Project Governance Function Model

The PMO's "project governance" function model presents the capability to define and construct a viable, if not a superb, project management capability within the relevant organization. It does this through authority granted and supported by senior management. It also requires a moderate amount of ongoing senior management involvement at critical junctures in the PMO's efforts to implement an effective and professional project management capability. As the PMO demonstrates its own capability and success, the early reliance on senior management decisions and approvals can be somewhat reduced, but it will never be eliminated. In project governance, the PMO is the extension of executive and senior manager authority within the project environment. That necessitates ongoing PMO coordination and collaboration at senior management levels across the relevant organization.

The prominent activities of the PMO's "project governance" function model are depicted in Figure 5.1. Each activity is described in the following subsections.

Figure 5.1: "Project Governance" Function Model

Prepare and Maintain PMO Charter

The PMO is created to oversee, control, and support the project management capability of the relevant organization. It is normally designed relative to the existing business and cultural norms of the organization. Some PMOs may vary from those norms, and in such cases, it may require a concerted effort to introduce and manage the required organizational changes. Whatever the conditions, the PMO should pursue its mission based on a PMO charter that is documented and approved at the highest management level within the relevant organization.

The PMO charter is a "living document" that can be updated and adapted to organizational changes, growth of the project management environment, or PMO expansion as a business unit. As a document, the PMO charter should be no more than a few written pages in length. A two-to-three page PMO charter document should be sufficient to present all of the credentials and guidance that will be needed.

The PMO charter is constructed to:

• Describe its purpose relative to the achievement of business objectives

• Show its organizational alignment with other business functions or units

• Guide its development of functional capability

• Confer appropriate authority to accomplish its mission

• Identify PMO funding

The following sections describe the preparation of these five elements within the PMO charter.

Define Business Purpose

The PMO, while dedicated to the pursuit of excellence in project management, conducts its efforts with a somewhat higher purpose — to ensure that project performance contributes to improving business performance. How this will be accomplished is an element of the PMO charter that should be explicitly stated. If the PMO's business purpose is not stated, it could be viewed as an ad hoc attempt to fix an isolated or temporary condition within the project management environment.

Consider the following five points of discussion when formulating the statement of business purpose of a PMO.

Project Contributions to Business Revenue

Project management in many organizations directly represents the product or service that generates revenue — either directly for customer-specified work or indirectly as a matter of products on-the-shelf. Likewise, the PMO could concentrate on internal project work that is also indirect but still supports the generation of revenue by making the business environment more efficient and effective. The PMO charter should address these as business concerns that the PMO will manage. Avoid placing specific financial objectives in the PMO charter, as these can be identified else-where after the PMO functionality and authority have been established and tested. Rather, indicate why a business solution is being placed under the purview of the PMO.

Reduction in Project Disarray

The PMO can be instrumental in introducing the critical practices needed to gain control of an otherwise disorderly collection of projects. This is not to say that all projects are in disarray, but that a sufficient number of projects across the relevant organization have performance results that warrant some additional professional oversight and guidance. Project disarray can be identified by a variety of indicators — a change in the types of projects being conducted, reduction in force, excessive turnover and replacement of project managers and project team members, changes in senior management, reactions to customer satisfaction issues, and much more. Specify what responsibilities the PMO will have for improving project management performance and what centralized oversight, control, and support will be included in its responsibilities.

Project Management Competency

Is project management a core business competency? Should it be? The PMO may be established to build both organizational and individual competencies in project management. At the individual level, the PMO could provide training and education consistent with an individual's responsibility within the project environment. This would be done in conjunction with the identification and introduction of best practices in project management that allow them to translate their new skill and knowledge into immediate and effective solutions in the workplace. Similarly, at the organizational level, the PMO can lead the pursuit of increased organizational maturity in project management. Indicate in the PMO charter what responsibilities the PMO will have for improving or enhancing individual competency and organizational maturity in project management. This point of discussion could include the PMO's potential purpose of providing project management technical support — the options for project management mentoring, facilitation of project planning, conduct of formal and informal project audits and reviews, etc. In addition to being a primary resource for project management expertise that nearly all stakeholders in the project management environment can access, particularly project managers, the PMO may also have responsibility for technical process performance. If so, then that should also be specified in the PMO charter.

