how do portfolio, program, and project management relate?mydlc.com/pmi-mn/pdd/2.s4_how...

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How Do Portfolio, Program, and Project Management Relate?

Brian Grafsgaard, PgMP & PMPDirector of Professional Services

Quality Business Solutions (QBS)12701 Whitewater Dr, Suite 180Minnetonka, MN [email protected]

September 29, 2011

mailto:[email protected]

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• Introduction

• Definitions / Concepts

– Portfolio Management

– Program Management

– Project Management

• Overview of Disciplines

– Interactions Between Disciplines

• Summary

• Q & A

Agenda

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• Quality Business Solutions (QBS)

–Minnetonka-Based Consulting Firm (1998)

• Portfolio/Program/Project Management and Solution Development & Integration

• Portfolio Mgmt and Program/Project Mgmt Office Solutions

• IT Service/Operational Portfolio & Service Catalog Definition

• Governance-Risk-Compliance and Process Definition & Improvement

Introductions

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• Speaker Biography—Brian Grafsgaard

– Director of Professional Services at QBS

• 25+ Years Experience in Development & Integration of People, Process, & Technology Solutions

• PMP® Certification—Oct. 1998 (#12027)

• PgMP® Certification—June 2007 (#1!!!)

– 1 of 13 Selected to Help Write PgMP® Exam (N.Am.)

– 1 of 150+ Selected Worldwide to Participate in Pilot

– PgMP® Panel Review Committee Charter Member

– Std for Program Mgmt – Third Edition Core Team

Introductions

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• Portfolio Management Context

Portfolio Management helps organizations do the right work

by managing alignment and investment of resources.

The Standard for Program Management – Second Edition (PMI, 2008) [paraphrased]

Definition / Concepts

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• Portfolio Management


Portfolio management is the centralized management of one or more portfolios, which includes identifying, prioritizing, authorizing, managing, and controlling

projects, programs, and other related work, to achieve strategic business objectives.

The Standard for Portfolio Management – 2nd Edition (PMI, 2008)

Confirms concept of related/operational work (sustaining) and programs/projects (creating) within portfolio.

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“…portfolio management comprises continuous, repeatable, and sustainable

processes designed to map business requirements and objectives to

projects and programs.”The Standard for Program Management – 2nd Edition (PMI, 2008)

Emphasizes link between portfolio mgmt and programs/projects that deliver the results.

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• Portfolio Management (in short)

– Centralized Management Function

• Can also be decentralized (multiple levels)

– Continuous / Repeatable Process

• Align Portfolio (identify, prioritize, & authorize)

• Monitor / Manage Portfolio (manage and control)

– Links Organizational Strategy to “the Work”

• Create Value and Sustain Value (operations)

We’ll review process groups later…


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• Program / Project Management Context


Program & Project Management help organizations do the work right

by managing execution.

The Standard for Program Management – Second Edition (PMI, 2008) [paraphrased]

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• Program Management


Program Management is the centralized coordinated management of components to achieve strategic objectives and benefits. It

involves aligning multiple projects to achieveprogram goals and allows for optimized and

integrated cost, schedule, & effort.The Standard for Program Management – 2nd Edition (PMI, 2008) [paraphrased]

Confirms aspect of coordinated management & optimization of constituent projects to achieve benefits.

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Programs and projects deliver benefits to organizations by enhancing current

capabilities or developing new capabilities for the organization to use. A benefit is an

outcome of actions and behaviors that provides utility to the organization.

The Standard for Program Management – 2nd Edition (PMI, 2008)

Management & delivery of benefits is a core theme of Program Management.

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“PPM can succeed without Program Management, but as the enterprise

portfolio grows, the bridging benefits Program Management provideswill more than justify its costs.”

Program Mgmt – The Missing Link Between PPM and PM (Bondale, 2011)

Can get PPM “fatigue” over time and just start going through the motions. Program Mgmt reinforces the constant

alignment and performance monitoring that is necessary.

