“Is your company a business that hires experts (business company)? or experts who are in business (experts company?)” This is one of the main questions I consider when determining how to setup a PMO for a company. Getting this right sometimes can determine whether a PMO succeeds or fails.
In the heart of this determination is the understanding of the important difference between “product quality” and “project quality.” Project Quality includes finishing on time, within budget, the right project scope, and securing acceptance and payment from the customer. Product quality, on the other hand, is more about customer satisfaction through the product itself fulfilling the technical specifications, fulfilling the product scope, and most importantly securing the value from the product for the client.
The “business company” is focused on the business aspect, rather than the domain of expertise. So, it focuses a bit more on “project quality.” Most big professional services firms are like that. They are in business to make money for shareholders, and the value provided aims at securing the profits for shareholders.
Another sign of a “business company” is that new products might be added to the product portfolio that are not originally part of the domain of expertise of the company. The main determinant here would be whether we make money or not long and short term, not whether this line is within our domain of expertise.
In a “business company,” usually higher-ups come from a business, not technical, background. Also, project managers are business people, trying to orchestrate the work of the team to achieve business results for the company, not worrying too much or having much passion about the product and its features. They are away from technical and closer to business.
In a “business company,” business arguments win over technical arguments, and finishing on time, within budget and with the right resources and cost are always on the table when discussing changes. In this kind of business, a customer is evaluated based on revenue secured or future potential business. Mass production, standardization, processes, everything is focused on saving money, getting more work, etc. Efforts to improve the product are looked at as means to achieve business results only.
In this kind of business, given significant amount of their work is projects, a matrix organization structure with equal powers divided between functional managers and project managers can be suitable. However, in real life, the project manager will probably get his or her way when in conflict with functional managers. Management in this type of business sides with the “project quality” priorities, rather than the “product quality” priorities.
In an “experts company” set up you can expect a different mentality. This is a group of professionals who have a passion towards their domain of expertise and feel they can serve through it and provide value, because they are the experts in their field, not because they are good business people. Customers come to them because they are the best at what they do. They are like the custom tailors who you go to when you need something perfected, and neither saving money nor time are your top priority. They look at business as a way to make money, sustain, but not as a goal in itself. Their goal is to be prosperous of course, but through offering value from what they know how to do most, and give it to their customers.
If you are an “experts company,” your need for a PMO might be even more necessary than the business of professionals mentioned earlier. Because you need a PMO to keep an eye on the business aspect while the product professionals dream of better features. Because the professionals passionate about their product, if they are left to themselves, they will probably drive themselves broke; Money to them does not matter and fades in face of the temptation to make the product they aspire to make.
Project Managers in this organization cannot function without deep knowledge in the product they offer, so they come from a technical background. Not because they need it, but probably because they will be rejected by the higher-ups and also their teams in the organization for their lack of technical knowledge. Architectural firms are a good example of this.
In this type of organization, PMO’s might feel obliged to sacrifice business gains to accommodate the experts insisting on changes and improvements. In this kind of business, experts are more stubborn when dealing with the client and might not accomodate all his requests because they feel they have a say in what the product should look like as it carries their name and reputation. So the PMO becomes an agent who negotiates with the experts in favor of the client to get things done in a way that will secure customer acceptance and project completion.
There is no better or worse in this argument. It depends on what the mission is for the company and the value it provides and to whom. Once that is figured out, the answer to this question becomes easier and hence setting up the PMO can have better chances of success.