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Capital Projects & Portfolio Management
August 19-21, 2015
Minneapolis, MN
2015 Transmission & Distribution BenchmarkingCommunity Insights Conference
Agenda
2
◼ Process Overview
◼ Capital Program Development Practices and Outcomes
◼ Portfolio Management Practices and Outcomes
◼ Project and Program Management Practices and Outcomes
Develop System Strategy
Develop and Approve Asset Plans
Project/Portfolio Management
Expand System
A Process Model for Managing the T&D Business
3
Operate System
Sustain System
Indicates separate D, S, T components
Add New Customers
Respond to Emergencies
The processes that we will be reviewing in today’s presentation are essential foundational elements for the operational processes that sit on top of the structure
Process Model: Capital Program Development and Execution
4
Comprehensive capital program development and execution requires many coordinated activities. This model formed the foundation for First Quartile’ s analysis of company practices in capital project and portfolio management
Capital Program Development
Major Capital Program Budget Categories
6
Companies organize their capital budget programs in very different ways. The majority isolate their mandatory/regulatory compliance work in the top tier of their budget structure
Capital Projects page 8 – CP15
ID Budget Category #1 Budget Category #2 Budget Category #3 Budget Category #4 Budget Category #5 Budget Category #6 Budget Category #717 Increase Capacity NERC Compliance Reliability
ImprovementReplacement Safety Improvement Serve New Load Strategic
18 Regulatory, Compliance, ISO Baseline
ISO Supplemental, Critical Reliability
TO Criteria, Low Reliability
Discretionary
21 Mandatory Regulatory Reliability Customer Needs
22 Serve New Serve Existing Other
24 Capacity Expansion System Performance Corrective Maintenance
Preventive Maintenance
Environmental Vegetation Management
Customer Operations
25 Criteria Compliance Load Growth Reliability
27 Load NTC NERC Performance
28 Mandatory Discretionary
31 Voltage Equipment Type New Vs. Existing Special Projects Communications
33 Mandatory Discretionary
37 Compliance Growth Reliability Strategic Other
38 Growth Grid Modernization & Reliability
Technology Baseline
40 Regulatory Requirements
System Performance CM and PM New Business
Most Important Criteria For Ranking Projects
7
Criteria 17 18 21 22 23 24 25 27 28 31 33 37 38 40
Regulatory requirement 7 7 7 7 1 1 4 1 7 3 6 7 5 7 70Customer requirement 4 4 6 5 5 4 5 3 5 4 7 4 7 2 65ISO requirement 6 5 2 6 2 2 6 5 6 2 5 6 4 57System failure risk 1 6 4 4 3 5 3 4 2 1 5 7 3 6 54Return on investment 1 2 1 2 6 6 7 7 1 5 3 2 1 3 47Load needs 5 3 3 3 4 3 1 2 3 2 4 4 4 5 46Other Criteria (see below) 2 1 5 1 7 2 6 4 1 1 2 32
Ranked 1 to 7, with 7 being the most important
Companies assign different levels of importance to different project ranking criteria. The composite ratings put Regulatory, Customer and ISO requirements at the top of the list
Capital Projects Page 17 – CP35
ID Other Identified Criteria18 Consideration of low priority capital spend such as future ROW and land purchases.21 Pilot projects such as dynanic line relaying, wildfire mitigation22 Available resources.25 Safety - Public and Employee28 Capital repairs to the system33 Corporate Responsibility37 Political pressure, strategic advantage, innovation/R&D38 Discretionary maintenance
Regulatory Mandates That Are Driving Capital Investments
8
NERC/FERC and ISO Mandates17 Company currently has capital projects to meet compliance obligations as part of the CIP version 5 requirements
and for NERC requirements related to power line carrier relaying. Company also has a few PJM projects on our current capital project list.
18 NERC CIP, NERC Security
21 Nerc, FERC Compliance and ERCOT Outages
25 NERC-CIP
27 NERC Alert, relay loadability, under frequency load shed (PRC-006)
31 Reliability and CIP related changes
33 Projects initiated in order to comply with NERC Requirements, ISO Requirements or other Regulatory Entity.
37 FERC/NERC/SPP rules
38 NERC reliability standards, ERCOT operations and design standards
State PUC and Other Governmental Agencies22 State PUC requirements for System Harding and Increased Reliability.
