PMO as a Service (PMaaS): Benefits, Disadvantages & Best Practices

A project management office (PMO) as a service (PMOaaS) is a way for companies to execute their enterprise strategy. PMO as a service or project management as a service seeks to do many things from increasing project managers’ capacity to streamlining processes through automation.

To understand how it does this, first, we must understand PMO as a service (PMaaS) and explain when an organization needs to hire a PMO as a service. Then we’ll show the difference between having an in-house PMO and hiring a PMO as a service, the benefits of PMO as a service and its disadvantages, to help readers know if it’s right for their business.

What Is PMO as a Service (PMOaaS)?

PMO as a service is a way for businesses to contract out a staffed PMO to handle their projects and provide PMO software, tools and templates. It’s an alternative to spending the time and money in building an in-house PMO. This out-of-the-box solution can be tailored to the needs of an organization and its objectives.

Using a PMO as a service can help an organization increase its delivery of projects, improve commercial focus and have a team of project management professionals working towards meeting cost and time constraints for an organization’s projects. Unlike having an in-house PMO, PMO as a service has the flexibility to scale up or down to provide the appropriate governance of an organization’s portfolio or program.

Whether you’re an in-house PMO or PMOaaS, the right tools will give the best results. ProjectManager is award-winning project and portfolio management software with powerful PMO roadmaps that show all projects on a timeline, equipped with resource management, time tracking and task management features. Roadmaps can be filtered, see open projects and who’s assigned tasks while getting key metrics for stakeholders. Get started with ProjectManager today for free.

ProjectManager's roadmap — ProjectManager’s roadmaps have the features PMOaaS need to deliver successful projects. Learn more

When Should You Hire PMO as a Service?

Using a PMO as a service is ideal for organizations with a lower project management maturity, or those that just execute projects sporadically and don’t need to establish an in-house PMO. This saves them the expense and time that needs to be spent building an internal PMO while giving them the benefits of one for the projects they’re running.

PMO as a service can also be hired for companies looking to ramp up their project management. It provides them with access to the latest tools and technologies, as well as the expertise and guidance they need to ensure the success of the projects they manage.

Companies that don’t have the resources or time to manage a fully-fledged PMO will find an affordable alternative in hiring a PMO as a service. As noted, it gives organizations expert guidance and flexibility by tailoring the PMO as a service to the company’s precise needs and allowing them to grow and scale over time.

What’s the Difference Between an In-House PMO and Hiring a PMO as a Service?

We’ve mentioned both in-house PMOs and PMO as a service, but have yet to define the two terms and how they differ and where they share commonalities. As defined above, PMO as a service is a cost-variable structure based on the volume, complexity and specific nature of the services an organization needs.

PMO as a service is a more cost-effective way to oversee multiple projects than having to maintain a full-time, in-house PMO. The key considerations in deciding between the two are scale, cost and value.

Using an in-house PMO means the creation of a functional department within the organization. This group is designed to help projects by providing support, ensuring best practices are met and benefits are obtained from projects, programs and portfolios. The level of control and influence a PMO has over projects depends on the type of PMO. There are five types: supportive, which is low-level; controlling, focused on standards and practices; directive, which provides resources and support; centralized, which has decision-making authority; and departmental, supporting specific departments or business units.

Benefits of PMO as a Service

Deciding on whether to create an in-house PMO or hire a PMO as a service depends on many factors. To start that discussion requires looking at the pros and cons of hiring a PMO as a service. Here are a few advantages of using a PMO as a service.

Lower Overhead Costs

Overhead costs are those costs that aren’t related to direct labor or materials. For example, the salaries of administrative, maintenance and security personnel are overhead costs. Not directly related to manufacturing a product, but still costs that manufacturers need to keep track of and then document in their financial statements.

PMO as a service is a more dynamic, performance-oriented model that adapts to the changing needs of an organization. Therefore, the organization can scale its project management capabilities based on demand, without the overhead of maintaining a full-scale in-house PMO.

Connects Organization With a Team of Experienced PMO Professionals

For organizations that don’t have project managers or experience with project financial management, PMO as a service offers them an inexpensive way to fill those holes in their organization. Rather than hire an experienced project manager to oversee projects, provide governance, manage resources and more, PMO as a service has all these benefits baked in for a price. That price is usually more reasonable than the investment of an internal PMO for its portfolio management.

Helps Deliver Successful and Profitable Projects

Ideally, hiring a PMO consulting firm should ensure an organization avoids common project management risks, such as scope creep, inaccurate project schedules and any other issues that might increase costs. This leads to the delivery of successful projects that meet deadlines and come in on or under budget, which in turn creates greater profits for the organization.

