Developing a Programme Management Office in Local Government
1. Introduction
The key purpose of project management is to ensure initiatives are effectively run to be on budget, on time and meet the desired outcomes; whilst a Programme Management Office (PMO) is a service or function that provides support to projects.
This document highlights key considerations and lessons learned as guidance to local authorities who are looking to establish a PMO or review their current project management arrangements. It is important to note each local authority is unique and will have different requirements, therefore one size and one approach will not fit all.
The guidance has been informed by local authorities who operate a PMO and by the support provided in forming project management arrangements. Many thanks to contributing authorities of South Cambridgeshire, Watford, Walsall and Wolverhampton with particular thanks to Sandwell Council for their time to shape the research into delivery.
2. Why Establish a PMO?
An effective PMO will support projects to improve outcomes, including reducing project failure and ensuring initiatives are delivered to specification, budget, and within agreed timeframes.
Successful implementation of a PMO can improve organisational efficiency, increase collaboration, support transformation, and generate savings. Furthermore, PMOs can support governance requirements and provide confidence to leaders. Where a PMO is run effectively the benefits can amount to the following:
Better project outcomes
• Increases project success rates and helps protect services and individuals from project failures
• Improves project outcomes for more projects delivered on time and to budget
• Captures the benefits generated from projects
Improved organisational efficiency
Maintains robust governance
• Increases collaboration within the organisation and reduces siloed working
• Can help support organisational transformation
• Can generate savings through improving project outcomes and operate savings programmes
• Supports effective governance across the organisation
• Provides confidence to senior management and councillors that projects are being properly looked after
Figure 1: Benefits of a PMO
3. Establishing a PMO fit for the Council
The first step in building a successful PMO is understanding the specific needs of the council and what problem it is trying to solve – both strategically across the organisation and operationally in the delivery of projects.
Establishing a PMO comes with a unique set of challenges, and councils need to consider several elements to ensure that a PMO is developed and structured in a way that will maximise its value.
It is imperative that senior level support is in place for any incoming PMO – ensuring leaders (officers and members) understand the role and value of the PMO will help support implementation and compliance across the organisation. The value of the PMO also needs to be recognised by officers as a useful resource and not something imposed. Below is a summary of key considerations which are explored in this guidance:
• Defining the council’s approach to project management in a framework, outlining key elements and requirements. The framework should be developed through cross-organisational working and then agreed at a senior level, including adopting through a formal governance decision.
• Considering the project management model that best fits the organisation, depending on its intentions for a PMO, the size of the authority and the number / type of projects.
• Defining the role of the PMO is important to know the boundaries of where project management starts and stops, particularly next to operational delivery or when linked to improvement and transformation plans.
• Determining the operational management of projects across the organisation. Much of this will need to be outlined in the framework, but covers areas such as project reporting, assurance, performance and evaluation.
• Embedding project management through communication and training is vital to achieve a consistent approach across the council to the standards expected.
4. A Project Management Framework
A newly formed PMO should be supported by a robust project management framework with relevant documentation, templates and tools. A framework will set out the council’s requirements for running projects, outlining the different steps, stages, roles and accountabilities, as well as providing clarity over terminology which can often be overlooked.
Define ‘what is a project?’
Set reporting requirements
Detail what needs reporting and how often ability to use one report for different audiences
Outline project assurance
Profile of project boards and assurance structure linked to wider governance
Key elements of a PMO framework
Set out criteria on how to define project work and how to differentiate from ‘business as usual’.
Set thresholds
Thresholds determine PMO requirements for each project based on key criteria.
Define the ‘project cycle’
Outline requirements and milestones for projects
Detail roles and responsibilities
Determine the role of the PMO and responsibilities across the council
The framework and documentation relating to project management needs to be drafted in a clear and concise manner, using language that is easy to understand for a broad audience. The framework can follow the project lifecycle, giving guidance on what is expected at each stage:
Concept Initiate Plan Deliver Close
Figure 2: Key elements of a project management framework
Figure 3: Project stages made simple
5. PMO Models
There are generally three models that can be adopted when establishing a PMO to suit the needs and structure of the council.
