Dirk Lupien, Sr. Constultant
Oakwood Systems Group
Project and Portfolio Management disciplines
directly affect IT’s ability to align with and
support strategic company goals. In this
session, we will discuss executive visibility and
control required in a Business Enabled
Enterprise. This includes reviewing the critical
success factors, KPI development, processes
and management concepts required to
optimize business performance.
PPM level set and financial advantages
Portfolio visibility is key to project selection
The Dashboard concept
What are KPI’s – What to include in your dashboard
Business and IT alignment
Management insight and control to optimize business
performance
Six critical success factors of PPM
Supporting and evolving Project Management processes
Project Management Institute:
“The centralized management of one or more
portfolios, which includes identifying,
prioritizing, authorizing, managing, and
controlling projects, programs, and other
related work, to achieve specific strategic
business objectives.”
Business Case Development
Portfolio Prioritization / Valuation
Portfolio Optimization / Selection
Project Planning
Cost Management
Resource Management
Time Reporting
Change Management
Issue Management
Risk Management
Status Reporting
Earned Value Analysis
Program & Portfolio Reporting
Benefits Realization
Portfolio & Program Management
Request Management
Project Management
Business & Technology Stakeholders
Portfolio Management answers:
Governance Process Definition
 Have I selected the right project
investments?
 Do the project investments align with our
strategic objectives?
 Do I have sufficient resources to deliver
the selected project investments?
 Are my project investments delivering the
forecasted benefits?
Project Management answers:
 Who’s available to staff our new projects?
 When will we really finish and what will it


cost?
What am I supposed to be delivering this
week?
Can we link project data with our front & back
office?
In order for project portfolio management to be successful, project
management, resource management, reporting, and organizational
processes must be well established. Similarly, if processes have not
evolved to allow individual projects to be managed in a standard way, or if
the team members are not fully participating in the Enterprise Project
Management Solution initiative, accurate analysis of project portfolio data is
not possible.
Financial Benefit:
10%-25% Cost Reductions by Companies Implementing
PPM Processes & Tools
Common Sources of Financial Benefit:
Increase of 5%-20% in Cost Avoidance against IT
discretionary budgets
Increase of 5%-40% in projected return for global IT
budget (IRR, NPV, EBIT)
Increase of 5%-15% in resource utilization
(Gartner PPM show, 2005)
PPM Advantages:
Over 80% of organizations utilizing accurate portfolio
valuation could be able to reduce waste or increase value
creation opportunity by 20% to 40%
With Sarbanes-Oxley and similar legislation, PPM
provides the statistical rational for large project
investments and the transparency and accountability to
know where investments are flowing in the organization
Improved communication & alignment between IS and
business leaders - strategic corporate direction
Reduces the number of redundant projects and makes it
easier to kill projects
The mantra
If you can not identify it, you can not prioritize it,
If you can not prioritize it, you should not authorize
it,
If you authorize it, you expect it to be controlled,
If it is not controlled, how do you know if your
selection is meeting your strategic objectives?
It’s simple, isn’t it?
Just provide consolidated project data in an
easy to read format that lets management drill
down and investigate when there are problems
KPI – Key Performance Indicators or Indices
What are the important factors affecting your
business today and how do you determine if those
items are in trouble?
What is important to your business?
Cost (CV, CPI, Budget, Actual?)
Schedule (SV, SPI, Status?)
Closed Sales, Sales Cycle Duration, Project Phase
Revenue Generated, Profit Margin
Dashboards are a way to view summary
business data
They can include charts and graphs for trend
analysis, issues, risks or any pertinent data that
provides a clear picture on the health of projects
or the business
You should start with those items that define
success
Lagging Indicator
Leading Indicator(s)
Resulting Change
Sales Revenue
Calls per Week
Optimize Behavior of
Sales Team
Customer
Satisfaction
With Call
Center
High First Call
Resolution PLUS
Low Rate of
Abandonment
Raise Sense of Urgency
of Customer Service
Representatives (CSR’s)
What does the KPI
value chain look
like for your
organization?
