project portfolio management - webinar

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Project Portfolio Management

Claude Maley

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• Time will be allocated in the end for the speaker to address your questions



Your Presenter

Claude Maley is Managing Director of Mit Consultants, a consultancy and education practice servicing international clients in change management, and Chairman of a business solutions company.

His functional management and consulting experience with major corporations such as Alcatel, BP, Cadbury Schweppes, Cartier, Caterpillar, Cisco, Ericsson, GE, Hewlett-Packard, IMS International, Motorola, Organon, Overseas Containers Limited, Pechiney, Renault Automobile, Siemens to name a few, has spanned more than 40 years in engineering, production and manufacturing, distribution, transportation and marketing services sectors.



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Webinar Objectives

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Set clear Priorities across all Projects in your Portfolio and introduce a clear

Staging Process for Programmes/Projects within the Portfolio

Achieve your

Organisation's

Strategic Business

Objectives by

selecting the

Right Projects

for the

Right Reasons



Value Creation &The Organisation's Strategic Intent

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"BOTTOM LINE" IMPACT – VALUE CREATION

Constant state of ChangeIterative & Incremental in concert with Continuous Improvement,

Business Process Re-engineering and Enabling Technology

Constant state of ChangeIterative & Incremental in concert with Continuous Improvement,

Business Process Re-engineering and Enabling Technology

Change Management

Change Management

StrategicTransformational

TacticalOperational

AchievingTransformational

& OperationalGoals

MaintainingCompetitiveAdvantage

Seeking Growth& Opportunities

Sustaining ContinuingOperations



Organisation's ability to meet Market Requirements:Key Areas for an Organisation's Competitiveness

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CompetitionFinancial Constraints

The Market PlaceTemporal Constraints

EconomicalGlobalisation

Political & Regulatory

External Influences

CHANGE is the only Certainty in a World of Uncertainty

SustainingBusiness OPERATIONSand the constant need

for INNOVATIONAnd

CONTINUOUSIMPROVEMENT

Making StrategicInvestments

RedefiningOrganisational Structures

Empowering People

EnablingTechnology

Transforming KeyProcesses into

Strategic Capabilities

Analysing & ReviewingMarket, Competition,Services & Products

End-to-End SolutionsWithin Time to Market

Constraints



"Are we Doing it Right?"

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Are we doing it RIGHT ?

Right MarketRight ProductsRight OrganisationRight SkillsRight InvestmentsRight Size

Perform ContinuousAnalysis & Evaluation of

BUSINESS PROCESS MODELS

What are the Opportunities:

New Market New Product/Service Alliances

o Key Business Concerns :o ARE WE DOING THE RIGHT

THING?o ARE WE DOING THE THING

RIGHT?What are the Operational Issues:

Waste Heavy Process Points Costly Steps Low Quality Inadequate Response



Strategic Goals

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Organisations initiate Strategy Formulation by specifying theirMission, Goals, and Objectives & setting the Long-Term direction

and scope for the whole Organisation

Performance of SWOT analysis to select Appropriate

Strategies, based upon:

Organisational Change Impact Formal & Informal

Organisational Structures Organisation "Culture" Appropriate approach to

Implement the Strategy

Strategic BusinessObjectives

are Goals deemedmost Important to the

Current and Future Healthof an Organisation



Business Alignment and Business Benefits

Project Portfolio Management is the Key Approachto Accomplish Strategic Business Goals

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Projects are Managed to Create Value for the Organisation,

the Market and the Community



TacticsThe Projects to launch to fulfil the Strategy

From Strategic Vision to Projects

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Str

ate

gy A

pp

roach

Pro

ject

Sp

ecifi

cMission

Qualitative Statement describing the Organisation's Purpose

StrategyOrganisation's Road Map to achieve Business Objectives

VisionGlobal Macro picture of where an Organisation

wants to be

Concept

Planning &Execution

ObjectivesQuantitative description of the desired Accomplishments



For eachIdentified PROJECT

• Map against Strategy• Establish Ownership &

Operational Costs• Define Revenue/Benefits• Determine Overall Life

Cycle Benefits

Determining Strategic Direction and Financial Justifications for Projects

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TacticsThe Projects to launch to fulfil the Strategy

StrategyOrganisation's Road Map to achieve Business Objectives

Defining the Case Definition of Success Criteria (KPI's) Prioritisation of Benefits Rank Benefits

Primary benefits Secondary benefits:

Benefits Strategy

Concept

BusinessBenefits



Program/Project Strategy and Portfolio ManagementFrom Strategic Vision to Projects

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Str

ateg

y P

ort

foli

oS

trat

egy

Po

rtfo

lio

Portfolio Management

Objectives & Strategy

Tactics

Vision & Mission

Pro

ject

Sp

eci f

icP

roje

ctS

pec

i fic

Planning &Execution

Concept

Planning &Execution

Concept

Planning &Execution

Concept



Project Portfolio Management Vision

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* PMI Standard for Portfolio Management

