After definition of the basics in organizational paradigms at the last article, a differenciation of PPM follows. These cluster build the framework of the empirical research in project related acitivities.
3 Project, Program and Portfolio Management Offices
In this dection, the relationships and boundaries of the organization and the variation in management offices are defined. In addition, project related work is strongly related to the sociotechnical system.[1] The fields of project, program and portfolio management (PPM) are defined, and refer to leading frameworks such as the word wide standardized best practice approach of the Project Management Institute (PMI®) and the international norms DIN and ISO. PMO models are then introduced in chapter 3.5 and the relations and dependencies to the organization are defined.
Figure 4 – Relation between Portfolio, Program and Project management activities (high level)
3.1 Portfolio management
A portfolio has a start date but no defined end date. Portfolio management coordinates the related projects, programs and subsidiary portfolios as well as the operations of the organization in order to achieve the strategic goals of the organization.[2] The defined values are generally related to ethical convention, sustainability or priorities of stakeholder.[3] To fulfill this field, portfolio life cycle management, strategic management, governance, capacity and capability, stakeholder engagement, value management and risk management are related fields that must be addressed.[4]
In order for these complex activities to assist in the achievement of the strategic goals of an organization, portfolio managers measure the investment of organizational resource against the organizational value. The value is mostly driven by the examination of financial statements in order to align these with organizational assets and liabilities and shareholder equity. This key performance indicator is defined as a guide for correct action. Influenced by changing environments, an organization and its portfolio must be both stable and at the same time adaptable to new requirements. Therefore, there must be a balanced allocation of resources between the operational components, and the program and project components must be carefully aligned. Monitoring of the value contribution and sustainment by comparing resource usage is one result. In addition, the positive impact on the organizational strategy is monitored, and this describes how it supports the attainment of the intended business value. Opportunities and threats are proactively evaluated, and uncertainties of internal and external factors are monitored by remaining aligned and connected with key influencers in order to improve the probability of delivering value. To increase effectiveness and efficiency, categorizing, selecting, and approving of portfolio components are defined in the processes that endorse decision making.
Portfolio management within an organization is therefore a complex process and requires skills in the related topics for decision making and the preparation of transparent key performance. To fulfill this work, either a portfolio manager (PfM) or a portfolio management office (PfMO) is accountable and responsible for this work.
3.2 Program management
A program is a temporary interdependent compilation of projects, subsidiary programs or related work that aims to realize benefit for an organization using program management methods for coordinating related tasks in order to achieve these goals.[5] These benefits can be demand management, supply management, support services or regulatory compliance. These are aligned with monetary benefits and measured as net present value (NPV), return on investment (ROI), cash flow analysis, or internal rate on return (IRR). Other tools for decision making are pairwise comparison, scoring model, impact analysis or break-even analysis.[6] Major tasks in program management are strategy alignment, benefit management, stakeholder engagement, governance framework and managing the program life cycle, as well as subsidiary program activities related to tasks in project management.[7] Prior mentioned tasks are most important in order to achieve the proposed value for portfolios, to identify synergies and to align resources and risk management in order to identify synergies.
Tasks in program activities are more tactical than operational and therefore require a broad view, which can be seen as an umbrella on behalf of the strategic outcomes. While a definition of deliverables and a defined program closure is established in order to ensure that financial flows are measured according to their benefit, the most effective approach is therefore to establish helpful practices and ensure maintenance of program oversight, and to define measurables and decision making processes according to the strategy for associated ventures.
As part of program management, multi project management is closely related to the refinement and alignment of resource allocation between the different projects or programs. The main focus of this discipline is to achieve transparent processes, compatible systems of shared resources, to take preventative actions instead of using reactive mode, modular techniques between subsequences, and the best possible approach through the use of defined and designed frameworks.[8] To achieve an efficient result, processes are described and divided into the characteristics of leading, supportive, managing and value creation.[9] These are related to the defined different PMO models described in chapter 3.5 To fulfill this work, either a program manager (PgM) or a program management office (PgMO) is accountable and responsible.
