PMO 5.0 is referring to level 5 maturity of Project Management Office(PMO) function in a organization.
Since 2010, PMO has become a popular term in Project Management world. Increasingly, organizations started to recognize the importance of an established program management role, particularly in engineering and product development functions. There are many online resources regarding PMO 3.0 to introduce the content of Project Management Office such as “setting up PMO 3.0”.
At level 3.0, the PMO office main purpose is to support and provide an oversight function for the program management team. It is the initial integration step in Gartner’s overview process.
In the past decade, since PMO was established, how we work has changed completely. Therefore, technology and service business also went through changes to keep up with the industry trend. Project Portfolio Office(PPO) started a few years back, which is the PMO 4.0 level of maturity. PPO not only Improved the integration of PMO function in an organization, also provided process control. The rise of PMO 4.0 level of maturity was due to increasing project complexity and customer requirements. The traditional project waterfall project and template do not fit for all types of customers any more. Project reporting because an important element in technology and service companies’ financial reporting. The visibility to project performance became the companies senior management’s pain points. At PMO 4.0 stage, companies started tracking benefits of PMO function, and portfolios are benchmarked.
A recently study shows that by 2025, company executives would spend 85% of their time making project decisions. PMI(Project Management Institute) suggested that it is “The project economy”. It is different from the “Gig economy” a decade ago. Gig economy serves freelancer and refers to small and short term tasks. “The project economy” is a new form that company runs in digital transformation. Operations are done in large complex project bases. From Strategic initiatives to revenue generating customer projects. There are programs overseeing multiple projects. The operation structure will be project based. How the project runs are also changed. Projects are no longer monitored and controlled monthly. They need to be monitored real-time. Operation efficiency is also a key indicator of a companies profitability.
Going through all these changes, PMO needs to evolve as well to keep organizations successful. Here is PMO 5.0. The PMO at 5.0 level is called “Strategy Project Office(SPO)” . SPO has bring organization to archive process improvement to maturity 5.0. In addition, it is the center of effective innovation of project management in an organization. SPO leads from programs to strategy initiatives. Manages changes within organization. It is also part of the strategy board.
PMO at 5.0 level has evolved from overseeing projects to leading organization transformation. SPO is the center of excellence in a company. It is a vital function to ensure financial results. It is critical to nurture the culture of operational excellence.