MISSION
FUNCTIONAL
PERSPECTIVE
OBJECTIVES
VALUE
How well do we use
our corporate data
assets to measure
business
performance?
DASHBOARD
VIEWS
GOALS
KPI’s
CSF’s
BUSINESS
DATA
BUSINESS
PROCESS
DATA
USAGE
To what extent do the business processes and data
support corporate objectives and goals?
In defining your portfolio, review initiatives and determine
which company goal they support.
If the initiative can not be aligned to a company goal, why
are you doing it?
The trick is to define all projects being worked so a true
picture can be assembled.
If projects are left out, resources allocation will be faulty.
Enterprise
Opportunity Factor
Cross
Portfolio
Project
Portfolio
Project
Inventory
Ad Hoc
No Portfolio Inventory
or Repeatable
Processes
-“Just Do It/FIFO”
-Success is random
-Little/no business
driver alignment
Basic
Crawl
Processes are defined &
documented, and most
projects are aligned to a
consistent PMM & business
drivers
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
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
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
All projects are consistently
captured in some form of a
project inventory
Stages of Excellence
Walk
World-Class
Run
Select and Deliver the Right Investments
Portfolio Management enables organizations
to identify and select the investments that will
maximize business value
100%
50%
Value Lost
Portfolio
Management
66%
50%
Value Realized
Project
Management
75%
0%
Ability to Realize Business-Value Potential
(Project Server 2007)
100%
Project Management
helps ensure organizations
successfully deliver the
selected investments and
realize the business value
As an organization, you
must understand your
organizational
strategic goals and be
able to clearly
articulate them. KPI’s
must be clearly
defined.
Do you know how every project measures up against the
strategic goals of the organization?
How do you weight and score projects today?
Are you able to consistently weight your portfolio against
your organizational KPI’s and business objectives?
Can a project be easily rescored as it progresses, or if there
are changes in scope?
PPM Governance Phases
Project Management
Portfolio Management
Initiate
Complete
Project
Request
Form
Select
Manage
Close
Portfolio Prioritization
Go /
Kill
Go /
Kill
Business Case Development
1
2
3
4
5
6
7
Plan
Resource Requirements
Cost Estimates
Benefit Forecasts
Strategic Alignment Assessment
Risk Assessment & Mitigation
Macro Schedule Assessment
ID Inter Project Dependencies
1 Strategic Value
2 Financial Value
3 Risk Value
Portfolio Optimization
1 Charting Analysis
2 Constraint Analysis
3 Adv Portfolio Analytics
Portfolio Sequencing
Portfolio Tracking
1 Assess Surplus & Deficit
2 Sequence Portfolio
3 Run Staffing Scenarios
1 Change Request Mgt
2 Status Reporting
3 Portfolio Optimization
Portfolio
Updates
Go /
Kill
Select
Portfolio
Send Project
to Microsoft
Project Server
Complete
Project Tracking
Project Planning
Develop Detailed
Project Plan
--------------------Schedule
Resources
Budget
Risks Abatement
Procurement
Reporting
etc.
1
2
3
4
5
6
7
8
9
Project Tracking
Resource Mgt
Time Reporting
Portfolio Reporting
Financial Reporting
Document Mgt
Issues & Risk Mgt
Procurement Mgt
Team Collaboration
Project
Closure
Initial and on-going
organizational change
communication and
education programs are
required to ensure
process improvement
and cultural acceptance.
How well is the change control process defined, understood,
and used?
Is your organization prepared to make the cultural and
process changes necessary to ensure adoption of and
adherence to a PPM initiative?
Is senior management visible to the organization in support
of the PPM initiatives?
Does your project office provide on-going education
programs in support of PPM and PMM initiatives (i.e.;
lunch-n-learns, internal seminars, templates, tools, etc.)?
Acceptance Culture =
=
of
Value =
Change
+
Risk =
How easily the proposed change will be accepted.
Justification to obtain perceived commitment to see the
change through to successful completion - must be
measurable!
Level of actual organizational/individual accountability to the
value commitment (based on actual/measurable acceptance of
the change).