28 Smartgrid/Smart Meter, Energy Efficiency and Demand Reduction
37 Infrastructure inspection, Reliability performance/Worst Performing circuits
38 PUCT reliability requirements, other governmental agencies (Corps of Engineers, TxDot, HCTRA,FBCTRA, City of Houston, etc., )
NERC/FERC and ISO mandates are dominant considerations in company capital budget planning
Capital Projects Page 15 – CP25
Software Tools Used to Evaluate Proposed Projects Against Multiple Criteria
9
Davies AIS28 Davies Consulting - AIS
38 Davies AIS verson 3.0
Primavera Portfolio Management 17 Oracle Primavera Portfolio Management - Customized scoring information
40 Primavera with web based overlay for prioritization questions
Other Commercial Software22 Transmission and Distribution use UMS
23 IES
In-House Developed Specialized Software18 Homegrown Reliability Analysis Tool, others under development
33 Capital Project Prioritization Tool developed in-house
No Tools Other Than Excel Spreadsheets21 None
27 In-house spreadsheet/questionaire used to rank all T&S projects
31 Do not use software tools other than Excel for evaluating
Companies are using a variety of software tools to rank projects against multiple prioritization criteria
Capital Projects page 16 – CP30
Factors Considered When Selecting Projects For Annual Capital Budgets
10
Factor 17 18 21 22 23 24 25 27 28 31 33 37 38 40
Available budget ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ 100%
Available resources (labor materials vehicles & equipment etc.)
♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ 79%
Mandatory vs. discretionary projects
♦ ♦ ♦ ♦ 29%
Geographic location of projects
♦ ♦ ♦ 21%
Other Factors (see below) ♦ ♦ ♦ ♦ ♦ ♦ 43%
ID Other Factors17 Project scoring and ranking based on annual budget.24 Risk Evaluation27 Ability to obtain outages in summer months31 Is the job critical (planning)? Is it customer driven?38 demonstrated load and/or system risks40 System performance concerns
Capital Projects Pages 19 and 20 – CP40
After addressing budgetary caps, Resource Availability is the second most commonly mentioned factor that companies consider when selecting projects for inclusion in annual capital budgets
Projected Capital Spending Next 3 Years -- Transmission
11
Several companies are projecting very large Transmission Capital investments over the next three years, spending more than double what they spent in 2014
Spending per Asset Spending Compared to 2014 Actual
Capital Projects Page 62 -- CP165, TF65 Capital Projects Page 65 -- CP165, TF45
Projected Capital Spending Next 3 Years -- Substation
12
The Substation Capital projections also show significant increases at several companies
Spending per Asset Spending Compared to 2014 Actual
Capital Projects Page 61 -- CP165, DF70, TF65 Capital Projects Page 64 -- CP165, DF55, TF50
Projected Capital Spending Next Three Years -- Distribution
13
The Distribution Capital spending projections are in line with 2014 spending at most companies
Spending Compared to 2014 ActualSpending per Asset
Capital Projects Page 60 -- CP165, DF70 Capital Projects page 63 -- CP165, DF50
14
Key Success Factors:Capital Program Development
Communicate regularly with the external stakeholders that drive some of your company’s capital work plan requirements so that their needs and concerns are factored into your long range capital plans
Effectively forecast new business and increased load requirements and the system upgrades needed to support anticipated generation interconnections on both transmission and distribution systems
Identify and plan for all needed sustaining capital investments to ensure safe and reliable system performance throughout the planning horizon
Use available software tools to evaluate and rank potential capital projects/programs against multiple criteria
Apply well thought out ranking and selection criteria to select the projects/programs that will be included in near term capital budgets
Rationalize work plans based on realistic projections of labor resource availability to execute the plans
Portfolio Management
Processes To Update and Re-Evaluate Portfolios
16
Bi-Weekly Review21 Biweekly check of Available resources in construction meetings33 A portfolio review committee (PRC) meets bi-weekly to review the porftolio if there needs to be adjustments made
to the priority of a project(s) or program(s) due to a change in normal business circumstances.Monthly Review38 Executive Capex performance review meetings are held monthly, including detailed monitoring and reforecasting
results (as needed) of planned funds. Potential capex spending levers/dates are also reviewed should these be needed to level spending to remain on plan.
