improved business performance through effective portfolio management

1Copyright © 1998-2008 Empowered Networks Inc. All rights reserved.

Improved Business Performance Improved Business Performance Through Effective Portfolio Through Effective Portfolio ManagementManagement

Doing the Right Things Rightand Fast!

Mark [email protected] 416-726-3578


ContentContent

The Business ChallengeAddressing the Business ChallengeDoing The Right ThingsDoing Things RightClosing


THE BUSINESS THE BUSINESS CHALLENGECHALLENGE


Business ChallengesBusiness Challenges

Symptoms Resource Management

Can’t forecast mid and long term capacity, roles and skills needed Can’t find integrated view of resource profiles and demands We don’t have enough resources to get the work done.

Portfolio Management Business Investments have poor returns We don’t prioritize our projects, or every project is a #1 priority, or our priorities are

constantly changing with no explanation. We can’t kill a project. If we do kill a project, it always seems to show up again. We never have any objective measurements to overcome the real or apparent politics

in decision-making. Somehow we end up with redundant activities going in different directions.

Process Management Everyone is doing end-runs around the approval process More exceptions than the rule

Business Planning Funding appears to be very political – can’t explain, must be political Can’t use project plans to produce business financial plans or forecasts - Instead

historical burn rate is used Effort required for quarterly business forecasting, fiscal year end, or fiscal year plan

submission is excessive and time consuming


Business ChallengesBusiness Challenges

Causes Wrong projects – not linked to strategy/goals Projects are not prioritized Too many projects – not in line with resources Projects use strategic resources inefficiently Projects invest in non-strategic activities Projects are not monitored and managed collectively

to determine if projects should be slowed, stopped, helped or modified – tradeoffs are not identified and exploited

Unbalanced investment mix (short/long-term, supply/market-side, development, research, strategic assets/resources, revenue opportunity, risk, etc.)

More than 40% of projects fail to deliver intended results (cost, schedule, performance)


Business Challenges…Business Challenges…

Causes… Related Process Issues

Gaps in related processes Project estimation and planning Resource Management Portfolio Management Financial Management Functional Management Important stakeholder processes missed

Process effectiveness Inconsistent application of the process Weak project team integration with unclear accountabilities Complex process and deliverables Poor Understanding and buy in by the delivery teams Process or methods not aligned with Business needs (e.g.,

definition of quality) Inadequate Risk Management


ADDRESSING THE ADDRESSING THE BUSINESS CHALLENGEBUSINESS CHALLENGE


Doing the right things

The ability of project and service delivery to partner

with the business to maintain alignment and maximize

return from internal investments

It comes down to Two Primary It comes down to Two Primary DimensionsDimensions

Doing things right

The ability of the provider to make the best use of its people, budgets and assets


Define Success to Establish a Define Success to Establish a TargetTarget

Every Business has different priorities and goals!

Some Key business scorecard metrics that have the most impact on business outcomes

investment alignment to business strategy business value of investments

IT, R&D, Operations, Manufacturing, Business Improvement

program budget balances service level excellence operational excellence

These five metrics should form the core of any performance scorecard

1 April 4, 2008, The Five Essential Metrics For Managing IT, by Craig Symons with Alexander Peters, Alex Cullen, and Brandy Worthington


Don’t try to do everything at Don’t try to do everything at onceonce

Establish an effective plan of evolution?

Eye on the Big Picture While you achieve incremental value rapidly using a plan tailored to your business needs

for early wins


Define and Manage Processes To Define and Manage Processes To Rapidly Achieve High Quality Rapidly Achieve High Quality DecisionsDecisions

Portfolio Management

Program Management

Project and Activity Management

Info

rmatio

n M

an

ag

em

en

t


Enterprise-wide Processes for Enterprise-wide Processes for Doing the Right Things RightDoing the Right Things Right

IncludeGovernance ModelsPortfolio, Program and Project ManagementEngineering methods, tools and processesManufacturing methods, tools and processes…


Process Management - Process Management - GovernanceGovernance

Governance:The processes and relationships that lead to reasoned decision-making

3 Key Questions: What decisions need to be made?Who is accountable for making decisions?How will decisions be made?

Decisions require fact-based information – This requires a systematic approach to collect, integrate, analyze and provide meaningful data


Governance ModelGovernance ModelExample portion of Product Development Process

Events: Key project milestones used to manage and monitor the

natural evolution of the maturity of the

product.

Accomplishment Details and Success Criteria: Question-based framework measuring progress of a project through the maturity of the

product.

Gates: Business decision to confirm alignment with business strategy and projected marketplace.

Is the quality of execution of the project

sufficient enough to continue.


DOING THE RIGHT THINGS DOING THE RIGHT THINGS The Project and Portfolio Management (PPM) Solution


Provide for Fact-based information Provide for Fact-based information to make business decisionsto make business decisions

Support and Promote Innovation and Ideas and Include them in the Portfolio Process

Maintain a series of interrelated roadmaps for your business needs (market, product line, …)

Investment and Prioritization How much do we spend? What do we spend it on? How do we reconcile the needs of different constituencies? Ensures spending reflects strategic priorities Requires business-led and enabled Portfolio Management directly tied to decision-making and accountability Enterprise-wide Information systems Play a Pivotal role in today’s Business Environments


Support Business AgilitySupport Business Agility

Distribute Accountability and decision-making to the lowest level in the organization that is reasonable

Support these decision-makers with processes and high quality and timely information to ensure the best quality decisions fast.


