I am in search of some good sources of information related to Program Portfolio Management (an enterprise-wide process for selecting, monitoring, and reporting on the health of an enterprise's portfolio of program initiatives). Saving Changes...
I am researching the topic of project portfolio management as a potential theme for a conference. It sounds as though this is an area where there are certainly existing questions, challenges and issues that would be important and key to address at forum like this. Can anyone suggest any other topics that might be important to cover at a conference with a focus on Selecting and Prioritizing Projects to Drive Competitive Advantage. Any ideas would be greatly appreciated in helping me to shape the agenda. Thank you, Carina 703.807-1294 Saving Changes...
If you wish to manage a portfolio of proejcts and wish to consolidate them into an enterprise wide forward load tool why now use Artemis Views. Again you'll need processes and commitment in order for the tool to work enterprise wide. Saving Changes...
The ability to view all IT projects, superprojects, expenditures, services and resources in one tool.
And you'd like to use that tool to manage the choosing and the execution of new projects, svcs, etc.
And you'd like to automatically track these using ETL tools to draw data out of other tools like MS Project, SAP, Primavera, PeopleSoft, ABT or Niku, etc.
There's really only one tool that will do this. Check out www.prosight.com or look at the link to a computerworld article that should give you an objective look at what I'm talking about.
I am interested in any project reporting tips for how to present status to management. We have regular status/progress reporting in place, but would like to be able to summarize this consolidated on a monthly basis in an easy to view format of relevant information. Does anybody have a template they could share? Saving Changes...
John SchlichterFounder| OPM Experts LLC http://opmexperts.comAtlanta, Ga, United States
This is a re-posting to the appropriate thread.
Over the past several years, an increasing number of project management practitioners have begun to talk about project portfolio management. Some people borrow principles from financial management. Others simply reuse catch phrases like "managing projects as a portfolio of real options," without really understanding what this means or how to do it. Few approach the subject systematically, and fewer understand how to develop incrementally the capabilities that underpin best practices in project portfolio management. The fact, however, is that project portfolio management is not a poorly defined concept. It is based on tried and true management techniques. Organizations can learn and implement straightforward practices that help them to realize the value of their project investments and achieve their strategic goals. The key to success is to start small and build on incremental changes to the way your organization works.
In December of 2003, the Project Management Institute will publish the widely anticipated Organizational Project Management Maturity Model (OPM3), which has been under development since mid-1998. OPM3 was essentially a research project that involved analysis of nearly 30 existing maturity models and surveys of over 30,000 project management practitioners. Over 700 volunteers have helped to develop the model. Project portfolio management was researched, studied, and integrated into the OPM3. According to the PMBOK® Guide, (p. 10), "Project portfolio management refers to the selection and support of projects or program investments. These investments in projects and programs are guided by the organization's strategic plan and available resources." PMI has defined organizational project management as the application of knowledge, skills, tools, and techniques to organizational and project activities to achieve the aims of an organization through projects. Organizational project management, then, integrates project, program, and portfolio management.
I had the privilege of leading the OPM3 effort until the final phase (i.e. book production), which is underway now and estimated to complete in December 2003. After resigning my position as the director of the OPM3 program, I launched a new firm (OPM Experts, LLC), focusing on the practical implementation of organizational project management and the ways organizations can orchestrate change to achieve maturity using practical tools. I have seen a renewed interest among my clients in project portfolio management. One client is focused on improving project management in business units on different continents with separate PMO?s while improving portfolio management decisions that are driven from a separate geographical location at the corporate office through a Global PMO. It is exciting to see the difference between theory and practice, and to learn firsthand what works and what does not. Faced with the complexity of real organizations, we find it much easier to implement best practices like "project portfolio management" if we decompose them into a series of steps, and manage those steps as an organizational change project. This approach is similar to the strategy one would use to implement the OPM3 once it is released later this year.
During my tenure as a volunteer for OPM3, I recommended several best practices for project portfolio management which were received by the OPM3 team and integrated into a draft of the model. It remains to be seen whether these and other best practices will be approved as part of the final standard. The information in this posting reflects only my "unofficial" point of view with example best practices and capabilities which I penned myself for PMI, and which may or may not be adopted in the final standard that will be released in December 2003.
I assigned copyright for these best practices and capabilities to PMI. Per PMI policy, as the developer of this particular material, I can reuse it as I see fit provided I acknowledge PMI copyright. If you wish to reuse the actual words for these best practices or capabilities, you should reference PMI appropriately.
A few of the project portfolio management best practices that I proposed to PMI for the OPM3 include:
1. Ensuring the right number of projects for limited resources. 2. Maximizing the value of the portfolio. 3. Managing risks to cash-flow that could prevent good investments in projects. 4. Determining the appropriate balance of projects within the portfolio. 5. Ensuring projects of the portfolio are aligned to strategies.
