Project Portfolio Management (PPM) Microsoft Office Project Portfolio Server Ann-Charlotte Arrhenius anarrhen@microsoft.com

UMT have a Proven Track Record UMT, established in 1989, specializes in project portfolio management, and deploys the most sophisticated software tools available today. With offices in New York and London, UMT’s consulting services enable companies to manage their project portfolios throughout their lifecycle. Our software was recently sold to Microsoft to be added onto the Enterprise Project Management Solution. We have implemented PPM solutions in over 50 clients within Fortune 1000 type companies. Our solution enables companies to Create, Select, Plan and Manage their project portfolios at all levels. As the pioneers and thought leaders of this area we believe we are genuinely the best at what we do, which is making your strategy work effectively. Voted World #1 in the 2004 MetaSpectrum Review of PPM Portfolio Management Overview 16 April 2017

Programs and Initiatives Project Portfolio Management Real-time Executive Decision Support Portfolio Management Alignment with Business Objectives Corporate Strategy Investment, Resource and Prioritization Decisions PMO / Enterprise Resource Management Integrated Portfolio of Managed Projects Integrated Delivery Framework Programs and Initiatives Consistent, Repeatable Project Delivery Project Management Projects Portfolio Management Overview 16 April 2017

Select & Deliver the Right Investments… Portfolio Management enables organizations identify and select the investments that will maximise Business Value 100% 50 % Value Lost Portfolio Management Project Management ensures organizations to successfully deliver the investments and realise the Business Value Project Management 66% Select the Right Projects 50% Value Realized Portfolio Management enables organizations to identify Business Value Project Management helps organizations to execute and realize the Business Value Both Disciplines combined allow organizations to Select & Deliver the Right Investments Organizations need to ensure they skilled in both Disciplines 0% 75% 100% Deliver the Projects Successfully Portfolio Management Overview 16 April 2017

To Be Successful Organizations Require Both Disciplines PORTFOLIO MGT, Process Definition Governance Benefits Forecasting Prioritization / Valuation Portfolio Optimization Adv Portfolio Analytics Capacity Planning PPM answers the following questions:  Have I selected the right investments? Do the investments align with the strategic objectives? Do I have sufficient resources to deliver the selected investments? Will the investments be delivered on time and within budget? Are my investments delivering the forecasted benefits?  PROJECT MGT. Project Planning Cost Management Resource Management Time Reporting Change Management Issue Management Status Reporting Earned Value Analysis    Portfolio Reporting Benefits Realization Portfolio Management Overview 16 April 2017

     What is Project Portfolio Management (PPM)? “Alignment is the essence of management” Fred Smith, Chairman Federal Express  Management Discipline – improves alignment between strategy planning and business/IT; strengthens governance; improves project definition, portfolio selection, resource planning and executive reporting Comprehensive Project Inventory – develops and captures new, ongoing and carryover work centrally to provide transparency around how key Business Drivers are supported and how resources ($/FTE) are dispersed Transparent & Actionable Decisioning Framework – provides ongoing and actionable portfolio analysis and reports to the decision-makers to enable improved investment viability and accountability PPM is: a management discipline that helps organizations achieve maximum project portfolio value through the continuous process of evaluating and managing projects against key performance metrics and strategic business objectives.    Workflow With Roles & Responsibilities – provides clearly defined roles and responsibilities throughout the process and Governance framework Analytical software toolset – leverages toolsets to capture project inventory and to ensure optimal, consistent and fact-based portfolio selection and planning decisions by simultaneously evaluating and comparing competing project ideas and resource needs (e.g., what-if, sensitivity analysis, optimization, etc.)  Portfolio Management Overview 16 April 2017

Overview Reasons for project failure are plentiful; emphasis on execution failure and / or lack of project management capabilities Is this the only - or even the primary - dimension to reduce value of the project portfolio? This presentation suggests that when selecting projects, it is essential to take a portfolio view, rather than a project by project view It will discuss how effective selection techniques can be applied in practice When it comes to PWP, most of the discussions and analyses focus on the operational parameters of project failure – ie. Failure to achieve on time, on budget, on scope success. The rational behind this goes: if we analyse all the reasons for PWP, and come up with proper mitigation plans, we will be able to increase the probability of of success. I would like to add another dimension to this analsyis. Which I believe is not sufficiently addressed. What if, after all the anlaysis, the project is OTOBOS, but does not deliver the required results? What if its contribution to the company’s strategy is minimal, or non-existent? Very little discussion is focused on a question that might be obvious, however is rarely addressed at the project level – is the project the right project, to begin with? Is the combination of projects the optimal one to deliver our strategy? In this presentation we will review a method for creating scenarios that allow us to not only select the optimal group of projects, but also to understand the implications that each scenario has on the delivery of the strategy. Portfolio Management Overview 16 April 2017