Project and Business Integration

The PMO's role as a business integrator has been mentioned many times. The PMO charter should indicate how that role would be played out within the relevant organization. In general, it means identifying what the PMO will do to facilitate the integration of appropriate process and business relationships between the project environment and business unit activities. In a broad sense, this represents a variation on the concept of project disarray resulting from internal inconsistencies and multiple perspectives on how business processes are conducted. The PMO charter can address the PMO's responsibilities for bringing business and project stakeholders together under common practices and objectives.

Strategic Business Objectives

When properly designed and designated, the PMO can be an extension of senior management within the project environment. It will carry the results of executive deliberation and decisions for implementation by project managers, and it will return compiled and analyzed results of project performance back to senior management for subsequent deliberation and decisions. This is particularly characterized by a project portfolio management process that ensures that executives are involved in making project selection, continuation, and termination decisions. Of course, that is done in the context of ensuring that all current and pending projects are aligned with the strategic business interests of the relevant organization. The highlights of any such strategic alignment responsibility can be presented in the PMO charter.

Specify Organizational Alignment

This element of the PMO charter specifies how the PMO will relate to other business functions in the relevant organization. This can be an easy determination for a smaller PMO operating within a relatively flat organization, or it can be an extensively coordinated determination with politically charged implications for a larger PMO or one in which operating units tend to function independently. There are three practical points of information that are needed to specify the PMO's organizational alignment.

First, the PMO must have an executive sponsor. Ideally, this sponsor is the most senior person in the relevant organization — the CEO if the PMO is supporting the enterprise. Business needs will help determine whether the PMO is aligned at a level that warrants direct reporting to the executive sponsor, or if it is to be aligned lower in the executive sponsor's business unit. The PMO charter should identify the executive sponsor and the executive or senior manager to whom the PMO reports, if these are not the same person.

Second, the PMO should be designated at a recognized business unit level — work group, branch, department, division, etc. This designation will inherently demonstrate the PMO's peer business unit relationships within the relevant organization. This designation will either facilitate or constrain the PMO's ability to accomplish its business purposes, but nonetheless it should be presented in the PMO charter.

Third, and somewhat related to the business unit designation above, is the identification of the individual slated to head PMO operations. The individual selected for this position must have the appropriate position title to manage PMO operations consistent with the business unit designation and the responsibilities assigned, i.e., PMO manager, PMO director, etc. The incumbent head of the PMO should be named in the PMO charter, along with confirmation of the position title.

Highlight Functional Responsibility

The PMO charter should indicate what PMO functionality will be established for new PMOs, or what will be added or eliminated for existing PMOs.

First, a review of the PMO functions is needed to determine applicability to the needs of the relevant organization and the stated purposes of the PMO. Presumably, a team responsible for PMO planning will accomplish this. Planners must be cognizant of the workload impacts — both in function implementation and function operations — as choices of preferred functions are made. However, with the assumption of qualified resources being assigned to the PMO, a wide range of functionality can be addressed. More important is the depth or extent of that functionality. Many of the functions presented in this PMO model can be adapted for simple implementation and use. The PMO can specify these as "initial" or "fundamental" capability. Other PMO functions, those directly aligned with the PMO's business purposes, can be cited as more comprehensive functions and planned accordingly.

Following this PMO function review, a list of preferred functions can be identified for inclusion in the PMO charter. This can be presented as a general statement of activities to be performed by the PMO, and this might include an item for developing a PMO design document and schedule for implementing the PMO. This more detailed plan is not normally a part of the PMO charter.

Specify PMO Authority

The PMO charter provides the PMO and other business units with an understanding of PMO responsibilities. It is therefore very important to outline the authority granted to the PMO to enable it to achieve its business purpose.

A new and usually smaller PMO may not require as much authority as one that has broader responsibilities. In many cases, the specification of organizational alignment is sufficient to define what the PMO can and cannot do based on the implicit authority of its position within the relevant organization. However, if there are unique authority needs, these should be addressed in the PMO charter.

There are five particular areas of PMO authority that should be considered for inclusion in the PMO charter, as needed:

• Business and contract management: Define what the PMO is authorized to do with regard to leading cross-functional business efforts and establishing internal and external contracts. In particular, external contract management has business implications for which the PMO may require signature or review authority. Specify what role the PMO has in business and contract management.