In alignment with the organizational vision Supportive of the strategy and objectives of

the organization Reflects the organization’s cultural values Meaningful and valid to stakeholders



Defining Scope and Extent of the Project Portfolio:Definitions

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PROJECT PORTFOLIO

A collection of Projects or

Programmes & other work

grouped together

to facilitate effective

management of that work

to meet strategic business

objectives

A portfolio consists of:

Operations

Projects

Programmes

PROJECT PORTFOLIO MANAGEMENT

The centralised management of

one or more portfolios

which includes identifying,

prioritizing, authorizing,

managing and controlling

projects, programs andother related work

to achieve specific business objectives



Goals of Project Portfolio Managementfor Business Alignment

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A Project Portfolio will reflect theOrganisation's Strategic Intent

Alignment of Projectsto the

Overall Business Strategyis continuously Reviewed

The Project Portfolio will set:• Priorities• Investment Decisions• Resources Allocation

Projects are Quantified by :• Value to the Business• Business Drivers• Measurable Deliverables• Rank and Priority



Focus of Project Portfolio Managementto Achieve Business Benefits

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Aligned to thePolitical, Economic, Social,

Technological & Environmental RealitiesAdds Value to the Organisation

based upon robust Business Cases

Fulfils and ManagesStakeholder Expectations

Ensures Corporate Wide Communication

Is Financially Viable and Delivers ReturnsDynamic and Responsive to Changes

Maintains Alignment to overall Strategy



Defining Strategic Programs/Projects for Project Portfolio Management

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CorporateStrategy

InitiativesCAPEX

Total Funding & Resources

OperationsOPEX

Client/CustomerOfferings

Project AProject B

Project C Project n. . .

Challenges• Assessing Projects• Selecting Projects• Stopping/ending Projects• “Skunk works” Projects

Benefits• Improved productivity• Greater economic value• Faster time-to-market• Improved staff morale• Increased shareholder value• Enhanced organisational learning



Steering Strategic Programs/Projects in aProject Funnel Process

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Transformational

Operational

Market Data

Corporate KPI's

Strategic Drivers

Assess Evaluate Plan Implement Deliver

Establish Balance between :

Transformational and Operational Needs

Seek Consistency and Alignment to Corporate KPI's

Align Funding to Priorities

Balance Needs to Organisational

Capacity

Apply Rigour in Selection Criteria

Support the Process

DecisionPoint

Management Approval



Project Selection Funnel

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Stage 1: Pre-Survey Business Analysis

Stage 2: Business Processes Identifiedwith Key Metrics

Stage 3: Assess Projects for Benefits

Stage 4: Prioritise Projects and ensure Organisational Buy-In

Selection & Priority isBusiness Driven

RequiresQuantitative & Qualitative

Criteria

Fit to Strategy

Go & NoGo Criteria

Common Reporting &

Analysis

Prioritisation Criteria

Combined Capacity Planning



Project Portfolio Management Cycle

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InitiativesCAPEX

OperationsOPEX

Client/CustomerOfferings

USE a Formal Cycle and Initiate

the Process

Project Goals to Business Value

Confirm

Portfolio Project Selection Criteria

Determine

on Portfolio Reporting

Agree

Roles & Responsibilities

Establish

RefreshPortfolio

ProjectSelection

UpdatePortfolio

ManagePortfolio



Establishing Strategic Intent for Program/Projects

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The Strategic intent determines the resources that should be allocated to the Programmes/Projects in the Portfolio

The Strategic Intent is mapped onto a set of projectsand programmes, including their resource allocations

Each Programme/Project then corresponds to a subset of the overall Strategic Intent, which it will deliver by means of the allocated resources

Each project is defined by its contributionto the portfolio's strategic intent



Project Portfolio SelectionScreening Potential Project Candidates

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Portfolio Committee Portfolio Management Team Project Sponsor Project Manager

Projects are Assessed and

Challengedto ensure their contribution to Business Value

Assumptions are Validated or

Infirmed

Reviewers request lacking or

omitted Information

Selected Projects raise the levels of

Commitment

Project Manager to demonstrate an

Entrepreneurial Approach



Project Portfolio Governance Approval, Sign-off and Launches

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Final Approval on Project Selection• Management Sign Off• Project Charter

Prioritise Project• Ascribe a RANK• Assign Key Resources

Document Key Project Drivers• Business Goals• Decision Points• Assumptions• Risks

Approve Project Funding• Release Initial Funds• Determine Management Reserve and

Variance Range

RefreshPortfolio

ProjectSelection

UpdatePortfolio

ManagePortfolio



Project Portfolio optimisation - Capacity Planning, Schedule Optimisation

Consolidate Project Data into the Portfolio

Develop Individual Project Plans

• Organisation• WBS and

Schedule/Cost Charts

Aggregate Project Plans

• Establish Portfolio Time Frame

• Develop Resource Charts

• Determine Cumulative Project Costs

Rearrange Project Priorities

• According to Business Goals

• Establish Modified Project Schedules

Re-Approve Project Portfolio Contents

• Finalise Funding• Secure

Management Sign Off

Capacity planning is the evaluation of the RESOURCE capacity needed by the Organisation to

meet demands for its Projects



Portfolio Project Screening – A Continuous ProcessMajor Decision Points at the GATES

