Transcript 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.

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 company’s
strategic objectives”
Why?
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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
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Steps to Successful
Project Portfolio
Management
“There is no single right
way to do portfolio
management.”
Steps
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Gather a detailed inventory of all projects
2
Set strategic objectives for the company
3
Align projects with objectives
4
Score and categorize projects
IT Plan, Budget
5
Actively manage portfolio
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1
Inventory of Projects
Software upgrades
New systems
Policy changes
Product
development
Internal controls
Workflow
automation
Infrastructure
Facilities
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Some companies using PPM, begin with taking a
complete inventory of current requested projects.
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Other companies benefit from starting from scratch
with the process and require that all projects be rerequested and re-assessed through PPM.
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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”.
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Set Strategic Objectives
 One 3 hour meeting with all company Vice Presidents and President/CEO
CEO, CFO, CIO, EVP, VP HR, Division President,
VP Books, VP Journals, VP Reference, VP Sales/Mktg
 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.
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2
Set Strategic Objectives
Sample Operating Plan Objectives
(Publishing Company)
1
Create specific competitive advantages to attract and retain the best co-workers,
authors, editors and societies
2
Develop global business practices and systems to increase revenue, reduce costs and
improve coordination between sites
3
Ensure our book product lines are coherently organized and effectively resourced to
generate substantial growth in our markets
4
Position company to take greatest advantage of growth opportunities in journals
business
5
Develop Marketing and Sales organization in line with changing product needs,
customer relations and technology opportunities
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Grow through the purchase of lists and/or companies
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Develop local infrastructure to mitigate risk and obtain operational efficiencies
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2
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Set Strategic Objectives
1.Objective
2.Initiative
3.Project
VP’s 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 VP’s 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 VP’s 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.
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2
1.Objective
2.Initiative
3.Project
Set Strategic Objectives
Ensure our book product lines are coherently organized and
effectively resourced to generate substantial growth
Improve process for managing the rollover of adoptions
to new editions
VP Books
Improve integration of the Reference line throughout the
organization
VP Reference
Reduce costs and improve transactional efficiencies in
the book life cycle
CFO
Grow the XYZ brand
Division
President
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1.
2.
!
3.
4.
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Align Projects
1.Objective
2.Initiative
3.Project
Department VP’s 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 VP’s and direct reports are given this opportunity to introduce
the project and “sell” it to the chairs for approval.
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3
Objective
Initiative
Projects
Align Projects
1.Objective
2.Initiative
3.Project
Ensure our book product lines are coherently organized and
effectively resourced to generate substantial growth
 Improve integration of the Reference line throughout the organization
 Develop reference production tracking module within
existing books production tracking system
Director of
Books
Production
 Develop and implement plan for electronic reference
databases as part of the on-line journals platform
VP Reference
 Provide Reference editors with a project management
tool for managing reference works in development
Reference
Manager
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4
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Score Projects
1.Objective
2.Initiative
3.Project
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:
1. Start Project
2. Start after validation*
3. More research needed
4. Unlikely to start this year
5. Do not start this year
Status:
Accepted
Proposed
Proposed
Proposed
Deferred
Next Steps:
Begin projects in order of priority
Begin validation process
Continue research and propose again
Hold (candidate for Q4 if resources allow)
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
Page 2 of Project Proposal Form in Operating Plan System
Assigned by IT
Status:
Proposed
Accepted
Deferred
(All project requests default to
“proposed.” Only Department
VP’s can change this field)
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
4.5
IT Plan and Budget
1.Objective
2.Initiative
3.Project
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After all projects are reviewed and scored, the Department VP’s are
tasked with prioritizing all action level 1 and 2 projects for their
department. The priorities are simply high, medium and low.
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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.
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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.
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Actively Manage Portfolio
“Portfolio Management without governance is an empty concept”
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Monthly IT Steering Committee (ITSC) chaired by CIO. Members of
committee include CEO, CFO and EVP. All other VP’s attend as
needed based on agenda of items to be discussed.
Purpose of committee:
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Business owners and department VP’s 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/strategies.
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Actively Manage Portfolio
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Quarterly review of entire Operating Plan at standing Executive
Committee meetings. All VP’s are required to give status of
initiatives and projects quarterly.
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Quarterly review by CEO of high-level Operating Plan at Board of
Directors Meetings.
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Hurdles to Portfolio
Management
“Democracy ain’t easy”
Hurdles
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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.
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