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Project Portfolio Management Tom Westcott, CEO Project


Project Portfolio Management Tom Westcott, CEO Project Solutions Group Agenda What is Portfolio Management? Aligning projects to business strategy The project ... – PowerPoint PPT presentation

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Title: Project Portfolio Management Tom Westcott, CEO Project

Project Portfolio Management Tom Westcott,
CEO Project Solutions Group
  • What is Portfolio Management?
  • Aligning projects to business strategy
  • The project selection process
  • When do you terminate an existing project?
  • Demonstration of Microsoft UMT product
  • Becoming a PPM Organization

What is Project Portfolio Management?
  • Project Portfolio Management (PPM) is a
    discipline used to manage a grouping of projects,
    resources and assets, to effectively achieve
    organizational goals.

PPM is a Solution to a Problem
  • The biggest problems organizations face in
    achieving their objectives
  • Not realizing the benefits promised from projects
  • Competing and changing priorities on projects
  • Not enough resources to complete all projects
  • Project delays and budget overruns

PPM is a Solution to a Problem
  • PPM should help organizations
  • Maximize organizational benefits from projects
  • Choose the right projects
  • Ensure adequate resources to complete projects
  • Increase project success rate

Defining Strategic Goals/Objectives
  • Defining strategic goals and objectives is
    critical to being able to effectively manage a
    project portfolio.
  • Strategic goals and objectives help to
  • determine which project work should and should
    not be done
  • Prioritize project work
  • Establish metrics for measuring portfolio success

Linking Strategy to Portfolio Management
Buy and integrate Company X
Buy and integrate Company Y
Implement 3 additional sales channels
Grow to 2B
Develop Sales Channels in Europe
Establish survey programs
Improve Customer Satisfaction
Build Customer Survey Program
Build online survey tools
Fund university collaborative
Build industry leading competency in X
Increase Market Share
Build recruitment program
Develop catalog
Increase direct marketing efforts
Execute direct marketing campaign
Symptoms of Defective Strategic Planning
  • Project and resource managers often fight over
  • Project priorities and resource assignments
    change frequently
  • Managers have authority to unilaterally start
  • Projects are started without regard to resource
  • Completed projects do not produce expected
  • By the time change is implemented, it is obsolete
  • There is no single view of all projects how they
    relate to strategic goals
  • Significant turnover at the senior management
  • The strategic objectives are a list of
    initiatives without priorities, benefit analysis,
    dates or sequencing

Symptoms of Defective Strategic Planning
  • If an organization is constantly changing project
    priorities, this is a red flag that the entire
    strategic planning process is out of control!

Defining the Portfolio
  • The portfolio of projects exists only to deliver
    results for the strategic goals of the
    organization. This involves a top-down planning
  • When project are identified outside of the
    strategic planning process, they must be
    evaluated against the strategic objectives and
    then against the current portfolio.

Project Portfolio Prioritization (forced)
  • Purpose of prioritizing your project portfolio is
    to determine which projects
  • should be done
  • can be done
  • get funded
  • start when
  • get terminated
  • get strategic (scarce) resources

Align Investment to Strategy
  • Optimization of project selection promotes
    strategic priorities

Resource Constrained Project Scheduling
  • Consider these 2 scenarios
  • Scenario 1 Resource A is working on 2 projects
    simultaneously (50 on each).
  • Scenario 2 Resource A works on one project (at
    100) and then begins the second project when the
    first is complete.

Resource A (50)
Resource A (50)
Resource A (100)
Resource A (100)
Ongoing Measurement Analysis
  • Just by observing a system, you change its
    behavior the Observer Effect, Heisenberg's
    Uncertainty Principle
  • The purpose of a measurement system is to drive
    the parts to do what is good for the system as a
    whole. Dr. Eli Goldratt, Theory of Constraints
  • To be able to manage, you must be able to
    control, and to be able to control, you must be
    able to measure. Thus, if you cannot measure,
    you cannot control and if you cannot control you
    cannot manage!

Ongoing Measurement Analysis
  • Since measurement changes and affects behavior,
    it is critical to choose the right measures and
    apply them in the right way to achieve the
    desired results.
  • One of the biggest failures of organizations is
    measuring the wrong factors.
  • Tell me how you measure me, and I will tell you
    how I will behave. If my measurements are
    unclear, then no one can predict how I will
    behave, not even me! Dr. Eli Goldratt

