01020 6 Ppde Webinar Slides

Project portfolio delivery performance: What really makes a difference

Initial findings from PA’s survey into the drivers of delivery effectiveness

Jon Hughes, Tim Pare

June 10, 2009

© PA Knowledge Limited 2009. 01020-6 PPDE webinar slides

A bit about us…

Jon Hughes

Jon is head of PA’s Business Transformation Group in North America and is a Member of PA’s Management Group. He specializes in helping clients deliver transformational change, and draws on a background in industry and consulting spanning over 20 years.

Tim Pare

Tim is one of PA’s leading program and change managers with over 20 years’ experience in successfully shaping and delivering large and complex initiatives.

Tim leads the survey team and its deployment across PA’s geographies.


Seize the crisis – PA’s Cost Reduction webinar series

PA’s webinar series:

• Business process simulation: Forecasting the benefits of process change

• Improving portfolio delivery effectiveness in a downturn: What really makes a difference

• Business processes under the microscope

• Surviving a downturn through effective restructuring

• Getting real value from your support functions

“Surviving and thriving in the economic crisis”

A handbook for corporate leaders

We are now living through a major economic crisis, brought on by one of the most serious financial downturns in history. This book is about how to respond.


Improving overall delivery is a key imperative for project-based organizations

Pressure to deliver projects continues to grow

Conventional improvement approaches may have reached their limits

Conventional approaches to improvement have tended to include:

• Intensive support for a few high profile projects/programs

• Investment in training or recruiting project managers

• Establishing PMOs

• Redesigning or buying new processes and systems to standardize the approach.

These changes will deliver benefit to specific programs but are often not sustained or do not deliver performance improvement across the organization.

In organizations that deliver projects, there is perpetual pressure to do it better.

This might be because customers want:

• Improved reliability: ensuring you can deliver on promises every time

• Results faster: and therefore cheaper

• New technology: driving rapid ‘ideation’ to product launch and shorter lifecycles

Or maybe you need:

• More capacity: to deliver more without increasing cost

• To focus effort on the ‘right things’: aligning better with strategy

• Increased profit: by doing things more cost effectively

• Greater market share often generated from breakout innovation


Key questions:

1. Is there a simple model to define current state and required developments to become a high performer?

2. What are the critical elements in this model that differentiate the Great from the Bad (or the Good from the Not So Good)?

3. What is the optimum organizational model to deliver the most effective outcomes?

4. Where should an organization focus efforts to become a high performer based upon its starting position?

The aims of our survey were to answer a number of questions

The survey covered two key dimensions…

Practice Maturity:

a measure of the quality of practices organizations operate

And

Delivery Effectiveness :

a measure of the quality of outcomes organizations experience as a result


The first dimension – maturity – is a key driver of delivery effectiveness – with caveats

A range of practices can contribute to, or impede, overall delivery performance:

• Design Authority practices

• Governance practices

• Portfolio management practices

• Project management practices

• Workforce management practices

• Resource management practices

• Financial management practices

Becoming more mature in these practices will, in general, improve effectiveness.

Organizational complexity and culture also play a part.


The second dimension – delivery effectiveness – is measured across a range of outcomes

The ‘right’ resources are allocated to projects based on priority, availability, skills & experience and development potential. 95% of committed FTE resources delivered to projects.

Allocation

The quality of business cases is high. Project and business-as-usual demand estimates, and subsequent re-forecasts, are realistic, enabling variances and changes to be incorporated without excessive disruption. 95% of projects completed on budget.

Demand estimating

The organization's capability profile (staff skills, numbers) is the desired shape, with sourcing used to augment capacity.95% achievement of FTE targets for project vs business as usual activities.

Supply capacity

Resource management goals are measured to show progress against a balanced scorecard (e.g. utilization, recruitment and sourcing targets). 85% utilization achieved for key project resources.

Utilization

Accountability is well understood. Achievement of respective portfolio, resource and project delivery targets drives behaviors across the organization.

Accountability

Highly transparent, dynamic tracking facilitates realignment of portfolio according to current needs, constraints. Actual value delivered meets/exceeds targets

Portfolio adaptability

The overall portfolio is optimized to maximize value and achieve a good strategic fit. 90% of projects meet strategic project criteria; aggregate value meets/exceeds targets.

Portfolio balance

Iterative/concurrent development, multi-disciplinary collaboration and streamlined decision-making optimize delivery. 20% annual reduction of projects failing to meet their objectives (cost, time & scope).

Process effectiveness

Stakeholder feedback is routinely obtained. 90% of stakeholders give a satisfaction rating of at least 8/10.Stakeholder satisfaction

Work is initiated in waves, focused on delivering quickly and regularly, with visible results through the year. 95% of projects completed to budget, on time and scope.

