Seven Processes White Paper With NPD Added

8/8/2019 Seven Processes White Paper With NPD Added

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1 2008 Planview Inc. www.planview.com

PORTFOLIO-DRIVEN PERFORMANCE

THE SEVEN PROCESS AREAS THAT DRIVE

BUSINESS RESULTS

PLANVIEW INC.

BACKGROUND

Organizations and the people who manage them have lots of issues to deal with today. Te economy is unstable,

government regulations require unwavering compliance, competition is fierce, innovation is a must to stay ahead

of that competition and to just survive, and cutting costs and making a profit are more challenging than ever.

Tis struggle is made more diffi cult by the lack of a central location for decision making from the initial stages

of strategic and financial planning, through to work and cost management, and finally to the confirmation of

benefits realization.

By offering a clear path for communication and financial visibility throughout the organization, Planview hasidentified seven business process areas that provide a transparent framework for better management of people,

money, and time to help organizations with major business issuessuch as engaging in more innovative work

to meet key business objectives.

Tis paper examines the seven business process areas and business issues, organizational problems, and strategies

that can help knowledge-driven industries manage change and respond to market dynamics.

CONTENTS

Introduction .......................................................................................................................2Performance Management Framework .................................................................................2

Strategic Planning ..............................................................................................................3

Demand Management ........................................................................................................4

Capacity Management .......................................................................................................5

Funding and Budgeting ......................................................................................................6

Work and Resource Management ........................................................................................7

Cost Management .............................................................................................................8

Benefit Realization .............................................................................................................9

Summary ........................................................................................................................10

Process-Driven Portfolio Performance Management with Planview ..........................................10


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INTRODUCTION

Te collaborative aspects of change are the true challenge to knowledge worker organizations. Business evolutionis often defined by, accompanied with, or is the driver for, process change. Strategies, standards, methodologies,governance, and practically everything else that defines how an organization operates is rendered actionablethrough enabling business processes. Process areas are groupings of business functions within the conceptual

structure of the framework that help build mind-share and provide a level of iteration.

Organizations with undocumented or unstructured processes are burdened with ad hoc, siloed, and evenrenegade processes that operate as if each instrument in an orchestra is playing its own piece of music and hasno idea what the other instruments are playing. Processes can not operate in a vacuum within an organizationbecause decisions made in one area impact what happens in another area. If an engineer or developer is allocatedto work on two projects and gets pulled off one of them, it affects the schedule of both projects. Te organizationwith siloed processes experiences cacophonya lot of noise, but no harmony or fluidity.

Without a way for business processes to communicate and for information to flow, it is almost impossible fororganizations to get a snapshot at any point in time and over time of what resources they have, how they are

being used, where things are getting bogged down, how much all this is costing, and whether costs are stayingon track.

ruly forward-thinking organizations understand how essential a structured yet fluid framework is. A member

of the Executive Leadership eam doesnt want to have to think about what software he needs to access to look

at strategic and financial data. Tis kind of transparent access to, interconnection, and high performance ofbusiness processes is possible with a portfolio-driven approach to performance management. Programs, projects,services, and incidents are all squeezed through the funnel of demand management to determine how to bestalign processes to an organizations objectives and capacity for change.

Any process is most effectively managed relative to how it interacts with and impacts the overall organizational

ecosystem. As the framework will illustrate, no single business process adds bottom line value as an independententity; like players in a symphony, each must work together with a minimum of friction to deliver benefit. Tus,

the objective of the process framework is to provide a mechanism for placing major enterprise or business unit

functions in context with each other. By doing this, organizations are afforded a comprehensive vantage point

to enable the entire business ecosystem to function as a dynamic entity.

PERFORMANCE MANAGEMENT FRAMEWORK

Putting in place structured business processes can drive change and lead to higher performance and innovation.Tis is not an easy feat, though. It becomes even more complicated to make these processes visible within the

organization and to tie metrics to them.