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Assess Evaluate Plan Implement Deliver

Assessment of Project according to Evolving

Business Value

Appraisal of Business& Market Factors

Review of Project Progressand Compliance to Objectives

Changes in Priorities

Risk Re-Assessment

BenefitManagement

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Project Portfolio ReportingEvaluation of the Portfolio to Expectations

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• Are Strategic Intents Unchanged?• Are Projects in Alignment?

• Are Project Budgets within Range?• Are Operational Benefits in Limits?

• Are Project Schedules within Range?• Are Technical Issues Addressed?

• Are Project Risks Managed Suitably?• Are Organisational Risks Assessed?

• Are Internal/External Constraints & Interfaces Handled Appropriately

Health

Risks

Constraints &

Dependencies

StrategicAlignment

ValuePortfolio Manager

Collects, Collates & Reports

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Project Portfolio Management:Major Responsibility Areas

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Determining a viable Project

Mix, capable of meeting

Organisational Goals

Balancing the Project Portfolio

to ensure Current & New Opportunities are Beneficial

Monitoring and Reporting on

the Performance of Projects in the

Portfolio

Analysing Project Portfolio Performance &

engaging on Continuous

ImprovementProviding Recommendations to

Decision Makers



Multiple Project Portfolios in the Organisation

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Business

Unit

Business

Unit

Support

Unit

Support

Unit

Programmes

& Projects

Programmes

& Projects

Programmes

& Projects

Programmes

& Projects

Organisation'sExecutive VPs

ProjectPortfolio

Team

Organisational

Unit

Organisational

Unit

Organisational

Unit

Organisational

Unit

Organisation'sLine Reporting

ProjectPortfolioCoordination

Corporate

Portfolio

UnitPortfoli

o

UnitPortfoli

o

UnitPortfoli

o

UnitPortfoli

o



Operating in a Combined PPM/PMO Structure:Organisational Structure – Major Options

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Project Management

Office

Business

Strategy

Project Portfolio

Management

DemandManagement

Project & Programme

Management

Centre of Excellence

Business

Strategy

Project Portfolio

Management

DemandManagement

Project & Programme

Management

Project Management

Office



Instituting the Project Portfolio Management System

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Confirm Business Strategy, Driversand Business Value

Determine Portfolio Project Selection Criteria

Agree on Portfolio Reporting Select Project(s) for Portfolio

using :Economic & Financial CriterionBalanced ScorecardRisk Ranking

Rank Selected Projects

Document Key Project DriversBusiness GoalsAssumptionsRisks

Approve Project Funding & Release Initial Funds

RefreshPortfolio

ProjectSelection

UpdatePortfolio

ManagePortfolio



Operating in a Combined PPM/PMO Structure:Functional Focus in the Organisation

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PPM - Supporting the Organisation'sStrategic & Operational Goals

InvestmentManagement

DemandManagement

ResourceManagement

BenefitsManagement

RiskManagement

ValueManagement

Managementof Programmes

Managementof Projects

Expectations& Scope

Management

Monitoring,Control

& Reporting

Execution &Implementation

Engineering& Planning

PMO - Supporting the Organisation'sProgramme & Project Discipline

Processes, Standards and Methodologies

ProjectSupport

Competence& Skill

Development



Project Portfolio Manager:Scope and Range of Roles & Responsibilities

The Portfolio Manager, typically a senior manager,or senior management team, is responsible for monitoring

assigned portfolios, by:

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Source: PMI® - Project Management Institute, Inc.,

Playing a key role in project prioritisation, ensuring there is a balance of components, and that

they align with strategic goalsProviding key stakeholders with

timely assessment of portfolio and component performance, as well as

early identification of (and intervention into) portfolio-level issues impacting performance

Measuring the value to the organisation through investment instruments, such as return on

investment (ROI), net present value (NPV), payback period (PP), etc.



Extent of PPM Governance

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Selecting Projects and Programmes to deliver the

required results

Ensuring Projects are aligned with Evolving

Organisational Objectives

Defining appropriate Governance processes to support the

achievement of the

Organisation’s Strategy

Planning the organisation’s Project

work-load on an on-going basis

Negotiating Resource and Capacity issues and

resolving problems at the Organisational level

Organisations are Effective in their Project and Portfolio Managementby defining and improving the processes within the PPM domain,especially concerning the Resource and Capacity Management& the prioritisation of Programmes & Projects in the Portfolio



Achieve the Organisation's Business Goals withProject Portfolio Management

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Thank You

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project portfolio management - webinar

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market constraints

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