Project Portfolio Management (PPM)

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• Project Portfolio Management (PPM)

Microsoft Office Project Portfolio
Server Ann-Charlotte Arrhenius anarrhen_at_microsoft
.com

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UMT have a Proven Track Record

• UMT, established in 1989, specializes in project
  portfolio management, and deploys the most
  sophisticated software tools available today.
• With offices in New York and London, UMTs
  consulting services enable companies to manage
  their project portfolios throughout their
  lifecycle. Our software was recently sold to
  Microsoft to be added onto the Enterprise Project
  Management Solution.

• We have implemented PPM solutions in over 50
  clients within Fortune 1000 type companies. Our
  solution enables companies to Create, Select,
  Plan and Manage their project portfolios at all
  levels.
• As the pioneers and thought leaders of this area
  we believe we are genuinely the best at what we
  do, which is making your strategy work
  effectively.

Voted World 1 in the 2004 MetaSpectrum Review of
PPM
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Project Portfolio Management
Real-time Executive Decision Support
Portfolio Management
CorporateStrategy
Alignment with Business Objectives
Investment, Resource and Prioritization Decisions
Integrated Portfolio of Managed Projects
PMO / EnterpriseResource Management
Integrated Delivery Framework
Programs andInitiatives
Consistent, Repeatable Project Delivery
Project Management
Projects
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Select Deliver the Right Investments
Portfolio Management enables organizations
identify and select the investments that will
maximise Business Value
100
50 Value Lost
Portfolio Management
Project Management ensures organizations to
successfully deliver the investments and realise
the Business Value
Project Management
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Select the Right Projects
50 Value Realized
75
100
0
Deliver the Projects Successfully
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To Be Successful Organizations Require Both
Disciplines
PORTFOLIO MGT, Process Definition Governance Be
nefits Forecasting Prioritization /
Valuation Portfolio Optimization Adv Portfolio
Analytics Capacity Planning
PPM answers the following questions
Have I selected the right investments? Do the
investments align with the strategic
objectives? 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 benefits?
?
?
PROJECT MGT. Project Planning Cost
Management Resource Management Time
Reporting Change Management Issue
Management Status Reporting Earned Value Analysis
?
?

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Portfolio Reporting Benefits Realization
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What is Project Portfolio Management (PPM)?
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
objectives.
?
?
?
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.)
?
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Overview

• Reasons for project failure are plentiful
  emphasis on execution failure and / or lack of
  project management capabilities
• Is this the only - or even the primary -
  dimension to reduce value of the project
  portfolio?

• This presentation suggests that when selecting
  projects, it is essential to take a portfolio
  view, rather than a project by project view
• It will discuss how effective selection
  techniques can be applied in practice

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Benefits of a Portfolio Management
ApproachConfidence, Transparency and Flexibility

• Key Benefits
• Creates a common currency for comparing
  investments and making better-informed decisions
• Ensures decisions made according to supportable
  data, not politics or noise
• Reduces senior management time spent on
  decision-making
• Reduces overall spend by eliminating low value
  investments
• Uses a benefits-led approach to delivering
  strategic projects
• Enables greater focus on high-value initiatives
• Promotes organisational agility through modelling
  of what-ifs and other detailed scenario analysis

• Specific Examples
• ..we saved 5 to 10mm (out of a budget of 50mm)
  in the first year alone, on projects that would
  have gone through automatically before Paul
  Bateman, Director of Enterprise Governance, Axa
  Financial
• UMTs solution led our Senior Executive Team to
  increase the 2004 budget to allow additional
  projects to be funded, based on their proven
  strategic value Frank LaRocca, CIO Keyspan
  Energy
• Capable of solving exceptional business
  problems MIT Sloan Review, May 2004

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Success Comes With Iteration Increasing
SophisticationMoving Up The Portfolio Maturity
Curve
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
PPM Maturity Stages
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
Realize
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
Basic
World-Class
Crawl
Walk
Run
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Portfolio Mgmt Synergies Between APM PPM
The Task of Continuously Renewing the Company
Assets Capabilities is the Greatest Challenge
Facing any CEO and CIO
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Portfolio Prioritization Optimization