• Financial management: Define what financial responsibility the PMO has with regard to financial management. Specify what it is authorized to do regarding the commitment and allocation of funds; any requirements for management and reporting of revenue or cash flow resulting from external, customer work; and preparation and management of an internal business unit budget.

• Resource management: The PMO will likely work with resources obtained and "owned" by resource managers across the relevant organization. Specify what authority the PMO has to interact and direct the work efforts of individuals assigned to project teams within its purview. As well, consider any authority needed to redirect individuals to additional projects, project-related training, or follow-on work. This section also may include guidance on how the PMO is involved in selecting the project manager and the project team members as well as responsibility for individual performance review activities.

• Customer relationship management: Determine the PMO's authority for interactions with customers. Specify whether the PMO is the next level of issue resolution above the project manager, whether the PMO is involved in customer invoicing and payment management, and what role the PMO plays in ensuring customer satisfaction.

• Vendor/contractor management: Define how the PMO will interface with vendors and contractors in the project environment. Specify its level of authority in vendor and contractor selection; establishing and managing vendor/contractor contracts; and whether it is involved in vendor/contractor invoicing and payment management, including oversight of acceptable performance and approval of deliverables.

Identify PMO Funding

This section of the PMO charter may or may not be required as a matter of organizational practice. If parent organization funds and the associated budget are being used, this section may simply identify one or more expense codes that can be used by participants in PMO activities.

Conversely, if the introduction of the PMO is treated as a business initiative, then a separate budget is likely needed to appropriately place boundaries on progressive steps of PMO development and implementation. In this case, a funding statement should be presented to identify any initial or updated funding to be applied to PMO development and operations. This inherently implies that PMO development and operations costs will be tracked and managed.

Establishing and operating a PMO is not a casual expense item. If such an effort is treated as a routine business activity without recognizing the investment costs, the relevant organization may not get the expected value or anticipated results from the effort. The specification of funding in the PMO charter provides an acknowledgement that there is a cost associated with the pursuit of excellence in project management.

Develop Project Management Policies

Business guidance is prevalent throughout most organizations. Proper oversight of the project management environment warrants similar attention. The PMO must develop necessary policy guidance to ensure that all participants and stakeholders understand the business aspects of project management. The PMO actually only recommends policies; it is senior management, presumably the executive control board, that approves the PMO's recommendations and issues the policies for implementation by the PMO. By agreeing to guide project management policy, senior management is endorsing the use of project management as a preferred if not core competency within the relevant organization. Such endorsement is vital to the success of nearly all project management endeavors.

The PMO can facilitate development of project management policy using the three steps described below.

Evaluate Policy Needs

The PMO should examine areas of the relevant organization where development of project management policy will provide benefit without undue burden on individuals or business units. However, it is likely that "growing pains" will be experienced before benefits are realized, so some difficulties should be expected. The PMO can minimize any adverse impact by developing a complete understanding of the organization in conjunction with policy development.

The PMO should evaluate project management policy needs in the following areas:

• Cultural reception: Identify the prevalent culture of the relevant organization and indicate how that will influence the introduction or expansion of professional project management capabilities.

• Organizational change capability: Examine the change initiatives of the relevant organization to determine (a) how well individuals and business units have responded to the specification and (b) the results of change.

• Current business practices: Review business practices to ascertain how they fit with the preferred practices of project management. In particular, identify any business practices that appear contrary to best practices in project management.

• Current project management practices: Review project management practices, the methodology, and any linked technical processes and determine whether they represent benefits to project performance and associated business practices in the relevant organization.

This evaluation should enable the PMO to gain insight to the policies and senior management endorsements that are needed to support project management activities. The PMO should then use this information to develop required policies for review and approval by senior management.

Demonstrate Senior Management Support

It is essential that all participants in the project environment — project managers, team members, business unit managers, customers, and even vendors and contractors — understand the business interest and operational importance placed on project management within the relevant organization. This must be expressed by managers at all levels, and particularly by senior management. Before issuing written policy guidance, the PMO can assist executives and senior managers in conveying their positions on project management as a vital business initiative and an integrated component of their business operations. The PMO can facilitate this by illustrating the need and encouraging executive and senior managers in a few action areas:

• The PMO charter is endorsed and signed by the senior executive in the relevant organization. This is followed by personal endorsements of PMO operations by that executive in formal meetings and informal gatherings.