17 The Capital Management committee meets monthly to review the portfolio. A scoring review is also completed once a year for all previously scored projects.
18 Monthly asset management review by business process, quarterly re-forecast review for 5-year plan27 budget is reviewed monthly, additions to the 10 year forecast happen throughout the year and the forecast is
adjusted/reviewed once a year.22 The capital Asset Plan contains all requested and funded projects and programs, and is updated with monthly and
year-to-date actual expenditures, and projected year-end expenditures.37 Ongoing monthly actuals review & forecasting to stay on target to meet budget40 Monthly Enterprise Investment Management meetings are held where statuses of in flight projects, upcoming
projects, budget variance and new project work are discussed and re-prioritized to accommodate need, funding and resource availability
Quarterly Review31 The quarterly re-projection process evaluates financial and resource availability for the current year planned
projects. We are continually monitoring project progress with our project management function relative to budget, crews and outage conditions on our system.
Review Cycle Not Described25 Risk informed data analysis
28 Long Range Plan (LRP) Budget Build
Most companies update and re-evaluate their portfolios on a monthly cycle
Capital Projects Page 23 -- CP50
Processes For Adding Projects During The Year
17
17 The Capital Mangement Committee meets monthly to review submitted problem statements and project requests. A new project adding during the year would be done through this process.
18 Asset management performs technical challenge, project officially proposed at monthly organizational review and funding granted for project planning phase, project planning phase completed and strategic in-service date identofied, finally project budget and cashflows submitted to governance
21 Management directive
22 PUC Reliability Standards, Regulatory impacts are considered in the evaluation of priorities for each project.23 Through approval at Utility Review Board and Corporate Capital Review Committee
25 Formal evaluation process for new projects - sponsor proposed and evaluatee by project resources for execution
27 future years projects are ranked and added to the forecast, current year projects are put on a list and discussed at the monthly outlook meeting and added as budget dollars allow
28 Specific projects may be identified during the year due to New Business (customer) requests and emergent request to address system issues.
31 Project Managers follow a Change Order process to communicate the advanced/additional projects to the current year budget, as well as request additional financial support for scope and schedule changes. Change Orders are reviewed and signed by upper management. Planning memos, customer requests, equipment replacement needs. Within a budget year through a formal change request process that includes approval by the appropriate signature level.
33 Projects are added as needed and evaluated by the PRC to determine impacts and mitigations plans in regards to reliability, budget and human & material resources.
38 Projects can be added to plan and forecast based on management approval. Those above a certain cost threshold must be approved by Executive Committee.
37 Only a few, tend to stay fairly disciplined
40 Projects are added and deleted as business needs change and are re-evaluated at monthly program status meetings and quarterly reprojections.
Capital Projects Page 24 -- CP55
Most companies have a formal review process to control additions of projects to the current year’s work plan
Percent of Completed Projects That Were “Walked In” During The Year
18
Capital Projects Page 29 -- CP65
The reasons for having a high percentage of “walked in” projects should be examined. There may be gaps or weaknesses in the current capital program planning processes
Percent Of Capital Budget Actually Spent – Past Three Years
19
Capital Projects Page 30-- CP70
The reasons for underspending capital budgets should also be examined. This suggests either unrealistic capital planning or weaknesses in portfolio management processes, or both
20
Key Success Factors:Portfolio Management
Use a well-designed and documented process for managing the overall capital portfolio throughout the year , including procedures for handling “walk-in” requests
Use effective software tools to monitor the execution of the entire capital portfolio and track portfolio execution KPI measures
Employ a robust and coordinated resource management process to ensure that needed labor resources are acquired and deployed on a timely basis to execute all projects/programs as planned.
Use a well designed process for moving individual projects from planning to delivery with early engagement of stakeholders that are involved in permitting
Coordinate transmission and substation outage schedules as far in advance as possible, and bundle work activities to optimize the outage opportunities
Have contingency plans available to “move projects up” in the schedule if other planned projects are delayed, so that budget targets can still be met
Best Practice – Responding to Changes During The Year
21
◼ Managing a portfolio of projects and programs requires the ability to move a few projects/programs in or out of the current year budget in order to maintain remain close to annual total spending targets when needed “walk-in” projects appear or projects are delayed
◼ At many companies, the volume of projects/programs ready to move forward in response to delays in other projects is insufficient to prevent an overall underspend of the current year’s capital budget.
