how to focus ppm on business value - dispelling the maturity myth
DESCRIPTION
Just about every business discipline has its own take on the familiar 5 stage process maturity model, and PPM is no different. The problem with this popular rubric is that it implies achieving "level 5" is always the ultimate goal. Ironically, this approach largely ignores any assessment of the relative benefit vs. risk of such an undertaking - thereby violating one of the very tenets of successful portfolio management!In this webinar slide excerpt, PowerSteering's Jay Hoskins turns the maturity model on its head and offers a more practical alternative: the PPM Capability Model. It incorporates a "crawl-walk-run" approach focused on top-down Governance and Demand Management to deliver an actionable plan for realizing immediate business value. If you're an executive responsible for delivering measurable, sustainable benefits from a project portfolio, you will learn how to:-Achieve an optimal level of portfolio oversight without imposing excessive overhead-Assess your organization's current capability for each PPM process-Identify & pursue those improvement areas which represent the greatest incremental valueTRANSCRIPT
Dispelling The Maturity Myth: How to Focus PPM on Business Value
by Jay HoskinsDirector of Solution Consulting
Dispelling the Maturity MythHow to Focus PPM on Business Value
View the full presentation now.
Or Contact UsPowerSteering Softwarewww.powersteeringsoftware.com1-866-390-9088
The PPM Challenge
Org
anizatio
nal S
tructu
resF
un
ction
al View
Oth
er Stakeh
old
ers
Business Segments
Business Units
Geographic Markets
Innovation / R&D
Sales
Operations
Strategic Planning
Finance
Risk
Product Lines
Marketing Dem
and
Resources ?Results
Effective PPM Optimizes Delivery
Org
anizatio
nal S
tructu
resF
un
ction
al View
Oth
er Stakeh
old
ers
Business Segments
Business Units
Geographic Markets
Innovation / R&D
Sales
Operations
Strategic Planning
Finance
Risk
Product Lines
Marketing Dem
and
Opt
imiz
eD
eman
d Execute
Analyze
OptimizedDelivery $
DocumentedImprovedResults
An efficient portfolio governance process will create an optimized funnel of delivered services, resulting in 5% - 30% improvements in cost, benefit, productivity, and service levels…*
An efficient portfolio governance process will create an optimized funnel of delivered services, resulting in 5% - 30% improvements in cost, benefit, productivity, and service levels…*
Governance
* Documented by Gartner, Mckinsey, Forrester, Customer Testimonials, and others
* Documented by Gartner, Mckinsey, Forrester, Customer Testimonials, and others
Maturity – A Typical View
Project Portfolio Management Maturity Levels
Processes recreated every time
Processes established at team level, but not shared more widely
Ad HocRepeatable
Defined
Processes established and applied consistently across the organization
Quantitatively
ManagedProcesses are not only defined & practiced, but metrics are used to gauge effectiveness
ContinuousImproveme
ntMetrics are used to drive ongoing optimization of processes
Source: Adapted from Gartner’s “Maturity Assessment for Application Organizations: Project Portfolio Management,” July 2009
An Emphasis on Benchmarking
Project Portfolio Management Maturity Levels
Ad HocRepeatable
Defined
“The average maturity for PPM is 2.08 on a scale of 0 to 5, slightly higher than the average overall maturity*, which is 1.73.”
- Gartner
Quantitatively
Managed
ContinuousImproveme
nt
* across the 8 IT disciplines for which Gartner has defined a maturity assessment approach
PPM Maturity Average
• PowerSteering’s On-Demand PPM Maturity model that focuses on the capabilities most likely to result in improvements aligned to the goals of the PMO stakeholders.
• Fast Crawl, Walk, Run implementation approach.
• Proven value in as little as a couple of weeks.
There is a faster and better wayThere is a faster and better way
Nor Are Capability Levels Created Equal…
Crawl A basic level of rigor and discipline creates a huge potential for Quick Wins for organizations currently at “Level 0.”
Walk Typically the “just right” level of capability, balancing control with time & effort required.
Run The highest level of capability, but likely overkill for most due to the amount of overhead. Generally recommended only when a process is mission critical.
50%Value
30%Value
20%Value
Key Activities for Each Process/StageGovernance Optimize
DemandExecute Analyze
Crawl Investment Review Board
Portfolio Review
Common system of record
Capture all investment & demandSimple value assessment for prioritization and selection
Deliverable & milestone managementSimple Governance process (e.g., phase / gate)
Simple cost trackingMilestone on time %Stakeholder satisfaction
Walk Collaboration Add better value drivers to investment assessment Establish balance and resource targets
Schedules & tasksCapacity management (by resource classes)
On Time / On BudgetCycle time reductionsPortfolio benefit tracking
Run Governance automatic part of culture
Investment contribution to earnings analysisContinuous portfolio optimizationAgile adjustments of portfolio
Resource ManagementTimekeeping Financial integration
Biggest impact of the process comes from crawling with Governance & Optimize Demand.
Allows easy organizational adoption by implementing the right capabilities at the right time.
Requires involving People, Processes, & Systems. Cannot succeed without all three.
The target maturity is “Walk” across the enterprise. It provides the right amount of control without over engineering or deploying too much overhead.
“Capability Model” Implications
Project Portfolio Management Maturity LevelsProject Portfolio Management Maturity Levels
The Result: Increased Speed to Value
Project Portfolio Management Maturity Capability Levels
Crawl RunWalk
Client Example: Background
• A large UK company needed to improve project delivery service levels by 37% over the next 3 years. This could be in terms of better spending, improved delivery performance, and increased portfolio value.
• The following analysis was for the entire project portfolio / discretionary (change) spend and did not cover operational (run) spending. Estimated annual budget of £40 Million.
• IT owned all project budget except the portions of the strategic projects funded by specific business systems.
Client Example: Assessment
Governance - No major gaps.Optimize Demand:
• Prioritization• Selection• Roadmap• Resource Capacity
Execute:• Deliverable Management• Project Health
Analyze:• Benefits Realization• Quality of Execution• Roadmap
Several key portfolio management capabilities were missing and will significantly improve value delivery and productivity when deployed. These are organized across four capability categories:
As-Is
Client Example: Recommendations
1. Implement a prioritization method 2. Implement a capacity and resource management
process3. Incorporate the priority and capacity into all
portfolio review selection decision points4. Create demand intake process using priority and
capacity5. Ensure that project health measures are
automated and derived from project actuals6. Implement a deliverable management process7. Implement a benefits realization process8. Develop a program management capability
Deploying the most valuable capabilities first is the fastest way to true business benefits: Assess your IT organization’s current capability for
each process Identify & pursue those improvement areas which
represent the greatest incremental value Don’t overlook the overhead & opportunity costs!
• Stopping at Crawl will be optimal for most organizations• If you are at Run in some processes, consider the time &
resources you could reclaim by “reverting” to Crawl!
Key Takeaway & Getting Started
Dispelling the Maturity MythHow to Focus PPM on Business Value
Jay HoskinsDirector of Solution [email protected]
View the full presentation now.
Or Contact UsPowerSteering Softwarewww.powersteeringsoftware.com1-866-390-9088