I suggested that dependencies exist among these best practices. Best practice 1 depends on 2, which depends on 3 and 4, while 4 depends on 5. A dependency between two best practices actually means that a dependency exists between one of the capabilities necessary for one best practice and one of the capabilities necessary for the other best practice. It is extremely useful to understand the dependencies between small steps (to implement each capability) when orchestrating organizational changes that will produce significant gains.
Like all best practices in the OPM3, each best practice is comprised of a series of capabilities that are achieved incrementally to produce each best practice in time. For example, consider the best practice "Maximizing the value of the portfolio." I proposed several capabilities that build up to this best practice. The capabilities are:
1. Ability to select projects and make project continuation/termination decisions to maximize the value of the portfolio.
2. Ability to determine the riskiness of each project, i.e. the variance per period in project returns for each project.
3. Ability to determine length of time the decision to invest in each project may be deferred. 4. Ability to compare the present value of assets of proposed projects to the discounted present value of the capital expenditure. 5. Ability to determine expenditure required to acquire assets of each project. 6. Ability to determine present value of assets of each project proposed for investment. 7. Ability to determine the time value of money, i.e. the risk free rate of return.
Dependencies exist among these capabilities. Capability 1 depends on 2, which depends on 7, 6, 5, and 3. Capability 3 depends on 4, which depends on 5, which depends on 6.
I also proposed that the capability "to determine the riskiness of each project, i.e. the variance per period in project returns for each project" depends on a separate best practice: "Portfolio managers and program managers assess confidence in project plans." This best practice too is achieved through a series of capabilities that an organization may develop incrementally:
1. Ability of portfolio managers and program managers to assess confidence in project plans. 2. Ability to confirm the availability of resources throughout critical paths necessary to achieve Work within allotted Duration for each project. 3. Ability to identify dependencies among all projects. 4. Ability to analyze the critical paths of all projects and to measure variance in the critical paths of all projects. 5. Ability to measure variation in activity duration values for all projects. 6. Ability to develop best, worst, and most likely estimates for durations all tasks of each project. 7. Ability to estimate duration and work for each project. 8. Ability to develop a WBS dictionary for each project. 9. Ability to confirm the scope of work for each project with the project sponsors and project customers. 10. Ability to understand the business drivers, constraints, and assumptions for each project.
Likewise dependencies exist among these capabilities. Capability 1 depends on 2, which depends on 3, which depends on 4, which depends on 5, which depends on 6, which depends on 7, which depends on 8, which depends on 9, which depends on 10. Such dependencies constitute a recommended sequence for developing the capabilities incrementally within an organization to achieve this best practice, i.e. 10, 9, 8, 7, 6, 5, 4, 3, 2, 1 in this example. Within a system of capabilities like these, small actions can have large, measurable effects. But failure to recognize a dependency can result in false starts or significant delays.
When I co-founded the PMI Metrics SIG several years ago, I had hoped that the work ahead for the OPM3 would propel the discussion of project management metrics forward throughout industry. Now that OPM3 is in its final stage I have confidence that the model will do exactly that. For each capability in the OPM3, outcomes that result from having or using each capability have been defined. For each outcome, key performance indicators using metrics also have been defined to help users assess whether the intended outcomes have been produced in their own organization. OPM3 will provide both the roadmap of dependencies among capabilities leading to best practices, and methods to assess and measure whether each capability has produced the intended results.
The best practices and capabilities described in this article reflect only a very small number among hundreds incorporated into the OPM3. If the capabilities leading to each best practice constitute roadmaps to maturity, then the entire OPM3 is like an atlas, allowing organizations to choose different domains of project, program, and portfolio management that they wish to explore and develop. While an increasing number of project management practitioners have begun to talk about project portfolio management, sometimes borrowing principles from financial management and sometimes simply reusing catch phrases, after December 2003 everyone will be able to reference a new standard that approaches the subject systematically. Like any first release, the product will not be perfect, and opportunities will always exist to refine and perfect the model. But the mere existence of the model in a tangible form will transform opinions from so many experts-of-the-week into practical steps for action that can be critiqued widely and improved. The model will propel discussion regarding techniques like project portfolio management to new levels of maturity. Users will learn about the practical implementation of organizational project management and ways they can orchestrate change to achieve maturity using practical tools. For the history of OPM3, see http://www.pmforum.org/library/papers/TheHistoryofOPM3.htm Saving Changes...
John SchlichterFounder| OPM Experts LLC http://opmexperts.comAtlanta, Ga, United States
This posting is about portfolio management processes versus tools. We describe the typical approach to implementing project portfolio managment, and we offer an alternative approach, which happens to be the typical steps in reverse. This posting offers more questions than answers in order to make you think, but very good answers exist for all of these questions. We offer some checklists as well. Enjoy.
