Frank WintersPhotographer and ConservationistSandwich, Ma, United States
In your experience, what are the benefits of Project Portfolio Management (PPM)? If you have a moment to spare, please let us know benefits you've realized or negative results that you've seen or experienced from PPM. Is PPM just another buzzword or can it deliver tangible benefits? What do you think?
Mike Cooper PMPPrincipal Project Manager (retired, sort of)| New England Project ServicesWestford, Ma, United States
In a word, a key benefit I've come across when either helping organizations create a portfolio or doing so myself, is COMMUNICATION.
This starts with visibility. There are many times when I've gone into a situation and had great difficulty understanding what people are working on, or perhaps better put, what are the major objectives of all the activities? Setting up a portfolio by just simply listing all the projects being worked on can be very illuminating.
After you have achieved initial visibility comes the real value - using the portfolio approach to communicate with senior staff what is going on - the high level status of all the projects, what new projects are in the pipeline for consideration, what projects have been completed, etc. If you get around to it, you should keep projects in the portfolio long after they have been completed to track the actual ROI achieved.
Now that this has been setup, and you can use it for regular communication, you can get smarter working with the business in terms of deciding whether an idea for a project should be turned into an actual project. In other words, working together as a team (IT and business) to manage the capacity of the IT organization. How can sensible decisions be made about whether to do a particular piece of work if it's not clear how utilized IT is and how far the current work extends into the future?
Nobody should be daunted into thinking that there is something complex about setting up and managing a portfolio. It's a bit like project management - fairly simple to understand the basics, but tough to actually do well. Just starting with a simple list of all the projects, getting that agreed with the business and executives, can put you ahead of many organizations.
Finally, not all projects have financial ROI. I'm sure Frank will address this during this series. Examples would be projects done to fulfill regulatory requirements. The financial cost of doing the work is important to understand, as is its consumption of resources, but the actual ROI may be more along the lines of "if we don't do it the CFO goes to jail". Now that's a project that probably will have no trouble getting funded!
I'm in the process of launching PPM withing my organization. Everyone agrees it's important and useful (visibility and priority setting being 2 of the main expected benefits) but people have trouble finding the time to provide the informatino required. So now I publish metrics on how many projects have a calculated ROI (those which are not compliance driven anyway), how many have a named project manager, what value is sitting in un-implemented projects, waiting to be realised, etc.
But the only real way to get it built in to the organization is to get the managers using the PPM tool to get their own data out, and to then use this data to drive their team activities. Right now people are still saying yes, nice process, but then still running their organizations and resource allocation based on gut feeling or back-of-envelope assessments rather than using the output from the PPM process.
Here are some identified benefits in my organization :
Business
Run IT like a business. 72% of all IT projects fail, come in over budget, or run past deadline (The Standish Group). An integrated tool to manage project schedule information allows project managers to better follow-up and control their projects, forecast project issues, and it enhances the possibilities of the project’s success.
Align IT with business priorities, support IT governance and improve decision-making at all management levels : program and project information can be accessed by all authorized people for better visibility and transparency of the activity portfolio and clear priorization of projects and activities. Available both detailed and consolidated information with an easy-to-use software is a tool for managers to react quickly and take the best pro-active decisions.
Communicate effectively with business partners and other stakeholders to create transparency, accountability and ownership (75% of business users perceive IT to be failing or lacking credibility – The Meta Group)
Optimize IT investments / maximize benefits: ability to log and describe all opportunities, to classify them depending on their risks, costs, benefits or business strategy, to manage them in a portfolio linked to projects, and to help prioritize and choose the best investments.
Productivity
Less wasted time by Project Managers to manage project information and solve project data processing errors. Project schedules all have integrated information without double tracking, tracked actuals are available against the project plan WBS elements, ETC are updated, project performance indicators are calculated, …
Project report processing benefits : no time needed for Excel consolidation
Resource Managers can forecast and optimize the different projects and activities resource assignments : less time wasted by resources between assignments
Efficiency
Efficient and secure environment : reduction of number of problems due to loss of information, processing errors, misunderstandings, …
Better projects, better dependicies (project and resources) against the portfolio
Better performance on time tracking
Project Managers, Resource Managers, Directors, PCOs and other stakeholders work on the content and not the planning process. They have better visibility on project costs and deadlines.
Improved project teamwork and communication: all project managers, resource managers and other people use the same tool, with the same process and same information type. Deeper team commitment to projects.
Quality improvement
All resource, portfolio, program and project information is shared in a single, supported and integrated database.
More rigor in project scheduling and monitoring
Unique definition of data element inside the company. For example, resources are defined once for all projects and activities, so that all assignments can be listed, and for all other resources information.