• Senior management participates in reviews of project performance commensurate with its position and responsibilities, and it routinely provides guidance to rectify performance problems and applauds performance excellence.

• Senior management demonstrates ongoing awareness of initiatives to improve project management capability, perhaps commenting on them in interviews and written articles. In situations of major initiatives that affect the entire organization, senior management convenes large group meetings to make formal announcements, issue press releases, and establish expectations for cross-functional participation and contributions to the efforts.

• Individual promotions in the project management environment are associated with the successful completion of initiatives that produce improved project performance or integration of project management and business practices.

• Consideration is given to making project management a core competency within the relevant organization. This is an executive decision that is a policy statement in itself.

• Policies created and implemented in the relevant organization that have application to the project environment are signed by the appropriate executive and endorsed by all members of the senior management team.

These actions by senior management will convey the business relevance of project management. They will do as much for policy implementation as will the written policy document.

The extent to which senior management support of project management appears lacking in the relevant organization provides an additional indicator to the PMO of the work that lies ahead. Any senior management support is needed and welcome. If there is a noticeable lack of support, the PMO can encourage buy-in by senior management by developing better ways to demonstrate the benefits of what can be achieved through the use of effective project management practices.

Prepare Policy Guidance

The PMO, as senior management's representative in the project management environment, examines the policy needs and senior management positions on the issues to develop policy guidance that can be implemented to support the efforts encountered within the project management environment.

There are four prominent areas in which the PMO will want to consider developing policy guidance, as summarized below:

• Business interest: This type of policy guidance conveys the use of project management for purposes of achieving business objectives. This approach highlights the fact that project management and business processes and practices must be aligned and integrated. Such policies usually specify or mandate the use of a preferred process. They also indicate whether it is primarily a business process introduced into the project environment or a project management process introduced for use by business units.

• Project management as a core competency: This is a specific policy that transcends all business units in the relevant organization. It establishes that business will be pursued with a high degree of reliance on individual capabilities in project management. This is a business decision that can only come from the most senior executive in the relevant organization.

• Enterprise continuous improvement: This is a policy area that enables expansion of project management practices both within the project environment and throughout the relevant organization. It also represents expansion of PMO responsibilities, possibly across business units. Policies in this area specify or mandate the use of practices that provide more comprehensive oversight, control and support of project management activities. This approach is often aligned with pursuits of increased organizational maturity in project management.

• Project management practices: This policy area indicates the required use of the established project management methodology within the project environment and, possibly, across the relevant organization. It also specifies the preferred business practices, tools, and standards that are applied in project management, and it presents requirements for use of project classification guidance. As well, it can specify requirements for project audits and reviews.

It should be noted that policy development operates within a different context than the "mere" guidance offered by standards, operating procedures, or regulatory documents. These can be prepared and implemented by the PMO, often on its own authority and perhaps with some level of senior management approval. However, the preparation of project management policy guidance presented by this PMO model is one of developing an "executive directive." That means that an executive within the relevant organization is establishing official business direction, and in this case, one that requires application of project management practices or principles.

The PMO should prepare its policy guidance in close collaboration with project managers and business unit managers, as the policy may influence them. This effort is one that requires ongoing coordination during development to ensure that all parties are aware of adjustments and modifications that may have occurred since a previous review. This culminates in a meeting for group acceptance of the recommended policy. Then the PMO presents the policy recommendation to senior management for signature and endorsement. When signed, the PMO will then conduct business according to the established policy, implementing procedures, conducting initiatives, and preparing further guidance as necessary to carry out policy.

Develop Project Classification Guidance

It is important for project management stakeholders to have a common frame of reference regarding the types of projects being performed. The establishment of a project classification scheme addresses this need. This determination is placed under the "project governance" function because it has distinct business implications. It is also placed here because it requires senior management review and may require an associated policy statement.

The specification of a classification for every project will assist the PMO in describing the important characteristics of each project, and it will allow stakeholders to immediately associate project importance to the business. Project classification, when constructed while considering the business interests of the relevant organization, will be an aid in the following areas:

• Selecting, prioritizing, and managing projects in portfolio management

• Aligning projects with business objectives

• Identifying business and technical risks that may be encountered

• Calculating levels of project work performed in different technical areas

• Providing general indications of duration, resource requirements, and complexity

• Identifying and assigning project managers with appropriate skill and experience

• Qualifying team members for participation in the project effort

• Selecting vendors and contractors for participation in the project effort

For some PMOs, this information could very well be the project performance indicators that it tracks and manages. The list is sufficiently condensed for use by senior managers, who may or may not have adequate time for detailed reviews of project performance results. Nevertheless, the use of a project classification scheme will convey a significant amount of information in a few words.