There are some great tools on the market today that will provide a top down portfolio view. You should be able to create a "portfolio" kind of view by having Project Managers just do their job, instead of feeding multiple processes and systems to generate mediocre reports.
Do you find yourself saying the following? "Our organization has strategic priorities. How do we organize most effectively to execute priorities, i.e. deliver change with limited resources?" This is a portfolio management question.
According to the PMBOK® Guide, (p. 10), "Project portfolio management refers to the selection and support of projects or program investments. These investments in projects and programs are guided by the organization's strategic plan and available resources." The PMBOK Guide also says that a project is a temporary endeavor undertaken to create a unique product, service, or result, while a program is a group of related projects managed in a coordinated way. Now that the difference between these core concepts has been asserted, here's the punchline: Project Portfolio Management can not be implemented overnight. Several steps are required. Skip any one of them at your peril. Orchestrating organizational change is not easy. False starts can mean disaster.
Here's the typical approach to implementing portfolio management:
1) Buy a new Project Portfolio Management "PPM" tool! Hey, new software!
2) Formalize a PPM role or function (usually becomes the tool administrator)
3) Get Project Managers to input data regarding their projects into the tool, roll data up, and use data to begin Program Management activities. (Usually encounter some nasty surprises here about inter-project dependencies or resource constraints.) Vetting discussions ensue.
4) Run into difficulty comparing apples to apples. Develop standards regarding management of individual projects and begin coordinating Project Initiation.
Here's a better approach, and note it's almost the reverse of the "typical" approach:
STEP 1: Organization-wide standardization of Project Initiation STEP 2: Formalization of Program Management STEP 3: Formalization of Portfolio Management STEP 4: Bringing processes into state of "Control" STEP 5: Consolidation of Tools
Let's look at each step more closely.
STEP 1: Organization-wide standardization of Project Initiation Decentralization of Project Initiation is a typical - and effective - organizational response to rapid environmental changes, but control mechanisms must exist to introduce new work into the pool of existing work, defining links between projects, and allowing you to estimate the organization's capacity for new work. You need a framework for initiating new projects, guided by organization?s strategic priorities. You need an inventory of current projects. You need appropriate governance bodies to facilitate cross-functional decision-making.
What does a Framework for Initiation look like? - Informed consensus from any number of relevant personnel on which objectives will best drive the business - Increased credibility of investments through a systematized decision process accounting for any number of variables; accountability for every decision - Budgets with a rational balance across departments and accurate alignment of funding with corporate strategy - Ability to constantly monitor project performance, and to adapt the entire process instantly to future variables, while preserving all relevant considerations and objectives For help with your Framework for Initiation, contact "the experts in organizational project management" at [email protected]
Now ask yourself: "How do projects get started in my company?" - Does our current approach create visibility for high priority projects? - Does our current approach enable cross-functional coordination, identification of logical or resource dependencies across projects, etc.? - Do we know if projects are competing with each other? - Does our project initiation process include identification of success criteria for each project? - Are projects evaluated against the agreed upon success criteria? If so, are projects evaluated against this only at initiation or closing of projects or during execution as well? - Are actions taken based on this information?
STEP 2: Formalization of Program Management Do you believe that it's possible to practice program management well if your organization does not practice project management well? We are using the definitions of project and program from the PMBOK Guide 2000 Edition. Project: a temporary endeavor undertaken to create a unique product, service, or result. Program: a group of related projects managed in a coordinated way. What do you think?
Now ask yourself these questions: Does our organization practice program management, i.e. the management of groups of projects in a coordinated way, often with an element of ongoing operations? If so, are individual persons dedicated to this role? Is there a unique title for this role? Are they empowered to make decisions affecting their program? Do project managers report to them? Are the relationships among all projects understood?
To formalize Program Management processes, we must use a standard Project Management Process on all projects. This is essential in order to pave the way for portfolio management (which integrates program and project management). Basic information generated from each project should feed program management functions, which should assist in generating information about cross-project risks, contribution of risk to the portfolio, and resource capacity.
STEP 3: Formalization of Portfolio Management
Factors to consider for evaluation of projects can be many, e.g. level of risk tolerance, industry dynamics, availability of resources, and many other factors. Best Practice: Whatever the factors are, design them into a well defined and understood framework. Consider these elements: Organizational fit Strategic fit Potential for synergism with other projects Identify all opportunities that can be translated into projects Some balance between categories you chose ? e.g.: Transform the business (TTB) Grow the business (GTB) Maintain the business (MTB)
Now ask yourself these questions: Does anyone in our organization know whether there are objectives/benefits that our organization has chosen as strategic goals but that the current projects can not attain? Can we answer this either negatively or positively with confidence? Would we characterize the project portfolio as balanced? Why or why not?
