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Gartner Shares the Most Important PPM Trends for 2014• Donna Fitzgerald

Gartner Research VP, Program & Portfolio Mgt.• Ben Chamberlain

UMT360 Chief Product & Marketing Officer

IntroductionsDonna Fitzgerald• Gartner Research VP focused on Project

& Portfolio Management• Combines a unique blend of thought

leadership & industry practitioner experience

Ben Chamberlain• UMT360 Chief Product & Marketing

Officer• Over 12 years experience of building

Portfolio Management solutions on-top of the Microsoft platform

The Value Driven Future

Doing What You’ve Done Successfully in the Past Will Generally Cause You to Fail in the Future

The bridge can be built by focusing on Value & better Portfolio Management

80% of PMOs are

below level 3

The 7 Steps Toward the Chasm and Why Most Managers Won’t see if Coming

The competitive landscape is in constant Flux

Organizations have already taken all the easy cost reductions

The focus shifts to competitive advantage

This makes the success of the planned investment more important

Success therefore isn’t completion of the project –it is Value Generated

Value Generated requires the project to deliver the things that enable the value generation

Maximum Value Generation generally entails CHANGE

Unless you know to look for it…

You won’t see the impact of these changes until your organization has passed step 4

Then by the time You see the need to change

it’s too late…

2 3 4 56 7

1

What Does This Focus on Speed and Value Really Mean for Your PMO?

• All projects need to be clear on what substantive value they are delivering before they are approved

• Post project value assessments are only meaningful if you understood what measurable value you were expecting

• True Value can be nebulous but the components that are used to build it out should be measurable. Techniques like value chain and results chain will help. 6

“I don’t want to see anything about on-time and on-budget

in your reports. Going forward it’s all about value delivered”

Midwestern insurance company CIO

Resources• Tacit Knowledge• Thought Leadership• Commissioned

Research

Curriculum• Outcome driven• Execution

alternatives

Member Success• Respect as

measured by press• Good

Compensation

Valu

e C

hain

How Do You Measure Value?

• Value is not always financial but it is most often expressed in financial or measurable terms

• The Project Manager is in the driver’s seat and requires the tools and information necessary to reach the Value destination

• The PMO must design systems and processes that support this goal• Virtual Business Case• Strategy or Value statements • Deliverable based progress

measurements

The average Level 2 PMO scores a 2.16% on the maturity curve for their value and financial expertise

How is Value Generation Different from Benefits Realization?

• Benefits are contingent on a host of factors that are external to the project

• The measurable Value delivered by a project might be a contributor to a benefit or it might the enabler of the benefit itself

• Value can be continuously checked over the life of the project to make sure all assumptions still “make sense”

Portfolio Focus

FinancialFocus

Product Focused

Value

When Gartner Measures Value & Financial Management Capabilities What are We Measuring?

• Projects and programs are approved in a portfolio context only

• Projects are evaluated for the degree to which they support strategy as part of the initial portfolio process

• Each project consciously defines how the benefit realization process will be tracked

• The portfolio supports dynamic reviews based on progress to date and benefit to be delivered

• Programs/projects are chartered to deliver the full scope of required change and are not siloed to a single area (i.e. IT runs one project and the business runs another)

The Value Based Portfolio Transcends IT

Begin by Adopting an Enterprise Perspective Even if You Still Work in IT

IT Centered Projects

Benefit Centered Business Projects

Customer Facing Apps

Business Capabilities

Measurable Benefits

Strategy Execution

IT PM Processes

Technology Deployments

Accounting for Value

Enterprise Portfolio

Roadmaps & Blue Prints

S/W Product Development

Clearly Delineate What Lever a Project will Turn to Generate Value

Benefits Realization Plan

Program Plan

Results Chain

Help Your Organization Invest First in What Delivers Maximum Value NOW….

