Good PMO

Options to improve project performance: 1) Develop internal PM competencies, or 2) Contract it to the experts. Contractors/consultants/Outsourcing. This is Knowledge Process Outsourcing (KPO) http://en.wikipedia.org/wiki/Kpo

• http://www.insurancenewsalerts.com/project-management-office-pmo-outsourcing-or-a-virtual-pmo-and-project-management-services-outsourcing-a-new-trend
• http://www.pmforum.org/library/papers/2005/PMOCVPWhitePaper.pdf

Outsourcing Pros: No PMO setup time; Best in class tools/ dashboard/ templates; Quality PMs

Outsourcing Cons: Data confidentiality risks (pipeline projects and development plans); Tensions due to having a two tier project teams (external PMs with internal project members)

The key question is: what is it being oursourced/contracted? Is it tactical, methodology/project planning&execution processes,  and PM people (model already popular, loads of PM vendors); or Strategic PMO for Portfolio decision making? I haven’t seen data/examples of this latter case, as the risk of  lossing control of the Portfolio/Strategy seems a serious obstacle. Who is running the company? Portfolio management should always be a core competency of internal Management.