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1
Implementation of Project Portfolio Management - North
Carolina State Government
Overview Presentation
2
Framework for Managing IT InvestmentsI. Strategic Business I. Strategic Business and IT Planning and and IT Planning and Investment Selection Investment Selection
and Budgetingand Budgeting- Investment Portfolio - Investment Portfolio
Management (IPM) – Build, Management (IPM) – Build, Buy, and/or Implement the Buy, and/or Implement the
Right AssetsRight Assets
III. Investment III. Investment Operation and Operation and
Maintenance, and Maintenance, and Renewal, Retirement, Renewal, Retirement,
or Replacement or Replacement - - Applications Portfolio Applications Portfolio Management (APM) – Management (APM) –
Maintain, Operate, Renovate, Maintain, Operate, Renovate, and Retire Assets in the Right and Retire Assets in the Right
Ways and TimesWays and Times
II. Project ImplementationII. Project Implementation -- Project Portfolio Project Portfolio Management (PPM) – Build and Implement Assets in Management (PPM) – Build and Implement Assets in
the Right Mannerthe Right Manner
Life Cycle of IT
Investments
Identify investments that best:
• Enable governmental initiatives, agency missions and strategies, or compliance mandates
• Result in financial returns – revenue generation or cost savings
• Provide better constituent services or program effectiveness
• Fit technical architectures
• Satisfy budget, staffing, and other constraints
• Meet risk profiles
• Clarifying roles and responsibilities
• Providing appropriate oversight
• Ensuring they are well planned and thoroughly researched prior to starting
• Following management and development methodologies, best practices, and lessons learned
• Defining, tracking, and evaluating project progress frequently to achieve budget, schedule, scope, and quality expectations
• Completing them successfully so that business goals and objectives are realized and benefits accrue
Manage projects by:
Operate and maintain assets so that:
• Benefits/costs are optimized over their useful lives through astute and timely renovations, consolidations, or eliminations
• Services offered meet availability, reliability, security, quality, and recoverability expectations within acceptable budgets
• Retirements and replacements are effected when assets are no longer cost-justified or risk-acceptable
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Overview of IT Portfolio ManagementAgency Missions and Vision and Business Goals and Objectives
Statewide and Agency IT Plans
Application Portfolio Management
Project Portfolio Management
Investment Portfolio Management
Identify Problems and Opportunities
Funded New ProjectsManage
Portfolio
Analyze Portfolio
Optimize Portfolio
Build and Maintain Inventory
Develop Business Drivers and Business Cases
Analyze Candidate Investments
Adjust Project Portfolio
Assess Value of Projects and Portfolio
Manage Portfolio
Implement Projects
Select and Plan Investments
New or Renovated Applications
Proj
ect
Prop
osal
s for
App
licat
ions
Ren
ovat
ions
,
Ret
irem
ents
, or
Rep
lace
men
ts
4
Portfolio ManagementPortfolio management is: a strategic and dynamic decision-making process to assess value, prioritize actions, and allocate resources to meet key enterprise objectives. A portfolio is: a collection of items grouped together to facilitate efficient and effective management so that fiscal, staffing, and other scarce resources can be optimally allocated to provide the most benefits or greatest value for investments made. The objective of portfolio management is: to optimize the enterprise’s IT portfolios in order to contribute to the organization’s successful performance and its sustained viability, value, and growth. The major tasks of portfolio management are: inventory and classify items in the portfolios, identify problems and opportunities, develop viable options, determine relevant criteria and weights, evaluate alternatives using pertinent information, and make reasoned and appropriate decisions. The results of portfolio management are: fact-based, data-driven, and analytics-oriented management decisions, using a consistent and disciplined approach within a well-defined governance structure.
5
Portfolio Management GoalsInvestment Portfolio Management (IPM):
Identify, evaluate, and prioritize candidate investment opportunities that meet strategic business goals and objectives in the most effective and productive manner by appropriately considering and weighing key factors, such as alignment with agency missions or governmental initiatives, satisfaction of compliance mandates, delivery of desired returns or public value, initial and life cycle costs, architectural fit, risk profiles, staffing availabilities, and the inter-relations among investments.
