3.1 The PO context

3.1 The PO context

A PO can be set up at the business unit level, the product unit level, or at any level at which there arises a need to coordinate multiple projects. Whatever the level within the organizational hierarchy at which the PO is located, it is important that the PO manager has direct access to the same management level as the resource owners. This will help maintain the PO's focus on the interests of the organization as a whole rather than on the interests of any particular functional group, while ensuring that the PO manager has the authority and the access necessary to resolve the conflicts that arise between projects competing for common resources. Figure 3.1 shows the proposed PO reporting relationships. The PO interfaces are shown in Figure 3.2.

Figure 3.1: PO reporting relationships.

Figure 3.2: PO interfaces.

Senior management refers to the highest level of management within the organization of which the PO is a part. Senior management is responsible for formulating strategies; it has overall business responsibilities, and provides the ultimate decision in the resolution of conflicts. Common titles for senior management are director, vice president, and department head.

Project sponsors are those who request the project work; they have ultimate approval power over expenditures and deliverables. Depending on the business situation, these could be "paying customers," sales representatives, product managers, or any number of internal customers.

Line managers are responsible for the resources to be used in the execution of the projects. They are in general responsible for a function or discipline within the organization. Common titles for line managers are department or section managers.

The technical disciplines entity represents the domain specialists that do not belong to the PO, but who perform work, such as tradeoff studies, on its behalf. These resources usually belong to the line functions.

Third parties are subcontractors, vendors, and other external partners with which the projects are involved in commercial transactions.

In Figure 3.2, the execution of the projects is depicted as external to the PO to emphasize that the day-to-day decisions and the work of the project itself are outside the scope of control of the PO, which intervenes only in case of major deviations and to prevent disruptions to the project portfolio. To do otherwise and involve the PO in every single project decision would result in the establishment of a grinding bureaucracy likely to kill any advantage that might be created by instituting a PO.