Figure 1 below shows a performance management framework that links Strategic Planning, Demand Management,

Capacity Management, Funding and Budgeting, Work and Resource Management, Cost Management, and

Benefit Realization.

PORTFOLIO-DRIVEN PERFORMANCE: THE SEVEN PROCESS AREAS THAT DRIVE BUSINESS RESULTS


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Te above framework serves as a meaningful way of structuring business processes. With one click, managementhas access to a library of information in any of the seven process areas, with more specific information availableat the component level. Managers and executives can also get specific information on the organizations currentperformance in that area, helping them make better decisions and put in place the changes that will lead tohigher performance and innovation.

Visually, one can see from this framework that programs, projects, services, and incidents all place demands onthe organization that affect every process area. Lets take a look at each area individually to get a sense of the

kind of information that is available for effecting change.

STRATEGIC PLANNING

Most organizations that have instituted portfolio management primarily use it for managing work, resources,capacity, and costs. Forward-thinking organizations first put in place business processes to decide what projectsor products should even be done and what investments should be made.

Strategic Planning consists of those processes necessary to define and maintain the business plan, and involvesanalyzing the current state compared to change influences (internal or external) and development of resultingorganizational missions, objectives, strategies, and tactics. Tis includes creation of potential investment and

product portfolios and selection of initiatives approved to proceed, along with top-line operations and capitalallocation decisions. Business planning and investment analysis are no longer separate functions, but arelinked.

Te following can be accomplished by having establishing Strategic Planning business processes:

Increase revenue by aligning work, programs, products, and services with strategies

Mitigate risk by adjusting investment decisions in response to market conditions and operationalexecution

Figure 1. Framework for Process-Based Performance Management


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Respond with agility to market opportunity, competition, and regulatory changes

Establish a product roadmap that delivers the optimal product portfolio

Reduce expenses by consolidating applications, products, and services

Reduce expenses by eliminating misaligned work, products, and services

Increase revenue by optimizing the investment portfolio

Management has a single location to capture and analyze strategic and financial data, can respond quickly tochanges in priority or strategy as they arise, and can automatically create various investment portfolio scenarios,as is seen in Figure 2 below.

Beneficiaries of Strategic Planning process information include the following: PMO, EMPO, COO, VP ofStrategy, Strategic Steering Committee, VP of Product Development, VP of Product Management, CorporateFinance, and the Executive Leadership eam. Each one of these functions can access the same up-to-dateinformation to help them make the best possible decisions for doing business planning and investmentanalysis.

DEMAND MANAGEMENT

Demand can come from external sources such as consumers, customers, regulators, or shareholders or from within an organization. Demand Management encompasses processes associated with demand intake anddispatch of work. Tis includes the receipt of new ideas and initiatives plus requests for new and enhanced

programs, projects, products, services, or incidents.

Demand Management also includes functions that must occur between time of receipt and the decision toproceed in fulfilling the request, including any additional information gathering necessary to effect a dispositionor assignment, backlog management, prioritization, initial planning and estimating, and handling of cancelled,duplicate, or disapproved requests.

Demand Management serves as the process linkage between any strategic changes requested as part of capacity

Figure 2.Strategic InvestmentPriority Matrix


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management and strategic planning functions required to analyze and process those requests. Additionally, forthe service provider, Demand Management fulfills additional customer-facing responsibilities to communicatereceipt and disposition back to the requestor.

With one place to go to view all demand within an organization, managers can do the following:

Capture complete demand in a single location and eliminate costs of maintaining multiple systems

Utilize a structured process to prioritize all demand to optimize business results

Reduce costs by cutting redundant work and services that are currently underway

Having this single place to view demand gives management visibility into changing programs, new project orproduct work, services, and operational requests. It also depicts how time, resources, and money are utilizedby incoming demand, and facilitates making intelligent trade-offs. Figure 3 shows the ability to drill down ondispatched requests to get more information.

People within an organization who can benefit from having Demand Management information available froma single console include the following: Resource Manager, Project Manager, LOB representatives, ProductManager, Portfolio Manager, PMO, Strategic Steering Committee, VP of Product Development, and VP ofProduct Management. Each one of these functions can access the same up-to-date information to help themmake the best possible decisions for capturing and responding to demand.