The PMO is responsible for creating and implementing a project classification scheme under this PMO function. Project classification criteria are developed to describe the project in terms of the business interests and the project work effort. This PMO function model prescribes a relatively simple, yet fairly complete, project classification scheme. It applies the four factors of business interest, project size, project value, and project complexity to classify projects.

The PMO can consider the following categories for inclusion in its project classification scheme:

• Nature of business interest: This category refers to the importance of the project to the organization and suggests four criteria:

  • Base project: A project that is usually short-term in duration, generally noncompetitive, and frequently concerned with providing an administrative or simple technical solution. This represents many of the internal projects conducted within an organization.

  • Tactical project: A general-interest project that is usually short- to medium-term in duration (although some may be long-term), tactical or operationally oriented, and concerned with developing established products or providing well-defined services.

  • Growth projects: A market-based project that can be short- to long-term in duration, tactical or operationally oriented, and concerned with developing a product or service having market growth objectives. It is performed as a result of emerging market demand, a response to changing business conditions, or a response to changing technology. It is usually concerned with delivery of new products or services or with modifications to existing products and services.

  • Strategic project: A market-based project that is usually long-term in duration, integrated with the organization's strategic business plan, and concerned with developing a product or providing a service that meets critical strategic business objectives. It is concerned with providing products and services to key customers, selected market segments, and new markets.

• Project size: Size is based on the amount of resource labor hours, the number of resources (project team members), and the approximate duration required to complete the project. The PMO will have to calibrate the size values for this criteria category to adequately represent the types of projects it conducts. Some sample values that can be used to describe project size include:

  • Small: Up to 1000 labor hours, one to three project team members, and less than 2 months duration

  • Moderate: Between 1000 and 2500 labor hours, two to five project team members, and up to 6 months duration

  • Intermediate: Between 2500 and 5000 labor hours, up to ten project team members, and 6 to 12 months duration.

  • Large: Over 5000 labor hours, usually more than ten project team members, and more than 1 year duration.

• Project value: The estimated cost or value of a project is critical to defining the project classification, as it indicates what financial gain or loss is at stake by undertaking the project effort. Again, the PMO will have to calibrate the project-value figures for this category to adequately represent the range of project values it encounters. Some sample figures that can be used to describe project value include:

  • Low value: Up to $250,000

  • Moderate value: $250,000 to $1 million

  • Intermediate value: $1 million to $10 million

  • High value: $10 million or more

• Project complexity: Project complexity is based on the following sample elements that may produce complications for the project effort. These sample elements can be adapted by the PMO to address specific matters of importance to the relevant organization. Each of these elements will also require a rating that serves as an indicator of complexity. In general, the PMO can start with simple ratings such as low, medium, high, and very high to describe the impact of these elements on a given project. More detailed calculations can be introduced as needed.

  • Number of business units: The number of business units participating in the project, including cross-functional participation and external vendors and contractors, their locations considered, will affect project performance and project management requirements.

  • Technology factors: The amount of technology that is introduced into the project will have an effect on the capability to provide the intended technical solution. This includes consideration of new technology, current technology, the likelihood of technology changes, and technology training requirements.

  • Risk: This element considers the business risk produced primarily by external business influences and the technical risk associated with new product development, recurring project work, and development of new technology.

  • Strategic importance: A project becomes more complex when it becomes more important to business success. This element examines the alignment of the project with strategic business objectives, the level of importance associated with marketing efforts, and business factors such as net present value and results of cost-benefit analysis. Strategic importance can also be defined by executive mandate or demonstrated interest.

These four project classification categories should be sufficient to identify projects in most types of organizations after criteria values that are more appropriate to the organization are constructed to replace the samples shown. The PMO should create a tool or matrix that allows these elements to be combined and evaluated together.

