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Portfolio Management or Bust!(a very real possibility for PMOs today)

November 8th, 2014Andy Jordan

President, Roffensian Consulting Inc., Management Consulting firm specializing in PMOs and portfolio management.

Author, facilitator and in demand speaker featured on ProjectManagement.com & Projects@Work.com

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Portfolio Management• What it is (and what it isn’t)?• The portfolio lifecycle• Strategic execution

Portfolios and the PMO• A business focused PMO• An independent, objective partner• Up and out, not just down and in

Starting the journey• Gaining permission• Delivering success

Contents

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PPM leaders must prepare for extreme transformation of must prepare new résumés

Gartner Predicts, 2014. December 5th, 2013

PPM has ‘defaulted’ to PMOs up until now That will change (and is changing) if PMOs fail

to deliver PMOs must evolve or become marginalised

Before we start…….

What is a portfolio?Portfolio

Program A

Project 1

Project 2

Program B

Project 3

Project 4

Project 5

Program C

Project 6

Project 7

Cons

olid

ated

Info

rmat

ion

Strategic Managem

entX

Vehicle for delivering strategic priorities Aligned with goals and objectives May be multiple portfolios• Departmental• Business function• Regional• Etc.

A portfolio is the management framework for effective project execution

What is a portfolio?

The portfolio lifecycle

Slide 6

Idea Business Case Selection Execution Benefits Realization

Project

P o r t f o l i o Portfolio begins with the seeds of an idea and lives

through the harvesting of the benefits

Successful portfolios need nurturing at all stages of development

The implication is that the PMO spans all portfolio elements and all portfolio departments

Is that the reality in most organizations?Before the

projectViewed as a departmental responsibility

Ideas compartmentalized

Business cases inconsistent

Proposals champion departmental priorities over organizationalPolitics plays a major role in selection

After the project

Returns to operational silo

Little to no benefits tracking

No accountabilityDoes that maximize the ability to achieve the organizational goals?

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Put yourself in their shoes – what is the likely reaction of these roles to what you have heard so far?• Executive• Department head• PMO manager• Project or program manager

The portfolio perspective

Strategic project execution

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STRAT

EGY

If portfolio management doesn’t provide a strategic portfolio framework then projects will make deliverable focused decisions that ignore the organizational goals

Projects cannot be managed as self contained entities – they are part of the organizational ecosystem

Effective project management means understanding how the project fits within that ecosystem

Execution – Context = Failure

Deliverables are only relevant to the extent that they deliver business results

A project can only be successful if it delivers its planned benefits

Change decisions are often driven by the project’s alignment rather than anything internal to the project

Project management is a sub-discipline of portfolio management

Priorities and expectations are dynamic and must be managed as such

Principles of strategic execution

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A logical alignment for portfolio delivery, but……• PMOs must be business functions, not project

functions• PMOs must be viewed as trusted, independent

advisors• PMOs must be given clear mandates supported by

organizational commitment

If PMOs fail to embrace portfolio management they will become increasingly irrelevant

Portfolio management & the PMO

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A PMO is a department – it persists beyond any individual project

As such it is no different from other departments – sales, HR, IT, etc.

So why do so few PMOs have:• Annual goals / objectives?• A business plan?• A regular review of performance against KPIs?

Or even……• A clearly defined role within the organization?

The business focused PMO

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The business focused PMO

PMO

Purpose

Goals

Structure

PMO must be supported by a clear organisational mandate, otherwise it cannot succeed

If the organisation cannot (or will not) provide the mandate then perhaps the PMO is not required

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Independent & objective•Central Planning Support•Screening•Business Case Development

Facilitator

•Portfolio Modeling•Capability & Capacity•Constraints AnalysisAdvisor•Variance Tracking•Strategic Execution•Benefits RealisationManager

Which three of the following would you choose as your year one priorities – and why?

Establishing priorities

To Do List

Organization wide

idea capture Collabora

tive idea enhance

ment

Preliminary idea

screening

Standardized

business case

formats

Portfolio modelin

g

Capacity and

capability planning

Strategic project

execution

Centralized

benefits tracking

Benefits accountability

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Up and out, not just down and in Broader scope than traditional PMOs• Managing out to the organization, not in to project

execution• Connecting projects with objectives

Project execution support focuses on context• How projects can be better executed to support

the business• Development of business focused PMs

Existing support functions may still exist• Provide a foundation, not a differentiator• Not enough to justify existence

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Change only comes from a recognition of need• If your organization doesn’t feel execution pain then

they won’t recognise the value Commitment must be meaningful or it won’t

last• Executives and department heads must ‘live’ the

commitment You need a champion to sponsor the concept Approval will always be conditional• You will need to demonstrate success to maintain

support

Gaining permission to change

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What is your leverage for making this change? Why should the executives buy in?• What’s the benefit for them?

What does success look like?• In year 1?• As a roadmap?

What has to happen to deliver the change? What’s the plan?• Costs• Milestones• Stakeholders

The elevator pitch

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Delivering successPain

points

Goals

PlanActions

Metrics

It’s not rocket science!

Consistency between approaches taken elsewhere help gain buy in.

Early results show value and drive commitment.

Focus on needs demonstrate alignment with stakeholders.

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Questions?

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Thank you!

E-mail – andy.jordan@roffensian.comTwitter - @RoffensianPM

www.roffensian.com