Companies seem to organize PMs into two types of models…
1. Centralized PMO which is accountable for delivery of projects, has HR responsibility for the PMs and owns the process/metrics/tools. In these models PMs are dotted lined into business segments.
2. Decentralized model which has PMs directly aligned into business segments but have dotted lined responsibility back to the PMO to ensure standards.
I have worked in both models and think there are pros and cons of each. Some benefits of a centralized PMO include:
- Ability to build a sense of community because everyone is together
- Ease of rolling out standards because there is a direct alignment of standards and the PMs
- Ability to rotate resources to different areas in the case of volatile demand across business segments
- Consistency of work
Some benefits of a decentralized PMO include:
- Closer alignment of PMs to business segments and the ability to become an expert in the business of that segment
- PMs can report into segment managers so there is not as much overhead as a PMO
I think there is validity in either model and it really depends on the organizational culture and values. If consistency is a top priority then it makes sense to centralize. If being nimble and operating at a segment level is a priority, then decentralization makes more sense. Having a hybrid model is probably the best scenario – for example having a centralized organization but then keeping the PMs aligned to specific segments and not moving them around too much.