What is Project Portfolio Management?
Alignment is the essence of management Fred
Smith, Chairman Federal Express
Management Discipline improves alignment
between strategy planning and business/IT
strengthens governance improves project
definition, portfolio selection, resource
planning and executive reporting Comprehensive
Project Inventory develops and captures new,
ongoing and carryover work centrally to provide
transparency around how key Business Drivers are
supported and how resources (/FTE) are
dispersed Transparent Actionable Decisioning
Framework provides ongoing and actionable
portfolio analysis and reports to the
decision-makers to enable improved investment
viability and accountability
PPM is a management discipline that helps
organizations achieve maximum project portfolio
value through the continuous process of
evaluating and managing projects against key
performance metrics and strategic business
Workflow With Roles Responsibilities provides
clearly defined
roles and responsibilities
throughout the process and Governance framework
Analytical software toolset leverages
toolsets to capture project inventory and to
ensure optimal, consistent and fact-based
portfolio selection and planning decisions by
simultaneously evaluating and comparing competing
project ideas and resource needs (e.g., what-if,
sensitivity analysis, optimization, etc.)
Organizations Utilize Both Disciplines
Governance Process Definition
Portfolio Management answers the following
Request Management
Business Case Development
Portfolio Prioritization / Valuation
Have I selected the right investments?
Portfolio Optimization / Selection
Do the investments align with the strategic
Business Technology Stakeholders
Portfolio Program Management
Do I have sufficient resources to deliver the
selected investments?
Will the investments be delivered on time and
within budget?
Are my investments delivering the forecasted
Program Portfolio Reporting
Benefits Realization
Investment Effectiveness
Even with the advent of portfolio management, in
use by over 50 of organizations today and better
project management techniques, 40 of the value
of projects is lost. However companies that have
put their focus on selecting the right projects,
the right way, at the right time are attaining a
yield of 90 or more from their projects1.
Best Practice Company Today
Average Company Today
lt10 Value Lost
Effective Use of Resources
40 Value Lost
Portfolio Management

Ability to Identify Business Value Potential
Project Mgt.
Ability to Identify Business Value Potential

gt90 Value Realized
60 Value Realized
Efficient Project Delivery
Ability to Realize Business Value Potential
Ability to Realize Business Value Potential
1Source Dr. Howard Rubin Meta Group
Project Portfolio Lifecycle
Determine Selection Criteria
  • Gather C-level personnel and identify goals and
  • Goals should be quantifiable
  • Strategies should be objective
  • Projects should be specific plans to achieve
  • Improve Financial Performance
  • Expand into new markets and segments
  • Increase market share in existing markets
  • Reduce expense base
  • Maximize Organizational Efficiency
  • Expand into new markets and segments
  • Improve Customer Satisfaction
  • Improve customer satisfaction score
  • Improve product quality
  • Reduce Turnover
  • a) Improve employee satisfaction

Prioritize Selection Criteria
  • Conduct Pairwise Comparison session with
    C-Level personnel

Consistency Rate is important!
Project Portfolio Lifecycle
Project Portfolio Lifecycle
Project Portfolio Lifecycle
Evaluate Project Portfolio
  • Coordinate with SMEs and middle managers to
    align projects to strategies

Result Project Priorities
Project Portfolio Lifecycle
Were not done yet . . .
  • Model portfolio based on constraints (i.e. cost,
    resource, etc)

Project Portfolio Lifecycle
Project Portfolio Lifecycle
Project Portfolio Lifecycle
Project Portfolio Lifecycle
Project Portfolio Lifecycle
Terminating Projects
  • Just because a project has been initiated,
    doesnt mean it should never die!
  • At each stage-gate, evalute project against
    strategies and criteria.
  • Ask questions

What is the probability that the project will be
commercially successful?
Is the project still aligned with strategies?
What is the probability that the project will be
technically successful?
How is the project performing against target
Does the project still represent effective use of
the firms resources?
PPM Stakeholders
  • Project Portfolio Servers PPM features address
    executive concerns, opening doors
  • CEO/Strategy Mgt. Officer
  • Operationalize strategy
  • Executive level strategic consensus
  • Chief Information Officer
  • Business value-based prioritization
  • Resource commitment control / budgeting tool
  • Often the starting point for PPM maturity growth
  • CFO
  • Optimize investment allocation
  • Standardized financial forecast and tracking
  • Project Sponsor visibility
  • PPMO
  • Real-time visibility
  • Project Life Cycle framework
  • Reportable repository
  • Inter-project coordination
  • Skill leverage escalation
  • LOB Executives
  • Business benefit linkage
  • Higher strategic ROI
  • Clear resource demands

MS PPM Solution Architecture
Integration with Tools People Know
Team Participation Executive Reporting
Easily Create Enterprise Project Plans
Project Web Access
Project Professional
XML-based API
Project Documents, Issues/Risks Tasks
UMT Demonstration
PPM Maturity?
  • How are projects currently selected in your
  • Ad Hoc or Random
  • Selected individually on a case by case basis
  • Evaluated against other projects based on
    financial ROI OR against other projects based on
    strategic goals
  • Evaluated against other projects based on
    financial ROI and strategic goals
  • Financial ROI, strategic goals AND optimized,
    given budget and resource constraints
  • What is your biggest PPM-related concern?
  • Governance (inconsistent PPM governance processes
    across organization)
  • Monitoring (Lack of reporting/monitoring
  • Consistent Valuation (Difficult to compare
    projects because of inconsistent valuation
  • Alignment (Ineffective processes to align
    investment ideas to business strategies)
  • Transparency (Poor visibility and missed

