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PMO Or VMO: How To Choose One for your Org

Defining PMO and VMO

A project management office (PMO) is a group, or functional unit, that sets, maintains, and enforces the practices, policies, and standards for structuring and executing projects within an organization

According to the Project Management Institute (PMI), a PMO is essential for enterprises seeking to centralize and coordinate the management of projects throughout their life cycles.

The Value Management Office (VMO) is an organizational function responsible for facilitating the Lean Portfolio Management process and for fostering operational excellence and lean governance as part of a Lean-Agile transformation.

Value management office (VMO) is an agile inspired function which came into existence after the focus shifted from project outcomes to Value creation. Traditionally PMO are aimed at completion of projects within triple constraints. But what if they fail to add any significant value to the organization? The shift from PMO to VMO is a shift in focus from managing projects to maximizing value across the organization.

Establishing a Value Management Office is an outcome focused which enables agility by leveraging small and easy controls. It is focused more on individuals and their interactions to generate value delivered to customers in the quickest time as compared to PMO which is more process driven and not the quickest of the lot.

Value Management Office (VMO):

• Focus on Value Realization: The primary focus of a VMO is to ensure that the organization maximizes the value it receives from its investments, initiatives, and projects. It is concerned with the strategic alignment and value delivery of projects and programs.

• Strategic Alignment: VMOs work closely with senior leadership to align projects and initiatives with the organization’s strategic objectives. They prioritize projects that contribute the most to achieving strategic goals.

• Benefits Management: VMOs are responsible for defining, tracking, and realizing the expected benefits and value from projects and programs. They establish key performance indicators (KPIs) to measure value delivery.

• Risk Management: VMOs assess and manage risks related to value delivery, ensuring that projects are on track to achieve their intended benefits and making adjustments as necessary.

• Portfolio Management: VMOs often oversee the entire project and program portfolio, ensuring that resources are allocated to initiatives that provide the greatest value. They may also make decisions about project funding and continuation.

Project Management Office (PMO):

• Focus on Project Execution: PMOs primarily focus on the successful planning, execution, and delivery of projects. They ensure that projects are completed on time, within budget, and according to scope.

• Project Methodology: PMOs establish and enforce project management methodologies, standards, and best practices within the organization. They provide guidance and tools to project managers.

• Resource Management: PMOs are responsible for resource allocation and capacity planning, ensuring that the right people with the right skills are assigned to projects.

• Project Governance: PMOs oversee project governance, including project initiation, risk management, issue resolution, and project reporting. They ensure compliance with project management standards.

• Project Documentation: PMOs maintain project documentation, including project plans, schedules, budgets, and status reports. They often facilitate project reviews and lessons learned sessions.

VMO or PMO?

Here are some of the factors which affect the organization to choose between PMO or VMO.

• Maturity of project management

• Primary objective of the organization

• Overall authority of the PM

• Strategic alignment of the project

Here are some key considerations to help your organization to choose between a PMO to VMO:

• Understand the key differences between a PMO and a VMO: A PMO focuses on managing projects and ensuring they are delivered on time, within budget, and to scope. A VMO, on the other hand, focuses on maximizing value across the organization by aligning projects and initiatives with the overall business strategy.

• Align your VMO with the organization’s strategy: To maximize value, a VMO has to be aligned with the organization’s overall strategy. This requires a deep understanding of the organization’s goals and objectives, as well as an understanding of how each project or an initiative contributes to those goals. On the other hand, PMO sometimes does not goes into that strategic level, instead it achieves the goal of successful completion of project within the triple constraint.

• Develop a value framework: A value framework is a set of criteria used to assess the value of projects and initiatives. It can include factors such as ROI, strategic alignment, risk, and stakeholder satisfaction. Developing a value framework will help ensure that the VMO is focused on maximizing value across the organization.

• Communicate the value of the VMO: Transitioning from a PMO to a VMO requires buy-in from stakeholders across the organization. It’s important to communicate the value which a VMO can bring and how it will help the organization achieve its goals. Since VMO operates on the strategic level, stakeholders’ involvement and their buy ins is very high.

• Build a team with the right skills: The skills required for a VMO are different from those required for a PMO. A VMO requires people with strong business acumen, strategic thinking skills, and the ability to influence and communicate effectively. Make sure to build a team with the right set of skills to support the transition.

• Focus on continuous improvement: A VMO is not a static entity, and it requires continuous improvement to maximize value. Regularly review and refine the value framework, assess the effectiveness of the VMO, and look for ways to improve processes and procedures

• The purpose of PMO and VMO are different, but organizations can choose to function with one or both depending on their needs, maturity and their overall objectives.

References:

https://scaledagileframework.com/blog/glossary_term/agile-program-management-office/

https://www.pwc.com/my/en/perspective/workforce/190724-the-rise-of-value-management-office.html

https://agilemanagementoffice.com/value-management-office-vs-project-management-office-whats-the-difference/

https://scottambler.com/what-i-do/presentation-from-pmo-to-value-management-offices/

https://www.projectmanagement.com/webinars/799732/transforming-the-pmo-into-a-vmo–value-management-office

About the Author:

Girish Devapura, PMP, CSM, Prince 2, SAFe 6 Agilist works as Associate Practice Partner and Cloud Transformation Program Manager with Wipro, India. He is an Engineer and working as IT professional with Practice Management, People Management, Program Management and Delivery Management experience of more than 22 years.