Quality and precision of information and its processing
No loss or duplication of information
Quality of progress report information : integrated tracking, schedule and effort performance indicators
Quality of experience register : once entered, all data can be used as experience register for projects (project post-mortem, estimations, …)
Integrity of information
Consistency between project costs, project schedules and accounting
Availability of information
Better management and visibility of project information execution: more information available on line depending only on the user rights. The project portfolio information can be managed online with all project information : list of projects showing actuals, baseline, performance indicators and other information if needed. No wasted time to search for project information, aggregate results, double track information, manipulate several versions of heavy Excel spreadsheets.
Availability of resource information:
• Resources are defined once for all projects or other activities management
• resource managers can access directly :
o the resource actuals by project, project WBS elements or other activities, to help for appraisal or other HR activities (skill database updates, …)
o the resource usage by project, project WBS elements or other activities, to help assign people, to forecast over or under allocation
CMMI metrics available : some project metrics are mandatory to be CMMI 3.
BUT it doesn't seem to be enough... My CIO wants hard dollars, that will be measured after implementation.
Does anyone can provide me with hard dollars benefits with details on calculation formulas ? Does anyone has some market figures that could help ?
As usual, another very relevant and timely article from Gantthead.
I am finding important benefits of PPM are visibility and communication.
In the new year I received some questions from our CFO on progress of one project in particular - questions he shouldn't have needed to ask, if I'd kept him better informed.
While all our projects are well documented and plans are tracked and updated almost daily, this information wasn't flowing upwards.
In response to this we have decided to put together a project portfolio for tracking and more importantly communicating progress.
I am encouraged to see I have unwittingly taken the first step to PPM here, by creating a simple spreadsheet, listing projects, with brief (very brief) summaries, status updates and expected completion dates - this links to more detailed information if required. This is placed on the Intranet for all to see. Visibility! CFO, CEO etc will then have input into priorities and direction if they don't like what they see.
Regardless of one calls it, when do we not consider ROI (mandated projects not included)? How is this different from effective project(s) management?
As stated in the article: "There is much more to be discussed regarding the nature of PPM and what makes it different from other ways of managing groups of projects, but we are not going to delve into them in this article." Looking forward to the article that does.
Thanks! Saving Changes...
Mark Price PerryBusiness Driven PMO Evangelist| BOT InternationalOrlando, Fl, United States
Dear Frank, great post and replies. I agree with you and am of the opinion that PPM can and does delivery tangible results; your article provides excellent analysis in support of this. Thanks..! -- Mark Perry, VP of Customer Care, BOT International Saving Changes...
Great article! I would like to add that an application portfolio should also be included since many large organizations doing routine maintenance work do not categorize the maintenance work as a project (from a pure definition point of view it is a process or ongoing operation - not a project; but we may treat it as a maintenance/enhancement project).
As new initiatives are added to existing applications or the maintenance costs increase due to regulatory enhancements or corrections - the ROI can similarly be reassesed in favor of retiring/replacing/rewriting.
Looking forward to the next part! Saving Changes...
Dave DavisSenior Project Manager| Cincinnati Children's HospitalSpringboro, Oh., United States
After having been involved in PPM implementation for over 2 years, I have several comments regarding its success.
1) Compliance - getting all PMs to keep their projects up to date is a must.
2) Individual style is diminished for conformance to the tool’s constraints.
3) Other organizations must adhere to the project governance model. If you are tracking issues and risk mitigation, this is critical.
4) People will blame the tool for to mask their own deficiencies.
5) The tool needs care and feeding and constant vigilance. The program manager must use the output and help define the input.
6) You need an application administrator who is knowledgeable in administration, report writing, SQL, and project management. You can't just turnkey an app and expect it to work.
Re: Improved fiscal management and communication between IT and business management - One key element of success to PMM is the alignment of the portfolio to the organization's business strategy as a first step. As the program sponsorship and funding is secured - a roadmap plan emerges that distinguishes between 'enabler' and 'foundational' initiatives. The portfolio sums to a total investment that also enables efficiency in terms of securing outside resources (software, infrastructure and services) rather than individual projects competing in a realm of scarcity. Saving Changes...
Kathryn SchwalbeProfessor Emeritus, Publisher and author| Augsburg CollegeSouth Haven, MN, United States
I'd like more clarification on what exactly project portfolio management is. I've read several of the definitions, but I want to understand its real purpose and how it really works. It can't just be tracking ROIs of individual projects. And it must be different from program management. For example, an organization would have multiple project portfolios, wouldn't they? Maybe all of their internal IT projects would be in one portfolio, they'd have another for external IT projects, another for all projects for a certain industry group (i.e. health care, constuction, etc.), another for all projects by geographic region, etc.? So couldn't the same project be in more than one portfolio? Is the main purpose of viewing project portfolio data to make better investment decisions? For example, if the returns for a certain portfolio are really good, try to do more projects that fit into that group, like a certain geographic region? Or am I way off base...? Saving Changes...