Project Portfolio Management (PPM):Advance the management of IT implementation projects by
assisting to clarify roles and responsibilities; provide for well-understood and comparable oversight; ensure they are planned well and researched thoroughly prior to starting; follow management and development methodologies, best practices, and lessons learned; facilitate the management and monitoring of them to achieve, budget, schedule, scope, and quality expectations; and complete them successfully so that proposed business goals and objectives are realized and anticipated benefits and value accrue.
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Portfolio Management Goals (Cont’d)
Inventory applications; assess them using a variety of criteria (such as agreement with agency business strategies or governmental priorities, benefits and value to agency missions or business processes, costs to maintain and operate, ability to meet current and future agency business requirements, operational performance, technical status, and risks; and develop a management strategy for continued investments in them to maximize value over their useful lives. This is done by: a) analyzing present and future status from business, financial, operational, technical, and risk perspectives; b) determining business-criticality of applications and risk-urgency of results from assessments; c) identifying areas of over- and under-investments and reallocating funds to give the most benefits or greatest value for monies spent; and d) developing the best approaches, priorities, and timeframes for enhancement, renovation, consolidation, elimination, or replacement. Assets should be retired when they no longer are cost-justified or risk-acceptable.
Applications Portfolio Management (APM):
7
Why Lifetime Management of Applications is Important – Causes of Value Dissipation
As s
e t L
ife
Cyc
le V
alu
e
Phase of Investment Life CyclePotential or Expected Value
Selection Implementation Operation
100%
Lose 10 – 15%
Lose 5 – 10%
Lose 20 – 25%
Actual Value Realized
50-65%
• Lack of strategic business plan
• Not strategically aligned with business goals and objectives
• Business cases deficient in tenuous benefits, overly optimistic costs, too ambitious schedules, unrealistic staffing, optimistic risk assessments, and/or unachievable benefits/returns
• Poor architecture fit
• Inadequate investment evaluation, ranking, and selection processes (pick wrong investments)
• Lacking executive support• Weak project manager• Deficient project planning, monitoring, and reporting• Insufficient or inadequate requirements definition; contracting; and management of risks, vendors, testing, training, scope, quality, change, data conversion, communications, etc.• Failure to reengineer business processes• Over-customizing COTS packages• No or inadequate post implementation assessments (PIAs)
• Incomplete post implementation reviews without focus on value and benefits realization and change impacts (delivery on business case)• Lacking service management best practice framework (e.g., ITIL) and not implementing associated good processes• Inadequate asset management best practices – current and complete inventories; periodic assessments; management plans for useful lives; and business cases for renovations, replacements, or retirements
Adopted from PMO Executive Council Research
8Adopted and Modified From: PMO Executive Council research.