3.3 Project management
A project is defined as a temporary endeavor with a unique outcome that is intended to create value for an organization.[10] The activities of project management are coordination and integration of scope, schedule, cost, quality, resource, communications, procurement and stakeholder engagement in order to achieve a detailed perspective on deliverables and ensure value creation in reaching the target.[11] These activities involve processing efficient interactions with the project team and evaluating and controlling the effectiveness in the endeavor using benefit methods such as earned value analysis (EVA), burn down charts (BDC) or velocity (VC) in delivering benefits, supported by a systematic process using and tailoring techniques, methods, tools and competencies. While governance is defined as corporate leadership, project governance supervises the process from business case to delivery object through a defined project framework.[12]
In addition, leadership is a task which is assigned to project management and is closely related to organizational decision making and the systemic dimension people. Roles are designed for long-term benefit,[13] with a project management framework which influences the social system by termination, dedication, limitation and heterogeneousness.[14] The structure and culture of an organization therefore influences the projectized processes and their productivity.
3.4 The systemic portfolio, program and project management approach
After defining PPM activities, the relations between the objects are examined and will be analyzed with regard to the systemic approach to vision and mission, structure and processes as well as people, competencies, and behavior.
Strategic management is related to the strategy of an organization. Governance framework creation is an activity with congruence between portfolio and program, and is related to processes. Stakeholder engagement is defined according to optimization of processes and its relation to the strategy.
When examining the drivers in detail, it becomes clear that there is a variation between the element value definition of a portfolio and the benefit definition of a program. While the value of a portfolio refers to its strategic fit to an organization, the benefit is valuable for the stakeholder and their engagement. From a systemic perspective, a stakeholder does not necessarily have to be inside the organization itself. Therefore, benefit management is connected through the value and benefit drivers with third parties, both inside and outside the corporate system. A similar approach underlies the capacity and capability management of a portfolio, which is aligned with the systemic approach to people and culture, but the program perspective is aligned to project execution and process orientation, where skills and execution are required efficiently.
A view of people engagement related to the portfolio level, with defined resource planning on the program level in order to monitor and control the operative sequence of a project assigned team results in a partially unaligned sequence once a change is requested in either skill or assignment duration. This has an impact on PPM processes and the governance framework with regard to their objectives. From a systemic view, program management therefore has an indirect and inconsistent people engagement fit between portfolio with its strategy and the project with its efficient execution.
The risk perspective is an active element in portfolio management which assists the decision-making process for investment; program management monitors and controls this element in projects and therefore summarizes the perspective of performing correct actions from project to portfolio. Program management therefore means working with the strategic fit of an organization and its portfolio.
From a systemic perspective, strategy and organizational elements are strongly engaged in PPM, but with a lack of people engagement, mindset and culture. While the portfolio perspective assesses the value through comparison of financial performance indicators, the value of people and culture is not yet honored as a congruent element in the same way as mission, vision, structures or processes. Therefore, the current research includes the cultural perspective and mindset in order to identify a potential change in PPM and PMO activities to include an engagement with people.
3.5 PMO – portfolio, program or project management office
Project, program or portfolio management aligned structures are independent organizational units designed to ensure effectiveness and efficiency in project related processes.[15] The use of a PMO involves the coordination and alignment of different activities according to the various functions and tasks of portfolio, program or project management. A PMO is also aligned to the strategic goals of a company in order to build effective framework conditions, while project offices (PO) are aligned to unique projects in order to enable efficient execution of procedures. For further consolidation of these variations in terminology, in this thesis PMO is referred to as a contextual function in either portfolio, program or project activities.
