Enterprise Project Management

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Portfolio Management Whats it all about?
Rich Murphy Founding Partner EPK Group
LLC richmurphy_at_epkgroup.com
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Agenda

• What is Portfolio Management?
• Why its important
• Facts and history
• Some Tips

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Some Definitions

• Project management is the process of planning,
  measuring, and taking corrective action to
  complete a specific project on time and within
  budget
• A Program is a project or a collection of related
  projects which facilitate the realization of
  Strategic Business Objectives.

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Definitions

• Portfolio Management is the process of aligning
  investments with corporate business needs and the
  analysis and proper mitigation of investment
  risks

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Portfolio Management must consider ALL the
effort
Portfolio management is about doing the right
things and making best use of your resources.
Resource management is the critical success
factor for effective portfolio management
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Portfolio Management

• is a process something we do, to answer these
  questions like

• Which projects best support the corporate
  strategy?

• Where should the resources from a project
  nearing completion
• best be allocated?

• Which programs, projects, and infrastructure
  support efforts
• are currently behind schedule, over budget , and
  why?

• Do we have enough of the right people to
  successfully take
• on a key initiative?

• How is the resource plan impacted when a new
  project is added
• to the portfolio?

• What project should be the next to start?

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Portfolio and Project Management

• Strategic/Optimization PPM
• Project Portfolio Server
• Tactical Portfolio Management
• NIKU, PlanView, Primavera, Compuware
• EPK-Suite (budgeting/cost, stage-gates,scenario
  modeling, project initiation)
• Project Management
• Microsoft Project and EPM
• Collaboration/workforce management
• SharePoint
• Project Server
• EPK-Suite resource management

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Function
Audience
CXOs, Governance Board
Line Management, PMO
Project Management
Project Managers
Support and Operational efforts, simple projects
Complex projects
Team Members
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How are we doing?
Source The Standish Group
74 of IT effort goes to operations/support 26
to projects (but of that only ¼ are
strategic, meaning they affect the bottom
line)
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How are we doing?
88.9
100
Organizational PM Maturity
80
60
40
6.3
3.2
20
0.8
0.8
0
Source PM Solutions
Level 3
Level 1
Level 2
Level 4
Level 5

• More than 50 of all projects fail to meet
  budget, deliverables or delivery dates
• Project failure is down to 15 - but time
  overruns have doubled.
• Less than half of completed projects meet
  business expectations one year after
  implementation
• Heroics is prevalent more than wed like to
  admit

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How are we doing?

• Were developing enterprise PM processes, but
  were not seeing real improvements outside of
  some individual projects

Issues This Year Last Year
Changing Organizational Priorities 50 43
Change Management 40 35
Risk Assessment and Management 36 37
Alignment between project and organizational goals 21 20
Project Mangement Skill Level 33 34
Scope Clarity 49 50
Source BIA and Giga Information Group
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What does this mean?

• There have been slight improvements in PM
  practices
• Many still arent buying into the concept of
  organizational project management
• Result is that reactive behaviors stemming from
  habit and external pressures tend to preside over
  proactive ones.
• Personal and political preferences decide
  priorities more than alignment with business
  goals

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Relationship of project, program, portfolio
management
Collaboration
Project Mgmt.
Consistent, Repeatable Delivery
People, Process Technology
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Portfolio Management Maturity Stages
Critical Processes
Investment Process Benchmarking IT-Driven Strategic Business Change
Post Implementation Reviews and Feedback Portfolio Performance Evaluation and Improvement Systems and Technology Succession Management
Authority Alignment of IT Investment Boards Portfolio Selection Criteria Definition Investment Analysis Portfolio Development Portfolio Performance Oversight
IT Investment Board Operation IT Project Oversight IT Asset Tracking Business Needs Identification for IT Projects Proposal Selection
IT Spending without Disciplined Investment Process
Stage 5 Leveraging IT for Strategic Outcomes
Stage 4 Improving the Investment Process
Stage 3 Developing a Complete Investment
Portfolio
Stage 2 Building the Investment Foundation
Stage 1 Creating Investment Awareness
Source US Government IT Investment Management
Standard
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What are the Business Challenges that portfolio
management can solve?

