Execution of projects successfully require a central control point to manage, coordinate between the external and internal project environment and to organize project resources effectively. The project management office (PMO) is such a central point around which all the projects of an organization revolve. We will learn about project management office (PMO) and different organizational structures in this blog.
Index
Project Management Office (PMO)
A project management office is an organizational structure that defines and maintains standards for project management within the organization and facilitates sharing of resources, methodologies, tools and techniques.
Roles of Project Management Office (PMO)
(a) It formulates policies and provides methodologies, tools and templets for managing the projects.
(b) It supports the project team and facilitates training of project staff.
(c) It appoints the project managers for ongoing projects within the organization.
(d) It ensures compliance with all the government policies, procedures and methodologies within the organization.
(e) It maintains project documentation and keeps record of lessons learnt from projects for future.
(f) It helps in coordination among different projects running within the organization.
(g) It facilitates sharing of resources among different projects.
(h) It helps in terminating projects.
(i) It maintains the project management knowledge base within an organization.
(j) Every organization has different structure. In this post we will learn about different organization structures classified according to the authority vested in the project manager.
Organizational Structures
Functional Organization
In the functional organization, the staff is grouped on the basis of areas of specialization and the project manager has limited authority to assign work and apply resources. In other words, we can say that the position of project manager as not strong in these type of organizations. In such organizations, each staff report to function manager.
Characteristics of a Functional Organization
(a) Resources are grouped according to the functions or departments.
(b) Function perform specific roles and are headed by the functional manager.
(c) All the resources under a function report directly to their respective functional management.
(d) The role of a project manager is not explicitly defined. Resources from within the organization play the role of project manager.
(e) Project resources are borrowed and allocated to different projects from the functions for a specific period.
(f) There may be a conflict regarding the allocation of resources of a function to different projects and therefore the priority need to be set for allocation of resources.
(g) The position of the project manager is weak as compared to the function manager in these types of organizations.
Projectized Organization
These type of organizations provide maximum authority to the project manager. In these organizations, organizational resources mostly work on projects and the project manager is authorized to apply the resources to the projects. All staff in these type of organizations, report to the project manager.
Characteristics of a Projectized Organization
(a) Resources are assigned directly to the projects.
(b) The role of the project manager is defined and the position of the project manager is strongest in these types of organizations.
(c) Project manager is fully authorized to allocate the resources to the projects.
(d) Role of function is limited.
(e) The resources return to the functions once the project is complete.
Matrix Organization
Matrix organization is a mix of projectized and functional organizations. In this type of organization, the project manager shares responsibility with the functional managers for assigning priorities and for applying the resources. The resources report into the functions but may also work on projects. Based on the authority of the project manager, these organizations may be classified as weak matrix, strong matrix and balanced matrix organization.
Characteristics of a Matrix Organization
(a) The authority of the project manager varies according to type of the matrix and it is weakest in a weak matrix organization while strongest in a strong matrix organization.
(b) This is the mix of projectile and functional organizations.
(c) It provides maximum utilization of resources and functional expertise.
(d) The resources have to report both the functional management and project manager. It increases cost of communication.
Advantages and Disadvantages of Different Organizational Structures
| Types of Organization | Advantages | Disadvantages |
| Functional | (i) Less confusion because the resource reports to one manager only, (ii) More specialization and skill enhancement. (iii) More flexible workforce, (iv) Suitable for career path in specific domain | (i) Functional work gets more priority then project work, (ii) Not ideal for project management career |
| Projectized | (i) Ideal for project management career, (ii) Projects gets more priority w.r.t. resource allocation, (iii) Project goals are achieved faster, (iv) Better communication with the project | (i) Limited skill development, (ii) Full utilization of resources is not made |
| Matrix | (i) Maximum utilization of resources, (ii) Better coordination between departments and project teams | (i) More chances of conflict, (ii) More complexity w.r.t. communication and more overheads |
Conclusion
The project management office (PMO) plays a crucial role in successful execution and management of the projects. It formulates policies and provides methodologies, tools and templets for managing the projects. It supports the project team and ensures compliance with all the government policies, procedures and methodologies within the organization. Project management office (PMO) maintains project documentation and keeps record of lessons learnt from projects for future. Project management office (PMO) maintains the project management knowledge base within an organization. The project team working in project management office (PMO) should be skilled and knowledgeable in project management so that it may provide strong support to the projects running within the organization.
The organizations are classified into three categories, based on the authority given to the project manager. These three categories are projectized organization, functional organization and matrix organization. Projectized organizations provide maximum authority to the project manager. In the functional organization, the staff is grouped on the basis of areas of specialization and the project manager has limited authority to assign work and apply resources. Matrix organization is a mix of projectized and functional organizations. In this type of organization, the project manager shares responsibility with the functional managers for assigning priorities and for applying the resources.
The project management office (PMO) and organizational structures therefore determine the performance of a project in a great way. The organizations, therefore should pay much attention to its project management office (PMO) and organizational structure in order to execute and manage projects successfully.
Also read: Sustainable Project Management and Its Benefits