Centralised
This model sees the creation of a corporate function that provides a central PMO resource. All project managers across the organisation report directly to the central PMO function to run the full range of initiatives and programmes. This approach is good for setting consistent standards, but project managers may not be specialists in the areas they are supporting and risk lies with the PMO rather than shared with services.
Embedded
In this model the project managers sit within respective service areas and are managed within the directorates. This is sometimes complemented by a small corporate PMO team that sets standards and provides guidance. This model allows project managers to specialise in project work relevant to their functions, but may not provide a holistic and consistent approach to project management. The model may also lack flexibility in deploying project managers where there is the most need.
Hub-and-Spoke
The “hub” tends to be a centrally positioned team that defines policy, procedures, and systems, and the “spokes” represent project managers who are managed by the hub and assigned to projects, working closely with (though not for) the service area. This model is useful for large organisations where there are many projects being undertaken. This hub- and-spoke approach in different forms tends to be the favoured model for local authorities.
Advantages
• Provides resourcing flexibility, allowing the PMO to move between projects
• Allows for consistent standards
• Clear line management structure
Risks
• Potential loss of specialism within specific service areas
• Relationships with service areas need to be carefully managed
Advantage
• Project managers can develop specialis knowledge of service areas
• Dedicated resource for services
• Cost of PMO can potentially be spread over multiple service areas
Risk
• Potential inconsistency in approach and standards
• Greater risk of silo working
• Limited strategic approach in allocating resources to the greatest area of need
Advantage
• Can work well in larger organisations with large numbers of projects
• Can provide a consistent approach across the council, whilst still working closely with services
Risk
• Clarity over roles carefully assigned between the PMO and services
• Lack of flexibility to account for bespoke requirements within services
6. The Role of a PMO
PMOs provide a range of dynamic business functions that support other services within a council. It is easy for the scope of a PMO to expand quickly, and therefore it is a good idea to define and communicate the purpose early on. Having a clear definition of responsibilities reduces the risk of a PMO being pulled into conflicting directions, and taking on board too many activities that means it loses focus and capacity to manage projects.
The table below provides a core list of responsibilities for a PMO, though important to note that the functions are delivered in collaboration with services across the council and the PMO by its nature provides a co-ordination role:
Function
Project management
Leadership of project management
Purpose
Central resource to support the delivery of projects
Drive improvement and change, through a strategic approach to project management
Co-ordination
Pipeline
Reporting
Assurance
Consistency
Training
Mentoring
Engagement
Evaluation
Work across directorates to create a joined-up approach
Manage a pipeline of projects to support planning and resourcing
Produce status reports, along with identifying and escalating issues
Ensure quality of delivery and troubleshoot when intervention is needed
Ensure an agreed / standard approach across the council
Provide training to support quality of delivery
Guide services through project management
Make sure the right people have the relevant information
It’s important to set out what you are not responsible for to avoid taking on work that will impact your team’s capacity.
Review the outcome of the project next to the original business case
7. Defining a Project
The terms “project” and “programme” often become interchangeable, though are distinct. In simple terms a project is a specific, single initiative with tangible outputs, whilst a programme is a collection of related projects. This is illustrated as follows:
Figure 4: Project vs programme
Defining what is a project and what is business as usual (BAU) is a key parameter in establishing the role of a PMO, as doing this will clearly set out what a PMO will take responsibility for and provide support to. The figure below provides a comparison of project work and BAU and can be used as a guide to define what a project is.
Tiering a Project and Threshold Tool
Once it has been established what work a PMO is responsible for, further parameters around what support it will provide to different types of projects needs to be determined. Projects can be categorised into tiers based on factors such as value, status, complexity, risk, and available capacity. Once these factors have been considered, projects can be placed into a threshold system that can define the level of support needed from the PMO, the assurance routes and reporting.
