Experts say an average of 70% of projects fail — an absolutely staggering number. While there are many reasons for failure in project management, most cases can be attributed to a misalignment of project goals.
Thankfully, with both an enterprise project management office (EPMO) and a project management office (PMO) in place, your team members can benefit from a higher level of organization and an increased project success rate.
But what exactly is an EPMO, and what roles does it fill in the grand scheme of things? In this article, we go in depth and discuss everything you need to know about an EPMO, including how it differs from a traditional PMO.
I’ll cover:
- What Is An Enterprise Project Management Office (EPMO)?
- When To Transition To A EPMO
- How To Transition To An EPMO
- What Software Tools Should EPMOs Use?
What Is An Enterprise Project Management Office (EPMO)?
An enterprise project management office operates directly beneath C-suite executives and the board of directors. It's composed of an executive leadership team that's in charge of making major decisions about what projects the enterprise should or shouldn't take on, as well as who should oversee each one.
Instead of managing the projects themselves, the EPMO effectively oversees all projects simultaneously. It operates on a strategic level, ensuring each project undertaken within an organization aligns with enterprise goals.
The office is responsible for handling important functions such as demand forecasting and resource planning, as well as financial evaluations such as budgeting, scheduling, and the potential return on investment (ROI) for projects.
Related read: What Is Enterprise Project Management?
How Is An EPMO Different From A PMO?
While an EPMO takes a strategic approach to overseeing projects across an entire organization, a project management office, or PMO, takes on a smaller but similar role within a specific business unit, such as information technology (IT) or procurement.
There are three main types of PMOs:
- Supportive: A supportive PMO works with project managers, offering consultative services, assisting with the creation of best practices, providing training, and developing outlines and templates for use throughout the project.
- Directing: Directing PMOs operate at a level just above the project management team. They provide methodologies and best practices to use throughout a project and ensure the project management team adheres to them as the project progresses.
- Controlling: The controlling PMO manages projects directly. It oversees day-to-day tasks and metrics to ensure each step of the project is carried out efficiently. Controlling PMOs also hire, manage, and train project managers directly.
While each of these types of PMOs has very different functions, they vary considerably from those of an EPMO. Instead of strategizing to determine which projects are best aligned with the organization's goals, the PMO simply oversees the project itself and delivers tactical solutions to ensure it is successful. In large organizations, the two offices generally work to support each other.
EPMO Responsibilities
EPMOs have a great deal to manage. The core functions they carry out are vital for many large organizations, and that means they need to be staffed with high-level professionals who understand the business they work for, as well as the role they're hired to take on, inside and out.
The core functions and responsibilities undertaken by a traditional EPMO include:
- Cost management and analysis: EPMOs have to ensure projects are financed effectively and stay on budget.
- Resource management: It's also vital that EPMOs have the foresight to know which people belong at the head of which projects. They also need to ensure there are enough project managers and team members available to take on each project and manage any conflict that might arise between team members.
- Risk management: Prior to approving any project and throughout project deployment, EPMOs must identify and assess potential risks, as well as provide strategic plans to mitigate them.
- Performance management: EPMOs need to ensure the organization they serve is performing well. They may be in charge of defining and controlling key performance indicators, as well as building reports that help C-suite executives or the board of directors see how well a project or project management team is performing.
- Project governance: EPMOs are tasked with defining and implementing project governance frameworks across their enterprises.
- Stakeholder communications: EPMOs must communicate with stakeholders to ensure the organization is achieving goals and meeting expectations.
- Strategic portfolio management: An EPMO needs to supervise project portfolio management, overseeing project investments and objectives to ensure priorities are aligned with business goals.
When To Transition To A EPMO
An EPMO is a great asset to a large organization that requires an enterprise project manager or an entire department that can ensure the strategic alignment of multiple projects and make sure business strategy coincides with the organizational goals. However, not all businesses can benefit from an EPMO.
In cases when a company is too young or too small to consistently carry on multiple projects at the same time, a project management office, whether it's supportive, directive, or controlling, is usually a better way to keep projects on budget and on schedule.
Furthermore, if a business is limited to major projects in a single department, developing a PMO is most often a better choice than an enterprise PMO.
As an organization grows, it can be hard to know when the time is right to transition to an EPMO. Here’s some signs that the time is ripe to start moving toward an enterprise PMO:
- Project managers spend a majority of their time putting out fires instead of meeting project objectives and goals
- Execs and leaders within the org do not have insights on real-time project progress and execution
- Project team members and other employees in the org cannot clearly state (or don’t know) the overall business strategy
- Project team members are unsure how their work fits into this big picture strategy
How To Transition To An EPMO
Making the move from a PMO to an EPMO isn't necessarily an easy feat, but if it's the right choice for a business, it's certainly worth putting in the work.
An EPMO that works directly with a project team and liaises with senior management can ensure projects are assigned to the right project manager and carried out according to the project schedule, budget, and scope.
Making the transition can often be done internally without seeking out new hires. Many PMO personnel can easily make the transition into a role that’s less hands-on; however, some businesses may want to outsource their EPMO externally, which can be just as beneficial.
If you’re creating your EMPO internally, work with other leaders to analyze project managers and other employees to see if they might have the skills and strengths to transition to a role within your EPMO. Those who don’t may need to move to other roles and departments that align with their experience.
What Software Tools Should EPMOs Use?
The most important tools for EPMOs to use include those that enhance team collaboration.
Software such as Microsoft Teams or Google Drive can ensure documents, spreadsheets, and presentations can easily be shared among team members. These platforms also facilitate remote work through the hosting of video and voice conferencing.
Other project management solutions such as Workzone or Primavera can help EPMOs oversee project finances and schedules with ease. Check out the 10 Best Enterprise Project Management Software of 2023 for other programs that can help make your EPMO more efficient.
Related read: How Much Does Enterprise Project Management Software Cost?
Develop An EPMO For Enterprise-Wide Project Success
If your business is large enough, an EPMO is one of the best ways to ensure the projects you undertake align with the goals and strategies put forth by your business. They help project managers and project teams stay on track and keep high-level executives informed of what's happening throughout the company.
Want to learn more about project management? Subscribe to our newsletter to stay in the loop about everything to do with EPMOs, PMOs, and other project management initiatives. Learn more about enterprise PM in our downloadable PDF guide here.
Have something to add to the discussion? Leave us a comment below or get in touch on social media.