Year 1 Workplan/ Budget
Year 3 Workplan/ Budget
Year 5 Workplan/ Budget
Year 7 Workplan/ Budget
Best Practice
Projects/programs get postponed and others are moved forward in time.
Year 1 Workplan/ Budget
Year 3 Workplan/ Budget
Year 5 Workplan/ Budget
Year 7 Workplan/ Budget
Typical Practice
Projects/programs get postponed leaving money unused.
Project/Program Management
Sizes/Types of Projects That Have Project Managers
Most or all projects (6)21 – All projects have PM’s; Projects >$1M have PMP PM’s
22 – Projects that are engineered or greater than $40K
25 – All projects have Project and/or Program Managers
28 – Distribution, Transmission, Substation Projects.
38 – Transmission: All projects; Substation: projects >$30K; Distribution:
Large scale projects, URD Joint Trench Installations in subdivisions
40 – All projects are assigned a project manager/program manager
Complex projects (2)23 – 230KV and 500kV and UG Transmission Projects have outside
consultant Program Managers
33 - Complex, cross functional and/or highly political projects with
spend typically greater than $5M
Projects >$1M (2)18 - $1M to $340M, 69kV to 500kV transmission and substation projects/programs
30 – Capital Projects that are estimated to be >$1M
Projects >$500K24 – Complex projects >$500K in value
Projects >$200k (1)27 – All major capital construction projects (i.e., anything over $200K)
None (2) 17 – Company does not have any project managers by title. Company Engineers and Designers perform Project Management Responsibilities in addition to their design responsibilities
37 – No formal PM roles in T&D
Survey Results
2011 2012 2013
2014
Most/All Projects 9 3 5 6
Significant Projects
1 6 3 2
>$1MM 3 2 1 2
>$500k 0 2 1 1
>$200K 1
>$100k 4 2 1 0
None 2
23Capital Projects Page 31 -- CP75
Authority That Project Manager Has Over Project Execution
24
Strong PM /High Authority (7)18 High level of authority
23 PM is responsible for full execution of the project.
24 100% Budget Ownership
25 PM has total authority over project execution, although there are Change Control processes the PM must adhere to
27 Directs and guides the work, approves scope and budget changes within their schedule of authorizations
28 Full
31 Resource Management Team (RMT) Project Managers are well integrated into the budget, scope, design, systems and construction planning phases of the line construction projects. RMT Project Managers are responsible for ensuring the completion of projects within scope, on schedule and on budget, as well as risk and issue escalation to upper management. RMT Project Managers are also responsible for developing the recommendations for budget spending for private development, public improvements and system integrity projects. Project managers for SR and Comm projects have authority over budget and scheduling issues. Engineering PMs have budget and schedule reporting duties as well as risk and issue escalation to management team.
Half of the responding companies assign high levels of authority to their Project/Program Managers
Capital Projects Page 45 -- CP105
Strong PM/High Authority 7 companiesBalanced Matrix/Shared Authority 4 companiesWeak PM/Limited Authority 3 companies
Authority That Project Manager Has Over Project Execution (Continued)
25
Balanced Matrix/Shared Authority (4)17 The Project Manager coordinates with the cross functional team. There is no formal or information ('dotted-line')
authority. The Project Manager is given responsibility to make decisions regarding project activities, and is expected to keep the project team, all stakeholders, and his/her supervisor informed. The actual project managers answered that they have about 50%authority over the project.
22 The PM has the authority to take critical issues up-line to Management for resolution if needed.30 PM has some control of all Specific Projects >$1M in the portfolio in a matrix environment. (ie, Engineering, Work
Mgmt, Public Outreach, etc) For the limited # of Blanket Programs that PM manages, the execution is a joint effort with Operations
38 Transmission: The PM has authority up to the point of handing off to construction. Substation: Schedule and Cost changes must be approved. Distribution: The service consultant is the project manager and they are the single point of contact for the Developer for all dry utility installations (electric, gas, cable and phone).
