Your Guide to Establishing a PMOaaS

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The decision to move to a Project Management Office as a Service (often shortened to PMOaaS) is rising in popularity. PMOaaS offers clients the ability to ensure consistent utilization in their PMOs, provides better value for money, and enhances the visibility of project performance. Mainly driven by efficiencies in procurement, many PMO organizations are now looking at how to make the move.

In our previous article, we discussed why companies move to a Project Management as a Service (PMaaS) approach. Because PMOaaS impacts both how those services are procured and project management processes are delivered, its important to understand what a PMOaaS is.

What is Project Management Office as a Service (PMOaaS)?

PMOaaS is a longer-term contracting agreement where pricing is dependent upon the specific services provided by the Project Management Office, and the volume and complexity of projects within the service.

It should also be noted that “As a Service” solutions can also be
called “managed services”. So, if you see “PMO Managed Service”, it’s
just another way of referring to PMOaaS. It’s the same for “PM Managed Service” when referring to PMaaS.

What is the Difference Between PMaaS and PMOaaS?

The difference between PMaaS and PMOaaS is slight.  It reflects the move from procurement of a service against an agreed scope to the procurement of a service to complete deliverables. 

Performance against specific deliverables is then measured with revenue put at risk against deliverable completion.

4 Steps to Establish PMOaaS at Your Organization

A transition to a managed service model is a large scale organizational change. Thus, it should be managed as any other large program with plans for change. We have worked with many clients to capture the benefits of PMOaaS, including:

  • Reduced management effort
  • Improvements in PM capability
  • Improvement in delivery quality

Our approach reflects our core competency in Project Management Office operations and is based on establishing a plan for success. To keep things simple, our approach used the four tried and true phases: Identify, Define, Deliver, and Close. We modified the later phases to support continuing to an operations based service in lieu of a project.

Here are the four steps in moving to a PMOaaS:

Approach to Transitioning to a PMaaS - Identify, Define, Deploy and Operate

Step One: Identify

In the first step, you must determine the current landscape. This includes defining the vision, goals, and key performance indicators (KPIs) that govern the service. One of the key tenants of a successful managed service is the ability to pay for results, not resources. In order to do that, you must identify the key requirements for the service and set appropriate metrics for success.

A Program Diagnostic helps the organization gauge the availability of:

  • Standard processes
  • Tools
  • Reporting mechanisms
  • Variability of delivery across key tasks and projects

Establishing this baseline in performance will allow the team to measure and communicate any increases in performance. Identification of huge variances in delivery will also identify key focus areas for quick wins.

At this point, it could be necessary to also get some “light touch” consulting to stabilize your programs or projects. This consulting can bring them under control and to prevent having to make a lot of change in the future.

Step Two: Define

In the second step, there’s a learning period where the consultants work alongside existing resources. These resources could be in house staff as well as external contractors. The point of this phase is to define a book of work or catalog of activities along with a mobilization plan.

Establishing a catalog and cadence of regular PMO functions and tasks ensures you can appropriately assess the effort required to manage. If you do not already estimate the complexity of projects upon initiation, this is a good practice to put in place. This helps standardize the service across simple, moderately complex and complex projects, which then supports in standardizing the price.

Mobilization is the second key point in the Define phase. Here, a mobilization plan covers conversion of existing resources and lessens any impact that changes could have on mid-flight projects.

MI-GSO | PCUBED was engaged by a major energy company as part of a PMaaS framework to improve their IT Innovation. Their current portfolio suffered from lack of overall proposal quality and project planning. There were 56 projects that included:

  • Advanced computing
  • Internet of Things (IoT)
  • Cloud computing
  • Modeling analytics
  • Cyber Security

MI-GSO | PCUBED focused on adding value in four areas:

  1. Portfolio Restructuring
  2. Proposal Quality
  3. Project Valuations
  4. Team Culture 

During Portfolio Restructuring, the existing portfolio, with projects running across multiple years, was re-prioritized. Projects were postponed and resources were reallocated to more strategically aligned initiatives. Therefore, the IT Innovation team could deliver value earlier.

Implementing best practices from design thinking to proposal definition, the team facilitated three workshops. The goal was to pitch like a startup, resulting in better business proposals and improved Proposal Quality.

In addition, the implementation of an “Emerging Technology Improv Area” within the organization focused on increasing knowledge sharing and communications. In turn, this resulted in improved overall Team Culture.
 
Finally, through hands-on project management coaching and mentoring, our team improved project plan creation by 78%. The result was increased Project Valuation estimation quality, impacting more realistic downstream forecast revenue and cost savings.
PMO Managed Service Transition
MI-GSO | PCUBED’s PMO Managed Service Ramp Up Example

Step Three: Deploy

The third step is the deployment and adoption of the managed service. Delivery is standardized, pricing is set, and the project managers understand what the client wants and takes it over. In the previous ramp up graphic, the path illustrates moved from a learning phase to a scaling phase. In scaling, the client is moving projects into the portfolio or Book of Work through a managed change control process.

During scaling, you should have regular reviews so that your client is satisfied as more projects are added into the portfolio. Key performance indicators can include resource fulfillment times, customer satisfaction levels, onboarding progression and service delivery status.

Dashboards

Finally a key success factor for MI-GSO | PCUBED has been the embedding of delivery teams with onsite expert leadership. If your organization has many contractors or suppliers, getting them to uniformly operate or deliver project management services can be difficult. Our onsite team lead means you have a single point of accountability during reviews, and they can fast track necessary improvements.

Step Four: Operate

The last step in our approach is Operate. The focus during this phase is always on the continuous improvement of the PMO service. Strong PMOs are always looking to improve and assess where they can provide the most value back to the organization. There are a few questions you should ask:

  • Does the organization need to focus more on driving business intelligence, digital initiatives, AI?

  • Should the PMO include change management services, allowing the organization to better capitalize on their digital investments?

And in some cases it may make the most sense for the service to be transferred back to the client. Is this client ready to do this on their own? This happens when internal capabilities have matured to the point where the service is no longer necessary.

In Conclusion

While the decision to move to a PMOaaS is not a light one, it can be a positive one. All it takes is applying a project management approach and following logical steps.

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