The project classification can then be used to identify the type of project being undertaken. It provides a common frame of reference that allows all key participants to recognize the type and nature of each project, and it facilitates decisions along the way. As well, the nature of the content of this sample project classification scheme illustrates why this should be addressed within the PMO's "project governance" function.

Establish Project Manager Authority

The concepts of modern project management prompt continuing expansion of the project manager's responsibilities. The PMO must be a proponent for providing project managers with adequate project and business authority to allow them to accomplish their jobs. Of course, this can only be pursued with consideration for existing business practices, project management guidance, and cultural norms of the relevant organization. The PMO may find, however, that if project managers demonstrate responsibility toward achieving business objectives, appropriate levels of authority will be provided.

The PMO's role in this governance activity will be decided by its own level of authority, as presented in the PMO charter. If sufficiently vested, the PMO can serve to specify the level of project manager authority while also serving as the granting authority. Otherwise, the PMO's primary objective in this function element is to prepare recommendations for project manager authority levels for review and approval by the executive control board. The latter may be the more frequent approach taken by most PMOs.

Similar to the elements in the PMO charter, the PMO can examine the relevant organization's business interests, the stakeholders in the project environment, and project management performance requirements to identify the types of authority needed by project managers. It can then prepare its recommendations for project manager authority.

The following are examples of project manager authority the PMO will want to include in its deliberations:

• Contractual authority: The PMO must determine whether project managers have any signature authority relative to customer contracts. Presumably, the organization's sales management team will sign any master contract. Conversely, the PMO may want project managers to have certain levels of authority to deal with such things as contract modifications and statements of work.

• Financial authority: The PMO will use its knowledge about the nature of the business to guide the extent of financial responsibility given to the project manager. That, in turn, will indicate the level of associated financial authority needed by project managers. This consideration may require collaboration with the accounting department to ensure granted authority is recognized. It deals with such things as customer invoice management, vendor and contractor invoice management, and in some cases, special or additional employee compensation, such as bonuses or rewards.

• Resource management: The PMO will likely operate in an environment where project team members are introduced to projects in a matrix format. This may present a need for broad collaboration within the relevant organization. Project resources working in a matrix format are assigned to resource managers. They are "borrowed" by project managers to work on specific project efforts, and then returned to the purview of the resource manager. The PMO must develop recommendations regarding how resource management authority can be shared between the resource manager and the project manager. Again, the business culture will influence this deliberation, but in some cases a new approach to project resource management can be designed as a result of the PMO's effort.

• Customer relationships: The PMO will recognize that there are many business elements in the organization that influence each customer relationship. It needs to determine what role project managers will pursue as a part of the total business effort. Authority issues here deal with such things as customer contact protocols, customer satisfaction, and resolution and elevation of customer issues. This deliberation is particularly important when the project manager and project team perform work on site at client facilities, where they are the primary representatives of the relevant organization.

• Vendor and contractor relationships: The PMO will likely want to be involved in any prequalification of vendors and contractors, and it may have an established process for doing this within its performance of PMO functions. However, once vendors and contractors have been validated, the PMO may find it to be of benefit to allow project managers to select them for specific work on projects.

The PMO can examine this list of project manager authorities and add to it based on the business interests and needs of the relevant organization. Following this review, the PMO should develop its recommendations for project manager authority. Key stakeholders in the project environment, and of course senior management, should review these recommendations. Then, senior management approves these authorities, and the PMO can then implement them in the project environment.

The PMO may want to consider varying levels of project manager authority. That is to say, project manager authority increases as each individual progresses to more advanced project management positions. Conversely, project manager authority can be specified for individuals who have project performance responsibility, where every project manager is given the same authority level based on standard project management practices rather than on position within the organizational hierarchy.

Establish Executive Control Board

The PMO in most organizations will be responsible to an executive team — the executive control board — that provides business guidance and direction for application within the project management environment. A key participant on this board will be the PMO's executive sponsor. This person will interpret and convey the deliberations and decisions of the executive control board to the PMO on a routine basis. However, there also may be occasions when the PMO participates in meetings and interactions with all members of the executive control board.

This executive level body may already exist within the relevant organization, perhaps operating under a different naming convention. It might be called the management oversight committee or, in a technical organization, the systems control group. It is the PMO's responsibility to identify and facilitate its inclusion in this senior management board's business matters. In some cases, a new or smaller PMO may not have sufficient functional responsibility to warrant a direct interface with this senior management board. It then will normally report to a senior manager who does. In the rare case where a central, executive oversight group cannot be readily identified, it will fall upon the PMO to seek or facilitate creation of such a body for the purpose of providing executive level business guidance and direction to the project management environment.