Change will always challenge the existing culture of an organization. The greater that challenge,
the greater the reliance on compliance metrics and the need for the organization’s management
team to be actively and visibly supportive of the change. The greatest success to implementing
organizational change comes from tangible accountability in compliance to the change at all areas/
levels of the organization impacted by the change, including management.
Acceptance
Metric for =
Change
> 85% Compliance for a minimum of 3 Months to ALL
change metrics.
Making a portfolio
management process
work requires strong
governance,
participant
accountability, and
relevant metrics.
Does your team understand your project management
methodology and adhere to it?
Do you use clearly understood and consistent metrics for
measuring and managing projects?
Are project goals and associated measures communicated
clearly and consistently?
What are your accountability standards for project
participation, compliance, and management?
The project prioritization
framework should
include investment
categories, risk-adjusted
evaluation criteria, and
strategic alignment.
How do you prioritize projects – and how do you
communicate the prioritization to your team?
What safeguards are in place to prevent “tag-along” projects
from being improperly categorized / prioritized?
Can you dynamically re-prioritize projects based on your
changing business climate, and communicate that change
to your project office / team?
How do you prevent lower priority projects from keeping
resources tied up that should be used for higher priority
projects?
To facilitate the use of
PPM, provide tools that
make compliance easier.
Tools ensure
consistency and support
group decision making.
What tools are you using today? Are they meeting your
needs for PPM?
Do you have ready access to tools that, with proper
implementation planning, could meet these needs?
What framework can be structured around your toolset to
provide high level visibility to the PPM?
Do your current tools provide you the best possibilities of
projects that your organization can implement given the
available budget and your organizational capabilities?
Prioritize projects by their business values as derived statistically
Select the best portfolio by optimizing against risk, budget, and
resource constrains
Utilize “What If” analysis through advanced portfolio intelligence
Provide drill down capability as to the reasons why a project may
not qualify for portfolio selection
Enable communication and sharing of portfolio data through
automated, real-time distribution services
Provide practical graphics and representations that are easily
interpreted and modified to reflect a project’s current state within
the portfolio, including project change requests.
Through effective workflow management, insure and expedite
scalable project governance
Portfolio Management is
such a major
undertaking that it needs
to be treated as a
strategic project to
succeed. PPM needs a
process owner and a
qualified support team.
At what level of the organization will PPM be utilized – Departmental,
Divisional, Corporate?
How will oversight of the portfolio be governed and who will be
accountable for the accuracy of data within the portfolio?
What is the perceived value of the portfolio by varying levels of the
organization?
Does the business owner of the portfolio have the authority to determine
and insure compliance to business processes that support the
portfolio?
Where does the expertise lie within your organization in developing a
Project Portfolio solution?
Can you field a qualified support team?
Project Portfolio
Management
Components OCM
Information
Management
PMM
Analysis
OCM
• Earned Value
• Financial
• Time Reporting
• Compliance Statistics
• Resource Management
• Trending
••Work
WorkPlan
PlanStorage
Storage
••Deliverables
Deliverables Repository
Repository
•Time
Tracking
• Time TrackingServices
Services
••Resource
Resource Pool
Pool
••Financial
Financial Data
Data
••Project
Project Data
Data Archives
Archives
OCM
Supporting
Supporting
Business
Business
Processes
Methodologies
& Standards
• Project Management
• CMMI
• PMI
• Financial
• COBIT
OCM
Information
Distribution
PMM Audit
Services
• Data Distribution
• Time Tracking
• Dashboards
• Scorecards / Stoplight
• Reporting
• Portals
• Business Compliance
• Forecasting
• Financial
OCM
Perform a Maturity and Readiness Assessment
Evaluate your current Project Management maturity by reviewing
existing process documentation and team usage.
Determine Future State Requirements of the Enterprise Project
Management (EPM) solution to include process improvements as
well as tool requirements.
Perform a Gap Analysis and make recommendations for a complete
EPM solution with a Roadmap to get to the desired maturity level.
Determine if a Project Management Office (PMO) is
needed to champion the development of your Project
Management Processes.
It starts from Senior Management realizing the value.