In Part 2b of the PPM Master Class we extend your understanding of Project Portfolio Management further by explaining the relationships between Portfolios, Programmes and Projects and the goals of PPM. We will also focus on some of the main barriers to adoption, the consequences of not implementing PPM and finally we will highlight best practice considerations whilst deploying PPM.

The Relationship between Portfolio’s, Programmes and Projects

In order to implement an effective PPM Framework it is essential to understand the relationships between portfolio’s, programmes and projects.  In summary:

• A Portfolio represents the collection of programmes and projects within the business. The process of PPM involves the strategic oversight, management and control of these components. Basically, Portfolio’s provide a structured environment for deciding which projects to fund, to sustain or to eliminate.
• A Programme is the process of managing multiple, ongoing, interdependent projects. PPM distills strategic goals into operational initiatives that enables the realisation of business value. Programmes are focused on business outcomes rather than outputs, they are about business management as well as technical management.
• Projects are a series of planned activities with clearly defined start, end points and clearly defined deliverables. Projects manage the estimated and actual start and complete dates for project tasks.

 

Putting it all Together

The Project Portfolio Management process serves as a continuous mechanism to ensure projects remain aligned with their strategic intent and  that assumptions defined in their original business case are adhered to and that decisions made during development are based on timely and accurate data.

There are many benefits to implementing PPM, these are:

• A standard methodology for starting, managing projects and making them accountable to the business
• Empowering the business with control over project GO/Kill/HOLD/FIX decision making
• Deliver a repeatable process for prioritizing, selecting and executing projects
• Early warning of any potential problems in meeting programme and project milestones
• Easy for different stakeholders to access project information relevant to their  interests
• A better understanding of  resource utilisation in order to ensure that the right staff are deployed on the right projects
• Calculate the financial impact of cancelling a poor-performing project
• Switch priorities based on organisational needs and redeploy staff quickly based on accurate real-time information
• Reduce project reporting timescales at executive and board level, allowing faster reactions to market and competitive changes and more accurate decision making

 

The Goals of Project Portfolio Management

No business can afford to only invest in strategic, or ill performing projects. The main goal of Project Portfolio Management is to provide the executive team with the right information at the right time so effective and efficient decision making is carried out.

The Goal of Project Portfolio Management is to ensure that Projects must…

• Be aligned with the firm’s strategy and goals
• Be consistent with the firm’s values and culture
• Contribute to a positive cash flow for the enterprise
• Effectively utilise the firm’s resources
• Contribute to the firm’s current health
• Position the firm for future success

Consequences of Not Implementing PPM

The main consequence of not implementing PPM is essentially the executive team loosing control of how projects are impacting the business, for example:

• Reluctance to kill projects
• Indecisive GO/Kill/Hold/Fix Decisions
• Poor project selection framework
• Wrong mix of projects
• Poor strategic alignment

The immediate impact of this is:

• There are too many projects
• Resources are thinly spread
• Project Execution Suffers
• There are too many low value, mediocre projects
• Good projects can become starved of resources
• The wrong projects are selected
• Projects lack strategic direction and alignment

Overall this can lead to poor business performance, including:

• Increased time to market
• Higher Project Failure Rates
• Too few top product winners
• Chaotic Launches
• Many Failures
• Diluted Effort
• New products that don’t support the strategy

 

Barriers to Adopting and Key Challenges

Project Portfolio Management by its very nature will demand change within the business, and with change comes resistance – from both above and below.  Top management commitment to and understanding of the purpose and value of Project Portfolio Management is critical.  PPM is not to be delegated to lower ranks, nor is it the sole responsibility of the PPM Vendor. You should look to educate as you implement. There will be may hurdles to face when implementing Project Portfolio Management,  typical challenges include:

• Internal politics and culture are by far the biggest barriers to adoption
• You will need to become an ‘evangelist’ for Project Portfolio Management,with an ‘executive sponsored guardian angel’
• Unwillingness of business managers to see their ‘pet projects’ shifted in priority
• Disagreement on the pace of adoption
• The willingness of the organisation to support the financial investment potentially needed for implementing a Project Portfolio Management software tool
• Organisational project capability and maturity – the more mature the organisation’s project management capability, the more ready will the business be to adopt PPM
• Resistance from programme and project teams to the adoption of a common approach to managing projects, reporting progress and constructing business cases
• It is simply human nature that people will blame the tools and processes to hide their own lack of knowledge and understanding of Project Portfolio Management
• PPM requires the adoption of time sheet technology as a method of collecting baseline and project progress data information – it is therefore essential to manage the ‘Big Brother Syndrome”

Best Practice Considerations

There are many best practice issues that should be considered while deploying Project Portfolio Management these include:

Who: engaging the right people 

• Senior management and executive buy-in is absolutely critical
• create awareness, provide support, build consensus and motivate stakeholders at all levels

Why: identifying the pain and calculating the ROI

• Sell PPM’s benefits
• Conducting a health check will help build a Return on Investment (ROI) model
• Give ownership to project stakeholders and executive sponsors

What: selecting the right tools 

• Consider how the tools integrate with the rest of the business from both a cultural and technical view point
• Avoid a ‘rip-and-replace’ tool-set
• Opt for configuration instead of customisation

How: testing the tools and processes 

• Sell PPM’s benefits via a Health check and PoB.
• Make PPM a tactical sell and scale accordingly
• Be sure to communicate the Return on Investment and Return on Opportunity (ROO)

When: avoiding a ‘big bang’ deployment 

• Opt for a phased,  incremental implementation where the business can solve  problems on a domain-by-domain level, giving  yourself time to understand the change management issues

Coming up in Part 3

In Part 3 of the PPM Master Class we look at how you can organise your business for Project Portfolio Management and discuss the role of the Executive Board, the Project Portfolio Management Team (PPMT) and the Programme Management Office (PMO) in the PPM process.

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