Project Portfolio Management Maciej Bodych, MBA, PMP Consultant, Trainer and Interim Manager in area of Portfolio Management and PMO PMI Region Mentor in charge of the Eastern Europe

Project Portfolio Management

Maciej Bodych, MBA, PMP®

© WHITECOM Project Experience

Bio

© WHITECOM Project Experience 2

Maciej Bodych, MBA, PMP

Consultant, Trainer and Interim Manager in area of

Portfolio Management and PMO

PMI Region Mentor in charge of the Eastern Europe

Longstanding President of the PMI Poland Chapter

Lecturer at Kozminski Univeristy, Executive MBA „IT Project Portfolio Management” Lectures at numerous conferences and seminars, national and international, such as PMI® Global Congress, Project Management Institute, PMDays, Institute for International Research, GigaCon.

Certificates in quality area (Six Sigma, ISO), software engineering (RUP) and IT tools (IBM Rational),

Co-author of the book „ PMO. Practice of implementation project and portfolio management in an organization”

Practitioner – long experience in managing IT and consulting projects in project and portfolio management, implementing project management offices and evaluation of organization’s project maturity.

WHITECOM Project Experience

Consulting-Training company specializing in providing adjusted to the Client

integrated services in the project management and project portfolio management

(PMI®).

KP Development Program - PMP® and

PMI-ACP ® certification

Development and rationalization of

PMO

Rationalization of methodology and

portfolio management

Status PMI Registered Education Provider (nr 3629)

We are Microsoft’s Silver Partner

We are PMI Poland Chapter’s Golden Sponsor

Status PMI Registered Consultant (PMI® RCP)


Euro 2012

Project, Program or Portfolio?


How defining this people involved

in this event?

• „A program of project portfolios connected to each other” PL2012 President

• „A initiative of 8 programs” PL2012 website

• „A portfolio of various projects connected to each other” Consulting firm

• „Euro 2012 Project” Sports Minister

• „Euro 2012: Project of the year” Forbes Magazine


Differences in projects, programs and portfolios

6 © WHITECOM Project Experience

PROJECTS PROGRAMS PORTFOLIOS

Scope

Projects have defined obectives. Scope is progressively elaborated throughout the project life cycle.

Programs have a larger scope and provide more significant benefits.

Portfolios have a organizational scope that changes with the strategic objectives of the organization.

Change

Project managers expect change and implement processes to keep change managed and controlled.

The program manager must expect change from both inside and outside the program and be prepared to manage it.

Portfolio managers continually monitor changes in the broader internal and external environment.

Planning

Project managers progressively elaborate high-tech information into detailed plans throughout the project life cycle.

Program managers develop the overall program plan and create high-level plans to guide detailed planning at the component level.

Portfolio managers create and maintain necessary processes and communication relative to the aggregate portfolio.

Differences in projects, programs and portfolios


PROJECTS PROGRAMS PORTFOLIOS

Management

Project managers manage the project team to meet the project objectives.

Program managers manage the program staff and the project managers; they provide vision and overall leadership.

Portfolio managers may manage or coordinate portfolio management staff or program and project staff that may have reporting responsibilities into aggregate portfolio.

Success

Success is measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction.

Success is measured by the degree to which the program satisfies the needs and benefits for which it was undertaken.

Success is measured in terms of aggregate investment performance and benefit realization of the portfolio.

Monitoring

Project managers monitor and control the work of producing the products, services or results that the project was undertaken to produce.

Program managers monitor the progress of a program components to ensure the overall goals, schedules, budget and benefits of the program will be met.

Portfolio managers monitor strategic changes and aggregate resource allocation, performance results, and risk of the portfolio.

How we can define it?


Project

Program

Portfel: Financial and Human Resources Optimalization

Project portfolio management in Poland

(non-representative examples)

„ We have over 100 projects realized by our team. Team consists of 10 people.

Our smallest project is a two-hour undertaking…”

IT Director

„We have over 100 projects realised by our team. Team consists of 10 people.

Our smallest project is a two-hour undertaking…”

Project Manager

„I’d like to train few-persons software maintenance and development sections

managers of managing projects portfolio”

Resource Director

„Why to implement a project prioritization system? You can come to me, and I

will tell you, which projects are most important at the moment.”

Member of Management Board


The Standard for Portfolio Management

Project Portfolio „A portfolio is a component collection of programs and projects, or operations managed as a group to achieve strategic objectives.”

Project Portfolio Management „Project porftolio management is the coordinated management of one or more portfolios to achieve organizational strategies and objectives. It includes interrelated organizational processes by which organization evaluates, selects, prioritizes, and allocates its limited internal resources to best accomplish organizational strategies consistent with its vision, mission, and values .”