DOING THINGS RIGHTDOING THINGS RIGHTThe Project and Portfolio Management (PPM) Solution


Develop PPM Solutions in Develop PPM Solutions in ContextContext

Develop a roadmap for change that works for your business in the context of its current state of capability and maturity


Other Considerations in Planning Other Considerations in Planning and Executing Changeand Executing Change

Cultural Change can take 2-3 years to institutionalize!

Understand the ramifications of different approaches

“Flip the switch” Phased over short time (3-6 months) “Grandfathered”

Don’t underestimate training needsConsider post launch support period

Mentoring Facilitation FAQs and e-mail support Helpdesk


Most Businesses TodayMost Businesses Today

95% of Projects Delivered Higher than initial cost and schedule High variability

• Pro’s• None

• Con’s• Will take on high risk

projects resulting in poor or negative ROIs

• Reputation for delivery is very poor

• All stakeholders start managing there own contingencies

• Portfolio ROIs are significantly less than possible

• Resource Management is extremely inefficient

• Almost All Projects are in “Alarm” state


Some Businesses TodaySome Businesses Today

95% of Projects Delivered Lower than initial cost and schedule Wide variability

• Pro’s• More Predictable and

Repeatable• Conservative business

opportunity decisions• Con’s

• May result in killing projects that could have good returns

• Projects that could be started would be delayed due to lack of funds

• Resource management is very difficult

• Most Projects are in “Alarm” state


The High Performing CompanyThe High Performing Company

50% of Projects Delivered Lower than initial cost and schedule 95% lower than 110% of cost and schedule High predictability and repeatability and low variability

• Pro’s• Highly Predictable and

Repeatable• Accurate business

opportunity/risk decisions• Excellent Reputation for

delivery• Stakeholders no longer

maintain large contingency buckets

• More projects can be funded• High Portfolio ROI...• Very Few Projects are in

“Alarm” state


The High Performing CompanyThe High Performing Company

Enterprise/Business Planning and ControlBusiness forecasting

available and up–to-date continuouslyPortfolio/Pipeline planning

5-10 years out, reflects business strategiesPortfolio Management

all activities including overhead and Business Improvement programs

“Cradle to grave” lifecycle processesEffective Portfolio Risk ManagementPerformance metrics

available and up–to-date continuously for all levels


The High Performing Company …The High Performing Company …

Agile and Organic operationBusiness governance integrated with all processes and tools

Business goals traceable from Goals/Strategies down and from activities up

Processes integrated seamlessly with Information Systems/Tools

Accountability and Decision-Making integrated with processes and tools


The High Performing Company…The High Performing Company…

Operational Planning and ControlRational Resource Planning short-, mid-, and long-term

Optimized Resource Utilization Effective Co-Development Effective Outsourcing

A single source of consistent and up-to-date information for all decision-makers

Activity-based cost control employee time management automatic with assignment of

tasks expense management is automatic with assignment of tasks

Information system management/maintenance is minimal



Information is disseminated to the right people at the right time and is always up to date

Communicating direction and status of portfolios, programs and projects is an output of normal activities and not an extra task



Data Integrity and Configuration ManagementAll information systems are in agreement on the data

Data is continually updated and reflects current status at all times



PMs are highly skilled, trained and supported Effective Risk Management

Integrated directly into project architectures Project Architectures Optimized

Fully integrated with processes, decision-making, and accountabilities

PMs Manage Teams and Activites, not schedules PMs Supported

Consistent support and mentoring available when needed – automatic triggers highlight need for action

Templates are available and meet 95% of project needs Project Administrative activity is minimum

Communication of Project status and forecasts is automatically derived from existing data – no extra effort is required

Highest possible “wrench time” Early Estimates are Accurate - +10% to -20%


The High Performing Company:The High Performing Company:All PPM Functions Supported and All PPM Functions Supported and IntegratedIntegrated

Communication Management

Information Views and

Reports

Resource Management

Closed Loop Control – Time

Cards driven by Project Plans

Role- and Skill-based Resource

Planning and Forecasting

Track and analyze costs and

resource profiles

Process Management

Program Financial Management

Track and analyze costs vs Budgets

vs Plans


Brand/Program Financials and

Pipeline Management

Idea Management

Project ManagementDeveloping Project

Plans from Templates

Managing Risks

Accurately forecast Project

Plans

Evaluate Options with “What ifs”

Demand Management

IT Project Demands

Business Improvement

Project Demands

Operations Demands

R&D Demands

Portfolio Analysis w/”What if’s”

Portfolio Risk Management

Document Management

Stakeholder Management

Business Forecasting and

Budget ManagementMaintaining

Project Schedule/Forecast

Business Systems

dBs (Oracle/SAP/...

Product Development

Process Review and Approval

Portfolio Process

Approvals

Project Change

Approvals

Document Approvals

Design Process

Management

Help Desk and other demand

Generating systems

Resource Allocation Process


The High Performing Company: Fully The High Performing Company: Fully Integrated PPM - Information, Integrated PPM - Information, Operation and ProcessesOperation and Processes

Enterprise PPM

Do Things Right

Business Relationship Management

Do the Right Things

Demand/Idea Management


Program Project & Resource

Management

Process Management


CLOSINGCLOSING


Take Away’s Take Away’s

You tell me


SummarySummary

Improving business performance requires

Effective Portfolio, Program and Project Management Plays a Key Role!

Best in ClassPeople + Processes + Tools

=Delivering Business Value

improved business performance through effective portfolio management

Documents