Weak PM Limited or No Authority (3)21 None33 Limited Authority- We have a functional organizational structure.40 The Project Manager's authority is more of a project coordination role rather than an execution role
Strong PM/High Authority 7 companiesBalanced Matrix/Shared Authority 4 companiesWeak PM/Limited Authority 3 companies
Capital Projects Page 45 -- CP105
Project Manager Workload Measures – Combined T, S &D
26
The responses show wide variances in the number and dollar value of projects handled per project manager. A few companies have relatively high values on both measures
Capital Projects Page 36-- CP90, CP80Capital Projects Page 37- CP90, CP80
Mean $19.5 MQuartile 1 $22.2 MQuartile 2: $18.5 MQuartile 3: $9.4 M
Mean 23Quartile 1 27Quartile 2: 13
Quartile 3: 9
(Excl. 0 Values)
Projects per Full Time Proj. Mgr Project $ per Full Time Proj. Mgr
Support Staff Per Project Manager – Combined T, S and D
27
Capital Projects Page 35-- CP85, CP80
Mean 0.8
Quartile 1 1.1Quartile 2: 0.6Quartile 3: 0.3
Capital Projects Page 37- CP90, CP80
Projects per Full Time Proj. MgrSupport Staff per Full Time Proj. Mgr
Variances in the amount of support staff per full time project manager correlates somewhat to the number of projects that each project manager is handling
Mean 23Quartile 1 27Quartile 2: 13
Quartile 3: 9
Software Tools Used To Monitor Projects
28
Primavera/P6 (8)17 Project managers have P6 Dashboard reports. BI project costing, and we are currently working on on-demand
calculation of our project metrics. We also use P6 schedules and excel spreadsheets to track progress.18 Primavera, CMX, BMI
22 PIP, Primavera reports used by Transmission. Dist uses elements of the earned value management system for automation and reliability (at the program level).
23 SAP/Primavera P6/Access/Excel
24 Primavera P6, PV-Plan View, Winestimator, WPT Clarity, Asset Suite 8
25 Primavera and proprietary software
30 P6, Microsoft Project and Excel
40 Primavera, maximo, work management system, report writer tool
MS Project (6)21 MS-Project, Excel, Ecapris (Oracle based database), MS-Outlook, and MS-PowerPoint
27 MicroSoft Project
28 Microsoft Excel, Microsoft Project Schedules, Outlook Email
31 MS Project, Oracle Financials and Excel
38 Transmission: Microsoft Project and Microsoft Access application. Substation:SAP Custom Application. Distribution: SAP.
33 SAP Project Systems, PM Database (Oracle), Microsoft Project, Crystal Reports
Other (1)37 projects monitored though STORMS work management system
Capital Projects Page 53-- CP90, CP135
Primavera P6 and MS Project are the most commonly used project management software tools
Percent of Projects Typically Completed On or Under Budget
29
Capital Projects Page 26 – CP65
Performance on this measure can be skewed by the type of budget estimate that is being provided: “Upper Limit” estimate vs. “Bulls Eye” estimate
Project budget performance varies widely
Mean 72%
Quartile 1 83%
Quartile 2: 75%
Quartile 3: 55%
Percent Of Projects Completed Within +/- X% of Cost Estimate When Released To Construction
30
Project Cost Variances
17 18 27 28 31 33 38
Within +/- 5% 33 % 52 % 4 % 53 % 8 % 23 % 54 %
Within +/- 10% 20 % 4 % 12 % 34 % 9 % 23 % 15 %
Within +/- 20% 27 % 9 % 12 % 12 % 13 % 19 % 21 %
Variance > +/- 20% 20 % 35 % 72 % 1 % 70 % 35 % 10 %
This measure assesses performance relative to a “bulls eye” estimate developed at the time the project was released to construction
Performance on this measure also varies widely
Capital Projects Page 25 – CP60
Percent of Projects Typically Completed On Time
31
Capital Projects Page 27 – CP65
On Schedule performance ranged from 62% to 100% last year
Mean 86%
Quartile 1 93%
Quartile 2: 89%
Quartile 3: 82%
Earned Value Management (EVM) Measures
32
Capital Projects Page 54 – CP140
Companies using EVM:
22, 24, 27, 38, 38, 40
6 companies are now using EVM measures to track projects while they are in progress
Project Management Techniques Used To Manage Capital Programs
33
Capital Projects P page 32 – CP78
24 PMI/PMBOK Processes are utilized and include training
28 Tracking and reporting on execution; Communicating issues to all Stakeholders
38 Transmission: We use Microsoft Project and Microsoft Access to track scheduled deliverables and major material forecasting. Substation: Cost control and scheduling. Distribution: SAP & Excel
40 Managed similarly to projects but evaluated with cost per information instead of % complete
33 Programs are managed in much the same way that projects are. All projects that are related (i.e. program) are managed by the same PM when practical and are reported together in the PM database to ensure schedules are aligned.