Vision

Mission

Strategy and objectives

Planning and managing a projects portfolio

Managing programs and projects

Planning and managing of

operational work

Performance management

Organizational resources

Processes vs. Projects


Role of the Portfolio Manager

• Establishing and maintaining a framework and methodology for portfolio management

within the organization;

• Guiding the selection, prioritetization of portfolio components to ensure the alignment with

strategic goals and organizational priorities

• Preparing recommendations on the list of projects to be realized

• Responsibility for balancing the project portfolio

• Controlling if the processes are conducted in accordance with the schedule

• Communication with stakeholders and sponsors

• Participating in program and project reviews

• Providing key stakeholders with timely assessment of portfolio components

• Measuring the value to the organization through portfolio performance metrics and

targets such as:

• Return on investment (ROI)

• Payback period (PP)

• Other


Knowledge and Skills of Portfolio Manager

• Knowledge of project and program management methods and

techniques

• Knowledge of the manufacturing process and the approach of

continuous improvement

• Leadership and management skills

• Knowledge of the market and organizational business

• Knowledge of standards and regulations within the organization

• Analytical skills

• Ability to manage risks effectively


Who can be the portfolio manager?

• Experienced manager

• Dedicated team

• Head of PMO

• Portfolio Review Board

• Directors Committee

Depending on the structure, roles and number of portfolios, there can be

several portfolio managers in the organization


Portfolio Management Office

• The PMO in the organization is the entity that defines and maintains the process standards generally related to portfolio management.

• It provides guidance on the practice of project management, in some organizations PMO may be involved in project execution, for example in process management or supprting implementation of proect management methodologies.

• Some of PMO’s functions: o Managing portfolio components;

o Negotiating and coordinating resources between various portfolio components or between portfolios;

o Coordinating communication across portfolio components;

o Developing and improving templates and checklists;

o Monitoring compliance to policies;

o Providing knowledge management including lessons learned;

o Conducting training and mentoring human resources in portfolio management skills, tools and techniques;

o Developing and maintaining portfolio, program and project frameworks and methodologies.


Portfolio Managemement Overview

1) Portfolio Management and Organizational Strategy and

Objectives

2) Portfolio Management Process Implementation

3) Portfolio Management Process Cycle

4) Portfolio Management Information System

5) Portfolio Management Governance

6) Portfolio Stakeholders

7) Organizational Influences on Portfolio Management



Portfolio Management Process Groups and Knowledge Areas

Portfolio Strategic

Management

Portfolio Governance

Management

Portfolio Performance Management

Defining process

Aligning process

Authorizing and Controlling

process

Portfolio Communication

Management

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Portfolio Risk

Management

Project Portfolio Management Processes

Knowledge Areas Process Groups

Defining Process Groups Aligning Process Groups Authorizing and Controlling

Process Groups

Portfolio Strategic Management

4.1 Develop Portfolio Strategic Plan 4.2 Develop Portfolio Charter 4.3 Define Portfolio Roadmap

4.4 Manage Strategic Change

Portfolio Governance Management

5.1 Develop Portfolio Management Plan 5.2 Define Portfolio

5.3 Optimize Portfolio 5.4 Authorize Portfolio 5.5 Provide Portfolio Oversight

Portfolio Performance Management

6.1 Develop Portfolio Performance Management Plan

6.2 Manage Supply and Demand 6.3 Manage Portfolio Value

Portfolio Communication

Management

7.1 Develop Portfolio Communication Management Plan

7.2 Manage Portfolio Information

Portfolio Risk Management

8.1 Develop Portfolio Risk Management Plan

8.2 Manage Portfolio


The Standard for Portfolio Management, PMI®

19

Project portfolio defining processes


Develop Portfolio Strategic Plan

Develop Portfolio Charter

Define Portfolio Roadmap

Develop Portfolio Management Plan

Define Portfolio

Develop Portfolio Performance Management Plan

Develop Portfolio Communnication Management Plan

Develop Portfolio Risk Management Plan

Organizational Strategic Objectives


Defining Process Group

Project portfolio management processes


Provide Portfolio Oversight

Manage Strategic Change

Optimize Portfolio

Manage Supply and Demand

Manage Portfolio Value

Manage Portfolio Information

Manage Portfolio Risks

Authorize Portfolio

Aligning Process Group


Authorizing and Controlling

Key Deliverables for Portfolio Management (1)


Key

deliverables Purpose Content

Portfolio Strategic

Plan

The portfolio strategic plan articulates the options, preferences, and factors that will be considered in specific portfolio that will aid the decision makers in aligning, authorizing and controlling the portfolio and its individual components with the organizational strategy, future benefit, and stakeholder expectations. Preexisting portfolios or inventories of work should be validated against organizational strategy updates to ensure consistency with the evolving organizational mission, goals, and objectives. Thus, by comparing new and preexisting components with/against one another, it may be determined that it is preferable to add, modify, or divest some components to ensure the portfolio objectives are aligned with the strategic plan.

