project management chap 2_final

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Project Management

Chapter 2: How to make Project Portfolio

Management (PPM) relevant?

Part of a series considering different aspects of Business Change

Understanding and Supporting Business Change – by Martin Schyns/ FILE: Project Management_Chap_2_Final.pptx

IntroductionWho am I?My headline would be…..Global Engineer Understands Transition Success Approach

Key take away is that I have been doing projects my whole career. I am an engineer at heart with a diverse background and I recognize that all organizations, and individuals for that matter, must continually seek to proactively change and adapt. As I am sure most organization can attest, Change is hard. I thought I would try using this medium to collect various themes and ideas on the subject of Business Change and share my insights.

Understanding and Support Business ChangeNaturally enough, Project Management is my first theme. It is a rich and complex endeavor and it is certainly an area where I think

most organizations would acknowledge they could do better. Typically the challenge is that if you ask five people within an organization, what needs to change, you get five different responses.

The Initial Path for this Enquiry1. Chapter 1 – 10: Project Management – 10 questions to explore some involved situations

2. Chapter 11 > : Sustaining Business Health – physiology of a modern business

3. Chapter X > : Insights on making relevant Change happen – road map to the future

4. Chapter Y : CONCLUSIONS – reflection on the relevance / value of what we have uncovered

ApproachI thought it would be interesting to use the Socratic method to explore what can often be some what dry material;

and, because it helps me understand, a series of supporting diagrams that, I hope, encapsulate and convey the key ideas and their context.

I would welcome any comments and alternative views to help challenge my desire to grow and make a difference.

Thank you, Martin Schyns.2

Ten common Project Management situations that are not easily understood…why?

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SITUATION KEY QUESTION

1. Reflection Was the Project a Success?

2. Prioritization How to make Project Portfolio Management (PPM) relevant?

3. Right Approach? How do you define a project?

4. Realism Level of confidence in the Project?

5. Sponsorship What does Project Sponsorship mean?

6. Planned results How will the Project impact Business Performance?

7. Justification What is the business case for the Project?

8. What or How? Is the business strategy working?

9. Audit Why am I not seeing results?

10. Soft value What are the lessons to take forward?

Do these questions echo you own experiences? How well do you really understand the challenges of Project Management?

Chap. 2:

Chapter 2: How to make Project Portfolio Management (PPM) relevant?

REF. Fig 2A - Introduction

• What is PPM? Basic definition is… the centralized management of the processes, methods, and technologies used by Project Managers and Project Management Offices (PMOs) to analyze and collectively manage current or proposed projects based on numerous key characteristics

• What does that mean? Typically this means balancing prioritized demand with time based resource supply & logic conditions

• What are the key issues?..... typically benefits shortfall; in terms of qty and / or timing.

• Why is this?.... most often companies tend to be too reactive and so needs / expectations are typically out of line with the do-able capabilities / rates of reasonable change

• Is this the only reason?... No. It has been my experience that companies that have struggled to establish a strong Project Management culture tend to be too conservative when defining project targets /project plans.

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Project Portfolio ManagementHow to make Project Portfolio Management (PPM) relevant?

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Project.: A First Project B: Second Project C: Third

Project X: First Project Y: Second Project Z: Third

PROJECTS

BENEFITS

TIMEQ1 Q2 Q3 Q4 Q1

Required BenefitProfile Current Planned

Benefit Profile

Planned Delay

Benefit Shortfall / by time

Actual Realized Benefit

Bed-in

Portfolio

The basics…balancing What needs to be done with What can be done. Is that all Project Portfolio Management should be?

FIGURE 2A


REF. Fig 2B – Typical Approach Logic

• What is the best way to scope / formulate a project? Should it be ‘inside – out’ or ‘outside-in’?

• Why is this important? It has been my experience that projects are defined, typically, by technology, process, function or budget boundaries

• Why would this be so? The overarching consideration of any project owner / sponsor is to ensure success. Controlling and influencing a limited scope/better focused project is more conducive to success!