Strategy A Strategy B Strategy C Strategy D

Finance Project 1Project 5Project 10

Project 4

Customer Facing Project 3Project 12

Process Improvement

Project 2Project 9

Project 8Project 13

Project 11Project 14

Project 6Project 15

Innovation/Learning and Growth

Project 7

And no – this isn’t short term thinking – This is real prioritization

Ensure Your Tracking System Is Measuring the right things• Track the time (Estimate to

Complete)• Track the dollars (Actuals and

Forecast)• Track the deliverables

• Forget about gates – Projects live or die by milestones

• Track the people – • the good ones are rare and can

only be spent once

This is a simultaneous equation requiring optimizing forMaximum Value across competing priorities. Finally remember…

It’s you, rather than Management, who is responsible for the analysis

Use an Integrated Portfolio Approach Once You’ve Mastered the Other Disciplines

Re-orient Your PMO to Successfully Cross the Chasm

The Investment Units of the Future Will be Defined Differently Than in the Present

• Today everything is either a Project or it’s operations• Tomorrow there will be:

• Programs for large change• Projects for Intra-organizational change (which includes IT)• New Product Develop efforts for software that touches the

customer (and might produce revenue)• Product Releases for continuous change to maintain business

capabilities• Continuous change efforts (Kaizan, Workouts) and IT bug fixing• Initiatives – speculative, exploratory work that might produce

something new but also might determine that something shouldn’t be done

The Investment Units of the Future Will be Defined Differently Than in the Present

• Today everything is either a Project or it’s operations• Tomorrow there will be:

• Programs for large change• Projects for Intra-organizational change (which includes IT)• New Product Develop Efforts for software that touches the customer

(and might produce revenue)• Product Releases for continuous change to maintain business

capabilities• Continuous change efforts (Kaizan, Workouts) and IT bug fixing• Initiatives – speculative, exploratory work that might produce

something new but also might determine that something shouldn’t be done. An

d it

will a

ll ta

ke m

oney

that

mus

t be

acco

unte

d fo

r in

the

portfo

lio

And to Make it Worse Current Funding Models will Change in the Future

Operations/Production

Product Dev &

Evolving Shared

Value chain

Control &complianc

eCorporate

CAPEX

Emergent Responses

withinSBUs &

Functions

Coordinated &/or Shared Budgets

Frequent Ad Hoc Funding

Planned FundingCycle

Independent Budgets

The PMO of the Future:

• Will be a Portfolio Office

• Will think and speak in the language of “Money”

• Will be consultative and analytical

• Will understand Value and how the business can generate it

• Can judge when an investment is going south before it’s too late and is not afraid of confrontation

• Understands that projects/programs and products are complex adaptive systems and that uncertainty and possible failure are a normal part of the equation

• Is regarded as a trusted advisor and honest broker by everyone involved.

20

Action Plan for PPMLeadersMonday Morning:

• Adopt a financial focus to support the generation of value and to support “speaking the language of money”

• Develop a collaborative approach to business cases that focuses on the measurable value from the project.

Next 90 Days:• Use a portfolio tool that will support a value and strategy

focus.• Provide transparency and visibility of the portfolio and

ensure that funding decisions are made in a portfolio context

Next 12 Months:• Insure your analysis includes all interdependencies

(including impacts on the application portfolio and your service portfolio)

• Encourage the adoption of product management by requesting a road map to assist with the portfolio process

Enterprise Portfolio Management

Take Your PMO to a New Level

2011 2012 2013 2014$0.00

$400,000,000.00

$800,000,000.00

$1,200,000,000.00

$1,600,000,000.00

$2,000,000,000.00

Demand vs. Capacity ChallengeOperational costs limit innovation

Run

Run

Total Demand for Growth

Overall Capacity for Growth

The Gap is Growing!