Benefits of a Portfolio Management Approach: Confidence, Transparency and Flexibility Key Benefits Creates a common currency for comparing investments and making better-informed decisions Ensures decisions made according to supportable data, not politics or ‘noise’ Reduces senior management time spent on decision-making Reduces overall spend by eliminating low value investments Uses a benefits-led approach to delivering strategic projects Enables greater focus on high-value initiatives Promotes organisational agility through modelling of ‘what-ifs’ and other detailed scenario analysis Specific Examples “..we saved $5 to 10mm (out of a budget of £50mm) in the first year alone, on projects that would have gone through automatically before” – Paul Bateman, Director of Enterprise Governance, Axa Financial “UMT’s solution led our Senior Executive Team to increase the 2004 budget to allow additional projects to be funded, based on their proven strategic value” – Frank LaRocca, CIO Keyspan Energy “Capable of solving exceptional business problems” – MIT Sloan Review, May 2004 Portfolio Management Overview 16 April 2017

Portfolio Value = Value Potential x Ability to Realize Success Comes With Iteration & Increasing Sophistication Moving Up The Portfolio Maturity Curve Enterprise PPM is optimized across the enterprise with a focus on continuous risk mitigation and value creation Project portfolio performance and risk data is understood and can be compared at the individual, cross-LOB, and enterprise levels Senior leadership is able to leverage PPM analysis when allocating funds to various portfolios Ability to measure and benchmark entire portfolio lifecycle PPM Maturity Stages Cross Portfolio PPM is adopted and used consistently across multiple organizations and portfolios Portfolio Analysts can compare and leverage portfolio analysis information across multiple departments Consistent measures enable cross portfolio analysis, selection, planning and management that supports predictive modeling and internal / external benchmarking Portfolio Value = Value Potential x Ability to Realize Project Portfolio Portfolio analysis is repeatable, predictable, and consistently used to evaluate and optimize project portfolio selection Portfolio Management teams are able to understand, analyze, & recommend optimal portfolio bundles and schedules to technology and business partners Value to Organization Project Inventory Processes are defined & documented, and most projects are aligned to Business Driver All projects are consistently captured in a project inventory Ad hoc No Portfolio Inventory or Process -“Just Do It/FIFO” -Success is random -Poor transparency Stages of Excellence Basic World-Class Crawl Walk Run Portfolio Management Overview 16 April 2017

New / Enhanced Applications Portfolio Mgmt: Synergies Between APM & PPM The Task of Continuously Renewing the Company Assets Capabilities is the Greatest Challenge Facing any CEO and CIO Application Analysis & Renewal Strategy Operations & Maintenance Portfolio Management Valuation & Selection Execution Project New Project Requests New / Enhanced Applications Business Strategy IT Strategy Current Investments New Portfolio Management Overview 16 April 2017

Create Select Plan Manage Portfolio Prioritization & Optimization Ensure the selected project portfolio aligns with the organization’s strategic priorities Create Select Plan Manage The next slides provide an overview of the Business Alignment Framework embedded in the Portfolio Optimizer Portfolio Management Overview 16 April 2017

Define Prioritize Optimize Select Business Alignment Framework: Business Driver Definition ‘The Business Alignment Framework ensures a Rational rather than Emotional approach to project selection’ Define Prioritize Optimize Select 1 2 Define Business Drivers & Impact Statements Prioritize Business Drivers 4 5 Optimize Project Requests Optimize Project Requests 3 Select Portfolio Assess the Portfolio Constraint Analysis Advanced Analysis New Project Requests Prioritize Requests Strategic Value Financial Value Risk Carry-Over Requests Portfolio Management Overview 16 April 2017

Capture Project Requests / Ideas Portfolio Builder Create: Business Case Development Capture all project requests within a central repository and define business case templates to standardize the data collection across the organization. 1 Pre-defined workflows ensure the projects are subjected to the appropriate governance controls throughout their lifecycle (i.e. proposal to post-implementation). 2 Capture Project Requests / Ideas Governance Workflow Portfolio Management Overview 16 April 2017

