Ron Sklaver, MBA, PMP, ABC, XYZ UMT Consulting Group Session #TRN30 Is Your Organization Ready for Portfolio Management A Model for Understanding Organizational Capabilities Ron Sklaver, MBA, PMP, ABC, XYZ UMT Consulting Group Session #TRN30

Special Thanks Wish I could take credit for the IP, but… Tom Malfi, Partners, UMT Beth Britt, Senior Vice President, UMT *

Setting Some Context High organizational level Strategic in nature Company, SBU, Operating Group, Division Not Department or Team Strategic in nature Big questions like who we are and what we do Think big

A Warm PMI Welcome To… Winky-Dink, Inc. *

Introducing Winky-Dink, Inc. Portfolio Management: What Is Needed to Kick Your Decline IN Kinz-Kash *

You’ve been called into a meeting with senior management The Set-up You’ve been called into a meeting with senior management

You’re Charged With… Figuring out whether Winky-Dink, Inc has what it takes to “do portfolio management”

Let’s Start With… A framework (Every consultant’s favorite word – right up there with “reach out” or “engage”) A way to organize thinking about portfolio management *

Operationalizing strategy A Portfolio Management Framework Governance Develop Strategies Operationalize Strategies Review Performance Operationalizing strategy Moving from current state to future state Bridging the gap between lofty strategic goals and achieving them 9

A Portfolio Management Framework Governance Develop Strategies Operationalize Strategies Review Performance Portfolio Management Create Select Plan Manage Govern demand intake… Create business cases Align proposals to business drivers (high level) Build financial models (ROI, NPV, etc.) Analyze costs/benefits Articulate the “what” Govern portfolio selection… Prioritize business drivers Align proposals to business drivers (specific degree of alignment) Analyze impact of constraints, play what-if scenarios Optimize portfolio Quantify the “why these” Govern portfolio schedule… Plan capacity Balance supply and demand Optimize the schedule Make sourcing decisions Communicate organizationally (delivery) Figure out the “how” Execute projects Report progress - management reporting, project reporting, ad-hoc reporting Control lifecycles, track plan vs. actual Track and realize benefits 10

So How Do I Apply This Framework?

Through Capabilities Technology Organizational Process Tools/templates PPM tracking Organizational Managerial Operational Portfolio Management Organization Technology Process Portfolio Management Organization Technology Process Process Methodology Compliance Mgt

Sample Organizational Capabilities (Create) Able to… Articulate strategic goals Define meaningful initiatives to undertake Initiatives are projects; projects are investments Define meaningful groupings of projects/work Forecast benefits and build business cases

Sample Organizational Capabilities (Select) Able to… Prioritize and weight strategic goals Generalize degree of “fit” Make decisions with incomplete data

Sample Organizational Capabilities (Select) Able to… Compare options through… Business case analysis Playing “what-if” with resources, required projects, budget constraints, etc. Analyzing efficient frontier

Sample Organizational Capabilities (Plan) Able to… Coordinate portfolio decisions with the business planning cycle Plan capacity, balance resource needs Evaluate cross-project dependencies

Sample Organizational Capabilities (Manage) Able to… Use and absorb performance data Does ongoing work support business drivers How efficiently are resources allocated Are benefits being realized Is alignment getting you where you want to be

Sample Organizational Capabilities (Manage) Ability to… Adapt to performance data Shift resources creatively from initiative to initiative… …BUT leave in place long enough to gain the value/complete the projects *

Sample Organizational Capabilities (Governance) Able to… Follow structured portfolio governance Provide clearly defined roles, responsibilities and activities in managing business processes Define and maintain investment accountability Through regular portfolio reporting and analysis for decision-makers * *

What About Other Lifecycles? Portfolio Management is wholly dependent upon other lifecycles Ergo…operationalizing strategy is also dependent upon others lifecycles *

Capabilities Across Organizational Layers Governance Executive Scorecards Develop Strategies Operationalize Strategies Review Performance Portfolio Management Portfolio Review & Tracking Supply & Demand Assessment Create Select Plan Manage Program / Product Management Resource Management Capability Performance Management Capability Program Value Reporting Program Resource Alignment Define Components Ensure Strategic Alignment Track Benefits Review Benefits Project Management Project Status Reporting Project Resource Planning Initiate Plan Execute/ Control Close Team Management Progress / Time Tracking Work Assignment Capacity Mgt & Availability Analysis Skill Assessment Work Assignment Progress Tracking 21

So We Know… Capabilities differ between portfolio management, program management and project management The work done at each layer differs from and complements the others We need all the layers ***

Is This Really How It Works?

Yes, This Really is How it Works Simple at a high level Strategize, plan, execute and measure Purpose, role and goals of each layer clearly defined Lots of moving parts Cross layer integration Nested lifecycles People and capacity to be managed Operational oversight at each layer *

Making It Real z z How do I approach this in my own company?

By Evaluating Your Capabilities Questions to… Ask yourself… Facilitate among leadership… …to determine where you need to grow capabilities *

“Create” Questions What is the process by which project ideas are submitted and approved? Have we gathered the info we need about each idea? Degree of alignment, expected return, resource needs, schedule relative to other initiatives *

“Create” Questions Have we captured all our active projects? What is on hold or in queue?

“Select” Questions In the current portfolio… Do components align to strategic objectives? Can we say to what degree? Are we on target to receive expected benefits? How do expectations for new initiatives compare to those for active projects? *

“Select” Questions Can we specify organizational constraints such as: Regulatory requirements? Overall budget?

“Plan” Questions Are the resources sufficient to deliver the selected projects? With what level of confidence will the projects be delivered on time and within budget? Do we understand the impact of cross-project dependencies **

“Plan” Questions What is the impact of the collective projects on the organization’s risk? Not the risk of a single project… …Rather, the risk of, say, three large projects at once for the finance function *

“Manage” Questions To what degree are projects staying within constraints (ie: on time and budget)? How long are projects taking from inception to benefits realization? Are they delivering the forecasted benefits? *

So How Mature Are We? Can these questions be answered… With consistency and ease? With real data? Who holds the answers? Does everyone who needs to know, actually know the answers?

So How Mature Are We? If you answered yes to even some of these…YOU CAN DO IT!

But First Things First! A pleasant reward… …for a job well done!

Contact Information Name: Ron Sklaver Email: rsklaver@umt.com Phone: +1-212-965-0550 Session #: TRN30