Whether an executive control board currently exists or not, the PMO will need to orient either current or new control board members to the needs of the project management environment. The PMO's role, as is often the case, is one of facilitating the executive control board in its role and responsibilities to lead and endorse effective project management. The PMO can perform the following three activities to establish either a new or existing body as the executive control board.

Determine Executive Oversight Requirements

The PMO begins this effort by examining the needs of the project management environment to determine the project, business, and technical oversight requirements. In conjunction with this examination, the PMO also collaborates with control board members or the PMO's executive sponsor to gain an understanding of the depth and extent of oversight that such a board would prefer to have within the relevant organization's normal mode of operations.

The PMO should examine the following prominent functional areas under its purview to prepare an initial list of oversight responsibilities for consideration by the executive control board:

• Methodology development: The control board should consider whether its review and approval are needed to authorize and fund project management methodology development. The board's endorsement will certainly be needed, but it may defer development responsibility to an appropriate technical board or committee, or even to an individual executive or the PMO.

• Knowledge management: This function provides for the exchange of project management and project performance information in the form of status reports, project work plans, and technical deliverables. This function also deals with implementing an "executive dashboard" that summarizes all project management information on-line at a glance. The control board will need to determine the type, frequency, and receipt method for project information it needs to keep itself informed so that it can make timely business decisions.

• Project governance: The control board or executive sponsor will be the issuer of project management policies. The board must determine the scope of policies it will consider as a group, and which policies will be deferred to the executive sponsor.

• Organization and structure: The executive control board may want to be included in deliberation and decisions regarding how project managers are functionally aligned, and assigned, to project efforts. This could be particularly important if the PMO is recommending a change to the current organizational structure and practices. This also may be only a one-time consideration that still warrants senior level involvement.

• Resource training and education: The executive control board may want to be included among those initially trained in project management practices and principles. It needs sufficient understanding of project management, although not the intensive training of project managers and team members, to effectively oversee and use the project management environment to achieve its business objectives. The board will have to decide on the training it will receive and, through PMO recommendations, the training other project management participants will be given.

• Project auditing: The executive control board may want to influence, and possibly control, project audit efforts. It must determine whether it will be involved in constructing the criteria or simply approve the PMO's recommended criteria for conducting project audits.

• Portfolio management: This function may be the most critical and essentially requires participation by the executive control board. Unless otherwise delegated, the executive control board inherently has responsibility for project portfolio management within the relevant organization. It should be involved in establishing both the process and the criteria that will be used to assist it in making project selection, continuation, and termination decisions that affect the outcomes of business.

• Business performance: The executive control board will likely want to influence how the PMO supports its business initiatives and strategic business plan. Considerations in this functional area enable the control board to direct the PMO in specific business integration activities within the project environment.

These are only a few samples of the functional considerations the PMO can formulate in preparing control-board oversight requirements. It is suggested that the new PMO start with just a few of the most important requirements and then add additional responsibility to the executive control board over time. It can also be noted that the size, culture, and business objectives of the relevant organization may influence delegation of some of these requirements to other technical or business committees that may be better positioned to deal with them.

Set Board Parameters

The PMO's next step is to help set the parameters for the executive control board's project management oversight activities. This will provide an operating basis and a common understanding of responsibilities among board members and business units.

The PMO should address the following elements when preparing the parameters for executive control board operations:

• Purpose: The purpose of establishing the executive control board for project management oversight is stated in the language and style of the relevant organization. The control board will be an active and positive influence on the project management environment when a well-defined purpose for its existence is established.

• Roles and responsibilities: The roles and responsibilities of key participants in project management oversight are defined. This includes identifying the PMO's executive sponsor on the board, if that person has not already been identified. It may also include specification of those executives having project portfolio management responsibility.

• Membership composition: It is a very good thing to know exactly who are the members of the executive control board. It is equally important, both for the board members and the PMO, to know whether alternative board members are required for meetings, activity coordination, and decision-making purposes. The identification of board members facilitates communication and collaboration requirements.