Roadmap to PPM Maturity in the Organization
Enterprise PPM is optimized across the
enterprise with a focus on continuous risk
mitigation and value creation Project portfolio
performance and risk data is understood and can
be compared at the individual, cross-LOB, and
enterprise levels Senior leadership is able to
leverage PPM analysis when allocating funds to
various portfolios Ability to measure and
benchmark entire portfolio lifecycle
Our Opportunity
Cross Portfolio PPM is adopted and used
consistently across multiple organizations and
portfolios Portfolio Analysts can compare and
leverage portfolio analysis information across
multiple departments Consistent measures enable
cross portfolio analysis, selection, planning and
management that supports predictive modeling and
internal / external benchmarking
Portfolio Value Value Potential x Ability to
Project Portfolio Portfolio analysis is
repeatable, predictable, and consistently used to
evaluate and optimize project portfolio selection
Portfolio Management teams are able to
understand, analyze, recommend optimal
portfolio bundles and schedules to technology and
business partners
Value to Organization
Project Inventory Processes are defined
documented, and most projects are aligned to
Business Driver All projects are consistently
captured in a project inventory
Ad hoc No Portfolio Inventory or
Process -Just Do It/FIFO -Success is
random -Poor transparency
Stages of Excellence
Implementing a PPM Process
  • Gain Senior Management buy-in
  • Take a phased approach
  • Develop governance process
  • Use proven PPM tools
  • Develop consistent set of strategies and drivers
    and weight their importance
  • Optimize the portfolio against constraints
  • Continue to monitor portfolio execution and
    benefits realization

Gaining Control Success Stories
UMTs solution led our Senior Executive Team to
increase the 2004 IT Budget to allow additional
projects to be funded based on their proven
Strategic Value. there was much less
skepticism about the value of the projects and a
richer dialogue about IT and business strategy.
it's re-established our credibility and trust
and has allowed senior officers to get engaged
with IT at a much more strategic level."
Wachovia is using UMT Portfolio Manager by
using the specialized tools, it allows a much
higher degree of interactivity and
participation. Its been extremely well
received by our business partners. Some business
units are even using the tools on non-technology
projects. It isnt fundamentally about cost
savings. Its about resource allocation.
Allan Shub VP Retail Wachovia
Frank La Rocca CIO KeySpan Energy
UMT Portfolio Manager helps agency heads and IT
managers to have a greater awareness of all IT
projects that are being worked on.
"we saved 5 to 10mm out of a 50mm budget in
the first year alone on projects that would have
automatically gone through before.
Paul Bateman Dir. Enterprise Governance AXA
Tom Runkle Dir. Enterprise Projects State of
North Carolina
Whats Next?
  • On-Site Executive Briefing on Project Portfolio
  • In this two-hour briefing we will discuss how
    your organization can take advantage of one or
    more of the following benefits
  • Determining appropriate project selection
  • Connecting your business strategy to the project
    selection criteria
  • Preventing problem projects from making it into
    the pipeline
  • Identifying terminating non-strategic projects
  • Using technology to optimize your portfolio and
    gain real-time visibility
  • Determine ROI on current and future projects
  • Properly staging projects for the highest ROI

Includes an interactive demonstration of
Microsofts PPS solution
Whats Next?
  • Strategic Project Portfolio Management Training
  • This 3-day intensive training class will cover
  • Fundamentals of Project Portfolio Management
  • Understanding why managers need to care about
  • Understanding the process of value realization
    from projects
  • Knowing your organizations strategy through
    three market disciplines
  • Linking an organizations strategy with
    enterprise project management strategy
  • Knowing, leading and working within your
    organizations strategy
  • Developing and managing the project business case
  • Implementing Project Portfolio Management
  • Using a process to implement project strategic
  • Assessing project alignment with the
    organizations strategy
  • Leading and managing when the organizational
    strategy is fuzzy or does not exist
  • Using financial success criteria measures for
  • Leading and communicating project strategy with
    project sponsors
  • Linking business and project management strategy
    with a PMO
  • Examining best practices of a project executive
    governance board
  • Developing and effectively using a skill-based
    resource pool

Whats Next?
  • Project Portfolio Management Webcast
  • For everyone who would like to share this
    information with others at your organization,
    Project Solutions Group will be holding two
    webcasts of our Executive Seminar on Project
    Portfolio Management.
  • November 21, 2006  1000 AM - 1130 AM (ET) to
    register https//
  • December 19, 2006 1000 AM - 1130 AM (ET) to
    register https//

Contact Information
  • Project Solutions Group
  • Tom Westcott, CEO
  • 508-579-1112
  • Tod Monchecourt, VP Sales
  • (617) 448-5674
  • Andy LaGarde, Senior Account Manager, New England
  • (617) 448-5119
  • Kristin Hanley, Practice Manager, New England
  • (781) 883-4415
  • Microsoft
  • Alban deBergevin