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• Program Management (in short)


• Can also be decentralized (aligned with Portfolio)


• Align Component Projects with Benefits

• Integrate & Optimize Cost, Schedule, & Effort

– Reinforces / Executes Organizational Strategy

• Create Value and Utility to Organization

We’ll review themes & process groups later…


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• Program / Project Management


“In mature project management organizations, project management exists in a broader context governed by program management and portfolio management.“

A Guide to the Project Management Book of Knowledge – 4th Edition (PMI, 2008)

PMI confirms larger context of Project Management…

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• Program / Project Management


“All projects within a program are related through a common goal. If the projects

have separate goals and are only related by common funding, technology, stakeholders,

or resources, then these efforts are better managed as a portfolio rather than program.”

The Standard for Program Management – Second Edition (PMI, 2008)

…but acknowledges that there are also strategic projects.

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• Project Management


Project Management is the application of knowledge, skills, tools, and techniques to

project activities to meet project requirements[within constraints of time, cost, scope,

quality and proactive mgmt of risk]. A Guide to the Project Management Book of Knowledge – 4th Edition (PMI, 2008)

In context of portfolios and programs, project results are the building blocks of benefits realization.

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• Project Management (in short)


• Can also be decentralized (aligned with Portfolio)


• Align Project Outcomes with Objectives

• Manage Cost, Schedule, Effort, & Scope

– Tactically Executes Organizational Strategy

• Create Discrete Deliverables / Building Blocks

Common denominator is management of resources & risk.


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• To Sum It All Up (again)


Portfolio Management helps organizations do the right work by managing alignment

and investment of resources.

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• To Sum It All Up (again)


Program & Project Management help

organizations do the work right by

managing execution.But whole is often greater than sum of

the parts when managing as a program.

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• To Sum It All Up

Let’s review each discipline and the integrations further…

Resource Demands


Performance

Alignment

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•What Is a Portfolio? (PMI)

–Collection of components (initiatives) grouped together to facilitate the effective management of work required to meet strategic objectives

• Reflects investments made (or planned) by organization

– Balances ROI with risk of investing in particular initiative

• Ensures that components are considered in relation to one another

– Aligns investments & resource allocations with organizational goals, objectives, & priorities

Portfolio Management

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•What Does Portfolio Management Do?

–Translates Organizational Strategy into Portfolio of Operational & Strategic Initiatives (align)

• Strategic Intent is Achieved through Initiatives

–Ensures That Initiatives are Realized through Investment of Resources (monitor)

• Priorities are Identified, Investment Decisions are Made, and Resources are Allocated at Portfolio Level

Portfolio Management is dependent on quality and consistency of process & information…”apples to apples”.


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•Two Process Groups

1. Aligning (top down from Strategy)

a. Identify—Inventory New & On-going Components

b. Categorize—Group Identified Components into Categories to Balance Investment & Risks

c. Evaluate—Gather Quantitative & Qualitative Information and Score Identified Components (e.g. increased profitability, risk reduction, compliance…)

d. Select—Select Short List of Components Based on Evaluation Results, Recommendations, & Other Selection Criteria (including risk impact)

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1. Aligning (top down from Strategy)

e. Prioritize—Rank Selected Components within Each Category, Investment Timeframe, & Organizational Focus Based on Established Criteria (including risk)

f. Balance Portfolio—Organize Prioritized Components into Portfolio Mix with Greatest Potential to Achieve Strategic goals and Maximize Portfolio Return

g. Authorize—Formally Allocate Resources Required to Execute Selected Components within “Balanced Portfolio”

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2. Monitoring (bottom up from Components)

a. Review & Report Portfolio Performance—Gather Performance Indicators & Periodically Review Portfolio

– Ensure That Portfolio Contains Only Components That Support Achievement of Strategic Goals

» Maintains strategic alignment

– Continually Add / Reprioritize / Exclude Components Based on Performance and Alignment with Defined Strategy

» Maintain effective resource utilization (and work on the right stuff)

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2. Monitoring (bottom up from Components)

b. Monitor Organizational Strategy Changes—Respond to Changes in Organizational Strategy and Realign Portfolio

– Significant Change in Strategic Direction Can Impact Component Categorization or Prioritization

– May Require Portfolio to Be Rebalanced

– Components may be put on hold or terminated as a result

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•Two Process Groups (illustration)

Aligning Monitoring

RISK!!!

