In a perfect world,
projects would be like an isolated island untouched by outside forces and constraints,
but unfortunately this isn’t the case. Projects inhabit an environment that is
characterized by many constraints and risks. In larger organizations, a
specific project is just one of many that are being planned or executed at any
one time, the project portfolio. These
projects share common risks and uncertainties due to constraints and
objectives of the larger organization in which they exist. Within this
environment, the Project Management Office (PMO) provides risk management
governance over the project portfolio to ensure that risks are managed
consistently and aligns with the organizations objectives.
Consistency is
important to ensure that same processes and criteria are used when
generating information used in the
decision making process. If there is no consistency, it is difficult to compare
project performance in the portfolio and allows personal biases to affect the
analysis. PMO’s ensure consistent risk
management practices first by developing and distributing guidelines and
specifications, templates, and training as necessary. These guidelines outline
the standard organization risk management processes for identification,
assessment, planning, monitoring, and controlling risks. The guidelines will often come accompanied by
templates or sample workbooks that provide standardized documentation to support
the risk management process, including planning documents, assessment matrixes,
and sample reports.
Along the same lines,
the PMO can support the processes by providing training and mentoring to
project team members. In fact, training and mentoring is just as important as
providing the risk management framework (processes etc.) as this will ensure
team members understand their roles in the process and how to perform them
successfully. Without the training and mentoring, guidelines and specifications
will suffer the same fate as most copies
of Tolstoy’s War and Peace. It is often featured prominently on bookshelves,
but on closer inspection it becomes clear that book has rarely if ever been
opened. Training bridges the gap between theory and practice and ensures that
all projects know how to perform the required steps in the risk management
process.
Finally, PMOs provide
a portfolio risk management capability where the assessments of the project
risks are rolled up at the portfolio level. This rolling up allows companies to
identify common risks across their projects that can be managed most
effectively at the organization level. This centralization of the risk
management the PMO is able to provide a portfolio risk reporting capability for
various organization stakeholders.
To conclude in organizations
with a portfolio of projects, PMOs can provide an important role in overseeing
the implementation of standardized project portfolio risk management process
that includes providing a process framework, mentoring and training, a
portfolio reporting capability.