21 Have corporate CPMO and ISO processes
30 Using PMBOK Standards; Project Intergration Mgmt Techniques
23 We follow PMI PMBOK standards as much as possible.
27 PMs are assigned, scopes and schedules are developed to work within the yearly project budget
37 work & resource management, scheduling, due date, material/supply chain mgmt31 Project Management typically follows PMBOK tools.
18 PMI PMBOK Methodologies
25 Scope, Schedule and Budget are used for all projects
17 Company uses the same guidelines, but they are applied across the program.
Companies are typically using the same management techniques and processes to manage both projects and programs
Capital Program Performance in 2014
34
Program Performance Measure 17 18 24 28 31 33 37 38
Percent complete for planned pole replacement 71 95 101 40 100 100 100 100Percent spending for planned pole replacement 68 100 119 40 94 100 100 100Percent complete for planned UG cable replacement
105 185 48 88 100
Percent spending for planned UG cable replacement
102 180 48 70 100
Percent completion on substation breaker replacements
100 100 75 2 56 62 100 100
Percent spending for planned substation breaker replacements
115 100 73 2 57 90 100 100
Capital program performance results deviated significantly from plan at more than half of the responding companies
Capital Projects page 49 – CP115
35
Key Success Factors:Project/Program Management
Have documented project and program development processes with clearly defined roles for responsibility, accountability, consultation and information (RACI) at all review and approval steps (gates)
Provide adequate resources in terms of PMs and support staff. Have clearly defined assignments
Collaboratively involve stakeholders to identify issues and problems early. Make sure Asset Management, Engineering, Construction, and Financial Planning are all aligned
Use an iterative estimating process that improves/refines estimating accuracy at each project phase
Use periodic reports from Engineering and Construction to track progress on projects and programs. Develop and use both lagging and leading performance indicators (e.g., Earned Value)
Use software tools such as Primavera or MS Project to monitor and manage project schedules and costs
Best Practice – Use of a Gated Project Management Process
Project Execution
Construction Planning
EngineeringProject Development
Asset Planning
0 1 2 3
Phase Owner
Work Steps
Outcome
Asset Management
• Identify need• Develop and
analyze alternatives
• Perform high level assessment
Project Development Engineering Project
ManagementProject
Management
• P&N doc• OOM Schedule,
Budget• Siting, outage
analysis• Project
recommendation
• Establish core team
• Conduct high level siting, ROW, permitting
• Project charter and team
• Detailed scope (physical spec, siting, ROW), schedule, 80% budget
• Identified risks
• Perform detailed design
• Release engineering
• Conduct detailed siting, ROW, permitting
• Detailed design• ROW, siting,
permitting complete
• Create RFP• Award contract• Schedule
construction
• Construction contract(s) awarded
• Detailed construction schedule
• Execute construction
• Mitigate risk• Place in service • Turn over to
TCC
• As-built drawings
• Equipment ready for service
Close Out4 5
Project Management
• Punch list items complete
• Permits closed out
• Redlines/FCNs closed out
• Accounts closed• Archive records
• Objectives met• Project closed
Project Recommendation
Project Approval
Detailed Design Validation
Construction Plan Validation
Equipment in Service
Project Closure
Validation
ObjectiveDevelop
"recommended project” into a formal project
Provide "recommended
project”
Detail out project design
Select contractor and prepare for
construction
Execute construction
Validate project completion
This process is in use by one of our T&D community members (Company #18)
37
Corporate Offices
400 Continental Blvd. Suite 600El Segundo, CA 90245(310) 426-2790
New York | Maryland | Texas | Wyoming | Wisconsin
First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs.