Vision for the portfolio, which is based on the

alignment with the organization’s goals and

objectives

Allocation of founds and resources for

different types of initiatives (portfolios,

subportfolios, and other work) and how these

contribute to the organization’s objectives

Portfolio benefits are clearly and consistently

identified

Initiatives can be appraised and prioritized

Strategic objectives can be optimized with

available resources and risks

Key assumptions, constraints, dependencies,

and risks

Portfolio structure including a listing of the

various portfolio components and other work

Portfolio prioritization model



Key deliverables Purpose Content

Portfolio Charter

The portfolio charter is the document that formally authorizes and structures a portfolio. The charter provides the portfolio manager with the authority to apply portfolio resources to projects and other work within the portfolio. Chartering a portfolio links the portfolio to the organizational strategic plan and describes how the portfolio will deliver value to the organization.

The portfolio charter include the

portfolio vision, high-level

scope, justification, success

criteria, resources, and high –

level timelines for portfolio

delivery

Identification of stakeholder



Key

deliverables Purpose Content

Portfolio Management

Plan

The portfolio management plan describes the approach and intent of management in identifying, approving, procuring, prioritizing, balancing, managing, and reporting a portfolio of programs, project, and other work to meet the organization’s strategic objectives.

Governance model

Portfolio oversight

Managing strategic changes

Change control and management

Balancing portfolio and managing dependencies

Measuring and monitoring performance and value

Portfolio performance reporting and review

Communication model as part of the

communication management plan

Portfolio risk management planning

Procurement procedures

Managing compliance

Portfolio prioritization model




Portfolio Roadmap

The portfolio roadmap provides the high-

level strategic direction and information in

a chronological fashion for portfolio

management execution and ensures that

dependencies within the portfolio are

established and evaluated.

List of components

The roadmap can be considered to be the

hifh-level prioritization mapping of the

portfolio over time, and the crucial aspect

of the roadmap is that it forms the initial

basis upon which dependencies are

established both within the portfolio and

externally so they can then be tracked.

Dependencies

Key milestones and deliverables




Portfolio

A portfolio is a collection of projects, programs, and/or other work that are adopted and grouped together to facilitate the effective management of that work to meet strategic business objectives. The projects, programs, and/or other work may not necessarily be interdependent or directly related. The portfolio and its components are quantifiable; that is, they can be measured, ranked, and prioritized.

List of components with attributes (including but not limited to: costs, time, resources, velocity of the component’s completion, etc.) and portfolio structure.

Exercise


• We need group of 4-5 people • Please, select who will be the Project Manager (One

person) and Sponsors (Others) • Each Sponsor should choose a Word that contains 7-8

letters (Do not tell it to PM !!!!) • PM needs a pen and paper • Sponsor needs a timer • And … • Round 1: Ad-hoc resource allocation • Round 2: Well organized parallel working • Round 3: Project Sequencing

Case study - Bank

Main Problems:

• IT Department – „bottleneck” of the organization

• Lack of prioritization – IT decides on work order

• Applying projects from many different business

departments

• Process and project approach in the organization


Main assumptions

• Appointing the PMO to coordinate projects and IT resources

• PMO’s responsibilities:

– Collection and evaluation of project initiatives

– Prioritization (based on the client and type of project)

– The preliminary allocation of the initiatives to the next version of the system

– Preparation of recommendations for IT Porfolio Review Board Meeting

– Collecting statistics and lessons learned

• Assumptions:

– Weights for the type of project and the client have been defined

– The overall availability of resources for given version of system has been defined

– IT Portfolio Review Board has been established

– Principles and frequency of reporting have been set


Project selection process

* The process does not contain elements of risk processes

29

Identify Select Categorize Evaluate

Prioritize Balance Portfolio

Communicate Portfolio

Adjustment

Authorize

Review & Report Portfolio

Performance

Monitor Business Strategy Changes


Portfolio – broader look

In many cases through project portfolio we understand list of projects actually chosen for realization.

Let’s look broader...

• Initiatives

• Ended projects, which report benefits

• On-hold projects because of dependencies

• on other projects

• Budgeted projects

Without this:

• There is no possibility of forecasting!!!


Development of PPM process


Information management

PPM Process management

Recommendations and opinions

Making portfolio decisions/

Participating in creating of the

Startegy

Recommendations

• Verify the scope of services provided by PMO in project portfolio

management case.

• We can show organization’s project portfolio because of our

cooperation with PM.

• Manage whole project’s lifecycle, from initiation to settlement accounts

of financial benefits

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How does it look today? Recommendations

1 Raport with status of all projects „Red” projects to analysis

2 How many resources does the project needs?

Are there spare resources for the project’s needs?

3 Quantitive statistics about number of projects in certain status etc.

Statistics about level of business goals, budget, resources realisation.


Organization audit

Conducted review:

• Maturity of practices in project management according to PMI® standards

• Maturity of practices in program and portfolio management

• Scope of PMO and its structure

• Role of project managers


Question?

Maciej Bodych, MBA, PMP

[email protected]

+48 695-754-882


mailto:[email protected]

Documents

Project Portfolio Management Maciej Bodych, MBA, PMP Consultant, Trainer and Interim Manager in area of Portfolio Management and PMO PMI Region Mentor in charge of the Eastern Europe