Strategic Goal 1 Strategic Goal 2 Business Alignment Framework: Business Driver Definition (Theory) Business Drivers are a series of short, sharp statements that express the shared focus of the organization in actionable terms Strategic Goal 1 Strategic Goal 2 Business Driver 1 Business Driver 3 Business Driver 2 Business Driver 4 They Are Attainable They Are Unique They Are Clear to Decision Makers Business Driver Criteria: They Address a Strategic Goal They Are Actionable They Are Measurable Portfolio Management Overview 16 April 2017

Retain existing clients Grow Customer Share of Wallet Business Alignment Framework: Business Driver Definition (Example) Strategic Goal: Dedicate our resources to those market areas where we can maintain our existing client base and increase share of market of current clients Business Driver Name: Business Driver Name: Retain existing clients Grow Customer Share of Wallet Business Driver Definition: Business Driver Definition: Maintain clients and remain competitive in existing markets Sell additional products to existing clients KPI’s: Client Satisfaction Rates Client Retention Rates Variance in % Market Share KPI’s: % Increase of Market Share Increase in Revenue Portfolio Management Overview 16 April 2017

Business Driver 1 Business Driver 2 Business Alignment Framework: Impact Statement Definition (Theory) Impact Statements are derived from KPI’s and used to quantify the impact of each project request against each of the Business Drivers Business Driver 1 Business Driver 2 Extreme Extreme Strong Strong Project Moderate Moderate Low Low No Impact No Impact The Impact Statements should clearly communicate the metrics that define the level of impact a project request may have on Business Drivers. Note: Existing KPI's / Balanced Scorecard/ Other metrics may be used Impact Statements ensure that each project requests impact on the Business Drivers are evaluated consistently using the same metrics. The Role of Impact Measures: Impact Statements are defined by the Executive team Impact Statements provide a quantifiable link between the measurable Business Drivers and the project requests. Portfolio Management Overview 16 April 2017

Grow Customer Share of Wallet Business Alignment Framework: Impact Statement Definition (Example) Driver Name: Grow Customer Share of Wallet Definition: Sell additional products to existing clients Associated KPI’s Thresholds Impact Statements Extreme Increases Revenue per client by more than 15% and increases Market Share by 5% % Increase of Market Share Increase in Revenue Strong Increases Revenue per client by between 8% -14.99% and increases Market Share by 2% - 4.99% Moderate Increases Revenue per client by between 3% - 7.99% and increases Market Share by up to 1.99% Low Increases Revenue per client up to 2.99% and increases Market Share up to 1.99% Portfolio Management Overview 16 April 2017

Define Prioritize Optimize Select Business Alignment Framework Prioritization & Optimization ‘The Business Alignment Framework ensures a Rational rather than Emotional approach to project selection’ Define Prioritize Optimize Select 1 2 Define Business Drivers & Impact Statements Prioritize Business Drivers 4 5 Optimize Project Requests Optimize Project Requests 3 Select Portfolio Assess the Portfolio Constraint Analysis Advanced Analysis New Project Requests Prioritize Requests Strategic Value Financial Value Risk Carry-Over Requests Portfolio Management Overview 16 April 2017

Business Alignment Framework: Business Driver Prioritization The Pairwise Comparison is a proven technique for deriving relative priorities or weights for Business Drivers through performing one-to-one comparisons. Indicates relative importance of Driver A vs. Driver B (row vs. column) Compares the relative importance of Driver B vs. Driver C (row to column) Steps to Success: Assess Divergence of Opinion: Each Stakeholder involved in the Business Driver Definition should prioritize the drivers independently Build Consensus: Invite all stakeholders to a Prioritization Workshop and collaboratively complete the Pairwise Comparison Matrix. Encourage the group to openly discuss the importance of each Business Driver pairing for the upcoming planning period. The same stakeholders who defined the Business Drivers should prioritize them. This ensures consistent understanding and better buy-in to the priority assessment conclusions. Portfolio Management Overview 16 April 2017

Define Prioritize Optimize Select Business Alignment Framework Prioritization & Optimization ‘The Business Alignment Framework ensures a Rational rather than Emotional approach to project selection’ Define Prioritize Optimize Select 1 2 Define Business Drivers & Impact Statements Prioritize Business Drivers 4 5 Optimize Project Requests Optimize Project Requests 3 Select Portfolio Assess the Portfolio Constraint Analysis Advanced Analysis New Project Requests Prioritize Requests Strategic Value Financial Value Risk Carry-Over Requests Portfolio Management Overview 16 April 2017

