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Portfolio, Execution & Monitoring 

Not all projects make the grade and many need to be eliminated even after the portfolio has been approved, because:

a) The projects concerned do not provide sufficient value and are no longer aligned with the business’s objectives.
b) Projects with a higher urgency have been proposed, resulting in a delay to or termination of current projects.
c) A project has been rescoped and integrated within another.
d) Technology has changed, negating the benefits of a planned project.

With only a small percentage of the proposed projects approved and executed, it is crucial that they succeed. Since the business is changing throughout the year, there will also be ongoing changes to the portfolio. This includes the addition of new projects and the elimination of old. This ongoing process of replanning and rebalancing the work, based on changing business needs, is also a part of the portfolio management execution and monitoring process. Portfolio management is therefore more than a one-time event that is performed once a year during your business planning phase. It is a contiual, iterative process that needs ongoing monitoring and course correction. It is essential that the PPMT take proactive steps to resolve problems and keep projects on track by:

a) correcting overlaps and redundancies
b) reviewing and resolving issues and problems
c) monitoring project spending and adjusting budgets
d) monitoring and mitigating project risks
e) managing resource conflicts sch as supply and demand shortfalls
f) reassessing the timing and duration of projects

The PPM selection and prioritisation process is easily emasculated if the portfolio is not actively managed. With projects straying over time, over budget and with business goals shifting and evolving, even originally well conceived projects rapidly become misaligned. However, misalignment must not be feared; it is in fact a natural and expected outcome. The real success of PPM lies in the ability of the PPMT to identify this misalignment and take corrective action. The PPMT must be able to make objective ‘go/kill/hold/fix’ decisions and be able to recognise that a dramatic change in business priorities may eliminate the need for a project, requiring quick project terminatio. As stated earlier, management of the portfolio includes managing the resources, proactively communicating what is going on, reviewing and replanning the remaining work on a regular basis and measuring the results. If new projects are added to the portfolio it will mean that other, previously authorised projects will need either to be eliminated or put on hold. With the help of the PMO, the PPMT needs to document and track individual projects and impelment a course correction process to ensure that the portfolio as a whole accomplishes its objective.

The typical steps involved in executing and monitoring the portfolio include:

Step 1: Gathering project portfolio information
a) collective individual project score cards
b) building a consolidated portfolio score card
c) collecting  project and portfolio resource plans including shortfalls and new demands
d) building a detailed project status report
e) building a detailed portfolio status report

Step 2: Measuring and analysing the project portfolio
a) measuring the performance of ongoing projects
b) measuring the success of completed projects
c) measuring interdependencies between projects
d) measuring overall business value and alignment
e) determining an inventory of projects for portfolio course correction changes

Step 3: Analysing the impact of changes to the project portfolio
a) analysing the impact of projects that may be cancelled
b) analysing the impact of newly identified projects
c) analysing the impact of current projects not achieving objectives
d) analysing the impact of projects that have changed their scope

Step 4: Reviewing portfolio changes and reforecasting
a) filtering new projects against the existing project portfolio
b) reviewing current and new portfolio goals and objectives
c) ensuring individual project business cases are revalidated and aligned with these objectives
d) ranking projects against revised priorities
e) updating the project inventory
f) modelling resource scenarios and analysing the overall impact on the business
g) selecting scenarios and updating the resource schedule

Step 5: Communicating and implementing portfolio changes
a) revalidating business cases for existing authorised projects
b) revalidating business cases for newly authorised projects
c) issuing a new project portfolio review
d) providing guidance on changes to portfolio work
e) communicating with project stakeholders
f) agreeing a timeframe for the next portfolio review
g) making ‘go/kill/hold/fix’ decisions

Being able to take corrective action on projects is a key component of PPM. If a project is not meeting its objectives, it is crucial to identify the root cause, develop an action plan, and then monitor and track to ensure the action is implemented and the issue is resolved. The PPMT must have the ability to intimately understand how projects in the portfolio relate to different business goals and the ramifications if either projects or business goals change. The PPMT needs to track trends and anticipate new opportunities and threats so that project stakeholders can implement measures to avoid misalignment.