Prepare Operating Procedures

The executive control board will fall into an effective routine in a shorter period of time when operating guidance is prepared for use by board members and those conducting business with the board. The regard for executive time is a prevalent issue in organizations across most industries. In many cases, the issues are minimized through adequate advance planning for executive participation. In this activity, the PMO prepares the recommended operating procedures for conducting executive control board activities with a focus on accommodating board member participation. The board then will review and implement these procedures.

The PMO should consider the following elements in its preparation of procedural guidance:

• Preparation and deliberation: Procedures should specify the responsibility of board members to prepare for each meeting. This could include reviewing the agenda, reading point papers, or examining status reports. The procedures also can specify the required advance distribution times (e.g., one week for point papers, three days for the agenda, etc.) in order for matters to be considered at an upcoming meeting.

• Meeting frequency and timing: Procedures should prescribe a recurring meeting time, either monthly or quarterly, so that board members can plan on participation. The duration of every meeting also should be standard for planning purposes. The procedure might also indicate the conditions and means to conduct special, interim meetings.

• Collaboration process: Procedures should identify the preferred methods of collaboration outside of scheduled meetings. This is particularly important when a board member is reviewing a document and requires additional information. The procedure might specify that the document producer serve as a primary contact for additional information, or that the PMO serves as a clearinghouse for such requests and will manage getting a response to the requester. This procedural area may also specify the means of individual collaboration using e-mail, telephone, or informal meetings.

• Action management: Procedures should identify how control-board action items will be managed — both those actions assigned to board members and those referred to the PMO or other business unit. This can include guidance on who can make assignments and completion dates, how progress is tracked and managed, and who closes action items.

The PMO will have to discern from its internal experience what procedures are needed and how they are conveyed to the executive control board and others having affiliation with the control board's activities.

Align Business and Technical Committees

The PMO's responsibility for some if not all areas of project management will warrant interaction with existing business and technical committees within the relevant organization. This is similar to the role of the executive control board, but here the PMO is soliciting guidance from specific business activities and technical leadership groups. In larger organizations, there may be several such groups. In smaller organizations, the executive control board, as defined earlier, is the group that also manages business and technical issues and guidance.

The primary objective of this activity is to ensure that the PMO has the necessary input and guidance from relevant committees so as to effectively incorporate their interests, and sometimes their mandates, into the project management practices. The PMO can use the following three steps to conduct initial alignment with relevant business and technical groups: (a) identify business and technical groups, (b) set up relationships, and (c) manage those relationships.

The PMO will likely have insider knowledge of business unit activities to adequately identify business and technical working groups and committees. This can be assured by the PMO with some additional examination of the organizational structure to uncover any "hidden" or newly formed groups. Some groups will be more deliberating and directive in their purpose, while others will be aligned with managing initiatives or leading forums. The PMO should identify all such business and technical groups in the relevant organization, and possibly in any parent organization as well.

In larger organizations, there may be multiple technical disciplines represented across business units. It is particularly important to recognize major technical components, especially if they have a technical guidance group. This will ensure that they are included in the committee relationships that the PMO will establish under this activity.

The PMO should then review each of the boards, committees, and action groups it has identified to understand their roles and responsibilities and their purposes within the relevant organization. It will then decide which groups on the list will be pursued for business or technical alignment. For the most part, the PMO should recognize that in this process it is primarily seeking sources of business and technical guidance that it can then integrate into project management operations. That is to say, the PMO will align itself with such groups to ensure that it thoroughly understands and is accurately conveying technical and business needs and interests of the relevant organization into the practices of project management.

The PMO should initiate contact with business and technical managers who head the groups identified for PMO alignment. In some cases, the PMO will simply request representation on a relevant board or committee, and this represents a peer relationship. In other cases, the PMO will be establishing an oversight responsibility for the identified group and a reporting requirement to the PMO. This type of business unit relationship should be examined carefully to ensure that operating procedures are properly developed, that other board responsibilities are not usurped, and that the PMO retains reasonable control of the project management environment. This latter type of oversight relationship may require executive control board review and sign-off acceptance by the PMO sponsor.

The PMO can then proceed to participate in the business and technical group relationships it has established and their associated activities. In many cases, the management of such relationships is a matter of routine information coordination. For oversight relationships, the PMO may have to prepare and participate in mandatory meetings and carry away action items.