into what the customer finds to be reasonable. Therefore, this procedure is often reduced to a record where the assigned Project Manager states the risks seen in the original premises of the project and try to minimize them from the beginning. From this point of view, even the simplified version of the procedure is extremely valuable. It is therefore important that the Project Manager, although he is always put in a position to solve some problems he didn’t cause, to realize that this is one of the reasons why we need project management; it is their art that is needed to lead to a successful project despite initial difficulties.

    • The revision of the applicable Project Management methodology - we call this the tailoring of the Methodology. This review must occur every time with the initialization of a project. It is then when the Project Manager decides what parts of the methodology applies to a project, considering its size specificity, taking into consideration lessons learnt from other projects and deciding the lifecycle of the project, in the same way that the driver imagines a mental driving route after consulting a map;

    • The revision of the project scope and its completion criteria - this review must occur every time a project is initialized. This activity is closely linked to the bullet above: it is possible that the objectives are not clear enough, or it is unclear where the project stops, what is and what is not part of the project. This is where the Project Manager, using techniques such as Work Breakdown Structure helps the beneficiary to limit scope. A word of caution: this activity is often viewed with suspicion by the Beneficiary as an attempt to deny what it was originally "given" in the business case, so it is very important to explain that it is in the interest of the project to allow the team to focus on what is important and to be sure goals are achieved;

    • The initialization of the project in the Project Management Information System (PMIS) is highly dependent on the internal systems in the organization;

    • The procedure for quality audit which is usually included in the Project Management Plan;

    • Financial policies for:
      • revenue recognition;
      • method for the calculation of the percentage of completeness (point of completion) - with direct impact on revenue recognition;
      • method for revenue forecast;
      • an allocation of revenue among multiple profit centers;
      • management of budget changes;
      • a reporting calendar.

    • The procedure for entering timesheets for the project. It is very important that team members enter timesheets daily or weekly. This is difficult to achieve if the company is facing operational overload, because people leave timesheets at the end of the month as a formality for the payment of wages;

    • Work at risk policy, or how to manage the situations when work starts before the contract or the delivery order is signed. The company will have a policy that states to what extent it can allocate resources without a firm order, if some form of a written document from the customer is required (eg a requirement to start work on the email) and to what level of expense (ie no more than 100 man/days). This policy may also contain conditions for client screening, e.g. if the client is recognized to be  a client with a previous good work relationship. A special approval chain for such situations is usually stated;

    • Procedure for reporting project progress;

    • Portfolio analysis procedure;

    • Standard work plan structure, that include activities that are often forgotten, such as activities under the responsibility of the Beneficiary, change management activities or regular meetings;

    • Risk assessment procedure, that includes practices used elaborate the risk log, to such as: brainstorming with the whole team, brainstorming with the customer for a complete picture;

    • The procedure for obtaining the necessary human resources for a project, their identification and contracting;

    • The procedure for the procurement of goods required for the project;

    • The procedure for closing the project and releasing resources;

    • Documenting lessons learned and their dissemination in the company, the decision to include lessons learned in project methodology, since Project management Methodology should contain the result of those practices that have already met with problems and specificities of various projects.