Delivery reliability

Portfolio outcomes

Resourcing outcomes

Project outcomes


Significant at 1%

All the practices influence effectiveness – but not all have an equal impact

Significant at 5%

2x impact of other domains

3x impact of other domains

Portfolio adaptability

Accountability

Workforce management

Project management

GovernanceDesign authorityPortfolio

management

Supply capacity

Overall effectiveness

Process effectiveness

Stakeholder satisfaction

Delivery reliability

Financialmanagement

Resourcemanagement

Utilization

Allocation

Demand estimating

Portfolio balance

Outcomes Practices


Organizations in each performance quartile exhibited stark differences

4th quartile

3rd quartile

2nd quartile

1st quartile

1. The best performers did everything appreciably better – indicating a focus on getting their organizations to work as a system

2. The essential differences between 2nd & 3rd quartile firms were in workforce, resource and financial management –the practices concerned with adequate staffing and funding of the portfolio

3. The most significant differences between 3rd and 4th quartile firms were in governance, portfolio and project management – indicating a focus on conventional areas of improvement

4. The least effective – 4th quartile –firms did most things poorly (although the Design Authority domain was a relative strength)

Mat

uri

ty

Practice domains

Design authority process

Governance practices

Portfolio management

practices

Project management

practices

Workforce management

practices

Resource management

practices

Financial management

practices


Resource and financial management are key differentiators

3.0

2.0

1.0

0.0

-1.0

-2.0

-3.0

-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0

Financial management score

Res

ou

rce

man

agem

ent

sco

re

Quartile 4 (lowest)Quartile 3Quartile 2Quartile 1 (highest)

Performance quartiles


Organizational complexity and culture play parts in improving performance

¾ of centralized organizations were in Quartiles 3 & 4

⅔ of decentralized organizations were in Quartiles 2 & 3

¾ of hybrid organizations were in Quartiles 1 & 2


Foundational practices:

• The fundamental building blocks of delivery• Key source of data to enable other domains

Overall maturity

• Consistency is key – deficits in the underlying practice domains impede overall effectiveness, but not in equal measure

Integrating practices:

• With the fundamental building blocks in place, these add demonstrable additional value – up to a point

• These domains are where organizations have traditionally focused efforts at improving overall delivery

Differentiating practices:• Ensures projects are adequately staffed and funded to deliver• The domains that appear to be under-managed by over half

of the respondents• Dependent on underlying domains and require significant

additional effort and focus

The findings suggest a layering in how organizations apply the practices

All practices

Design

Authority

practices

Governance

practices

Workforce

Management

practices

Portfolio

Management

practices

Financial

Management

practices

Resource

Management

practices

Project Management practices


Rapid improvements are possible – with efforts focused on specific improvement objectives

Time

Ove

rall

del

iver

y ef

fect

iven

ess

Gain control

Improve reliability

Increase effectiveness

Continuously improve


Improving effectiveness requires a clear idea of where you currently stand

Maturity vs Effectiveness

0%

50%

100%

0% 50% 100%

Effectiveness

Mat

uri

ty

ACME

How do you compare to your peers?

Overall outcomes – how effective is your overall delivery

Q3Q2Q1

Process – achieving efficiency/effectiveness in delivery

Accountability – taking ownership of delivery

Portfolio adaptability – tracking and adapting the portfolio to current needs

Stakeholder satisfaction – how well your delivery is perceived

Delivery reliability – how well you deliver on your promises

Portfolio balance – defining what you want to achieve

Allocation – matching demand and supply

Demand estimating – understanding what you need

Supply capacity – understanding what resources you have

Utilization – understanding what you use

Q4Outcomes

Overall outcomes – how effective is your overall delivery

Q3Q2Q1

Process – achieving efficiency/effectiveness in delivery

Accountability – taking ownership of delivery

Portfolio adaptability – tracking and adapting the portfolio to current needs

Stakeholder satisfaction – how well your delivery is perceived

Delivery reliability – how well you deliver on your promises

Portfolio balance – defining what you want to achieve

Allocation – matching demand and supply

Demand estimating – understanding what you need

Supply capacity – understanding what resources you have

Utilization – understanding what you use

Q4Outcomes

What is driving your performance ?

0%

10%

20%

30%

40%

50%

60%

70%

80%

Design Authoritypractices

Governancepractices

PortfolioManagement

practices

Project Managementpractices

WorkforceManagement

practices

ResourceManagement

practices

FinancialManagement

practices

Average - Cordis 90th percentile 75th percentile 25th percentile 10th percentileACME

Where should you focus improvements ?

PA’s survey remains open and can be accessed at: www.portfoliodiagnostic.com.


In summary, our key findings are

1. Maturity is a key driver of delivery effectiveness – with caveats

2. All the practices influence effectiveness – but not all are equal

3. Lower quartile performers appear to have focused on a subset of practices –the conventional areas

4. Resource and financial management are key differentiators

5. Non-centralized planning and delivery models appear to deliver better results

6. Focus on what you need to do to improve outcomes.


What’s next?

We will:

• Send you a copy of these slides

• Follow up with the interim report at the end of June

• Issue the next report and webinar Q3 09.

• Send you a copy of our Surviving and Thriving publication – E-mail: [email protected]

We would like you to:

• Invite colleagues and contacts to complete the survey

• Identify anyone else who may want to attend another webinar

• Provide any feedback to [email protected]

Tim Pare4601 N Fairfax DriveSuite 600 Arlington, VA 22203Tel: +1 571 227 9273Mobile: +1 571 215 1332E-mail: [email protected]

Jon Hughes4601 N Fairfax DriveSuite 600 Arlington, VA 22203Tel: +1 571 227 9800Mobile: +1 202 459 8970E-mail: [email protected]

01020 6 Ppde Webinar Slides

Documents

Transcript of 01020 6 Ppde Webinar Slides