Visit us at www.1stquartileconsulting.com | Follow our updates on LinkedIn
About 1QC
Satellite Offices
Debi [email protected]
David [email protected]
Dave [email protected]
Dave [email protected]
Your Presenters
Ken Buckstaff [email protected]
Thank You for Your Input and Participation!
Appendix – Supplemental Slides
Portfolio Management Maturity Scale
39
Level I Level II Level III Level IV
Documented Process
Ad-hoc process, not documented
Some documentation, limited discipline in execution.
Basic process well documented. Limited guidelines for contingencies.
Fully-documented approach, with guidelines for how to respond to changes in portfolio
Resource Management Approach
Handled by individual project managers
Plan for what types of projects to contract versus what to be done in-house. Applied by individual PMs.
Annual plans applying guidelines for in-house vs. contract.
Comprehensive plan at start of each budget cycle, recognizing all skill types, and use of in-house and contract personnel. Decisions, assignments made early
Software in Use No tracking tools for entire portfolio
Work management tools used for portfolio.
Use of a large-scale tool such as Primavera or MS Project to track major projects.
Large-scale tool in place to manage whole portfolio, dedicated staff to support the tools.
Performance Metrics in Use
No portfolio metrics in place
Budget vs actual costs. Schedule adherence, budget vs actual
Schedule adherence, Earned Value, budget performance, portfolio integrity
Planning horizon 1-year horizon 1-5 years, with detail for 1 year.
1-5 years, with details for first 2 years
10-20 year horizon, details out 1-5 years
Benefits of Higher Maturity in Portfolio Management
40
◼ Appropriate software tools enable a view of the entire portfolio of projects and programs, combined with the ability to make changes and understand their impacts
◼ Aligning the work plan (portfolio of projects/programs) with the annual budgets (funding) enables each project/program to move ahead smoothly, without delays awaiting approvals, etc.
◼ Having the early stages of projects completed early (e.g. preliminary engineering) enables flexibility to move projects ahead in the event that another project is delayed.
◼ Having the resource management plan at the start of each budget cycle assures that a key variable (e.g. availability of labor) is handled long before it can become a problem in project/program execution.
Project/Program Management Maturity Scale
41
Level I Level II Level III Level IV
Documented, Standardized Project/ Program Development Process
Ad-hoc process, project/program leaders determine their own primary steps to project completion
Defined process. Might skip approval steps for expedited projects. Some variance in who makes decisions
Documented for major projects. Consistency in roles and responsibilities.
Fully documented project management process, with defined review and approval stage gates. Might be formal PMI standard. Consistent roles & responsibilities
Staffing Approach
PM only for largest projects. Others handled by engineers or simply moved across the functional groups
PM for largest projects, Project Engineers for others, support staff in limited supply
PM assigned to most projects/programs, support staff available for cost, schedule tracking
PM assigned to each significant project/program, with approximately 1:1 ratio of PM to support analyst for cost/schedule
Software in Use No particular software in use for project/program management. Excel for cost or schedule tracking
Work management system used to track projects and programs
Large-scale software tools (e.g. Primavera or MS Project), used by PM on major projects
Large-scale software tools used to monitor and manage major projects. Full-time support staff to use software tools.
Performance Metrics in Use
Limited Estimated vs. actual costs.
Estimated vs. actual cost, schedule adherence
Earned Value, estimate vs. actual, schedule adherence
Organizational Collaboration
Limited collaboration, periodic conflicts between groups. PM typically not assigned till project is ready for final design
Unclear roles between groups. PM has loose oversight. Groups focused on their functional needs
PM assigned early to project. Team meetings periodically, to maintain good focus on project/ program needs.
PM assigned when project conceived, team works closely with Planning, Engineering, Construction, Finance, Environmental, Permitting, Procurement.
Benefits of Higher Maturity in Project/Program Management
42
◼ Disciplined process enables project/program managers and others to fully understand the expectations at each stage.
◼ Appropriate software tools enable tracking and reporting of project/program progress, enabling earlier decisions and actions where needed.
◼ Early assignment of project/program manager and other team members ensures all disciplines are represented, and that key elements will be addressed in a timely way.
◼ Iterative estimating stages enables both better estimates for current projects/programs and for future projects/programs, incorporating lessons learned.
◼ Performance reporting assures no surprises across the life of a project/program, helping both the individual project/program managers and the portfolio managers as they juggle multiple projects.