Does risk management exist at the portfolio level? Is there a formal portfolio risk management function in our organization?
Does anyone in our organization perform an analysis of each project's contribution of risk to all other projects in the portfolio? Are actions taken based on this information?
Are the projects of the portfolio designed to achieve the strategies of our organization within an acceptable risk/time-return spread? Do we have the information necessary to determine this?
STEP 4: Bring Processes into State of "Control" If your organization has a standard project management process, do you measure this process? In other words, have you identified the critical characteristics of this process, and do you measure those characteristics directly? If your organization does measure its project management processes, has it established how much variation is acceptable?
Bringing a process into a state of continuous improvement can be thought of as occurring in four phases: 1. Standardization 2. Measurement 3. Control (elimination of special causes) 4. Continuous improvement (reduction of common causes or intrinsic variation) This is called "Process Management."
In order for a process to be stable, the outputs must be stable, how the process is operated must be stable, and in nearly all cases the inputs must be stable (which means the processes producing the inputs must be stable).
Consider the relationships between project, program, and portfolio management processes (using the PMBOK Guide's definitions for those terms). You can standardize the project management processes without standardizing program or portfolio management processes. If you?re standardizing the program management process, does this mean you should standardize the project management process too? If you?re standardizing the portfolio management, process, does this mean you should standardize the program management and hence project management processes too?
To measure the project management process, you must have standardized the process first. If the program management process integrates the project management process, then to measure the program management process you must measure the project management process too. This implies that you have already standardized both the program and project management processes. To measure the portfolio management process, you must standardize it first. If the portfolio management process integrates the program and project management processes, then to measure the portfolio management process you must measure the program and project management processes, which also must be standardized first.
To control the project management process, all inputs (including those from both the portfolio and program management processes) must be stable (which means the portfolio and program processes producing those inputs must be in control). For any process to be in control, it must first be measured. To be measured, it must be standardized.
If the program management process integrates the project management process, then controlling the program management process entails control of the project management process. Likewise inputs from portfolio management must be stable or in control. Control requires measurement, which requires standardization.
If the portfolio management process integrates the program management process (which integrates the project management process), then controlling the portfolio management process entails control of the program and project management processes. Process inputs among these processes must be stable or in control. Control requires measurement, which requires standardization.
To continuously improve the project management process, you must first control the project management process, which requires all inputs from program and portfolio management to be stable or in control, which requires the portfolio and program management processes to be in a state of control. Control requires measurement, which requires standardization.
To continuously improve a process, you must first control the process, which requires all inputs to be stable, which requires the processes that produce those inputs to be in a state of control. Control requires measurement, which requires standardization.
Sensing a pattern?
To continuously improve a process, you must first control the process, which requires all inputs to be stable, which requires the processes that produce those inputs to be in a state of control. Control requires measurement, which requires standardization.
STEP 5: Consolidation of Tools A small number of tools should help in the capture and dissemination of the information necessary to practice project, program, and portfolio management.
There must be a balance between people, processes, and tools. Lacking in any one area, they all fall apart. Use a selection task force, and do your homework before talking to the vendors. Do an in-depth self-assessment. Match the tools to your maturity level/services you will be providing.
Develop a list of characteristics (selection criteria) the software must have for both a) supporting project teams, and b) portfolio management: Support the kind of detail information you want on projects, as well as able to roll it up for executive summaries (do you want top-down or bottom-up?) Support the needs of all ?stakeholders? who are going to use and interact with the software. Needs include software that is easy to learn and use, especially vis a vis data entry. Support the processes you intend to follow when tracking projects Support project teams in the environment they will be working in (Virtual teams? Cross-functional teams?) Data base approach to storing historical information you want to gather and use ? define the nature of your repository
Get buy-in from the project team population that the demands to be made on them to enter the required information is of value to them, gives them the reports they need, and that they will have the time (or will a Project Office support them with resources here?)
Understand what standards you will be implementing ? from methodology, to training, to templates ? will the software support them?
TAKE AWAY: By doing your homework in advance, the selection team gets educated. Open issues are identified before talking to the vendors. The team will manage the vendors (equal relationship!) during the process ? get educated, gain confidence.
The bottom line: Project Portfolio Management can not be implemented overnight. Several steps are required. Skip any one of them at your peril. Orchestrating organizational change is not easy. False starts, which are easy to make unless you take the reverse of the typical approach, can mean disaster.
STEP 1: Organization-wide standardization of Project Initiation (and Project Management Process) STEP 2: Formalization of Program Management STEP 3: Formalization of Portfolio Management STEP 4: Bringing processes into state of "Control" STEP 5: Consolidation of Tools
For more information, contact "the organizational project management experts" at [email protected]
Saving Changes...
John SchlichterFounder| OPM Experts LLC http://opmexperts.comAtlanta, Ga, United States