The structure of an effective PMO depends on many factors. In ergonomics, dependencies in the spatial environment (workplace), physical environment, and organizational environment as well as the social and cultural environment are considered. This can include for example organizational factors such as the sector or industry, and the size or maturity of a company as well as other influence factors of a human-technical interaction which the corporate is responsible for.[16] As Kütz (2010) states, governance must be ensured and service must be provided to improve beneficial outcome or increase the value, as shown in Figure 5. This means that processes must be designed, and this includes guidelines for quality management in projects. These follow principles in a process approach with customer focus, engagement in people, leadership and relationship management as well as improvement and evidence-based decision making.[17] These processes should be defined and guided through the main project management (as defined in chapter 3.3) in order to be measured and controlled and to make further improvements through the evolvement of the socio-technical relationship.[18]
Figure 5 – Effectiveness and efficiency constraints in PMO according to Kütz (2010)
The typical activities of a PMO are to ensure that governance and framework conditions to achieve the enterprise strategy are developed, aligned, monitored or negotiated between organizational units and projects.[19] From an organizational perspective, an additional management office functionality is the aligned enterprise portfolio management office (EPMO), which represents strategic perspectives such as investments, mergers and acquisitions or innovation.[20] Therefore, clear accountability as a centralized strategic function is required in order to make decisions, support, coordinate and lead while at the same time evolving a projectized management culture.[21] An agile portfolio management improves the abovementioned ideations while having a different mindset. An increase of efficiency has been identified due to automated quantitative reporting on the project level using agile frameworks and tools, but on the other hand there is a lack in effective qualitative reporting.[22]
The assumed created value is the reduction of failures. Aside from ensuring governance between organization, portfolio, program and projects are met and frameworks are defined, other main task of PMO activities include ensuring that information systems, risk policies, quality assurance processes and audits or reports are integrated.[23] In addition to the already mentioned tasks of a PMO, project marketing such as customer satisfaction or target group analysis is defined.
Evolving an organization and its processes from a strategy orientation to people and culture orientation means that an understanding of organizational processes is important. The abovementioned quality management system standards support effectiveness once efficient human interactions between employees, customer or other stakeholders are defined.
Monteiro identified 25 unique PMO models, but most of these had only been analyzed once in an empirical study and therefore do not represent the desired distribution for evaluation of an effective PMO approach.[24] Essentially, the most common match to summarize the variations of PMO models is defined by Dow (2012), as shown in Figure 6. In order to remain consistent with the defined PMI and norming approach, the consolidated view by Dow is further used in this research to analyze the current implemented PMO model within the organization. These results are also aligned to the three specific types of PMO: project-centric, PMO-centric or business-value-centric.[25]
The tasks for these types of PMO differ. For example, the coaching PMO focuses on personal development and motivation.[26] Reflecting the value of a PMO on projectized work, the continuous improvements and qualifications of an employee are benefits for an organization, especially during changes. Nevertheless, providing tools and methods such as prior coaching of project managers is the most valuable task of a PMO.[27] For knowledge transfer and defined frameworks, PMO aligns the sociotechnical system between organization and management with technology such as enterprise systems.[28]
With a self-organizations, a repository based on a framework of continuous learning might work for this organizational form. Where there is a holacratic mindset and a role-based team structure, with an individual and contextual need in builds a definition of tasks on demand.[29] With regard to project, program or portfolio management related tasks, a self-organized PMO approach is defined as a PMO circle. Using this model as a first indicator to identify whether an Evolutionary organization manages projects with a PMO approach, the detailed tasks are not defined and further analysis and research must be undertaken.
