Set up your project management office for success: Overcoming common design flaws in PMO establishment

In today's complex business environment, project management offices (PMOs) are expected to drive alignment, governance, and value across an organisation. Yet, many PMOs fall short of their potential, becoming bureaucratic hurdles rather than strategic enablers.

The harsh reality

The statistics paint a sobering picture of PMO underperformance:

• 63% of PMOs close within three years (Source: Forrester)
• Only 40% of PMOs align with organisational strategy (Source: PMI Pulse of the Profession, 2018)
• Almost 70% of stakeholders perceive PMOs as bureaucratic (Source: Project Management Institute)

These failures often stem from unclear mandates, misalignment with business needs, and cumbersome processes that prioritise administration over impact.

Three pillars of an effective PMO

To be truly effective, a PMO must be built on three fundamental elements: Jurisdiction, Role, and Maturity. When these are clearly defined and aligned to business needs, the PMO can deliver meaningful impact rather than becoming another layer of administration.

1. Jurisdiction: Establishing clear authority and scope

A PMO’s effectiveness is determined by its mandate—what it controls, influences, and supports. Without clear jurisdiction, a PMO lacks authority, leading to inefficiencies, mistrust, frustration, and a disconnect from enterprise priorities.

Key questions which organisations must address:

• What is the PMO’s scope - projects, programs, or the entire portfolio?
• What decision-making rights does the PMO have?
• How does the PMO integrate with business strategy and governance structures?

PMOs in hierarchical organisations typically have strong oversight; setting governance, funding allocation, and execution priorities. Those in consensus-driven environments may act as facilitators, guiding standards and methodologies without direct control. The key is ensuring jurisdiction aligns with organisational culture and strategic intent.

2. Role: Defining what the PMO does and how it operates

A major reason for PMO failure is role ambiguity - whether it acts as a support function, an enforcer, or a strategic partner. To avoid this, organisations must answer:

• What functions does the PMO perform (e.g., governance, resource allocation, capability building, investment gateway) and what are it’s boundaries?
• How does the PMO interact with business units and project teams?
• What is the balance between advisory, oversight, and hands-on project involvement?

Common PMO models include:

• Directive: Hands-on control of projects, directly managing execution.
• Controlling: Ensuring compliance with methodologies, providing tools and templates.
• Supportive: Acting as an advisory body, providing best practices and training.

An effective PMO role is not static - it must evolve with business needs to remain relevant and value-driven.

3. Maturity: Building the right level of capability and control

Maturity determines the sophistication of the PMO’s controls, processes, and expertise. Too much bureaucracy stifles innovation, while too little structure can lead to poor project outcomes.

Key considerations include:

• What level of governance and reporting is required?
• How complex are the organisation’s projects, and what level of control is necessary?
• What project management capabilities need to be developed within the business?

A high-maturity PMO operates with robust frameworks, strategic foresight, and enterprise-wide integration. Meanwhile, a lower-maturity PMO may focus on foundational project governance and process standardisation. Success lies in calibrating maturity levels to business and project/portfolio complexity.

PMO as a strategic enabler, not an administrative burden

A well-designed PMO is not just a function - it’s a strategic enabler that enhances decision-making, improves project execution, and aligns initiatives with organisational goals. By carefully defining jurisdiction, role, and maturity, organisations can create an PMO that delivers value, fosters collaboration, and drives sustained success.

Ready to transform your PMO?

At Rennie Advisory, our Business Advisory practice specialises in helping organisations design, implement, and optimise PMOs that drive real business impact. Whether refining governance models, aligning roles, or building capability, we ensure your PMO is set up for impact - not just administration.

Don’t let your PMO become another statistic. Contact Rennie's Business Advisory team today to discover how we can help you unlock its full potential and drive tangible business results. Let’s start with a health check to see how your PMO is performing.