Figure 5: Project vs BAU
The illustration below is from the threshold tool developed by Local Partnerships to support Sandwell Council to tier their projects. It works by answering a set of statements that best fits the profile of a project, which automatically creates a score to define if the project is intense, high, medium or needs only light touch support.
The threshold tool has been amazing as a way of defining the type of project and level of support needed; the important thing was to form the right set of statements combined with designing the tool to be really quick and easy to use by the service leads. (Sandwell Council)
Figure 6: Threshold Tool questions and example of result for high priority project
8.
Roles in the Council
7. Roles in the Council
The Different Roles
The Different Roles
PMOs can be structured in a number of different ways, and the roles that are included depend on the model that is implemented. A PMO will generally have a head of service, with a set of project managers and officers. Some PMOs include strategic support, such as resource planners or practice leads, that act as a resource to project managers, as well as assisting with longer term planning. Support roles can also be included to provide an administrative function or lead on managing the software. The PMO will work collaboratively with service areas to deliver projects, and these relationships are important in maximising the value that the function provides to the organisation.
PMOs can be structured in a number of different ways, and the roles that are included depend on the model that is implemented. A PMO will generally have a head of service, with a set of project managers and officers. Some PMOs include strategic support, such as resource planners or practice leads, that act as a resource to project managers, as well as assisting with longer term planning. Support roles can also be included to provide an administrative function or lead on managing the software. The PMO will work collaboratively with service are as to deliver projects, and these relationships are important in maximising the value that the function provides to the organisation.
The PMO is often linked to change, modernisation or transformation programmes either supporting delivery or as part of the same division.
The PMO is often linked to change, modernisation or transformation programmes either supporting delivery or as part of the same division.
An overview of common roles within a PMO is illustrated below:
An overview of common roles within a PMO is illustrated below:
Responsible Owner (SRO)
It is good practice, if not essential, for a project to have an SRO, particularly if the project is high priority. The SRO has overall responsibility for a project, ensuring it keeps to budget and time to meet its objectives – as part of this responsibility they will chair the project board . They might not be involved in the day-to-day operation but will need to be kept up to date and able to talk
Figure 7: Key roles
Responsible Owner (SRO)
Figure 7: Key roles
Senior Responsible Owner (SRO)
It is good practice, if not essential, for a project to have an SRO, particularly if the project is high priority. The SRO has overall responsibility for a project, ensuring it keeps to budget and time to meet its objectives – as part of this responsibility they will chair the project board. They might not be involved in the day-to-day operation but will need to be kept up to date and able to talk confidently about the project’s progress. Their experience will allow them to spot when intervention is required at an early stage or escalation is needed.
• Traits: forward planning; experienced in project and service delivery; decisive; able to interpret information quickly and communicate concisely.
Service Lead and Representatives
A PMO will have frequent contact with services. The service lead is critical in ensuring the service objectives are met and often are the “go-to person”. A service lead may report to the SRO, give updates to the project board and might be asked to accompany or fill-in for the SRO at programme boards. The service representatives will be other officers that support the lead with detailed knowledge of the outcomes the project aims to achieve.
• Traits: good collaborator; agent for change and improvement; know the service and particularly the requirements of users; can recognise risk and its impacts; able to communicate effectively.
Head of Service – PMO
A head of service (sometimes a service or assistant director) will lead the PMO. They will manage the PMO team and have oversight of the projects being supported – therefore will need to proactively manage the pipeline and allocate resources accordingly. They will have ownership of the project management framework and the processes it outlines. This will mean having good connection across different levels in the council, including regular reporting to senior officers and members. They may also be responsible for the transformation programmes and be key in having oversight in how projects are progressing.
• Traits: excellent at relationship building; experienced manager of people and projects; can form policy; proactive in forward planning and horizon scanning; can quickly spot when something is going wrong and be decisive in addressing it.
Project Managers
A project manager within the PMO will be involved in day-to-day operation of a project: organising the project boards, recording and following up actions; co-ordinating update reports or ensuring others input the relevant information. They will be proactive in raising any concerns and seeking mitigation to risks, and as a member of the project board can use their experience to contribute to decision making.
