Creating the PMO Business Case

You’ve asked a lot of questions to a diverse group of stakeholders. You’ve done an assessment. Now it’s time to create a PMO Business Case and start moving the needle from idea to reality.

If you notice, I call it a PMO Business Case, not a PMO Charter. I don’t like the word “charter” when talking about creating PMO’s. Charters are normally written for projects, which have a defined start and end. If the PMO is to be a lasting department, there needs to be a deeper level of understanding as to what it is and how it will use, and capitalize on, the valuable resources the company will expend.

Below are some of the key components of a PMO Business Case. I recommend most of these, but change up/rename as you see fit for the work you’re doing.

Executive Summary. This is going to be a very important part of the business case. It justifies to the world why you believe the company needs a PMO, its purpose, services, and generally how it will help the organization succeed. Don’t make it long and flowery, otherwise you can lose the reader (write it with the exec team in mind). I also recommend you write the executive summary last. Yes, last. That way, it can essentially sum up all the other information in the business case.

Mission & Vision for the PMO. You might put this in the executive summary section. I like to keep them separate. I leave it to your discretion. The Mission will describe WHY the PMO exists and its purpose. Spend time on the why. When working with stakeholders, this is an important talking point. The Vision will frame up where the PMO is headed. For example, I was part of a new PMO that started in IT. Our vision was to move it to an EPMO over the course of five years. This was in the business case and on the roadmap.

Strategy (Roadmap). The PMO’s strategy will answer the question; how will we achieve our vision? What steps are we taking to continually grow and drive greater results? Like any other department, you want to see the PMO grow. The business case approvers want to see that too. Have a strategy/roadmap for your PMO.

Staffing Strategy. Staffing will probably be the biggest expense for the PMO. Have a strategy for hiring, training, and maintaining PMO staff. Tie your staffing strategy to the greater roadmap. For example, if in two years you move from just managing projects to a large portfolio, you’ll need to plan to add a portfolio manager. Same goes for program management. Training can get spendy, so be prepared for that too.

Objectives & Services. This answers the question of “So, what’s the PMO gonna actually do?” You could easily go down a rabbit hole here, but don’t. Keep it high level. Highlight things like Governance: doing the right things at the right time with the right people; Resource Management: understanding the work being done, ensuring it’s the highest priority work, and the capacity they have to get it done; Consistency: projects being run in a similar fashion with consistent artifacts so stakeholders understand each project will be run the same; Communication: transparency of PMO progress and project success. There are more, but you get the idea.

Project Prioritization Process. If the PMO will be leading the charge for project prioritization, the process (at least at a high level) should be highlighted, including the roles involved in making the decision. Don’t forget about how to communicate the priorities once decided!

Success Factors. I highly encourage this to be quantifiable and easily tracked. For example, saying “improve delivery” doesn’t tell me anything. Saying “Deliver 90% of the projects the PMO manages on time, to scope, and within budget” can be reported against. You don’t need a lot of these. I say no more than 2-3. Make sure these success factors are aligned with the executive sponsor’s expectations.

Financials. Where is the money coming from to fund the PMO? For example, if the PMO is in IT but supports tech projects for all areas of the company, each department may allocate a percentage of their budget to pay for you. That’s good info to know! If you’re doing T&E and/or training of staff, understand how those expenses should be estimated and tracked. Nothing’s free, so know the financial aspects of the PMO.

Organizational Structure. Where will the PMO report into? IT? Finance? Operations? There are lots of choices here, and it’s usually outside of the PMO leader’s control. The only thing I would fight for is to ensure it doesn’t report too low in the organizational hierarchy. The lower the reporting, the less credibility and influence the PMO can have with those up the ladder.

Assumptions & Risks. When starting a PMO, you will have certain assumptions. For example, assume you’ll always have an executive sponsor to go to for support. Or the PMO will be involved with strategic planning. Risks are abound and you’ll ID those during the assessment. Note them here and ensure those approving the PMO understand what they are and help with mitigations.

Key Team Member and Stakeholder Roles. Roles, not actors. People come and go from companies all the time. Reorgs change reporting structures. Growth can create new divisions. Because of this, focus on the ROLES that will stay constant, not the people who fill those. If you’re an IT PMO, maybe the CIO or VP of IT will always be a key stakeholder. Note that as a role always involved.

Approvals. Have the sponsor and any other senior leaders who will approve the PMO sign the business case. Let’s make this official!

Your business case may contain more sections, but these are the sections I believe are important. What else would you add?