• How do I prioritize initiatives across my
  organization?
• What is the status of our top five initiatives?
• Do we have the right people working on the right
  projects?
• Do we leverage knowledge and best practices
  across people and projects?
• Do we have the skills and capacity within our
  organization to achieve our long term goals?

Portfolio Management is about helping to manage
the future not accounting for the past
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A Simple Survey

• How do you get data on your organizations
  financial situation?
• How do you get data about your staff?
• How do you get information on projects youre
  responsible for
• whats late?
• whats over budget? (before it actually is)
• whos available to work on a new project?
• Survey says
• I call the person I think knows the answer (80
  of 100 respondents)

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True Portfolio Management

• To properly control and manage this environment
• There must be a total inventory of projects,
  operations, initiatives
• Management must be able to prioritize relative to
  business objectives
• Decisions must be evaluated against resources
  capacity and budgets
• All efforts must follow a common process (stage
  gate workflow)
• Accurate tracking of actual performance against
  budgets and resource plans is required

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Start with a simple inventory of all efforts
Some Tips
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A Actual Situation
Overview

• A large organization with 750M in annual
  revenues 5,000 employees, and 150 IT staff.
• Historically successful, but struggling to reduce
  costs to keep pace with economic downturn
• CEO hires a new CIO with a clear mandate to turn
  things around.

This is what the new CIO inherits
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Snapshot of Current Organization
Current Culture Vertical Silos with projects
often thrown over the wall to other departments.
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List of Known Projects
200 projects identified 50
business 150 IT-related.
This fire drill provided lots of detail, but
little insight.
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Next Steps for CIO

• Initiates a 6-week review of current portfolio
  environment.
• Requests a plan to standardize all projects
• Wants recommendations for retaining,
  consolidating or killing projects.
• Also wants assessment and recommendations on
  organizational project management maturity

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Six Weeks Later
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Projects Assessed in 3 Ways

• Is the Project Right ?
• Strategic Fit Complexity
• Business Value Time to Complete
• Is the Mix Right ?
• Risk Profile Planned, or Near
  Completion
• Fast vs. Measured Strategic vs.
  Tactical
• Is the Priority Right ?
• High Priority Continue
• Low Priority Dont continue
• Not Sure ? Re-Assess, Re-Scope, Gain
  Consensus

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Big Question Whats the Payoff?
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A Major Portfolio Realignment

• Of the original 200 projects, more than one-third
  were either killed or absorbed.

Only 20 of the business projects had formal
plans 50 had none at all!
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Lessons Learned
Notable Quote Accountability and
cross-functional cooperation were new to many
managers. Changing our reward system helped to
speed up the transition. -- CIO
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1)Implement a Stage-gate review process
Some Tips
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What are Stage-gates?

• They are not phases of a project
• They are the approval/review process steps that
  all efforts should pass through, not just major
  projects
• IT Governance Board should be directly involved
  in the stage-gate reviews

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Example of Stage-gate process
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Some Tips

• 2) Address costs

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Cover all costs and time-phase
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Address Benefits and cash flow
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Scorecard View with costs
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Some Tips

• 3) Is resource management the real problem in
  your environment?
• If so, focus on the resource planning process
• For most IT organizations it is the problem
• Matrix organizations
• Resources work on many projects
• And operational responsibilities also
• Priorities constantly change

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Do high level Resource Planning, not just
bottoms up
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Resource Planning - Individuals
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Resource Planning consider all the work,
including requests
39
Capacity vs. Demand
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Some Tips

• 4) Carefully consider reporting needs
• Exception based reporting
• Orient reports to management levels
• Extensive graphical views
• Limit number of reports any person receives
• Reporting and views are probably the single
  biggest factor for user acceptance

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Key Milestone View
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Example-Interactive Scenario View
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Example-Bubble Chart
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Make use of graphical reporting
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Make use of graphical reporting
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Scenario Modeling
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Q and A
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