Whilst the project officer (see next) may be involved in a number of initiatives the project manager will usually oversee one or two key projects that are more complex, and will often line manage project officers.
• Traits: proactive; well organised; management experience; decisive; persuasive; negotiation skills; adaptable and flexible; diplomatic whilst assertive.
Project Officers
The project officer will be involved in the delivery of a project, ensuring the right people are involved at the right time. They will do similar functions to the project manager, but for less complex projects – this includes organising the project boards, record and follow up actions; they will co-ordinate information for updates and reporting. Their role is to drive the project, ensuring there is pace with the decisions made at the right point. It is worth noting they are not administrative support. They will often be involved in several projects across the council at one time.
• Traits: well organised; forward thinking; co-ordination skills; ability to negotiate to find solutions; adaptable and flexible; doesn’t easily take no for an answer.
Recruitment
One of the key challenges for local authorities, and the wider public and private sectors, is the recruitment of project managers - particularly as recognition of the role has increased.
Some of the ways local authorities are addressing the recruitment challenge include:
Co-partner arrangements: when working on collaborative projects have a shared resource, particularly across local authorities or with private sector partners as part of their contribution – though needs to be clear on reporting and accountability lines.
Apprenticeships: an incredibly useful way of “growing your own”, which needs investment as this is a learning programme with individuals requiring training, nurturing, and development.
Recruiting via the private sector: advertising and recruiting in the usual territory of the private sector, demonstrating the social value of working for the public sector and the career opportunities, with the council providing commitment to support formal training and qualifications. Our staffing structure provides a clear path for progression and has allowed us to retain more staff.
Graduate schemes: this is a useful way for graduates to gain career experience and support with project management. However, as with apprenticeships there needs to be a programme of wrap-around learning.
Recruiting via the private sector: advertising and recruiting in the usual territory of the private sector, demonstrating the social value of working for the public sector and the career opportunities, with the council providing commitment to support formal training and qualifications.
Built into supplier contracts: as part of a contracted service the requirement could include project management (including secondment to the council). This is useful in the supplier sourcing and providing the support, but for this arrangement it is essential to ensure clarity of reporting lines and accountability. Decisions need to be linked to the council’s governance and instructions are from one, agreed source.
Built into supplier contracts: as part of a contracted service the requirement could include project management (including secondment to the council). This is useful in the supplier sourcing and providing the support, but for this arrangement it is essential to ensure clarity of reporting lines and accountability. Decisions need to be linked to the council’s governance and instructions are from one, agreed source.
Training within the organisation
Training within the organisation
Generic project management skills have become a must in councils, often supporting day-to-day activity whether initiatives to make savings, delivering improvement plans or running schemes as part of business-as-usual.
Generic project management skills have become a must in councils , often supporting day-to-day activity whether initiatives to make savings, delivering improvement plans or running schemes as part of business-as-usual.
The figure below outlines key training areas, with items from the right-hand-side relating more to project managers and PMO staff, and items on the left being relevant to the broader organisation.
The figure below outlines key training areas, with items from the right-hand-side relating more to project managers and PMO staff, and items on the left being relevant to the broader organisation.
Concept of project management
Awareness of project management framework
8. Financing a PMO
Use of tools and templates
Use of project management software
Many to Few
Mentoring on good project management
Project management operational skills
Professional qualifications
The cost of a PMO will vary – from consisting of a small core team of a few officers, through to a team of 30-40 people. The size of the PMO will reflect its scope, the portfolio of projects and its adopted model.
Funding for PMOs can come from a variety of sources. The three most common sources of funding are based on:
Figure 8: Range of project management in a council
Figure 8: Range of project management in a council
9. Financing a PMO
The cost of a PMO will vary – from consisting of a small core team of a few officers, through to a team of 30-40 people. The size of the PMO will reflect its scope, the portfolio of projects and its adopted model.