Disadvantages of PMO as a Service

PMO as a service isn’t going to serve a company that needs to invest in an internal PMO. For project-based companies that need to establish a project intake process for reviewing many projects, programs and portfolios over time, the cost of a PMO as a service would be prohibitively expensive against the cost of creating an in-house PMO.

Another issue with hiring a PMO as a service is that control is taken out of the hands of the organization. While the PMO as a service is working for the company, there are aspects of the PMO as a service that are beyond the control of that organization, which some businesses might not like.

For example, an organization that hires a PMO as a service won’t be able to control things like staffing changes and how important this effort is for the team running the PMO as a service. When the PMO is in-house, it has greater control over the priority and resourcing of its projects.

3 Key Best Practices for PMO as a Service Provider

If your organization is looking to hire a PMO as a service, then it’s important to understand the best practices for having this project management as a service. Here are a few things to keep in mind for those looking to work with a PMO as a service provider.

Start By Assessing the Project Management Maturity of the Organization

Project management maturity is a measurement of how well an organization accepts and implements its project management as a business practice. This will show how well the organization can lead successful projects and achieve its strategic goals.

If the organization has a high PM maturity level it has well-planned, executed and completed projects that meet objectives. However, if the opposite is true, then the organization might want to hire a PMO as a service.

Ensure Project Strategic Alignment

One of the best reasons for hiring a PMO as a service is that it helps to keep projects aligned with the organization’s strategic goals. This overview of all projects is one of the principal reasons for a PMO or PMO as a service. It can be easy to get lost in the weeds of managing the day-to-day operations of a project and a PMO as a service is there to take a high-level view of all the projects, prioritize them and ensure they align with the organization’s strategic goals.

Audit the Project Prioritization and Project Intake Process

Hiring a PMO as a service helps determine the best order to complete a group of projects or tasks. Project prioritization can be difficult for project managers who are deep in the daily operations of their projects. PMO as a service can look at the big picture. PMO as a service also can standardize the process that the organization uses to gather information about potential projects and assess their feasibility, which is the project intake process.

ProjectManager's project prioritization template — Free project prioritization matrix template Download now

Free PMO Templates

PMO software has features to manage multiple projects and templates are always going to fall short in this process. However, for those who aren’t ready to upgrade, templates can be useful. Out of the over 100 free project management templates available from our site that cover every aspect of running a project, program or portfolio across many industries, the following are best suited for PMOs.

Multiple Project Tracking Template

Use this free multiple-project tracking template to monitor the progress of many projects at the same time. Get a high-level overview of all the projects in an organization, from task dependencies and schedules to costs.

Gantt Chart Template

This free Gantt chart template for Excel takes all the project tasks and uses them to create a visual timeline that shows the entire project on one page. Just add the task names and start and end dates on the left side and they automatically populate the timeline to the right.

Project Budget Template

With a project budget template for Excel, managers can list all the project tasks and subtasks, who they’re assigned to and add labor and material costs. There are other columns for costs that don’t fall into that category and users can then track the planned versus actual cost of the project.

How ProjectManager Helps Implement PMO as a Service

PMOs and a PMO for a service won’t use templates to manage programs or portfolios. It’s not efficient. Templates are static documents that have to be manually updated and they’re not collaborative. They can’t track time, cost or resources in real time. When an organization hires a PMO as a service it expects expert governance, which is impossible with templates that are always reflecting old data. ProjectManager is award-winning project and portfolio management software with real-time project portfolio management dashboard, reports and tools to balance the team’s workload across multiple projects.

Use Real-Time Project Portfolio Management Dashboards and Reports

PMO as a service and in-house PMOs alike have to monitor multiple projects to manage resources efficiently and deliver those projects on time and within budget. With our real-time portfolio management dashboard, they get a high-level overview of all those projects on one page.

Live data from all projects is collected and displayed on easy-to-read graphs and charts that show metrics, such as time, cost, workload and more. Plus, there’s no complicated and lengthy setup as with lightweight software alternatives. For more information, use customizable reports, such as portfolio reports, which can be shared with stakeholders to keep them updated.

Balance Team Workload and Log Work Hours

Managing resources requires real-time tools that view allocation. PMOaaS managers can see every team member’s allocation on the team page or a color-coded workload chart. This allows for a quick review of who is overallocated or underutilized. From the workload chart, managers can balance the team’s workload to have everyone working at capacity and staying productive.

To get a window into labor costs, there are secure timesheets, which teams can use to log their hours anywhere and at any time on the web app or a mobile device. Managers get transparency into how far each team member is in completing their tasks and teams can log work hours without having to interrupt their tasks.