What's the most important factor in creating a strategic IT department, one that partners successfully with and is respected by the business? For Phil Bertolini, CIO of Oakland County, Mich., it's effective project management.

Project management practices have helped Oakland County's IT department gain the trust of the business. When Bertolini was named director of IT for the county in 2001, IT was viewed as black hole, and the county's elected board of commissioners referred to Bertolini as "Mr. Money" because IT was always asking for funding.

Since then, the CIO has enhanced the IT department's project management office with staff, training and new tools. The moves have provided much improved visibility into the IT department's work while keeping costs down. And the improved project management has made Bertolini's group more strategic to county government.

The project management software (CA's Clarity) gives Bertolini the information he needs to explain to the board of commissioners why IT needs so much money (Oakland County's IT spend is six percent of the county's $700 million budget), what projects all that money is funding and the status of each of those projects. The CIO is able to show the board of commissioners exactly what everyone in the IT department has been working on each day for the last two years. The software gives him that much detail and visibility.

Now project management is helping the county cope with an economic downturn that has left 8.5 percent of the state unemployed—the highest unemployment rate in the U.S.—and that has resulted in a massive revenue shortfall.

"We've kept the IT budget flat or reduced it over the last seven years. This year we're taking $1.5 million out of operations and $4 million out of our capital plan, yet we're still able to deliver to our customers," says Bertolini. "We can be strategic because we can plan effectively, manage and measure customer expectations and because we use good tools to do that."

Here, Bertolini offers his advice for creating a project management office and for selecting the best project management software for your organization's needs.

Five Tips for Establishing a Project Management Office

1. Know what you're trying to accomplish.

When Oakland County's IT department first put its project management office in place in 1997, it had clear tactical and strategic goals: to better prioritize projects with business partners and to make the business side of government more effective through technology.

Bertolini says it's important to have a clear rationale for creating a project management office for a number of reasons. For one, formal project management offices aren't always necessary—or even right—for organizations. If you just want to track projects, for example, you may be best served by a simple project tracking application. But if you want to improve how projects are done and get more control over the prioritization process, a well-run PMO can help with both.

"If you want to change your culture and the way you do business, put a PMO in place," says Bertolini.

What's more, few people inside and outside of IT are going to like the idea of a central body in charge of approving and rejecting projects, reporting on metrics and cracking the whip on managers to keep projects on track. IT staffers and internal customers will challenge your effort to create a PMO. To get their support, you need a clear justification for setting one up that doesn't include the desire to increase bureaucracy.

Finally, instituting a project management office and associated project management processes often requires a significant time and financial investment. It can take a few years to get things in place. People will tire of the effort. When they question the time and money it's requiring to set up, you need to have a clear answer, says Bertolini, or else you risk seeing your project management effort dismantled when your organization needs to cut costs.

Next: Get executive sponsorship.