CAPACITY MANAGEMENT

Demand requires some kind of capacity to fulfill it. Capacity Management refers to those functions necessaryto plan and manage assets on a macro level. Any resulting requests for strategic changes in capacity are routed

through strategic planning for decisions. Change can be in the form of demand for new products or services orit can impact capacity directly.

Balancing internal and external demands with available resources is a challenge that every manager faces and iseven more daunting when management does not have a complete view of capacity with drill-down capabilities.Tis is possible within a process framework, which enables management to:

Improve overall planning and decision making to connect resource capacity to the business objectivesof the company

Figure 3.Dispatched RequestsPortlet with Drill-DownOn-Demand Report


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Optimize the labor profile of FEs versus contractors globally

Accelerate time to market and improve competitive advantage to meet business objectives

Offer more comprehensive products and services at lower costs

Understand the available infrastructure capacity to support new work and services and minimize risk

Having a singular view also helps management determine if they have the right people at the right place at theright time, respond to competitive pressures by making better decisions, and capture and communicate the totalcost of a business service or product. Figure 4 shows one drill-down capabilitycapacity breakdown by monthand by levels of effort.

Beneficiaries of Capacity Management information include: Program Manager, Project Manager, ResourceManager, VP of Strategy, VP of Operations, LOB Executive, PMO, EPMO, VP of Product Development, andthe Strategic Steering Committee. Tese functions all have responsibility for managing the valuable resourcesof the organization to meet demand and can benefit from being able to drill down on current information and

business issues.

FUNDING AND BUDGETING

Capacity always has a cost. Business management consists, at a fundamental level, of making demand versuscapacity trade-off decisions, and ensuring a suffi cient cost-benefit ratio to further stated goals and objectives.

Te Funding and Budgeting process usually begins with an annual proposed dream budget that includes thingseach department would like to do to be truly innovative and exceed expectations. Te Executive Leadershipeam and VP of Finance rank investments, similar to what is shown in Figure 5, and create a proposed

investment portfolio. After negotiations and multiple iterations, funding is approved for capital investmentsand an actual operational budget, which can be broken down to departmental, program, project, products, andservices budgets.

A central platform is needed so that all managers with financial responsibility can build out budgets withinthe context of the strategic plan and understand the true financial impact of delivering programs, projects,products, and servicesand any changes that are made to these. Tis is possible when Funding and Budgetingare included within the process framework. When they are, management can do the following:

Figure 4.Capacity

BreakdownPortlet


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Increase effi ciency of the budgeting process by using a central platform for defining all financial,product, and resource demands

Drive business results by aligning the budget with the strategic plan

Mitigate financial and operational risk associated with changing priorities, regulatory requirements,and/or strategy

Improve financial governance with clear transparency into the costs of projects, programs, products,and services

Maximize effectiveness of utilization of and accountability for the budget

Other benefits are that management gets visibility into the overall strategic value of the work and serviceswhen defining the budget, they can quickly respond to changing priorities and/or requirements, and it aidsmanagement in handling periodic impacts of changes to strategic or business plans.

Beneficiaries of Funding and Budgeting information include: Portfolio Manager, Executive Leadership eam,Strategic Steering Committee, VP of Finance, LOB Executives, CIO, COO, VP of Product Development, VPof Product Management, Controller, and the CFO.

WORK AND RESOURCE MANAGEMENT

Te level of approved funding directly impacts what resources are available and what work can get done. Workand Resource Management facilitate effective planning, managing, and controlling work and resources. Using

the portfolio-driven performance management framework can help determine resource availability, if the rightperson is being assigned to the job, project performance, effective work prioritization, operational bottlenecksthat are affecting productivity, and whether projects, programs, products, and services are supporting overallbusiness objectives.

