Infrastructure Delivery Management Toolkit: 2010 Edition Delivery Process 1: Portfolio Management Introduction Sonny Schmidt development through partnership

Overview of Portfolio Management “Infrastructure networks, ... represent a vast investment, made over many generations ... that support the fabric of modern living in our communities. It is important that we employ the very best management skills and practices to ensure that related services are delivered economically and sustainably.” (IIMM v3 2006) Public organisations are required to provide their mandated services effectively, efficiently and reliably. Well managed infrastructure assets assist organisations to achieve these objectives by creating the physical environment and networks enabling the delivery of the organisation’s services. Thus Infrastructure Portfolio Management is a component of an organisation’s (department, municipality, etc) service delivery procedures. It is not sustainable to focus on meeting infrastructure needs through investment (new building, purchases) only. Must recognise the long term life cycle costs associated with the ongoing operation, maintenance and renewal of infrastructure. Improving the management of infrastructure can bring major benefits by ensuring that scarce resources are used in the most cost effective manner, thereby: enhancing economic growth, improving living standards and improving environmental sustainability.

Overview of Portfolio Management “Portfolio Management is concerned with doing the right work” (Standard for Portfolio Management 2006 - PMI) Portfolio Management is the combination of management practices applied to infrastructure assets Objective of developing, implementing, monitoring and controlling prioritised work lists Based on long term plans, available budgets and an organisation’s management capacity. Portfolio Management also includes identifying and managing non-asset solutions

Overview of Portfolio Management (PMI) Portfolio Management is the combination of management practices applied to infrastructure assets Objective of developing, implementing, monitoring and controlling prioritised work lists Based on long term plans, available budgets and an organisation’s management capacity. Portfolio Management also includes identifying and managing non-asset solutions

Statutory Requirements for Portfolio Management (1) PFMA Section 38 (1): “ .. evaluating all major capital projects ..” “..effective, efficient, economical and transparent use of resources..” “.. safeguarding and maintenance ..” Chapter 5 of Treasury Regulations: Prepare and submit a strategic plan and APP for MTEF period annually Accounting officer responsibilities for departments (amongst others) UAMP is considered to be part of a department’s strategic plan Required to include infrastructure discussion on infrastructure expenditure in the strategic plan

Statutory Requirements for Portfolio Management (2) GIAMA: U-AMP: Reviewed, submitted annually Strategic needs assessment C-AMP Life cycle management plan for assets OHS: Operations and Maintenance requirements In operation in provincial governments from 1 April 2010 OHS: standard requirements that should be factored into Portfolio Management – not discussed in the module.

Standards and Guidelines International Infrastructure Management Manual (IIMM) Standard for Portfolio Management (PMI) Standard for Programme Management (PMI) GIAMA Guides for Asset Management Plans Based on work in Australasia; SA version 2006 with IMESA and COGTA (DPLG) participation Project Management Institute’s publications Guideline for Users – User Asset Management Plans (20 Oct 2008) Guideline for Custodians – Custodian Asset Management Plans (20 /2008)

The IDMS DP1: Portfolio Management DP2: Project Management Prov Infr Strat DP1: Portfolio Management DP1-1 Infrastructure Planning DP1-2 Programme Management Develop U-AMP (including prioritised MTEF works list) Develop C-AMP (including work plans) Dev Proc Strat Develop/review IPMP Manage Implementation G1(a) G1(b) G2 PC1 PF1.4 PF1.3 PF2.1 PF2.2 PF2.3 PF3 PF4 PF5 DP2: Project Management DP2-1 Planning (Develop IPIP) DP2-2 Design DP2-3 Works DP2-4 Close Out Package prep Package definition Works planning Design developt. MFC Info Con/Del works Handovr works Project Close Out Update Asset Register G3 G4 G5 G6(a) G6(b) G7 G8 PC2 PC3 PC4a PC5 PC4b T1 T2 Delivery Gates: G1a – Approved U-AMP (incl MTEF list) G1b – Approved C-AMP (incl Works list G2 – Accepted Procurement Strategy G3 – Accepted Strategic Brief G4 – Accepted Concept Report G5 – Accepted Design Development Report G6 a – Accepted Production Information G6b - Accepted Manufacture, Fabrication & Construction information G6c ?? – Sonny to confirm if required G7 – Accepted works in accordance with requirements G8 – Works taken over by User, complete with record information Procurement Milestones: PC1 – Procure PSP for Programme Management, incl strategic procurement services PC2 – Management Contractor / Framework Contract PC3 – Design and Construct PC4a – Design by Employer (Consultant procurement) PC4b – Design by Employer (Contractor procurement) PC5 – Develop and Construct Performance Management Processes: PF1.1 – Develop Indicators from Strategic Plan objectives PF1.2 - Develop Indicators from Programme Implementation Plans and Budgets PF1.3 – Develop Indicators from Project / Operational & Maintenance Plans PF1.4 – Link Indicators and RACI to individual Performance Agreements PF2.1 – Monitor & Evaluate Inputs, Activities and Outputs against plan PF2.2 – Monitor & Evaluate Outcomes against plan PF2.3 – Monitor & Evaluate Impacts against plan PF3 – Publish Performance Information PF4 – Review / Appraise individual performance PF5 – Take management action Triggers: T1 – Trigger – To O&M on requirements for works that will be delivered T2 – Trigger – To other Dep’s on requirements for other services (staff, books (Edu), pharmaceuticals (Health), etc) PF1.4 PF1.3 PF2.1 PF2.2 PF2.3 PF3 PF4 PF5 DP3: Operations & Maintenance DP3-1 Recognise & accept assets DP3-2 Mobilisation for Facilities Mgt DP3-3 Operations DP3-4 Maintenance DP3-5 Demobilise Facilities Mgt G8 PF1.4 PF1.3 PF2.1 PF2.2 PF2.3 PF3 PF4 PF5

Portfolio Management Process Outputs include first 2 Gates in the CIDB Gateway Process Key input is the Asset Register – record of each asset

Components of Portfolio Management Continuous activity that produces plans and reports at scheduled times (minimum) Effective implementation of management activities best carried out in collaboration by User and Custodian (User remains accountable for delivery)

Operation and Maintenance Management Portfolio Management Operation and Maintenance Management Project Management Feedback from Projects in Progress Feedback from Operations and Maintenance Handover of constructed, upgraded or rehabilitated asset

OAG: Asset Life Cycle (Asset Management Guidelines)

User and Custodian Portfolio Management Outputs organisations Custodian U-AMP Construction procurement strategy IPMP Organisation and Support plan Monitoring reports Recommended actions C-AMP Work Plans Portfolio Management outputs by responsible organisation The Implementing Agent is managed by the User on the basis of the SDA between the organisations and the IPIP it submits

Benefits of Portfolio Management Strategic Alignment Improved Stakeholder Management Good Governance Legislative Compliance Consistent Reporting Improved Risk Management Gives confidence that infrastructure is well managed; Using standardised methods to plan, deliver and monitor services; Allows time for important processes to take place – Optimised decision making Implementing good management procedures contributes to risk reduction Data is recorded allowing for analysis to improve systems and procedures Continuous improvements gives confidence that the portfolio management is sustainable

Portfolio Management is a continuous process Conclusion Portfolio Management is a continuous process Reports are snap shots at specific times Collaboration with custodian - develop Document work – institutionalisation, transfer lessons learned

Thank you 2006 Ver planning philosophy remains the same GIAMA requirements added – essentially a combination of the outputs of each of the steps in the roadmaps Good working relationship between Custodian and User essential Flows now linear – easier for people to use