PortfolioManagement
(PM)Components
Investment PortfolioManagement (IPM) -Build the Right things
(skill mix is 75%busines/financial and
25% technical)
Investment/project idea screening Portfolio definition Portfolio segmentation and prioritization Business drivers identification Risk identification and probability/impact analysis Technical and business architecture fit Business case development Investment/project evaluation and prioritization (strategic fit, financialanalysis, and value assessment)
Fiscal and personnel resource availability, prioritization, and allocation Investment governance structure and process
Required Competencies for Comprehensive and EffectivePortfolio Management
Revision Date11/22/2005
Project PortfolioManagement (PPM) -
Build Things Right(skill mix is 75%
technical and 25%business/financial)
Project management methodology and standards (PMI) System development methodology and standards (IEEE) Project governance and organization structure and process Project planning and management Project manager coaching and development Compeititive bidding readiness Business/user readiness assessment Business case realization tracking Status tracking and reporting Requirements definition Fiscal and personnel resource estimation Stage-gating and ongoing reviews Design and technical architecture review Test planning and management Rollout planning and management Risk management and mitigation Quality assurance management Vendor and outsourcing management Service/operations management Security review Data confidentiality and personal privacy review Disaster recovery and business continuity planning Post implementation review
ApplicationsPortfolio
Management (APM) -Operating,
maintaining, andrenovating/retiring thethings in the inventoryof applications stock(skill mix is equallydivided between
business/financial andtechnical)
Service/operations management Technical and business architecture fit Vendor assessment for hardware/software support Technical and business knowledge availability Current and future strategic fit Business needs suitability Cost-effectiveness analysis Disaster recovery and business continuity planning Risk acceptability analysis Asset life cycle planning and management Investment governance structure and process
9
Policy Drivers and IT Management Expectations for Project Management
Offer documents and administrative management capabilities that follow industry recognized best practices for system development life cycle and project management
Provide a “gated” review approach to ensure each project has performed all preceding work acceptably and is in position to complete the succeeding phase successfully, and to verify that it is still viable (i.e., continuing to offer worthwhile benefits and value within satisfactory cost and timetable parameters at desired quality levels and presenting an acceptable risk profile)
Provides a workflow process that encompasses project approvals, checkpoint reviews, and periodic status reporting at project, agency, and statewide levels
Enable the productive and effective management of projects
Employ governance to maximize the potential of project success
Support the consistent, disciplined, effective, and efficient performance of project governance
Legislative Mandates Drive IT Portfolio Management UseProvide stronger oversight of project management: Improve performance in costs, scope, schedule, and quality Increase reliability of achieving expected business results, projected benefits to citizens, and proposed value to the state
Guide and administer governance for project approvals and monitoring/status reporting
Prescribe information to be developed, maintained, and reported for programs and projects
Report program and project status and identify exception situations
10
Objectives of Project Portfolio Management• Provide a framework for the governance process and disciplines
associated with the approval and monitoring of projects at the agency and State CIO levels.
• Tie the schedules, budgets, and objectives of investments (projects) to the business strategies and goals of the business cases underlying the approved funding requests – ensure alignment of project tactical actions with strategic business intentions by establishing a clear and direct linkage to the investment portfolio management process.
• Provide a sustainable approach to access individual project and project portfolio status on a frequent (near continuous) basis in order to identify risks and problems early, take proactive and positive actions for remediation, and as warrented, restructure or stop under performing projects in timely manner.
The ability of state IT organizations to implement investment projects successfully (within budget, on schedule, and with the desired business results) in a predictable and reliable manner is key factor for retaining the faith and support of its funding authorities and tax payers.
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Project Portfolio Management – Combination of Software Development, Project Management,
and Governance Disciplines and Concepts• Provides a workflow process that encompasses project
