Project Portfolio Management

1
Project Portfolio Management

• The beauty of portfolio management is that
  ultimately, the prioritization process will allow
  you to fund the projects that most closely align
  with your companys strategic objectives

2
Why?

• Align IT resources with business objectives
• Build strong IT governance structure
• Ensure proper executive business support of IT
  projects
• Maximize IT investments
• Reduce of redundant projects
• Make it easier to cancel projects
• Set expectations
• Develop IT plan and IT budget

3
Steps to Successful Project Portfolio Management

• There is no single right way to do portfolio
  management.

4
Steps
1

• Gather a detailed inventory of all projects
• Set strategic objectives for the company
• Align projects with objectives
• Score and categorize projects
• Actively manage portfolio

2
3
4
IT Plan, Budget
5
5
Inventory of Projects
Software upgrades New systems Policy
changes Product development Internal
controls Workflow automation Infrastructure Facili
ties
1

• Some companies using PPM, begin with taking a
  complete inventory of current requested projects.
• Other companies benefit from starting from
  scratch with the process and require that all
  projects be re-requested and re-assessed through
  PPM.
• This presentation outlines the process for
  starting from the beginning with all projects
  being requested as new and therefore we skip to
  the next step Set Strategic Objectives.

6
Set Strategic Objectives
2

• One 3 hour meeting with all company Vice
  Presidents and President/CEO
• Operating Plan structure is set at 3 levels
• Objectives (Why?)
• Initiatives (What?)
• Projects (How?)
• Objectives are brainstormed and decided upon in
  this meeting with all attendees prepared with 3-5
  recommended objectives.
• Discussion serves as kick-off to next year and a
  chance to openly, informally discuss company
  strategies and challenges.

CEO, CFO, CIO, EVP, VP HR, Division President,
VP Books, VP Journals, VP Reference, VP
Sales/Mktg
7
Set Strategic Objectives
2
8
Set Strategic Objectives
1.Objective 2.Initiative 3.Project
2

• VPs brainstorm initiatives in support of the
  objectives with direct reports (directors and
  senior managers) within their department.
• Another 3 hour meeting is held with all VPs and
  direct reports to review all recommended
  initiatives by department. Initiatives are
  discussed and agreed upon in this meeting.
• A good amount of cleanup is required on this list
  after the meeting (deleting duplicates, merging
  similar initiatives, etc.
• Finalized list is distributed to all VPs and
  direct reports (now referred to as the Operating
  Plan Team).
• Involvement of direct reports at this level
  serves the purpose of generating early buy in to
  the Operating Plan process by senior management.

9

1.Objective 2.Initiative 3.Project
2
Set Strategic Objectives
10
Align Projects
1.Objective 2.Initiative 3.Project
3

• Department VPs and their direct reports are
  responsible for recommending projects that will
  support each initiative in alignment with the
  company objectives.
• Each senior manager must enter recommended
  projects into the Operating Plan system. Only VP
  approved projects are entered into the system,
  cutting down drastically on frivolous project
  requests.
• Each project entry requires a high level
  justification including project description,
  business benefits, executive sponsor, business
  manager, estimated quarter of completion, etc.
• The projects are then turned over to IT to assign
  IT owners and estimate costs for all projects
  requiring IT support.
• All proposed projects are then reviewed in
  individual departmental meetings chaired by the
  CIO, CFO and EVP with attendees being the
  department VP and their direct reports.
• Department VPs and direct reports are given this
  opportunity to introduce the project and sell
  it to the chairs for approval.

!
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1.Objective 2.Initiative 3.Project
3
Align Projects
Objective
Initiative
Projects
12
Score Projects
1.Objective 2.Initiative 3.Project
4

• During the project review meetings, each project
  is assessed based on strength of support for
  initiative/objective, estimated business
  benefits, and estimated costs.
• As a closing to the discussion on each project,
  the project is assigned a status and an action
  level.
• The action level is assigned first and drives the
  status and next steps, as outlined below

• Action Level Status Next Steps
• Start Project Accepted Begin projects in order
  of priority
• Start after validation Proposed Begin validation
  process
• More research needed Proposed Continue research
  and propose again
• Unlikely to start this year Proposed Hold
  (candidate for Q4 if resources allow)
• Do not start this year Deferred Hold for next
  year and propose again

Validation refers to a more in-depth
cost/benefit analysis required of the business
owner before a project is formally accepted or
deferred
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Page 1 of Project Proposal Form in Operating Plan
System
14
Page 2 of Project Proposal Form in Operating Plan
System
Status Proposed Accepted Deferred (All project
requests default to proposed. Only Department
VPs can change this field)
Assigned by IT
Action Level 1 Start Project 2 Start after
validation 3 More research needed 4 Unlikely
to start this year 5 Do not start this year
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IT Plan and Budget
1.Objective 2.Initiative 3.Project
4.5

• After all projects are reviewed and scored, the
  Department VPs are tasked with prioritizing all
  action level 1 and 2 projects for their
  department. The priorities are simply high,
  medium and low.
• The Operating Plan is then handed over to IT to
  schedule all action level 1 and 2 projects that
  require IT support into the four quarters of the
  year with estimated start and complete quarters.
  This scheduling is based on priority and action
  level with the high priority, action level 1
  projects at the top. IT resource leveling is done
  at this time.
• This schedule is the first draft of the IT plan
  for the coming year. It is then tweaked as
  needed when looked at on paper for anomalies,
  special considerations, etc. This schedule will
  also become the basis for the IT budget.

16
Actively Manage Portfolio
5
Portfolio Management without governance is an
empty concept

• Monthly IT Steering Committee (ITSC) chaired by
  CIO. Members of committee include CEO, CFO and
  EVP. All other VPs attend as needed based on
  agenda of items to be discussed.
• Purpose of committee
• Business owners and department VPs present
  projects requiring validation before approval.
  ITSC approves or denies these projects.
• Monthly status given on large-scale, strategic IT
  projects from the Operating Plan.
• Provides forum for strategic IT spending
  decisions and updates on critical system
  issues/concerns.
• Provides forum for reprioritizing projects based
  on mid-year changes in company priorities/strategi
  es.

17
Actively Manage Portfolio
5

• Quarterly review of entire Operating Plan at
  standing Executive Committee meetings. All VPs
  are required to give status of initiatives and
  projects quarterly.
• Quarterly review by CEO of high-level Operating
  Plan at Board of Directors Meetings.

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Hurdles to Portfolio Management

• Democracy aint easy

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Hurdles

• Team Many executives are initially
  uncomfortable having their decisions scrutinized.
  It requires real teamwork at the executive level
  to support portfolio management and governance.
  Executive buy-in is absolutely required up front.
• Complexity The desire to overcomplicate this
  process with complex scoring and red tape is
  overwhelming. Keep it simple at first then
  improve upon the process as participants become
  familiar with the steps.
• Software Do not rely on project portfolio
  management tools to manage this process for you.
  No one tool does everything and many tools
  complicate the process. Sage wrote their own
  tool in an attempt to keep it simple.
• Time This requires an additional time commitment
  from executives above and beyond their usual
  constraints. Coming to meetings prepared is the
  key to keeping this process time sensitive.