Transcript Slide 1

Portfolio Management
What’s it all about?
Rich Murphy
Founding Partner
EPK Group LLC
[email protected]
What
is Portfolio Management?
Why it’s important
Facts and history
Some Tips
 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.
 Portfolio
Management is the process of
aligning investments with corporate
business needs and the analysis and
proper mitigation of investment risks
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
…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?
 “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
7/6/2015
Audience
CXOs,
Governance Board
Line Management,
PMO
Project Managers
Function
Strategic
Portfolio
Management
Tactical
Portfolio Management
Approval and review of ALL efforts
Budgeting and Cost Management
Resource Planning and Management,
Project Management
Support and Operational
efforts, simple projects
Team Members
Complex projects
Workforce Management and Execution
Timesheet completion, status reporting,
Identification of risks, issues, change control, support help desk
How are we doing?
71% of all IT projects fail, come in over
budget or run past the original deadline.
Every year, $75 billion is spent on failed
IT projects in the U.S.
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)
100
80
60
40
20
0
88.9
Organizational PM Maturity
6.3
3.2
0.8
0.8
Level 1 Level 2 Level 3 Level 4 Level 5
Source: PM Solutions
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 we’d like to
admit


“We’re developing enterprise PM processes, but we’re not seeing
real improvements outside of some individual projects”
Issues
Changing Organizational Priorities
Change Management
Risk Assessment and
Management
Alignment between project and
organizational goals
Project Mangement Skill Level
Scope Clarity
Source: BIA and Giga Information Group
This
Year
50%
40%
36%
Last
Year
43%
35%
37%
21%
20%
33%
49%
34%
50%
 There
have been slight improvements in PM
practices
 Many still aren’t 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
Program
Mgmt.
Alignment with
Objectives
Integrated
Delivery
Collaboration
Portfolio
Mgmt.
Investment &
Prioritization
Decisions
Program
& Project
Dependencies
Consistent,
Repeatable
Delivery
Project
Mgmt.
People, Process & Technology
Portfolio Management Maturity Stages
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
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
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
 How
do you get data on your organization’s
financial situation?
 How do you get data about your staff?
 How do you get information on projects you’re
responsible for:
• what’s “late”?
• what’s over budget? (before it actually is)
• who’s available to work on a new project?
 Survey
says:
“I call the person I think knows the answer” (80 of
100 respondents)

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
Some Tips
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…
CEO
VP
H.R.
VP
Finance
Current Culture:
Vertical Silos with
projects often thrown
“over the wall” to
other departments.
CIO
IT
Given a Mandate for
Change by CEO
COO
Operations
Region 1
Region 1
Region 2
Region 2
Region 3
Region 3
200 “projects” identified:
50 business & 150 IT-related.
This “fire drill” provided lots of
detail, but little insight.




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

Is the Project Right ?
Strategic Fit
Business Value

Complexity
Time to Complete
Is the Mix Right ?
Risk Profile
Fast vs. Measured

Planned, or Near Completion
Strategic vs. Tactical
Is the Priority Right ?
High Priority
Low Priority
Not Sure ?
Continue
Don’t continue
Re-Assess, Re-Scope, Gain Consensus
Fast-forward 12 months…
as the CIO reviews findings
Of the original 200 projects, more than one-third were
Portfolio
Realignment Results
either killed
or absorbed.
Rescue
(11) 5%
Maintain
(84) 43%
Rescue
Accelerate
(8) 4%
Only 20% of
the business
projects had
formal plans;
50% had
none at all!
Accelerat
Maintain
De-priorit
Kill
(47) 23%
De-prioritize Absorbed
(28) 14% Kill
Absorbed (23) 11%
(Kill Criteria: Redundant, Conflicting, Out of Control, Irrelevant)
Strong executive
sponsorship
… resistance to change
would have doomed us.
“Fluid” alignment with
business objectives
… what works today may
prove deadly tomorrow.
Early warning alerts &
“root cause” analysis
… catching problems early
made a huge difference
in the ROI.
Notable Quote:
“Accountability and cross-functional cooperation were
new to many managers. Changing our reward system
helped to speed up the transition.”
-- CIO
Some Tips
 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
 2)
Address costs
 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
 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
Q and A
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