Funding for PMOs can come from a variety of sources. The three most common sources of funding are based on: Core funding: Core funding (also referred to as revenue) is ideal in creating stability and generally used to fund the backbone of a PMO. This can cover its head of service and permanent project managers / officers who will often be involved in council wide / corporate change projects – and the team could have savings targets to create a return on investment. However, there is often a need to flex-up the PMO when projects need resourcing quickly. Therefore, some authorities will appoint and retain project managers at risk before funding is confirmed.
Project funding: Project funding generally involves the cost of the PMO being built into project budgets. This can include a percentage spend in capital programmes or grants that allow for project management and administrative overheads. When project funding is used, there is often provision within the revenue budget for a Head of PMO position to coordinate the function.
Resourcing is a key risk when relying on project budgets – therefore it is essential that a forward pipeline is maintained so that the PMO can ensure its project managers are always assigned to project work.
Service funding: Services sometimes have project management allocations built into their base budgets. This type of funding generally works best for embedded PMOs, which have project managers permanently based within service areas. Services may be protective of these resources, and they can often only be part of a person’s job rather than their whole role.
Financing our PMO is based on 30% from recurring revenue budget. 70% is from recharges.
1. Core funding
2. Project budget
3. Service funding
Supporting Software
Software supporting project management is commonly used in the public sector. Software packages range from off-the-shelf products to fully customised suites of digital services, and whatever route is chosen needs to be consistent with the council’s IT strategy. Considerations for procuring PMO related software packages include:
• Availability and flexibility of licences – whilst it would be ideal to have licences for many, realistically the cost will be a factor, so moving licences around to different people would be useful with the ability to quickly see when a licence has not been utilised.
• Ease of use and user friendly – easy navigation is important, particularly for people who are not familiar with the software or do not use it regularly.
• Ability to be proportionate – this involves scaling what is needed, for example reducing the requirements for smaller scale projects.
• Document storage and management features – ideally all documentation for a project is actioned or recorded through the software.
This means different parties can be sighted on a project, plus it provides an effective audit trail. There might be unique documents that need producing outside of the system (e.g. templates from funders) but these should still be uploadable.
• Integration with other software – this can sometimes be tricky but something to be understood early so a decision can be made on the capability of the software being purchased.
• Reporting features that allow one report to be prepared and shared many times – this allows for information to be submitted once and extracted for the right audience to the right level of detail.
• Paperless – that the software is used to “design-out” any remaining paper based process and used to streamline procedures.
10. Assurance and Reporting
Governance and assurance are an essential part of any PMO to ensure that projects are carefully monitored to avoid failures and ensure delivery, with links to the council’s formal governance processes.
Assurance arrangements should be established early in the PMO’s development, setting clear expectations of what is required. The layers of assurance means that different parts of the organisation can have sight of a project, bringing their perspective to avert and mitigate when it looks as though something might go wrong. The assurance processes need to be proportional to the project, with the high priority and higher risk projects having more checks and balances in place. Those risks might not just be financial, but include reputational risk and impact on vulnerable people in the community.
Below is a suggested assurance structure:
• Project boards: oversee day to day management of projects, meeting at a maximum weekly and monthly as a minimum, chaired by the SRO.
• Programme boards: meeting monthly to agree business cases, receive dashboard reports on different projects in the programme area, and escalate when needed, agree and record changes, as well as providing a strategic overview in that programme area. Each authority will have different arrangements for programme boards – these can be based on directorate structures or the priorities of the corporate plan.
• Assurance board: meeting monthly to receive progress and health dashboards from the chairs of the programme boards, troubleshoot when necessary, provide strategic overview and review the pipeline of projects – chaired at director level (on rotation) to provide gravitas and leadership, supported by the membership containing specialist officers to spot and address pitfalls.
As part of regular performance reporting
Relevant to the council scale and design
• Leadership Team (senior officers): reports on projects built into the performance reporting cycle, highlighting risk and progress.
• Cabinet (member executive): as with the Leadership Team, cabinet will receive formal reports on projects as part of the quarterly performance reporting linked to ambitions in the corporate plan as part of usual governance, with these papers published in the public domain to support transparency.
