This question gets asked so many times, and the interesting thing is, many of the questioners assume the answer is obvious – though they may come down on different sides of the equation! In a sense, the question comes from the name Project Management Office, which is a bit of a misnomer given the charter of modern strategic PMOs. As those projects were listed and reported to management they became portfolios of projects.
Then while attempting to ascertain the resource capacity to take on the proposed projects, it became obvious that said capacity was constrained by non-project workloads. With today’s modern PMO charter, having project management skills – even if you’re really good, isn’t enough. A few days ago Gill over at JBVoices posted a blog entry about a graphic she’d happened upon on the web, showing a pie chart of a time breakdown for modern web design which had amused her greatly. Originally, a PMO was a temporary structure that ran the administrative and governance functions of large projects or programs.
First, the PMO became a permanent structure charged with oversight of all the important projects in an organization. So allocating and tracking work across resource pools became a must – and became the purview of the Project Management Office.

While Project Management is still one of the charges of the PMO, it’s only a portion – and not the main driver. This meant creating a standard methodology, monitoring status, and ensuring projects were executing according to plan while delivering value. While program and project management looks at allocating staff across a project or program, this was much broader. Strategic PMOs are really facilitators mediating the tough negotiations and decisions about how work is allocated and investments made across a diverse portfolio. If they are good at understanding business strategies, if they are good at understanding what makes their company’s business model tick, then probably. In my experience, project managers are too focused on the project(s) at hand to consider the broader picture. With that charter, the obvious choice to head the office would be a talented program or project manager. This initial type of PMO was still squarely in the realm of the project management discipline. If you’ve ever chaired a steering committee meeting full of VPs arguing for their projects, you get the point.

There may be exceptions, but I agree that the PMO should know and address the nuances of the business.
If there were more project ideas than funding or resources, how should we decide which to fund and which to decline or defer?
If you’ve had those tough conversations with business counterparts about how many resources are allocated to KLO (Keep the Lights On) work, you understand.
We think the best project managers are true leaders that know how to lead projects to achieve positive business outcomes. Someone had the bright idea to look at projects like financial investments (which they are, of course) and project portfolio management was born.
If you’ve ever tried to answer the “what has your PMO done for me lately” question, you really get it.
And investment decisions are definitely in the realm of business planning, not project management.

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