A  3-­‐layer  Project  Portfolio  system  to  align  traditional  and  agile  projectsSeptember  2016Thomas  Walenta,  thwalenta@online.de

6  -­ 8  September  2016  Auckland,  NZ  

The  Company

Founded  in  1874Family  owned

More  than  140  years  of  tradition  and  innovation

Leading  supplierof  intelligent  systems  for  home  comfort  in  Europe

• Branches  in  20+  countries,  export  to  60+• 30  million  customers• 340.000  installers• 12.000  employees• 2.000  patents• 8  brands

• 2.3B  Euro  revenue  in  2014

• IT  100+  staff,  mix  of  SAP/Salesforce  projects• Approx.  30%  agile  (SCRUM,  Kanban)• Started  IT  PMO  in  April  2015,  2  FTE  • Implemented  IT  PPM  in  July  2015  

Problems  observed  and  derived  objectives  for  IT  Portfolio  Management

Unstructured  requests  to  IT

Divisional  and  groups  wide  requests  

Surprise  requests

IT  staff  in  re-­‐active  mode  /  burn  outs

Frequently  changing  priorities

Unclear  alignment  to  strategy

Business  dissatisfaction

Lack  of  visibility  portfolio/project

Standardization/channeling  of  requests

Prioritization  based  on  agreed  criteria

Visibility/dashboard  of  portfolio

Increase  efficiency  /  self  management  

Increased  business  satisfaction

Alignment  to  strategy  by  categorization

Support  increased  capacity  (+50%)

Less  than  50%  of  requests  fulfilledDeliver  to  

Promise(trust)

Re-­‐structure  IT  to  align  to  business  (E2E)

New  IT  organization:  The  mapping  of  business  and  IT  structure  reflects  the  main  flows  of  project  demand

Strategy  to  Stock

Lead  to  Retention

Enabling  processes

Hire  to  RetireRecord  to  Report

Shared  TechnologyDigital  Eco  System

Scrum  teams

Mixed  teams

Service  to  Retention

Order  to  Cash

Lead  to  Order

Develop  to  ManufacturePlan  to  Manufacture

Manufacture  to  Stock

Source  to  Contract

Finance

Supply  Chain

Sales

Product  Development

Production

Marketing

HR

Purchasing

Service

Strategy

Group-­‐wideCross-­‐

divisional  Changes

PMO

Project  teams

10  End  to  end  (E2E)  teams  deliver  to  business  requests

Three  layers  of  decision  making  support  project  selection  and  prioritization  as  well  as  operational  resource  alignment  – driven  by  the  PMO

Businessdivision

E2E  team

PEB  Project  Entry    Board  

(3  months)

PfBPortfolio  Board  

(6  months)

E2E  team

E2E  team

Key  project  team

Backlog

Scope

Kanban

Portfolio  List

Request  list

Categorization

DCCDemand  

Coordination

Committee(2  weeks)

Operational  layerTeam  execution

Tactical  layerEnd2end  projects

Strategic  layerKey  projects

Coordina

teRa

te  &  

prep

are

IT  Tower  heads  are  responsible  for  data  collection.  IT  Process  Manager  is  responsible  for  data  input.  

1

2

planIT System

Collect

IT  PMO is  responsible  for  data  consolidation  and  review  preparation

IT  Portfolio  Coordination  Board  will  rate  the  collected  Key  Projects  and  recommend  priorities  for  the  Portfolio  Board  as  well  as  constraints.  

Customer  withIT  Process  Manager

Directors  with  IT  Tower  heads

IT  PMO

IT  DirectorIT  Tower  headIT  PMOEnterprise  Arch.

Key-­‐Projects E2E  Projects

IT  Portfolio  Board  will  review  and  discuss  the  recommended  prioritiesC-­‐Suite  will  decide  about  the  final  project  portfolio  and  project  priorities.

3

4 Decisio

n

MD‘sDirectorsIT  Tower  headIT  PMO

Preparation  for  IT  project  Portfolio  Board  Decision  making  takes  approx.  2  months

PfBPortfolio  Board  

(6  months)

Template  ‘categorization’  agreed  on  to  standardize  project  requests

ROI  

Strategic  Relevance

Resource  fit  

Compliance  and  Legal  must  

Application  Landscape  fit

Strategic  Relevance  (0-­‐18  pts):• Increase  revenue  /  profit   2  pts• Increase  efficiency 2  pts.• Market  penetration  /  Customer  value 2  pts.• Contribute  to  strategic  company  goal 2  pts• Special  Projects 10  pts.

Financial  Impact  /  ROI  Calculation  (0-­‐10  pts.):(OPEX+CAPEX+Operations)  devided by  Planned  savingsROI  <=  1  year: 10  pts.1  >  ROI  <=  2  years:   8  pts....  4  >  ROI  <=  5  years: 2  pts.No  ROI  or  >  5  years: 0  pts.

Compliance  and  Legal  must  (0-­‐10  pts.)• no  relevant   0  pts.• IT  Release  Update 5  pts.• Mitigate  Business  Risk 5  pts.• Legal/Tax  relevant 10  pts.

Application  Landscape  fit:• does  not  fit  to  current  IT  landscape 0  pts.• new  system,  new  service  required 2  pts.• new  component  for  existing  system 3  pts.• extend/modify  existing  system 4  pts.• use  existing  system 5  pts• Set  new  standard 6  pts..

Ranking  Pts.  =   Strategic  Relevance    + ROI+   Compliance  and  Legal  must+   IT  Application  Landscape  fit

Running projects =  100  pts.