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•What Is a Program?

–Group of Related Projects Managed in Coordinated Way to Obtain Benefits and Control Not Available from Managing Them Individually

• The Whole is Often Greater than the Sum of the Parts

– Continuous Optimization & Alignment of Resources and Components

• Includes Elements of Related (other) Work

– Infrastructure and Effort to Manage Program

– Support of Incremental Benefits

– Transition of Capabilities to Operations

Program Management

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Program Management

•What Does Program Mgmt Do?

– Focuses on Project Interdependencies and Provides Optimal Approach to Realize Benefits and Organizational Objectives

• Aligns Strategic Direction that Effects Program & Component Project Goals & Objectives

• Provides Shared Governance Structure to Resolve Issues & Scope/Cost/Schedule/Quality Changes

• Resolves Resource Constraints and/or Conflicts Effecting (or Between) Component Projects

• Mitigates Risks That Run Across (or are escalated from) Component Projects

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Alignment

• Interactions with Portfolio Management

–Portfolio Management Selects, Prioritizes, & Allocates Resources to Initiatives (in alignment with organizational strategies)

• Provide Strategic Goals & Objectives, Expected Benefits, Requirements, Timelines, Resource Allocations, and Constraints

• Parameters are Translated into Expected Program Benefits / Outcomes and Program Scope, Schedule, & Budget (based on initial estimates of resource requirements [human and financial])

Program Management

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• Interactions with Portfolio Management

–Provide Performance Updates to Portfolio

• Program Status, Cost Performance, Budget and Schedule Updates, Change Requests & Approved Changes, Escalated Issues & Risks, and Corrective Actions

• Continuous Monitoring Is Required to Determine If Program Is Still a Worthwhile Investment

– Negative Scope/Cost/Schedule Performance May Invalidate the Business Case (and why initiative was approved)

Performance

Program Management

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Program Management

•Primary Process Groups (will be going away)

1.Defining

• Define Program Objectives and Alignment with Organization’s Strategic Objectives

– High-level Business Case Demonstrating Needs, Feasibility, & Justification is Developed

2.Initiating

• Authorize Program and Define Program Benefits Statement & Benefits Realization Plan

– Benefits are Aligned with Strategic Objectives

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Program Management

•Primary Process Groups

3.Planning

• Plan Best Alternative Courses of Action to Deliver Program Benefits & Scope

– Goal Is To Incrementally Realize Benefits – defines “pacing” of program (the art of Benefits Realization)

4.Executing

• Integrate Projects, People, & Other Resources to Carry Out Program Plan and Deliver Benefits

– Component Projects are Initiated & Executed Based on Benefits Realization / Program Plan

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Program Management


5.Monitoring and Controlling

• Monitor Program & Component Projects Against Benefit Delivery Expectations

– Continuous Monitoring of Component Performance

6.Closing

• Formalize Acceptance of Benefit / Outcome and Bring Program To An Orderly End (fully transitioned)

– Benefits Must Be Sustainable Beyond Conclusion of Program

– Transition planning & execution is critical for component projects as well as program

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Program Management

•Key Program Management Concepts

1.Benefits Management

• Ensure that Organization Will Realize and Sustain Benefits from Investment During and After Program

– Strategic Planning and Portfolio Management Provide Expected Outcomes & Resulting Benefits for Program

• Continuously Develop & Execute Benefits Realization Plan throughout Program Lifecycle

– Benefits Mgmt Is Key Differentiator Between Programs and Projects (graphical representation on next page)

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Program Management

project delivery

outcomes require support until program completion

•Program Management Themes

1.Benefits Management (illustration)

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Program Management


2.Stakeholder Management

• Identify How Program Outcome Will Affect Stakeholders (organization’s culture, current major issues, resistance or barriers to change, etc.)

