What is an Enterprise Project Management Office?

EPMO: A Solution for Your Big Business

In a big business, it’s easy for communication problems to lead to project breakdowns. The people coming up with project goals in the office aren’t necessarily the people enacting business tactics in the real world – and that may or may not match the strategy coming from the executive team! The different branches of the company may not be in direct communication and may not even be aware of what their coworkers are doing. 

To create a successful project, business executives need to build unified strategies, tactics, and project goals. Creating an EPMO is one way to do that. 

An EPMO, which stands for Enterprise Project Management Office, provides structure to a company and brings together managers with different skill sets. It can boost the success rates for projects and improve coordination between departments. Additionally, it ensures that resources are efficiently distributed. Traditional PMOs operate in a silo, at the direction of middle managers, while EPMOs are deeply embedded with senior executives and connecting strategy to tactical success.

Before creating an EPMO, it’s important to understand how they function, how they differ from a PMO and how to set up an EPMO in your company.

What Is an EPMO?

An enterprise PMO is a centralized organization responsible for planning business projects. It is an organization-level office specializing in strategy and administration. The role of the EPMO is to evaluate a business’s projects and continuously optimize them. 

EPMOs work to ensure that projects are completed on budget and on time. By working with all aspects of a project, they can monitor everything and act quickly to correct errors, as well as help cut down on wasted resources. Perhaps most importantly, EPMOs ensure that all projects are aligned with the business’s overarching ideology.

The primary functions of an EPMO include:

• Assessing and navigating project risks
• Standardizing processes
• Monitoring progress
• Mentoring employees
• Driving benefits realization
• Improving project accountability

The leadership of an EPMO is composed of project managers, portfolio managers and other executives who are knowledgeable about the project. An EMPO director typically coordinates the activity of this team and may serve as project/portfolio manager and/or executive leader as needed. This leadership structure is what makes EPMOs unique. When managers with different specialties collaborate, they improve communication between their respective management branches. Working outside their usual niche exposes them to new ideas and helps them overcome potential blind spots.

Benefits of an EPMO

Projects can struggle or fail for many reasons. A proposed project might exceed its allotted budget. Or the project managers might realize too late that they lack the staff to implement their goals properly. Having an EPMO to oversee a project can help alleviate these problems.

Signs that you might need an EPMO include:

• Low project performance rates
• Over budget projects
• Project goals that are poorly aligned with business strategies
• Lack of a clear mission from project managers
• Underutilized project resources

By creating a structure that includes regular executive input, EPMOs help improve accountability for project performance.

EPMO vs. PMO

Businesses can also create a PMO (project management office) to coordinate their big projects. PMOs provide information transparency, support intelligent decision-making and conduct peer reviews. However, if you feel like your business is growing faster than your current management can handle, it may be time to switch from a PMO to an EPMO.

The role of the EPMO is to take an expansive look at enterprise-wide projects. In businesses that already have PMOs, the EPMO acts as a kind of super PMO. It tracks the work of the PMOs, mentors the executives involved in running the projects and coordinates among the existing PMOs. An EPMO is ideal for large organizations that manage multiple big projects at once.

What is an Example of an EPMO?

One example of a successful EPMO is from the Federal National Mortgage Association, also known as Fannie Mae, in 2012. Fannie Mae already had a project management office, but after the financial crash of 2008, they knew they needed a better way to coordinate and manage projects. They transformed their PMO into an EPMO and quickly saw positive results.

Fannie Mae’s EPMO reported directly to the board and senior leadership, which allowed for a rapid relay of information. As a result, they pivoted more quickly in response to demanding regulations. According to the vice president of portfolio integration Amilda Gjecovi in an article by the Project Management Institute, the delivery cycle for projects dropped from nine months to 60 days.

EPMO Best Practices

The best practices for an EPMO can vary depending on the needs and resources of the company doing the implementation. However, there are a few tried-and-true tools that typically result in successful EPMOs.

Value Maps

Value maps depict a company’s customer-facing attributes in comparison to the attributes of rival companies. A well-designed value map clearly establishes a company’s emphasis, including where it falls short of its competitors. Creating a value map helps executives determine where to invest heavily in a project and where to dial back their efforts.

Investment Principles

Investment principles provide the bedrock rules for balancing investments, and they determine the ideal investment targets for different projects. Important investment principles include infrastructure investment, regulatory compliance and strategic initiatives. When working on a project, project leaders should assess the investment principles and assign them priority rankings.

Strategy to Execution

Strategy to execution is a more refined version of the portfolio management function of a traditional PMO. It starts by breaking down business capabilities into capability models. Then, it evaluates the performances of the individual capabilities. Finally, it develops an investment roadmap.

Organizational Project Management

The organizational project management framework ensures that projects do not diverge too far from a business’s goals. In this framework, an EPMO oversees projects to align project management and overarching organizational goals. It keeps projects tightly focused on their strategic aims and prevents unnecessary spending.

How to Implement an EPMO

Before selecting an EPMO team, setting up an EPMO charter document to lay out specific goals can help show stakeholders how the EPMO will benefit the company.

Next, assess the organization’s skills and capabilities. You can evaluate things like management practices and the readiness of the team to implement big changes. Then, identify any company weaknesses and areas of opportunity and define how the EPMO could solve them. Once that’s done, you’re ready to create the team for your EPMO.

The Internal Staff Augmentation Model

One of the ways to staff an EPMO is to reform an existing PMO. In this strategy, the whole project management office is rebuilt using the talent pool that the business already has. A few new team members may be added, but most EPMO members are pre-existing employees. This is called the internal staff augmented model.

The Outsourced Professional Service Model

Alternatively, you can use the outsourced professional service model, which brings in brand new employees. The new hires might mentor the team of a previously established PMO or form a new EPMO from scratch. The outsourced professional service model works well for companies that need specialized skills lacking in their current employees.

Know Your EPMO’s Strengths

EPMOs offer many benefits compared to PMOs and other management offices, but they’re not infallible. Once you understand the role of the EPMO in your company, it’s important to monitor it to ensure it provides what your company needs. Conduct regular evaluations and assess how well the enterprise project management office works with the other offices. 

As the Project Management Institute explains, every EPMO needs to know its strengths. Only by continuously optimizing your EPMO can it reach its full potential.