Project management, work management, service management, resource management, scope management, andtime reporting are all included in this process area. Functions also include detailed work planning, HR resourcedevelopment and skills management, help desk, and project execution. All work requests can be captured,reviewed, and expedited from a single location. Performance can be measured in real time to mitigate risks andmanage change.

Figure 5. Rank Investments


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Managers who apply this discipline to Work and Resource Management are better able to do the following:

Eliminate cost overruns on work

Eliminate manual efforts to generate management reports

Improve operational execution by putting the right people on the work at the right timeDrive effi ciency by eliminating different systems to manage projects, products, people, and skills

Better plan and execute work for on-time delivery and to meet other business objectives

Establish repeatable and more predictable execution and delivery

Having a view into the current state of work performance and resources makes it possible for schedules to bepredictable (see Figure 6 below), products to get out on time, and time spent on programs, projects, products,and services to be measurable and auditable.

Beneficiaries of a Work and Resource Management process include: PMO, Portfolio Manager, Program Manager,Project Manager, R&D Manager, CIO, LOB Representatives, Resource Manager, and the Strategic SteeringCommittee. Te improved visibility they get with this framework yields project transparency and enhancesdecision making.

COST MANAGEMENT

Managing work and resources necessitates good Cost Management. It is essential to know the actual costs ofdirect labor, external labor, and non-labor as well as the variance to what was budgeted. Often there can be

hidden costs that cause this variance. Once a Cost Management process is added to the portfolio managementframework, it allows management to see what the total cost of ownership of an application, product, program,project, or service is, where there are redundancies and costs can be reduced, how to optimize the costs ofsustaining operations, how to meet Service Level Agreements (SLAs), how to improve customer satisfaction, andhow to manage chargebacks.

Services, programs, products, and projects can be linked with related assets, labor, and applications to reveal thetrue costs to the business (see Figure 7). With this information, it is possible to determine the true value, identifyand eliminate ineffi ciencies, accurately invoice business units, and gain control of spending. Hidden value canbe revealed by reducing maintenance costs and delivering business services and products more effi ciently.

Figure 6.

Gantt Chart inPortfolio Manager


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Managers who deploy a portfolio process approach to Cost Management are able to:

Manage costs by tracking planned versus actual costs

Reduce costs through the rationalization of the application portfolio

Evaluate services outsourcing alternatives

Control costs by understanding the true cost of all work performed

Capture otal Cost of Development of products from ideation to retirement

Te ability to view and track costs helps eliminate high operational spend, consolidate all work (labor and non-labor) costs in a central place, and understand the costs of projects, programs, products, and services.

Beneficiaries of Cost Management include Portfolio Manager, Product Manager, Development Manager,Executive Leadership eam, Strategic Steering Committee, VP of Finance, LOB Executives, CIO, COO,Controller, and CFO. By getting up-to-the minute analytics of all costs, management can do reforecasting,shuffl e resources, and spend as things change.

BENEFIT REALIZATION

After putting in place Strategic Planning, Demand Management, Capacity Management, Funding andBudgeting, Work and Resource Management, and Cost Management processes, it is important that a BenefitRealization process be added to measure the benefits and see the Return on Investment (ROI). Implementing,adhering to, and keeping current with structured portfolio management processes can bring additional profitsand/or capacity to the organization. By including Benefit Realization as a process in the portfolio managementframework, managers can:

Figure 7.ServiceTopologyView


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Quantify benefits and establish governance against forecasted versus actual returns

Drive effi ciencies by becoming a learning organization

Deliver more innovative, market-responsive, and cost-effi cient products, programs, and services

Business benefits can be quantified and the organization can see where it has a good return on the investments

it made in people, programs, projects, products, and services, and where it made choices that resulted in anegative or no return. Also, when benefits are realized, there needs to be a process to re-integrate these benefitsinto Strategic Planning and thus come full circle in the whole process.

Beneficiaries of Benefit Realization information are Executive Management and Shareholders. Ultimately, thewhole organization benefits by knowing whether their planning had positive results.

SUMMARY

Business processes are all ultimately inputs or outputs to each other and business operates as a continuous loop.