Ensure the selected project portfolio aligns with
the organizations strategic priorities
Create
Select
Plan
Manage
The next slides provide an overview of the
Business Alignment Framework embedded in the
Portfolio Optimizer
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Business Alignment FrameworkBusiness Driver
Definition
The Business Alignment Framework ensures a
Rational rather than Emotional approach to
project selection
Define
Prioritize
Optimize
Select
1
2
Define Business Drivers Impact Statements
Prioritize Business Drivers
4
5
Optimize Project Requests
Optimize Project Requests
3
Select Portfolio

• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis

New Project Requests
Prioritize Requests

• Strategic Value
• Financial Value
• Risk

Carry-Over Requests
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Portfolio BuilderCreate Business Case
Development
Capture all project requests within a central
repository and define business case templates to
standardize the data collection across the
organization.
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Pre-defined workflows ensure the projects are
subjected to the appropriate governance controls
throughout their lifecycle (i.e. proposal to
post-implementation).
2
Capture Project Requests / Ideas
Governance Workflow
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Business Alignment FrameworkBusiness Driver
Definition (Theory)
Business Drivers are a series of short, sharp
statements that express the shared focus of the
organization in actionable terms
Strategic Goal 1
Strategic Goal 2
Business Driver 1
Business Driver 3
Business Driver 2
Business Driver 4

• They Are Attainable
• They Are Unique
• They Are Clear to Decision Makers

• Business Driver Criteria
• They Address a Strategic Goal
• They Are Actionable
• They Are Measurable

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Business Alignment FrameworkBusiness Driver
Definition (Example)
Strategic Goal
Dedicate our resources to those market areas
where we can maintain our existing client base
and increase share of market of current clients
Business Driver Name
Business Driver Name
Grow Customer Share of Wallet
Retain existing clients
Business Driver Definition
Business Driver Definition
Sell additional products to existing clients
Maintain clients and remain competitive in
existing markets
KPIs

• Increase of Market Share
• Increase in Revenue

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Business Alignment FrameworkImpact Statement
Definition (Theory)
Impact Statements are derived from KPIs and used
to quantify the impact of each project request
against each of the Business Drivers
Business Driver 1
Business Driver 2
Extreme
Extreme
Strong
Strong
Project
Moderate
Moderate
Low
Low
No Impact
No Impact

• The Impact Statements should clearly communicate
  the metrics that define the level of impact a
  project request may have on Business Drivers.
• Note Existing KPI's / Balanced Scorecard/ Other
  metrics may be used
• Impact Statements ensure that each project
  requests impact on the Business Drivers are
  evaluated consistently using the same metrics.

• The Role of Impact Measures
• Impact Statements are defined by the Executive
  team
• Impact Statements provide a quantifiable link
  between the measurable Business Drivers and the
  project requests.

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Business Alignment FrameworkImpact Statement
Definition (Example)
Driver Name
Grow Customer Share of Wallet
Definition
Sell additional products to existing clients
Thresholds
Impact Statements
Associated KPIs
Extreme
Increases Revenue per client by more than 15 and
increases Market Share by 5

• Increase of Market Share
• Increase in Revenue

Strong

Increases Revenue per client by between 8
-14.99 and increases Market Share by 2 - 4.99
Moderate

Increases Revenue per client by between 3 -
7.99 and increases Market Share by up to 1.99
Low

Increases Revenue per client up to 2.99 and
increases Market Share up to 1.99
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Business Alignment FrameworkPrioritization
Optimization
The Business Alignment Framework ensures a
Rational rather than Emotional approach to
project selection
Define
Prioritize
Optimize
Select
1
2
Define Business Drivers Impact Statements
Prioritize Business Drivers
4
5
Optimize Project Requests
Optimize Project Requests
3
Select Portfolio

• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis

New Project Requests
Prioritize Requests

• Strategic Value
• Financial Value
• Risk

Carry-Over Requests
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Business Alignment FrameworkBusiness Driver
Prioritization
The Pairwise Comparison is a proven technique for
deriving relative priorities or weights for
Business Drivers through performing one-to-one
comparisons.
Indicates relative importance of Driver A vs.
Driver B (row vs. column)
Compares the relative importance of Driver B vs.
Driver C (row to column)
Steps to Success Assess Divergence of Opinion
Each Stakeholder involved in the Business Driver
Definition should prioritize the drivers
independently Build Consensus Invite all
stakeholders to a Prioritization Workshop and
collaboratively complete the Pairwise Comparison
Matrix. Encourage the group to openly discuss the
importance of each Business Driver pairing for
the upcoming planning period.
The same stakeholders who defined the Business
Drivers should prioritize them. This ensures
consistent understanding and better buy-in to the
priority assessment conclusions.
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Business Alignment FrameworkPrioritization
Optimization
The Business Alignment Framework ensures a
Rational rather than Emotional approach to
project selection
Define
Prioritize
Optimize
Select
1
2
Define Business Drivers Impact Statements
Prioritize Business Drivers
4
5
Optimize Project Requests
Optimize Project Requests
3
Select Portfolio

• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis

New Project Requests
Prioritize Requests

• Strategic Value
• Financial Value
• Risk

Carry-Over Requests
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Portfolio OptimizerSelect Portfolio
Prioritization
Use proven techniques to define and prioritize
business drivers
Assess the impact of each project request against
the prioritized business drivers
Business Drivers
3
4
Projects
Prioritize Business Drivers
Strategic Impact Assessment
Derive a priority score to evaluate each project
request (i.e. Strategic Value, Financial Value,
Risk)
Analyze the project portfolio before attempting
to make funding decisions
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5
L - Priority - H
Investment Maps
Prioritize Projects
Cost
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Business Alignment FrameworkPrioritization
Optimization
The Business Alignment Framework ensures a
Rational rather than Emotional approach to
project selection
Define
Prioritize
Optimize
Select
1
2
Define Business Drivers Impact Statements
Prioritize Business Drivers
4
5
Optimize Project Requests
Optimize Project Requests
3
Select Portfolio

• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis

New Project Requests
Prioritize Requests

• Strategic Value
• Financial Value
• Risk

Carry-Over Requests
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Portfolio OptimizerSelect Portfolio
Optimization Analytics
Benchmark the selected portfolio against the
Efficient Frontier
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Utilize sophisticated optimization algorithms to
maximize the portfolios strategic value under
varying budget constraints (i.e. cost, resource
etc.)
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Efficient Frontier Modeling
Calculate and communicate the selected
portfolios alignment with the organizations
strategic priorities
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What If Analysis
Business Alignment Analysis
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Portfolio Planner DashboardPlan Manage
Schedule and Track the Portfolio
Identify resource surpluses and deficits across
the planning horizon and maximize resource
utilization by proactively scheduling the project
portfolio to best fit the available resources.
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Portfolio Scheduling
Resource Surplus Deficits
Create real-time project and portfolio
performance scorecards to ensure Executives and
PMOs gain visibility, insight and control across
project portfolios within the organization.
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Portfolio Dashboard
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The UMT Portfolio Management architectureModular,
proven, leading-edge software
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MS Project Server Integration Synchronising
Project Update with Portfolio Analysis
UMT Portfolio Manager
Microsoft Project Server
Note Workflow is configurable and customizable
per client specification.

• UMT Portfolio Manager and MS Project Server
  integration points
• Project ideas are entered and analyzed before
  being selected in the UMT Portfolio Manager and
  exported to MS Project Server to enable detailed
  project planning (e.g., task level).
• Detailed project plans can be synchronized with
  the projects in UMT Portfolio Manager in terms of
  schedule data (i.e. at the phase and milestone
  level only) and resource data (i.e. by competency
  or skill type)
• Resource availability data can be uploaded to
  the UMT Portfolio Manager from the MS Project
  Server, and used for scheduling analysis
• UMTs Microsoft Gateway can be used on a
  periodic basis to synchronize Baseline, Actual
  Forecast data with UMT Portfolio Manager for
  portfolio reporting and portfolio
  re-prioritization and optimization.

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Seamless Integration with Microsoft's EPM Solution
UMT Project Portfolio Server integrates with the
EPM Solution to allow organizations to quickly
deploy Top Down portfolio analytical techniques
on top of the leading enterprise project
management platform.
Executives Portfolio Analysts Project
Managers Application Managers
PMOs Resource Managers Team Members
Project Managers