– Proactively Manage Expectations and Communicate Both Internally & Externally

• Develop & Execute Stakeholder Management Plan throughout Program Lifecycle (broader range & typically higher level than project stakeholders)

– Address Program CSFs and Foster Organizational Change

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Program Management


3.Program Governance

• Establish Program Level Governance Framework

– Phase Gate Reviews & Feedback Loop to Portfolio Mgmt

• Control Investment & Monitor Delivery of Benefits throughout Program Lifecycle

– Review Performance & Alignment through Each Phase

• Evaluate Organization’s Ability to Absorb Change

– May Have Organizational Constraints (e.g., operational capacity)

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Program Management


4.NEW: Program Strategy

• Program Strategy Is a New “Domain”

– Based on results of recently released Role Delineation Study (RDS) which is outlined in Examination Specification

• Addresses the Effort Before the Program

– Defining and Aligning the Program Vision, Mission, and Objectives with Organizational Strategy (and Portfolio)

– Conducting Environmental Assessments and Developing / Finalizing Program Business Case and Program Strategic Plan

– Transforming Program Strategy to Program Roadmap and Resulting Benefits / Capabilities

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• What Is a Project?

–A temporary endeavor undertaken to create a unique product, service, or result within defined constraints (scope, schedule, cost, & quality)

• In Program Mgmt Context

–Management of discrete efforts to deliver incremental benefits through creation of product, service, or result within defined constraints

• Projects may provide incremental benefits but program benefits must extend beyond last project

• Fully transitioned and sustainable

Project Management

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• What Does Project Management Do?

– Applies Knowledge, Skills, Tools, and Techniquesto project activities to meet project requirementswithin constraints of time, cost, scope, & quality[while proactively managing risk]

• Project Managers are Measured on Delivering a Project within five constraints (was triple constraint)

• Project Managers Must Control Change – can’t be expected to make decisions that jeopardize project

Project Management

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• What Does Project Management Do?

– Program Managers are Measured on Delivery of Capabilities According to Benefits Realization Plan

• Program Managers Must Embrace Change – expected to make decisions based on demands of all projects and understand trade-offs

Project Management

“One of the reasons that Project Managers struggle when they are promoted to Program Management roles is that

while they were used to focusing on winning battles, Program Managers need to focus on winning a war, which means knowing which battles to fight and which to avoid.”

Program Management – The Missing Link Between PPM and PM (Bondale, 2011)

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Alignment

• Interactions with Program Management

–Projects Focus on Delivering Specific Outputs through Temporary Endeavor (within constraints)

• Programs (or Portfolio) Provide Project Goals & Objectives, Requirements, Timelines, Resource Allocations, and Constraints

– Parameters are Translated into Project Scope, Schedule, & Budget (based on initial estimates of [human and financial] resource requirements)

• Projects are Initiated During Program Execution Phase or Directly Out of Portfolio

Project Management

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–Provide Performance Updates to Program

• Project Status, Cost Performance, Budget and Schedule Updates, Change Requests & Approved Changes, Escalated Issues & Risks, and Corrective Actions

• Continuous Monitoring Is Required to Determine Whether Project Is Still a Worthwhile Investment

– Negative Scope/Cost/Schedule Performance at Project Level May Also Invalidate the Business Case (and why initiative was approved)

Project Management

Performance

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Project Management

Alignment Performance

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Project Management


1. Initiating

• Authorize the project (or phase) and define project scope, high-level resource requirements, & constraints

– Scope Aligned with Program Benefits Realization Plan & Organizational Strategy (as dictated by Portfolio)

2.Planning

• Define/refine objectives, scope, resource requirements & constraints and plan course of action