| PMO Model | Pf | Pg | Pr |
| Supportive (on-demand expertise, template, best practices, access to information) *2 | yes | ||
| Controlling (processes established by PMO, guided procedure, methodology, documentation) *2 | yes | yes | |
| Directive (assigned highly professional PMO resources and aligned reporting for directed consistency) *2 | yes | yes | |
| Managing (governance and high rate of trainings, procedures, centralized reporting) *2 | yes | ||
| Consulting / Supportive / Coaching PMO (mentoring in best practice) *1 | yes | yes | |
| Project Repository (centralization of templates, methodologies, standards, tools) *2 | yes | yes | yes |
| Enterprise PMO (oversees programs and projects, functions such as IT-PMO, Finance PMO, Marketing PMO) *1 | yes | yes | yes |
| Center of Excellence (service catalogue for business as prerequisite for organizational change requirements) *2 | yes | yes | |
| Managerial (units in matrix organizations for tactical project management and reporting functions) *2 | yes | ||
| Delivery (planning and controlling the tactical execution of projects according to business expectations) *2 | yes | ||
| Lean-Agile PMO (planning and controlling the tactical execution of projects according to business expectations) *2 | yes | ||
| PMO circle (Hypothesis: self-organized PMO unit with defined tasks according to organizational needs) | yes | yes | yes |
To finalize the review literature of PMOs with indicators for organizational performance and the critical success factors on building a PMO unit, three main cluster are identified: The human resource concept, output quality and process conceptual design for stability, control and communication. The most important success factor is the value of people who receives the grade of empowerment, for their team work value and therefore for trust in PMO. Training and experience, individual development and coaching are also important. The morale of personnel is an indicator, as pleasure in work, employee satisfaction or conflict resolution competencies are major elements.[31]
[1] Q.v. Rusch, Gebhard (2011): IT-Projektkommunikation. Kommunikation in Prozessen sozialer Strukturierung, soziotechnischen und multiplexen Systemen. In: Matthias Freitag (Hg.): Projektkommunikation. Strategien für temporäre soziale systeme. 1. Aufl. Wiesbaden: Verlag für Sozialwissenschaften, p. 49–86.
[2] Q.v. PMI Project Management Institute (2018): The Standard for Portfolio Management. Fourth edition. Newtown Square, PA: Project Management Institute, p. 3
[3] Cf. DIN ISO 21504, 2017-09: Projekt-, Programm- und Portfoliomanagement – Leitlinien zum Portfoliomanagement (ISO 21504:2015), p. 8.
[4] Cf. PMI Project Management Institute (2018): The Standard for Portfolio Management. Fourth edition. Newtown Square, PA: Project Management Institute, pp. 21-95.
[5] Cf. PMI (2017): The Standard for Program Management. Fourth Edition. Newtown Square, PA: Project Management Institute, p. 3.; DIN ISO 21503, Oktober 2018: Entwurf. Projekt-, Programm- und Portfoliomanagement – Leitlinien zum Programmmanagement (ISO 21503:2017), p. 1.
[6] C.v. DIN 69909-3, 2015-11: Multiprojektmanagement – Management von Projektportfolios, Programmen und Projekten – Teil 3: Methoden, p. 6.
[7] Cf. PMI (2017): The Standard for Program Management. Fourth Edition. Newtown Square, PA: Project Management Institute. The knowledge areas belongs to program framework.
[8] Cf. DIN 69909-1, 2013-03: Multiprojektmanagement – Management von Projektportfolios, Programmen und Projekten – Teil 1: Grundlagen, p. 7f.
[9] Q.v. DIN 69909-2, 2013-03: Multiprojektmanagement – Management von Projektportfolios, Programmen und Projekten – Teil 2: Prozesse, Prozessmodell, pp. 5-6.
[10] Q.v. PMI Project Management Institute: A guide to the project management body of knowledge (PMBOK® GUIDE). Sixth Edition. Newtown Square, PA, p. 4.
[11] Ibid, pp. 69-535.
[12] Q.v. DIN ISO 21500, 2016-02: Leitlinien Projektmanagement (ISO 21500:2012), pp. 9-13.
[13] Q.v. DIN 69909-4, 2015-11: Multiprojektmanagement – Management von Projektportfolios, Programmen und Projekten – Teil 4: Rollen, p. 7.