The 2007 Atlantic Global User Group Event will be staged at the prestigious 5 Star luxury Landmark Hotel in central London Wednesday 7th November.

Whether you are an existing Atlantic Global software user, a new or prospective customer, this year’s agenda will be flavoured with a strong mix of practical product demonstrations, updates, as well as case study presentations from Oxford Pharmaceutical Sciences and the Welsh Assembly Government. These case studies will provide an insight into how they have implemented their solutions, overcome their challenges and are now reaping the benefits of our software.

In addition visitors will be given the opportunity to attend a session on “Best Practice Project Portfolio Management” as well as technology and feature update presentations. Breakout sessions will allow attendees to speak to the consulting team, run through product functionality and to help better understand how they can lever the strengths of the Atlantic Global Solutions.

Places are limited at the Landmark Hotel, so not to be disappointed, please Register Now. The User Group will take place between 10:00 - 16:00, is FREE of charge to attend and is open to all existing, new and prospective customers. We will provide lunch and all refreshments; don’t miss the chance to round up the day with a networking drinks reception.

Resource and Business Capability Analysis

Many portfolio management methods do a poor job of resource balancing. Projects are evaluated, “Go” decisions are made, but resource implications are often not adequately but more important realistically addressed. Many organisations simply consider individual projects one-at-at-time and on their own merits, with little regard for the impact that one project has on the next. Failure to manage the businesses resource capability leads to pipeline gridlock in which too many projects chase too few resources. Prioritization is one thing; the capacity to deliver on these priorities is another. Therefore before we approve and execute the portfolio it is necessary to match up the project portfolio with the corresponding resource requirements. This stage is crucial to determining the businesses capability to undertake the required work in order meeting the portfolio objectives.

The PPM framework needs to provide PPMT with a controlled and predictable method of monitoring resource and business capability against the strategic planning process in order improve the probability of a business being able to meet targets on time and to budget. Resource capacity is particularly challenging simply because so many organizations are lacking the processes to be able to effectively track how much effort is available for project work, and how much of that effort is already committed to initiatives underway. Before we explore the steps involved it is essential to note that the portfolio mix should not exceed the organization’s resource capacity or capability. One of the central components of PPM is its ability to enable the business to implement an equitable balance between the demand and supply of resources. With the support of the PMO has a project knowledge centre the PPMT is able to collect all the relevant information to update the project portfolio and build supply and demand scenarios that then can be fed back into decision making.

This in turn allows the business to make the right project selections and to allocate resources to the highest-priority activities across groups and organization units.

The business resources can typically achieved by implementing the following step process:

Step1 - Determine Resource Demand and Constraints: The first step looks to understand the resource spread between “Business-As-Usual” activity i.e administration, existing projects and the demands of new projects. Essentail here is rooting out so called “invisible projects” are often buried or masked has routine work and soak-up essential resources.

Therefore key issues within this step include:

a) Identifying existing resource demands and constraints
b) Determining resource requirements for new projects
c) Analysing ratio of resources between existing and new projects

Step2 - Create Resource Supply and Demand Scenarios: The next stage is to create resource allocation scenarios. This includes analysing the impact of cancelling active projects, putting them on hold and anlaysing for example their impact across a 3, 6 and 12 months perod. As well as examining delaying or bringing forward projects, and understanding their overall effect on the businesses capacity.

Key issues within this step include:
a) Creating portfolio variants for different allocations of resources
b) Developing resource redistribution scenarios and analysing there impact on the business
c) Determine the need for addition internal and external resources
d) Defining resource development requirements based on skills requirements

Step3 - Allocate Resources: As a result of scenario analysis, changes are made to the existing allocation of resources across both the portfolio as well as the organisations existing “business-as-usual “ activities. Also essential here is to establish metrics and processes that will allow the business to determine at what point in time there will be insufficient or excess capacity for the project portfolio as a whole.