PfBPortfolio  Board  

(6  months)

PEB  Project  Entry    Board  

(3  months)

(To  be  implemented)

Semi-­‐annual  IT  Project  Portfolio  Board  (C-­‐Suite  +  1st line  below)  decides  on  priorities

Focus  of  IT  Portfolio  Board  03  /  2016

Portfolio  Planning§ Resource  Capacity  

Planning§ Financial  Planning§ Prioritization

Portfolio  Management§ What-­‐if  Modeling§ Target  Modeling§ Key  Driver  Analytics

Analyze§ Portfolio  Health  &  Value  

contribution§ Exception  Management

Analysis Plan

Select

Capture

Collaboration§ Progress  Status§ Issue  &  Risk  

Management§ Change  Management

Execute

Resource  Alignment§ Reallocate  Resources§ Remove  completed  projects§ Cancel  /  change  projects§ Add  new  projects Manage

Demand  Management§ Idea  Categorization§ Strategic  Initiatives§ Operational  work

PfBPortfolio  Board  

(6  months)

Focus  of  IT  Portfolio  Board  09  /  2015

Portfolio  Health,  risk  status  and  budget  achievement  are  assessed  permanently  – for  key  projects

• Established  standardized  Project  reporting  (bi-­‐weekly)• Established  mandatory  Project  Risk  Register  • Budget  tracking  in  efforts  (person  days):  plan,  outlook,  actuals  

• Euro  Budgets  hard  to  compare  due  to  different  rates  and  uplifts  • PMO  runs  Health  Checks  with  all  key  projects  

• At  any  time  in  project  lifecycle• Covers  all  kind  of  projects  (best  projects  reviewed:  Scrum)• Results  in  RYG  status  per  7keys,  portfolio  risks  and  recommendations  to  PM

• Portfolio  Health  presented  to  IT  Management  Board  bi-­‐weekly  • Visibility  increased• Independent  assessments• Corrective/preventive actions  are  initiated  (reduce  surprises)

Major  success  factors  for  projects  

Delivery  organization  benefits  are  being  realized

Scope  is  realistic  and  managed

Business  Benefits  are  being  realized

Work  &  Schedule  are  predictable Team  is  high  

performing

Risks  are  being  mitigated

Stakeholders  are  committed

Based  on  IBM’s  7-­‐keys

Based  on  IBM’s  7-­‐keys  assessment

Project  Entry  Boards  (PEB)  owned  by  customer  run  per  E2E  team

PEB  Project  Entry    Board  

(3  months)

PEBs  run  differently  per  E2E  team  and  business  involved  (some  are  considered  agile  as  part  of  Scrum  backlog  grooming)

Input  and  Output  of  PEBs  is  standardizedInput:  • Key  projects  as  defined  by  Portfolio  Board  which  require  E2E  resources• new/existing  E2E  projects• use  of  standard  categorization  formatOutput:  • Prioritized  list  of  E2E  projects,  requests  to  other  teams  

PEBs  to  run  quarterly,  every  6  months  shortly  after  Portfolio  Board

Short  term  demand  coordinated  across  all  teams  and  key  projects,  aligned  with  bi-­‐weekly  SCRUM  cycle

DCCs  run  every  2  weeks,  just  before  the  2-­‐week  standardized  Scrum  sprint  cycle  starts.  Duration:  less  than  1  hour.

All  E2E  teams  and  key  projects  with  requests  participate.

Requests  to  E2E  teams  are  standardizedand  have  to  be  fulfilled  within  next  sprint  (2  weeks).

>>  ensures  E2E  teams  stay  protected  during  sprints  but  can  support  other  teams/projects  by  considering  prioritized  requests  in  sprint  planning

DCCDemand  

CoordinationCommittee(2  weeks)

FROM%Team/Project TO%Team

Action(name%of%employee)

PSP Contact

Benefits  Roadmap  Portfolio

PfM  Process  -­priorisation

PfM  Process  –resource  alignment

PfM  Process  -­health

PfM  Process  –demand/planning

PfMList  all    key  projects

PfM  toolreporting

PfMPfBoards  MD/VGI

PfMScenario  Tool

PfMPEB  Process/List

Project  /  Enabler  of  Benefit Benefit:  seen  as  positive  by  a  stakeholder

(Key)  Objective(SMART)

PfM  temp  -­Catagorization  sheet

PfM  ProcessRes  Capacity  Mgmt

PfM  ProcessRes/demand  coord

PfM  -­ templateBenefits  Register

PfM  -­ processBenefits  Mgmt

PfM  -­ templateBusiness  case

PfM  –develop    skills    benefits  mgmt

PfM  -­ templateBenefits  Report

PfM  procDCC  process

PMOP05:  Project  Categorization

1

PMOP01:  Establish  Portfolio  Visibility

1

PMOP06:  establish  preproject  standard

2

PMOP02:  Resource  planning  &  

alignment

10

PMOP04:  Efficiency  by  Portfolio  

Prioritization

1

PMOP03:  Ensure  PEB/DCC  and  x-­Team  

coordination

4

PMOP07:  Customer  expectation  and  benefits  management

5

PMOP08:  Pool  key  skills  &  resources

8

PfM  ProcessBottleneck  mgmt

PfM  -­ template'IT  Value  Sheet'

CULTCustomer  survey

started doneplanned

Increasestrategical value

Increase efficiency

Increase Customer  Satisfaction

Increase visibility

Improvestandardization

started

Crosscheck  against  ISO  21504  Guidance  on  Portfolio  Management  – Managing  Portfolio

Define  Portfolio

Identify  Components  (strategic)

Assess  &  select  components

Validate  Portfolio  to    strategic  objectives  (strategic)

Evaluate  performance  (strategic)

Balance  &  optimize    Portfolio  

Optimize  components

Maintain  Portfolio  (strategic)

Optimize  resources  (operational)

Manage  portfolio  risks

Control  portfolio  change  (strategic)started doneplanned started