[14] Q.v. Rusch, Gebhard (2011): IT-Projektkommunikation. Kommunikation in Prozessen sozialer Strukturierung, soziotechnischen und multiplexen Systemen. In: Matthias Freitag (Hg.): Projektkommunikation. Strategien für temporäre soziale Systeme. Wiesbaden: Verlag für Sozialwissenschaften, pp. 49–86.
[15] Q.v. Kütz, Martin (2010): Effizienz steigern mit PMO. In: Rüdiger L. Thomas, Lutz Becker und Bop Sandrino-Arndt (Hg.): Handbuch Project-Management Office. Mit PMO zum strategischen Management der Projektlandschaft. 1. Aufl. Düsseldorf: Symposion Publishing, p. 269.
[16] C.f. DIN EN ISO 26800, 2011-11: Ergonomie – Genereller Ansatz, Prinzipien und Konzepte (ISO 26800:2011); Deutsche Fassung EN ISO 26800:2011, pp. 7-16.
[17] Cf. DIN EN ISO 9001, 2015-11: Qualitätsmanagementsysteme, p. 10.
[18] Q.v. ISO 10006, 2017-11: Quality management — Guidelines for quality management in projects, pp. 10-29.
[19] Q.v. PMI (2016): Governance of portfolios, programs, and projects. A practice guide. Newtown Square, PA: Project Management Institute (Global standards).
[20] Q.v. Kütz, Martin (2012): Projektcontrolling in der IT. Steuerung von Projekten und Projektportfolios, p. 36.
[21] Q.v. Unger, Barbara (2012): Das Project Management Office. In: ZFO (01), pp. 11-15.
[22] Q.v. Christoph Johann Stettina, Lennard Schoemaker (2018): Reporting in Agile Portfolio Management: Routines, Metrics and Artefacts to Maintain an Effective Oversight.,
Husser, Philippe (2019): The high-impact PMO. How agile project management offices deliver value in a complex world. United States.
[23] Q.v. DIN ISO 21505, 2018-01: Projekt-, Programm- und Portfoliomanagement – Leitlinien zu Governance (ISO 21505:2017); Text German and English.
[24] Q.v. Monteiro, António; Santos, Vitor; Varajão, João (2016): Project Management Office Models – A Review. In: Procedia Computer Science 100, pp. 1085–1094.
[25] Q.v. Desouza, Kevin C.; Evaristo, J. Roberto (2006): Project management offices: A case of knowledge-based archetypes. In: International Journal of Information Management 26 (5), pp. 414–423.
[26] Q.v. Kuhlmey, Astrid (2014): Nutzenstiftende Erweiterung der PMO-Aufgaben. Mitarbeiter-Motivation im Fokus. In: Projekt Magazin (15), pp. 1-4.
[27] Q.v. GPM Deutsche Gesellschaft für Projektmanagement e. V. (Hg.): The PMO in Practice. Dispersal – Acceptance – Performance Measurement. Empirical PMO Study 2013 / 14. Hochschule für Wirtschaft und Umwelt Nürtingen-Geislingen, p. 34.
[28] Q.v. Le Dinh, Thang; Ho Van, Thai; Serge Nomo, Theophile: A framework for knowledge management in project management offices. In: The journal of modern project management Jan-Apr 2016., p. 27.
[29] Q.v. Robertson, Brian J. (2016): Holacracy. Great Britain: Portfolio Penguin, p. 42-55.
[30] Cf. Dow, William (2012) The tactical guide for building a PMO, pp. 78-81, (for *1).
Dow, William (2015) The PMO Lifecycle, pp. 76-79 for *2).
PMO circle as conclusion of this thesis research.
[31] Qf. Aubry, Monique; Hobbs, Brian (2011): A fresh look at the contribution of project management to organizational performance. In: Project Management Journal 42 (1), pp. 3–16.
#PMO #PgMO #PfMO