Post on 28-Jul-2015
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Project Portfolio Management
Claude Maley
The Webinar Will Start Shortly
Project Portfolio Management
Copyrighted Material. Not to be reproduced without prior written consent.
Project Portfolio Management
Housekeeping
• Slides will be available on our SlideShare page; the link will be emailed to you
• Recording of the webinar will be available to download; the link will be emailed
• Take the time to complete a post-webinar survey that will pop up at the end
• You can type your questions throughout the session
• Time will be allocated in the end for the speaker to address your questions
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Project Portfolio Management
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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Project Portfolio Management
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Project Portfolio Management
Designed & Created by
Ver. 2.1- 2015
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
"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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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 Management
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
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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
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Project Portfolio Management
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.
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Project Portfolio Management
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
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Project Portfolio Management
Achieve the Organisation's Business Goals withProject Portfolio Management
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Project Portfolio Management
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Thank You
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