– Metrics Continuously Provided to Program or Portfolio

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Project Management


3.Executing

• Integrate People & Other Resource to Carry Out Project Plan and Deliver Project Scope

– Corrective Action Also Implemented During this Phase

4. Monitoring and Controlling

• Monitor Project Against Delivery Expectations & Ensure that Performance Is Regularly Measured

– Identify Any Corrective Action(s) Required

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Project Management


5. Closing

• Formalize Acceptance of Product, Service, or Result

– Integrate Result into Program Benefits & Close Project

Program

Portfolio

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Summary


–Centralized management of portfolio components (initiatives) to achieve desired business objectives

•Overall strategy defined at executive level, which establishes strategic goals & objectives

• Strategic goals and objectives are passed to Portfolio Management function to ensure that initiatives are aligned with organization’s goals

–Portfolio Mgmt function selects, prioritizes, & approves proposed portfolio components (while considering short- vs. long-term risk & return)

Alignment

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Summary


–Priorities are identified, investment decisions are made, and resources are allocated at portfolio level (in alignment with strategic objectives)

• Approved components are passed to Program/Project Management functions to execute on strategy

• Program / project performance is monitored and communicated back to portfolio level

– Program / Project Status, Cost Performance, Budget and Schedule Updates, Change Requests & Approved Changes, Escalated Issues & Risks, and Corrective Actions

Performance

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•Program Management

–Centralized coordinated management of components to achieve strategic objectives and benefits (enhancing / developing new capabilities)

• Resolves Resource Constraints and/or Conflicts Affecting (or Between) Component Projects

• Mitigates Risks That Run Across (or Are Escalated from) Component Projects

• Aligns Strategic Direction that Affects Program & Component Project Goals & Objectives

• Resolves Issues & Scope/Cost/Schedule/Quality Changes in a Shared Governance Structure

Summary

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•Program Management

–Critical Themes/Domains across Program Lifecycle

1. Benefits Management

– Ensure that organization will realize & sustain benefits

– Develop & execute Benefits Realization Plan throughout program lifecycle (key differentiator between programs & projects)

2. Stakeholder Management

– Identify how program will affect stakeholders

– Proactively Manage Expectations and Communicate Both Internally & Externally (often at higher levels in organization – most outrank Program Manager)

Summary

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–Critical Themes/Domains across Program Lifecycle

3. Program Governance

– Establish Program Level Governance Framework

» Steering Committee & Advisory Boards, etc.

» Phase gate reviews & feedback loop to Portfolio

– Control Investment & Monitor Delivery of Benefits

» Review Performance & Alignment at Each Phase

4. NEW: Program Strategy

– Addresses effort before the program

» Defining and Aligning the Program Vision, Mission, and Objectives with Organizational Strategy (and Portfolio)

Summary

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•Project Management

–Management of Discrete Efforts to Deliver Incremental Benefits through Creation of Quality Products, Services, or Outcomes within defined constraints (time, cost, scope, & quality)

• Project Managers are measured on ability to deliver within constraints and must control change

• Program Managers are measured on ability to deliver benefits and capabilities aligned with strategic objectives and must embrace change

Summary

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• Interaction Is Cyclical

– Expectations & Constraints Flow from Portfolio to Programs/Projects in Early Phases (Initiating and Planning)

• Strategic Objectives Drive Programs/Projects

– Performance and Results Flow from Programs/ Projects to Portfolio in Later Phases (Executing, Controlling, and Closing)

• Bottom Up Performance Metrics Enable Continuous Evaluation of Investment

Summary

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• Interaction Is Cyclical

Summary

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Questions?

Questions

Brian Grafsgaard, PgMP & PMPDirector of Professional Services

Quality Business Solutions (QBS)12701 Whitewater Dr, Suite 180

Minnetonka, MN 55343952.564.3088

[email protected]

mailto:[email protected]

how do portfolio, program, and project management relate?mydlc.com/pmi-mn/pdd/2.s4_how...

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