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Introduction to Project Portfolio Management Establishing a Portfolio Strategy Evaluating Project Alignment to the Portfolio
Strategy Prioritizing Projects and Holding Pending
Funding Authorization Selecting a Balanced Portfolio Using the
Prioritized Projects
Managing the Active Projects Closing Projects in the Portfolio Preparing Your Submission to the
Portfolio Management Process
Understand current practices in corporate project portfolio management and how they are applied
Know how to deliver explicit business value through a strategically aligned project portfolio
Adapt the concepts and practices of project portfolio management
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 4
“A collection of projects that share some common link to one another.”
Examples of links Same business unit or functional area New product development Same budget or resource pool
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 5
Establishing the investment strategy of the portfolio
Determining what types of projects can be incorporated in the portfolio
Evaluating and prioritizing proposed projects Constructing a balanced portfolio that will
achieve the investment objectives Monitoring the performance of the portfolio Adjusting the contents of the portfolio in
order to achieve the desired results
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 6
Proposed Aligned Prioritized Selected
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 8
• Active• Postpone
d• Canceled• Complete
d
Strategic Alignment Model: Aligns projects with the strategic goals of the organization
Boston Consulting Group Products/Services Matrix: Four categories of products based on growth rate and competitive position Cash Cows Dogs Stars ?
Project Distribution Matrix Classifies projects by New, Enhancement, or Maintenance
Growth versus Survival Model: Projects to do better versus must-do projects
Project Investment Categories: Infrastructure Maintenance New Products Research
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 9
“Will projects be partially funded in order to include more projects in the portfolio, or will projects be funded only at the level of their request?”
“If an investment category has excess resources after project funding decisions have been made, can those resources be reallocated to other investment categories without compromising the portfolio strategy, and if so, how will they be reallocated?”
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 10
Is the project in alignment with the portfolio strategy? Proposer does the evaluation Intake person does the evaluation
Then project is placed in a bucket (either money or resources)
Best to use an objective, consistent criteria
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 11
Many methods ranging from the very simple to complex mathematical models
Six Example Models Forced Rankings Q-Sort Must-Haves, Should-Haves, Nice-to-Haves Criteria Weighing Paired Comparisons Risk/Benefit
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 12
Many ways to do this But there are two basic approaches
One master list of prioritized projects Could end up with less than satisfactory results
Separate projects into buckets and then prioritize the projects in the separate buckets. Could end up with good projects in unpopular
buckets Author suggests second approach
Takes longer with one master list Easier to allocate resources along different
funding buckets
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 13
Advantages More projects into active status Better chance to control risk
Weakness Will extend delivery date into next funding
cycle
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 14
Project Status On Plan Off Plan In Trouble
Role of the Project Manager Keep project on plan Reasons for off plan
Deficient method of validating task status Bad communication processes
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 15
Reporting Portfolio Performance Schedule Performance Index and Cost
Performance Index Trend Charts
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 16
Acceptance Criteria Checklist of Scope Items or Requirements When all items on the checklist are checked
off, the project is finished Post-Implementation Audit
Attainment of Explicit Business Value Lessons Learned
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 17
Three Ways to Prepare Your Project Proposal Adapt the Project Overview Statement
Parts of the POS Problem / Opportunity Statement Project Goal Project Objectives Success Criteria Assumptions, risks, and obstacles
Include two attachments Risk Analysis Financial Analysis
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 18
Three Ways to Prepare Your Project Proposal (Cont.) Two-Step Submission Process
First step is to submit the POS If the POS has been accepted, then the second
step is submit a detailed project plan
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 19
Three Ways to Prepare Your Project Proposal (Cont.) New Submission Process
Project Name Sponsor Name Project Manager Name Project Funding Category Project Goal Project Objectives Explicit Business Value Risks Estimated Total Project Cost Estimated Project Duration
Copyright 2007 John Wiley & Sons, Inc. Chapter 20 20
Background of the Project Support Office What Is a Project Support Office Naming the Project Support Office Establishing Your PSO’s Mission Framing PSO Objectives Exploring PSO Functions Selecting PSO Organizational Structures Organizational Placement of the PSO How Do You Know You Need a PSO? Establishing a PSO Challenges to Implementing a PSO
Describe a Project Support Office (PSO) Understand the signs that you need a
PSO Know the missions, objectives, and
structures of the PSO Know the functions performed by the PSO Know how to establish a PSO Understand the challenges to
establishing a PSO Know how to grow and mature your PSO
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 22
Early adopters use the new project management process
Adoption of project management spreads Management takes notice There are uneven proficiency levels of project
management Senior management introduces some common
tools and metrics for project management Some adopt the common processes and some
don’t causing confusion Thus the need for a Project Support Office
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 23
Projects grow in number and complexity The need for more qualified project
managers Lack of standards and policies leads to
increased inefficiencies and lowered productivity
Greater demand on resources requires more coordination
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 24
“A temporary or permanent organizational unit that provides a portfolio of services to support project teams that are responsible for a specific portfolio of projects.”
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 25
Temporary Usually called Program Offices Support the administrative needs of a group of
projects Disbanded when projects are over
Permanent Handle a changing stream of projects
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 26
Project Support Consulting and Mentoring Methods and Standards Software Tools Training Project Manager Resources
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 27
Linked through their goals and purposes Departmental or organizational unit basis Projects that are funded out of the same
budget
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 28
The author recommends a mission statement that is supportive of project managers
Rather than compelling compliance of standard practices
Supportive statements can be sold easier to project managers and senior management
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 29
Make the objectives specific Make the objectives measurable Provide business value
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 30
Project Support Consulting and Mentoring Methods and Standards Software Tools Training Project Manager Resources
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 31
Virtual versus Real Proactive versus Reactive Temporary versus Permanent Program versus Projects Enterprise versus Functional Hub versus Hub and Spoke
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 32
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 33
•Centralized – Enterprise-wide•Decentralized – Enterprise-wide PSO with Satellite PSOs•Unit-Level – Services specific department or project
Standish Group Report Top Ten Reasons Why IT Projects Fail
Symptoms That You Need a PSO Project failure rates are too high Training is not producing results HR project staff planning isn’t effective Inability to leverage best practices Lack of control over the project portfolio No consistency in project reporting Too many resource scheduling conflicts Gap between process and practice
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 34
Three major questions Where are you? Where are you going? How will you get there?
PSO Stages of Growth
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 35
Forming the PSO Task Force Measuring Where You Are
Metrics to determine current project management maturity
Metrics to determine current proficiency of project managers
Establishing Where You Want To Go Establishing How You Will Get There
Copyright 2007 John Wiley & Sons, Inc. Chapter 21 38