This assurance structure should not deviate from usual line management reporting and escalations, ensuring senior management is sighted on key projects and risks, including briefing portfolio holders on their relevant schemes. The review of capital schemes can be integrated into the model as illustrated below, though your council may have an additional requirement to monitor capital spend that contributes to financial reporting.
Figure 9: Assurance and governance structure
Cabinet Leadership team Assurance Board
Line management through the directorates
Although reporting is a critical aspect of project management, it is important that processes are simple and slick, ensuring that reports capture only meaningful information and not turn reporting into an industry in itself. If reporting is well defined, it is possible to create a single report that can be used multiple times – potentially in the form of a visual dashboard.
The BRAG (Blue, Red, Amber, Green) status is a good way of creating simple reports that can be quickly interpreted. The system utilises colour coding to highlight project elements that are on track or require attention.
The following figure provides an overview of the key elements for reporting:
Make sure documents are relevant and capture meaningful information. Provide templates to make things easier for service.
Blue: Ahead of schedule / better than
Red: Delay / issues impacting delivery Amber: Potential risk/unlikely to meet expectations Green: On track / as expected
Figure 10: Reporting and BRAG definitions
Figure 10: Reporting and BRAG definitions
An outline of how often reporting needs to occur and what should be reported at each stage of the reporting cycle can be based on the following.
Weekly
Monthly
• Project board (where necessary, could be bi-weekly, etc)
• Team meetings as relevant
• Programme boards – health and progress reports
• Report to directorate team meetings
• Assurance Board – overview, highlights, deep dives
• Portfolio member briefings
Quarterly
Annually
• Leadership team – key project delivery as part of performance reporting
• Progress reports to cabinet on corporate delivery plan
• Results and outcomes relating to the council’s corporate plan ambitions and benefits realisation
• Profile results of PMO and highlight risks in projects as part of the Annual Governance Statement
Reporting on Change
The foundation for reporting – the outcomes, measures, timescale, cost – should all be included in the original business case which enabled the decision makers to reach informed choices when agreeing to a project. There will inevitably be events that means a project could go off course, and minor change can be addressed through the described assurance structure. However, where there is major change that impacts the intent or delivery as set out in the business case then the case needs to be reviewed.
Where a business case was agreed through formal governance the same route will be needed to revise any decision. This is important for accountability, transparency and audit.
11.
Measuring the Impact
Measuring the return of investment and actual performance of a PMO can be challenging because they are heavily reliant on the results and behaviours of others in the council.
There are a number of metrics that can demonstrate a PMO’s value, and where possible, data should be collected over a period of time so that the impact of a PMO can be observed. Metrics include:
• Savings attributed to the activity of the PMO – often relevant in transformation projects
• Savings achieved through support of the PMO – though attributed to a directorate
• Projects delivered on time / percentage of projects delivered on time
• Projects delivered in budget / percentage of projects delivered to budget
• Contribution to delivery plan / corporate plan objectives
• Meeting the specific KPIs of the project e.g. reports on funding or level of improvement
• Culture and behaviour change – staff surveys on skills, abilities and approach to operating projects.
Re-evaluation
Initially the PMO was imposed on projects and there was resistance in its adoption. Now we can offer projects additional resource, and the service areas love this!
The performance metrics can form a key part of evaluation when assessing the results of a project and the impact of a PMO.
Along with metrics, part of the project close process should include “lessons learned”, which helps shape future delivery. Input from different stakeholders and parties should be included in learning the lessons to give a rounded view of the areas of improvement. Based on the result of the evaluation the role and purpose of the PMO could adjust to meet the changing requirements of the council.
It is also important to celebrate success – ultimately at the centre of public sector projects is the goal of improving outcomes for residents which provides great value.
12. Conclusion
This guidance is to help councils establish and review their PMO function, which has increasingly become a key part of the public sector arsenal in change, transformation and efficiency programmes. A well run PMO, valued by the leadership and respected by the wider workforce, can be instrumental in fostering positive culture change to increase collaboration and evolve to achieve the best outcomes for residents.
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