approvals, checkpoint reviews, and periodic (primarily monthly) status reporting at project, agency, and statewide levels
• Incorporates a “gated” review and approval approach at governance hierarchy levels to ensure past work is acceptable and project is in position to complete the succeeding phase successfully – due diligence path
• Offers administrative support for development sequencing and project management that follow industry recognized best practices for system development life cycle (IEEE) and project management (PMI)
12
· Initiation Phase & Planning Phase Cost· Budget Information Section· Enterprise Architecture Questionnaire· Security Questions· Project Manager Interview (Completed by EPMO)· Proposed Budget - Level 1 Budget Cost Tab· Financial Benefits - Level 1 Benefit Tab· Alternative Analysis if over $10M investment cost· Business Driver Impact Statements - Strategic Impact
Tab· Summary Risk Profile - Risk Tab· Procurement Plan **· Planning & Design Phase Milestones and Key Project
Deliverables· Planning and Design Phase Staffing Plan· Project Coordination List (Completed by EPMO)
Project Initiation Signoff
Project Initiation Review & Approval
Implementation Review & Approval
Project Closeout
Planning / Design
Review & Approval
Planning / Design Signoff
Execution / Build / Pilot Review & Approval
Execution / Build /
Pilot Signoff
Implementation Signoff
Gate 1 Planning &
Design Approval
Gate 2 Execution &
Build Approval
Gate 3 Implementation
Approval
SCIO REQUIRED
Initiation Exit Criteria and Planning & Design Entrance Criteria
SC
IO/O
SB
M/
OS
C/A
&E
/ E
PM
OInvestment Cost = Project Cost (Initiation thru Closeout Phase) + 5 years Operations
Con
trib
utor
sR
evie
wer
s/A
ppro
vers
AG
EN
CY
Phase 1: Project Initiation Phase 2: Planning & Design Phase 3: Execution & Build Phase 4: Implementation
Phase 5: Closeout
Project Information SectionProject Charter
· Business Issues· Business Goals· Project Goals· Project Deliverables· Items Out of Scope· Proposed Strategy
Additional Requirements
· High Level Assumptions / Constraints
· Key Dependencies external to the project
· Project Organization and Roles
Planning & Design Exit Criteria and Execution & Build Entrance Criteria
SCIO REQUIRED
AGENCY DOCUMENT CHECKLIST*· Project Management Plan· Communication Plan· Change Mgmt Plan· Configuration Mgmt Plan· Project Test Plan· Acceptance Criteria· Quality Assurance Plan· Statement of Work (SOW)· Project Schedule· Training Plan
Execution & Build Exit Criteria and Implementation Entrance Criteria
SCIO REQUIRED· Updated Roles/Responsibilities· Updated High Level Assumptions / Constraints· Updated Key Dependencies external to project· Updated Significant Issues / Risks - Issues / Risk
Tab· Updated Technical Architecture System Design** · Updated Project Schedule / Milestones· Updated Budget Cost - Levels 3 & 4 Budget Cost
Tab· Updated Financial Benefits - Level 2 Benefit Tab· Project Status Reporting · Updated Business Case - Project Charter,
Budget, Benefits Estimate, Strategic Impact, Risk, Schedule, Cost Tracking
· Plan vs. Actuals· Updated Budget Information Section· Updated Security Questions· Monthly Status Reports Current· Updated Staffing Plan· Sponsor’s Approval of User Acceptance Criteria
AGENCY DOCUMENT CHECKLIST*· Disaster Recovery/Business Continuity Plan· Test and Acceptance Results· Pilot Results· Operations & Maintenance Transition Plan
* Click to go to Document Templates. Any documents checked on the Project Info tab in the PPM tool are required and should be placed in the Document Management Tab.
SCIO REQUIRED· Project Status Reporting· Plan vs. Actuals· Updated Significant Issues /
Risks - Issues / Risk Tab· Updated Budget Information
Section· Updated Security Questions· Monthly Status Reports Current
Implementation Exit Criteria & Closeout Entrance Criteria
Project Status Reporting :>= $500K = Monthly Status Reporting
EPMO QA REQUIRED
· Project Closeout **· Lessons Learned
AGENCY DOCUMENT CHECKLIST*
· Historical Records
State of North Carolina PPM Workflow for Projects > = $500,000
Version 3.901/12/2010
· Updated Roles/Responsibilities· Updated High Level Assumptions / Constraints· Updated Key Dependencies external to project· Significant Issues / Risks - Issues & Risks Tab· Project Schedule / Milestones· Budget Cost - Levels 3 & 4 Budget Cost Tab· Financial Benefits - Level 2 Benefit Tab· Project Status Reporting · Plan vs. Actuals· Updated Business Case - Project Charter,
Budget, Benefits Estimate, Strategic Impact, Risk, Schedule, Cost Tracking
· Updated Staffing Plan· Technical Architecture System Design Doc**· Approved Business Requirements Document· Updated Budget Information Section · Updated Security Questions· Monthly Status Reports Current· Updated Procurement Plan **Budget, Scope and Schedule (Triple Constraints) are Baselined
· Deployment / Rollout Plan
· Risk Management Plan
** Template provided in the PPM Tool NC HELP section and on EPMO website is required for these documents only.
AGENCY DOCUMENT
CHECKLIST*· Updated Agency Applications
Portfolio as required (APM)