Prioritize Business Drivers Strategic Impact Assessment Portfolio Optimizer Select: Portfolio Prioritization Use proven techniques to define and prioritize business drivers Assess the impact of each project request against the prioritized business drivers Business Drivers 3 4 Projects Prioritize Business Drivers Strategic Impact Assessment Derive a priority score to evaluate each project request (i.e. Strategic Value, Financial Value, Risk) Analyze the project portfolio before attempting to make funding decisions 6 5 L - Priority - H Investment Maps Prioritize Projects Cost Portfolio Management Overview 16 April 2017

Define Prioritize Optimize Select Business Alignment Framework Prioritization & Optimization ‘The Business Alignment Framework ensures a Rational rather than Emotional approach to project selection’ Define Prioritize Optimize Select 1 2 Define Business Drivers & Impact Statements Prioritize Business Drivers 4 5 Optimize Project Requests Optimize Project Requests 3 Select Portfolio Assess the Portfolio Constraint Analysis Advanced Analysis New Project Requests Prioritize Requests Strategic Value Financial Value Risk Carry-Over Requests Portfolio Management Overview 16 April 2017

Efficient Frontier Modeling Business Alignment Analysis Portfolio Optimizer Select: Portfolio Optimization & Analytics Benchmark the selected portfolio against the Efficient Frontier 8 Utilize sophisticated optimization algorithms to maximize the portfolio’s strategic value under varying budget constraints (i.e. cost, resource etc.) 7 Efficient Frontier Modeling Calculate and communicate the selected portfolio’s alignment with the organization’s strategic priorities 9 ‘What If’ Analysis Business Alignment Analysis Portfolio Management Overview 16 April 2017

Resource Surplus & Deficits Portfolio Planner & Dashboard Plan & Manage: Schedule and Track the Portfolio Identify resource surpluses and deficits across the planning horizon and maximize resource utilization by proactively scheduling the project portfolio to best fit the available resources. 10 11 Resource Surplus & Deficits Portfolio Scheduling Create real-time project and portfolio performance scorecards to ensure Executives and PMO’s gain visibility, insight and control across project portfolios within the organization. 12 Portfolio Dashboard Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

Portfolio Management Overview 16 April 2017

The UMT Portfolio Management architecture Modular, proven, leading-edge software Central RepositoryTM SQL or Oracle Db IIS Web Server Thin Client Financial (GL) Time Reporting Enterprise Integration: Process: Tools: Portfolio BuilderTM Portfolio OptimizerTM Portfolio PlannerTM Portfolio DashboardTM Create Define projects to deliver strategy Select Prioritize & optimize portfolio on rational grounds using common currency Phase: Plan ‘Roadmap’ start & end dates according to resource availability Manage World-class PMO, track benefits, report progress, mitigate risk Define Drivers Develop Project Inventory Prioritize Projects Impact Statements Optimize Portfolio Optimize Project Schedules Competencies Requirements Competency Availability Analyze Supply vs. Demand Reporting Implement Initiation Design Construct Test Gates Status Reporting Issues Risks CR’s Resource Milestone Portfolio Management Overview 16 April 2017

MS Project Server Integration Synchronising Project Update with Portfolio Analysis UMT Portfolio Manager Microsoft Project Server Note: Workflow is configurable and customizable per client specification. UMT Portfolio Manager™ and MS Project Server integration points: Project ideas are entered and analyzed before being selected in the UMT Portfolio Manager and exported to MS Project Server to enable detailed project planning (e.g., task level). Detailed project plans can be synchronized with the projects in UMT Portfolio Manager in terms of schedule data (i.e. at the phase and milestone level only) and resource data (i.e. by competency or skill type) Resource availability data can be uploaded to the UMT Portfolio Manager from the MS Project Server, and used for scheduling analysis UMT’s Microsoft Gateway can be used on a periodic basis to synchronize Baseline, Actual & Forecast data with UMT Portfolio Manager for portfolio reporting and portfolio re-prioritization and optimization. Portfolio Management Overview 16 April 2017

Seamless Integration with Microsoft's EPM Solution UMT Project Portfolio Server integrates with the EPM Solution to allow organizations to quickly deploy ‘Top Down’ portfolio analytical techniques on top of the leading enterprise project management platform. Executives Portfolio Analysts Project Managers Application Managers Line of Business Systems PMOs Resource Managers Team Members Project Managers Portfolio Management Overview 16 April 2017