Creating a new project management office in your business can be challenging, no matter how mature it is. When assessing whether you need a PMO, finding the right time within your business cycle can be key to success.
While there is no clear-cut answer, there are times in the lifecycle of your business when it could make more sense than others to set up a PMO. Just as the type of business could indicate a PMO is a good idea, how much progress your business has made could help make your decision.
To feed into your assessment about needing a PMO, we’re going to look at:
- How a PMO fits into a business across the four stages of a business cycle.
- The reasons why a PMO makes sense at each of the four stages of the business cycle.
- Why you may want to wait to set up a PMO at each of the four business stages.
Creating a PMO during the startup phase
It’s no secret how challenging it can be to get a new business off the ground. There is a lot of work at this stage, and it’s likely the business won’t yet be profitable.
The case for setting up a PMO very early in your business includes:
- Having solid project management practices from the beginning, with less chance of needing to do a major overhaul later.
- Projects will have great communication and coordination, which can be a struggle for many startups just finding their feet.
- The business will be able to scale better when that point comes since projects will have frameworks and procedures good to go.
However, the case against creating a PMO at the beginning of your business includes:
- Cost – PMO setups can be expensive, mainly due to the resources needed.
- Agility – one of the great things about a startup is its flexibility, but a PMO’s rigid processes could stifle this
- Focus – unless your business is very project-oriented, a PMO could be a distraction when trying to kick off other elements of the business.
Setting up a PMO for a growth-stage business
As your business begins to turn a profit, develop more complex supply chains, and see more competition, it may feel like an ideal time to create a PMO. This may not always be the case, though.
Consider these benefits of setting a new PMO in a growing business:
- Standardisation in projects can help keep control of supply chains and resource pools that increase in complexity.
- Better-documented decision-making, meaning your project success can be better replicated across a range of projects.
- Strong risk management in all projects, with a focus on the wider business strategy with leadership from the PMO.
Some drawbacks of creating a PMO during the growth stage of a business would be:
- Adding more complexity to an already-challenged business.
- More costs at a time when suppliers change perceptions of your business’s success.
- Struggling to plug in many smaller projects across the business into one overarching PMO.
Should a mature business create a PMO?
Possibly the most logical time to create a PMO seem to be at maturity. The business has become more organised, and its challenges should be more self-evident.
The pros of creating a PMO when at maturity include:
- A mature business can find standardisation and replication a challenge, and a PMO can bring this to projects.
- With a much larger pool of resources, misallocation can happen – a PMO improves resource allocation.
- A large business has reporting, and data needs that a PMO can harmonise and present in one clear report.
However, the cons of setting up a new PMO in a mature business could be:
- Institutional resistance to change.
- Business-wide disruption to manage.
- A struggle to change business culture across geographies.
A new PMO is a declining business
At the stage of decline in a business, it may feel too late to bring in a PMO. With so many things of track during a decline, is the investment worth it?
The pros to getting a PMO going during decline would be:
- Turnaround efforts and investment in a new idea can spur positive team responses.
- Risks that contributed to moving to decline can be identified and mitigated.
- A wholesale review of projects and portfolios can rejuvenate priorities.
It may be a bad idea to start a new PMO in a declining business because:
- It’s another cost that takes time to yield bottom-line results.
- Resource capacity is likely already stressed, and people demotivated.
- Unrealistic expectations that the new office can solve deeper business issues.
When in the business cycle should you create a PMO?
Whether you need a PMO will be a different answer for every business. Choosing when in your business cycle to set up a PMO can improve the chances of the office and your projects’ success.