Change influences challenge the current state. If the change is more than a routine fluctuation, a transformationoccurs. Tis produces an evolved state, which becomes the new current state.

As change influences of any significance impact the current state, they have the potential to accelerate, disrupt, orinvalidate current strategies or cause adoption of new ones. Strategic response must be translated into actionablework, often through the assessment of various possible options or approaches, usually in the form of newprograms, products, and services. Te best approach is selected and funded. Te change response is designed,developed, and delivered, and the new program, product, or service causes a transformation into a new currentstate. If all goes well, the change provides expected results and benefits to the organization.

If this change is not proactively managed and accommodated, it then becomes a disruptive force that createsconfusion and frustration throughout the organization. If the change is proactively managed through the formof business processes, the organization accommodates the transformation cycle through innovation.

By offering a clear path for communication and financial and strategic visibility throughout the organization,a transparent framework for better management of people, money, and time helps organizations respond tochange and meet key business objectives through innovation.

PROCESS-DRIVEN PORTFOLIO PERFORMANCE MANAGEMENT WITH PLANVIEW

In order to maximize resources and be market leaders, forward-thinking organizations have to put in placeprocesses that introduce change. Over nearly two decades, Planview has amassed considerable expertise bypartnering with these organizations and developing a wealth of information to give them an advantage. TislibraryPlanview PRISMS is automated and integrated with Planview Enterprise, and includes businessprocess expertise and over 200 best practices in seven core areas to help with process change.

Te process framework discussed in this paper is the foundation for Planview Enterprise. Planview Enterprise isa comprehensive decision-making platform that drives performance by delivering unprecedented transparencyinto the trade-offs involved in key business decisions across the enterprise.


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Planview Enterprise combines comprehensive demand management with real-time portfolio analytics, best-of-breed resource management, and action-driven processes. Working together, these capabilities give customersimproved visibility, fewer redundancies, increased effi ciency, and the ability to focus limited resources on higher-value work. By integrating analytics with root-cause analysis, Planview Enterprise enables true optimization,yielding even greater effi ciency and productivity. Te result is a powerful, proven-effective way to:

Fully align strategies, resource capacities, and funding

Gain better control of projects, programs, products, services, and resource assignments

Capture and manage the total cost of delivering projects, programs, products, and services

Deliver effective governance

Te Planview Enterprise suite of portfolio management solutions has empowered hundreds of organizations tomake better business decisions through a structured framework for optimizing financial and human resourceson investments, projects, programs, products, and services.

Planview provides a range of versatile and effective programs that create a path to value that ensures effectiveadoption, customized organizational enablement, early benefits, and a decisioning and process solution that isscalable, integrated, and aligned to the organizations objectives and capacity for change.

Since 1989, Planview has been a market leader and trusted partner in providing comprehensive portfolio management solutions. Planview Enterprise, the companys leading

performance management platform, combines project and portfolio management software with adaptive best practices, Planview PRISMS, to enable better decision making

and business accountability. Industry leaders such as Citi, BP, EDF, and the American Red Cross, partner with Planview to achieve their strategic business goals.

Planview Micro-Frame Program Manager (MPM) is the industrys leading Earned Value Management solution. Planview MPM is the only complete solution for effi cientlymanaging the entire program lifecycle, from the proposal phase through program completion. Planview MPM is used by hundreds of organizations such as Northrop

Grumman, Raytheon, and L-3 Communications, and supports critical programs for the Department of Defense, Department of Energy, and NASA.

Headquartered in Austin, exas, with offi ces across the U.S., Europe, and Asia-Pacific, Planview supports 550 customers in virtually every industry. Planview is privately held

and has been profitable for over a decade. For more information, visit www.planview.com.

2008 Planview, Inc. All rights reserved. Planview, Planview Enterprise, and Planview PRISMS are registered trademarks of Planview, Inc. All other trademarks are

acknowledged. Planview reserves the right to vary specifications and availability of these products and services without notice.

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Seven Processes White Paper With NPD Added