Key issues within this step include:

1) Determining resource allocation for each project
2) Deciding whether to create additional internal or external capability
3) Ongoing capacity management inorder to provide visbility into long-term resource requirements.

Ongoing, responsive capacity management requires constant access to up-to-the-minute data from all related systems. This allows rapid identification of changes to the project portfolio. It also enables modifications to be simulated in response to deviations and bottlenecks, ensuring that the right decisions are made. The resource and business capability analysis process provides decision support for the following issues:

a) Which projects can be executed with available capacity,
b) Where and how can capacity at one organizational unit be reassigned to another and how can a project portfolio be capacity-optimized?

Next week Portfolio Selection, Prioritization and Authorization

I have found an interesting video post from 4 PM wesbite about the challenges of persuading a sponsor that project planning is worthwhile

The post says…”One of the very difficult barriers to doing projects the right way is the reluctance of sponsors and stakeholders to participate in the planning process. Its much easier for them to avoid making the the tough decisions that should be made at the beginning of a project. Project managers have to muster effective arguments or they wind up starting work without a plan which is the seed of project failure.”

To view the video post go to the 4PM website.

Dear Readers, below is a quick summary of the most important best practice considerations when deploying a PPM solution.

Who: engaging the right people

In order to organise the business for PPM, senior management and executive buy-in is absolutely critical – without this, PPM will fail. Executive sponsorship is essential to create awareness, provide support, build consensus and motivate stakeholders at all
levels to participate effectively. Executive sponsorship gives PPM the all-important ‘nod’ from above.

Why: identifying the pain and calculating the ROI

Justifying PPM within any organisation depends on the business’s ability to sell PPM’s benefits. This can be achieved by conducting a health check to establish key areas of pain and then to dovetail this with an ROI model. Ownership of the health check and ROI model should be with the key project stakeholders and executive sponsors. The ROI analysis will help the organisation define and quantify potential top-line benefits and also identify the quantitative and qualitative benefits from deploying PPM, such as in revenue, market capitalisation, increased customer base and decreased attrition.

What: selecting the right tools

The successful deployment of PPM will critically depend on selection of the right software tools, and a key determinant is how the tools integrate with the rest of the business from both the cultural and the technical viewpoints. As discussed earlier, when selecting PPM tools the organisation should look to avoid a ‘rip-and-replace’ tool-set. It is essential to choose tools that are scalable and flexible, avoiding excessive and restrictive customisation, and above that integrate with peripheral applications and
are able to evolve as the business evolves. Successful tool selection needs to be embraced by everyone in the organisation, and if an application is too difficult to use, or requires people to make drastic changes to the way they do their job, then PPM will fail.

How: testing the tools and processes

Deploying a proof of benefit (PoB) is an essential prerequisite that enables the organisation to minimise all the risks associated
with the implementation of a change project like PPM. The PoB provides an actual ‘real-world’ view of the value of a PPM solution within a ‘low risk’ environment and is an excellent way to facilitate the communication of potential Return on Investment (ROI) and Return on Opportunity (ROO). The PoB is in actuality the first deliberate step in a phased approach to implementation by starting small and then rolling out more functionality and coverage over time.

When: avoiding ‘big bang’ deployment

It is essential to understand that PPM by its very nature is a change project and that each business is different in terms of its level of maturity and ability to handle change. Building on a PoB as part of a larger, phased approach should be undertaken and this should be based on the company’s internal project management readiness and maturity. Use the results of your business case and PoB to scale the PPM solution throughout those areas of the business that are most needy. An incremental implementation allows cultural issues to be solved on a domain-by-domain level and then its success to be sold upwards throughout the organisation. PoB allows the business to cultivate best practice examples that can be converted into
quantifiable results for management.