Grow & Transfor

m

Grow & Transfor

m

Sp

en

d in

$b

n

2011 2012 2013 2014$0.00

$400,000,000.00

$800,000,000.00

$1,200,000,000.00

$1,600,000,000.00

$2,000,000,000.00

Demand vs. Capacity ChallengeOperational costs limit innovation

Run

Total Demand for Growth

Overall Capacity for Growth

Closing the Gap!

Grow & Transfor

m

Run

Sp

en

d in

$b

n

Run

Grow & Transfor

m

Business Process / Capability

Application

IT Services

Projects

Maintenance

Rationalizing Run InvestmentsPortfolio Relationships & Financials Intelligence is Key!

$

$

$ Application

IT Services

Projects

Maintenance

$

$

$

$ $

$

Integrate Business

& IT Portfolios

Drive Complete Financial

Transparency

Assets & Projects are

Business Investments

Synchronize Roadmaps & Gauge

Cross Portfolio Impact

Maximize ROI from Strategic InitiativesTraditional PPM is Failing to Deliver Anticipated Results

18%

43%

33%

33%

Of projects fail to get implemented

Of completed projects have cost overruns

Of all projects are delivered late or over budget

Of projects do not meet their goals or business intent

Gartner

PMI

Standish Group

Standish Group

54%46%Unrealize

d Business

Value

Realized Business

Value

Maximize ROI from Growth InitiativesTrifecta of Business Value Erosion

54%46%Unrealize

d Business

Value

Realized Business

Value

PPM+

Innovation & Estimating

Project Success Rates

Budget Utilization

Traditional PMO Enterprise PMO

Investment Focus Responsible for discretionary spend for projects

Visibility across all spend, both lights-on and discretionary

Portfolio Focus Responsible for managing project portfolios only

Responsible for integrating all portfolios and mapping to business capabilities

Innovation & Portfolio SelectionDemand is consolidated from bottom up requests from across the business

Higher quality demand is generated from analysis of business capabilities / products

Funding & AllocationFunding allocated by department and organization utilizes an annual planning model

Funding allocated by business capabilities and teams empowered to adopt a dynamic planning model

Portfolio Tracking & Measurement

A tactical focus on managing schedules, resources and scope

More emphasis on tracking project financial performance & maximizing ROI across the investment portfolio

Benefits TrackingBased on project level ROI and often no process for tracking actual benefits

Benefits realization framework established at program or capability level

The Essential Shift from PPM to EPMTake Your PMO to a New Level

UMT360 – Enterprise Portfolio Mgmt.Digitalize Investment Planning & Controls

Financial Transparency

Connected Enterprise Portfolio Intelligence

Synchronize Roadmaps

PPM+

PPM+

PPM+

Financial Intelligence

Application Portfolios

IT Business Mgmt.

UMT360 Solutions

in the Magic Quadrant for Integrated IT Portfolio Analysis (IIPA).

Visionary

2013 in Project and Portfolio Management.

Partner of the Year2013 in Program and

Portfolio Management.

Cool Vendor2012

UMT360 - Project Financial IntelligenceIntegrated Project & Portfolio Financial Controls

Investment Governance & Controls

Business Case

Analysis

Allocation & Funding

Cost Tracking& Variance Analysis

Change Request Mgmt.

ERP Connector / Integration

Program Mgmt.

Chargeback Reporting

Benefits Realization

Financial Dashboards & Reports

PerformanceMetrics

Project Financial Intelligence

Cross Portfolio

Mappings

Application Catalog

Portfolio Analytics

Cost Takeouts &

Benefits Realization

PerformanceMetrics

Application Portfolio Mgmt.

Chargeback Reporting

Cost Tracking & Variance Analysis

Demand Generation

Budgeting, TCO &

Funding

Application Roadmaps

Change Mgmt.

Dashboards & Reports

Investment Governance & Controls

UMT360 - Integrated APM & PPMGet More Business Value from your Applications

Thank YouVisit www.UMT360.com to learn more.

Ben Chamberlain

UMT360 Chief Product & Marketing Officer

ben.chamberlain@umt360.com