• ‘Inside- Out’ projects then ‘Assume’ an artificial box to contain the risk / exposure from external factors ( to the project).

• The challenge for most Portfolio Management organizations is managing a group of such projects and understanding how they may inter-operate- either during build or in production.

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Typical Logic in Compiling a Project Portfolio

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1. Project conceived around a concept, a technology, or a function

e.g. CRM, SAP Cloud, Purchasing

2A. Many stand alone projects grouped together as a portfolio

Portfolio Management then tries to aggregate individual benefits into a net performance benefit picture

2B. There are many issues with this approach. Top three being….

1. Dependencies – assumed conditions 2. Benefits not fully aligned to Business needs3. Capacity / Capabilities – of shared resources

3A. Actual and Projected benefits fall short of business need…..

Leads to ongoing need to re prioritize the portfolio to alleviate near term deficits

3B. Situation ultimately deteriorates to a point .. drives bigger decisions

Projects cancelled , outsourcing and/ or mergers seen as better alternative way forward

Regular prioritization shifts > major overhead

Projects cancelled / deferred > waste & inefficiency

How could we improve this approach?

FIGURE 2B


REF. Fig 2C – An adapted Approach

• How can we inject some pragmatism into the process? By providing a challenge early in the conception / definition of a project – Role 1 ( #1A) it is possible to strike a compromise between Inside-Out and Outside-In

• Should a project be cast in stone or adapt to evolving realities ? #1B & #1C bring more external factors to bear, early on in the Project, in consideration of flexing the project to a more time sensitive, full business context reality

• How do you ever get better? The key is to learn as an organization – not just the closely connected individuals – ref role #2. The learning's need to be contextually sensitive. Would this have always worked or were there some beneficial conditions?

• Does the organization think the project was a success?- ref Role #3. If not, why not? What can we learn from the analysis to impact the next project cycle? – ref Role #4

• How do you ensure well documented lessons are, in fact, considered when conceiving a new project / project change ? The real challenge tends to be reconciling the way it can be done and what is needed. How do you you evaluate the probable impact of short-cuts and consequent risks? Do you even have time to understand the true logic of the situation? These points hi-light the need to spend more time upfront balancing project options before expectations become solidified.

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Logic of an alternative approach to Project Portfolio

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1. Initial Project conceived around a concept, a technology, or a function

Typical ‘Inside - Out’ approach e.g.…CRM, SAP Cloud, Purchasing

Four Factors that progressively drive greater business value

Evolve / Adapt the Project to fit to the business needs

SCOPE/ FORMULATION – refinement driven by time phased business architecture view point – ‘Outside-In’ – what is needed – NOT what can be done, controlled or managed!

1B. Consider delivery phasing to manage risk / capacity and benefit timing

BENEFIT TIMING – driven by what is needed and other projects in the portfolio ( inter-dependencies). Consider risks associated with objectives, scope and approach.

1C. Consider the need for changes to other Projects within the portfolio

Balanced set of changes to meet business needs & circumstances – reducing risks

2. Portfolio ManagementAccountability for Timing & Benefits

4. Conditions & Learnings

3. Audited business results

Performance to Plan

Was the Project/Program a Success? ( See Chap.1)

Evolve / Adapt the Project to fit to the business needs

1A. Evolve / Adapt the Project to fit to the business needs

Role: Business Architect

Challenge iterations

1

4

2

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FIGURE 2C

Active / Other Planned Projects

Project Execution lessons


REF. Fig 2C – CONLUSIONS

• Defining a Project standalone (Inside – Out) – is the single biggest business challenge to PPM relevancy

• A collection of stand-alone projects does not necessarily make a tenable portfolio

• Project & Portfolio performance can be greatly enhanced by introducing a business architect viewpoint challenge during the conception / formulation phase of a project

• Project execution lessons must be intelligently extracted, shared and followed

• Audited performance and understanding the business organizations view of Project ‘success’ is critical to driving a higher performing project management culture.

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project management chap 2_final

Leadership & Management