Dirk Lupien, Sr. Constultant Oakwood Systems Group

Project and Portfolio Management disciplines directly affect IT’s ability to align with and support strategic company goals. In this session, we will discuss executive visibility and control required in a Business Enabled Enterprise. This includes reviewing the critical success factors, KPI development, processes and management concepts required to optimize business performance.

PPM level set and financial advantages Portfolio visibility is key to project selection The Dashboard concept What are KPI’s – What to include in your dashboard Business and IT alignment Management insight and control to optimize business performance Six critical success factors of PPM Supporting and evolving Project Management processes

Project Management Institute: “The centralized management of one or more portfolios, which includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work, to achieve specific strategic business objectives.”

Portfolio & Program Management Request Management Business Case Development Portfolio Prioritization / Valuation Governance Process Definition Portfolio Optimization / Selection Program & Portfolio Reporting Benefits Realization Project Planning Status Reporting Resource Management Time Reporting Change Management Earned Value Analysis Cost Management Issue Management Risk Management Project Management Business & Technology Stakeholders Have I selected the right project investments?     Do the project investments align with our strategic objectives? Do I have sufficient resources to deliver the selected project investments? Are my project investments delivering the forecasted benefits? Portfolio Management answers: Project Management answers:  Who’s available to staff our new projects?  When will we really finish and what will it cost?  What am I supposed to be delivering this week?  Can we link project data with our front & back office?

In order for project portfolio management to be successful, project management, resource management, reporting, and organizational processes must be well established. Similarly, if processes have not evolved to allow individual projects to be managed in a standard way, or if the team members are not fully participating in the Enterprise Project Management Solution initiative, accurate analysis of project portfolio data is not possible.

Financial Benefit: 10%-25% Cost Reductions by Companies Implementing PPM Processes & Tools Common Sources of Financial Benefit: Increase of 5%-20% in Cost Avoidance against IT discretionary budgets Increase of 5%-40% in projected return for global IT budget (IRR, NPV, EBIT) Increase of 5%-15% in resource utilization (Gartner PPM show, 2005)

PPM Advantages: Over 80% of organizations utilizing accurate portfolio valuation could be able to reduce waste or increase value creation opportunity by 20% to 40% With Sarbanes-Oxley and similar legislation, PPM provides the statistical rational for large project investments and the transparency and accountability to know where investments are flowing in the organization Improved communication & alignment between IS and business leaders - strategic corporate direction Reduces the number of redundant projects and makes it easier to kill projects

The mantra If you can not identify it, you can not prioritize it, If you can not prioritize it, you should not authorize it, If you authorize it, you expect it to be controlled, If it is not controlled, how do you know if your selection is meeting your strategic objectives?

It’s simple, isn’t it? Just provide consolidated project data in an easy to read format that lets management drill down and investigate when there are problems

KPI – Key Performance Indicators or Indices What are the important factors affecting your business today and how do you determine if those items are in trouble? What is important to your business? Cost (CV, CPI, Budget, Actual?) Schedule (SV, SPI, Status?) Closed Sales, Sales Cycle Duration, Project Phase Revenue Generated, Profit Margin

Dashboards are a way to view summary business data They can include charts and graphs for trend analysis, issues, risks or any pertinent data that provides a clear picture on the health of projects or the business You should start with those items that define success

Lagging IndicatorLeading Indicator(s)Resulting Change Sales RevenueCalls per WeekOptimize Behavior of Sales Team Customer High First Call Raise Sense of Urgency Satisfaction Resolution PLUSof Customer Service With CallLow Rate ofRepresentatives (CSR’s) CenterAbandonment

MISSION FUNCTIONAL PERSPECTIVE OBJECTIVES GOALS CSF’s KPI’s BUSINESS PROCESS DASHBOARD VIEWS VALUE DATA USAGE BUSINESS DATA To what extent do the business processes and data support corporate objectives and goals? How well do we use our corporate data assets to measure business performance? What does the KPI value chain look like for your organization?

In defining your portfolio, review initiatives and determine which company goal they support. If the initiative can not be aligned to a company goal, why are you doing it? The trick is to define all projects being worked so a true picture can be assembled. If projects are left out, resources allocation will be faulty.

Stages of Excellence Basic World-Class Opportunity Factor Ad Hoc No Portfolio Inventory or Repeatable Processes -“Just Do It/FIFO” -Success is random -Little/no business driver alignment Project Inventory Processes are defined & documented, and most projects are aligned to a consistent PMM & business drivers All projects are consistently captured in some form of a project inventory 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 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 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 Portfolio Value = Value Potential x Ability to Realize Crawl Walk Run

Ability to Identify Business Value Potential (Project Portfolio Server 2007) Ability to Realize Business-Value Potential (Project Server 2007) 75%100% 66% 100% 0% Portfolio Management Project Management 50% Value Realized 50% Value Lost Project Management helps ensure organizations successfully deliver the selected investments and realize the business value Select and Deliver the Right Investments Portfolio Management enables organizations to identify and select the investments that will maximize business value

As an organization, you must understand your organizational strategic goals and be able to clearly articulate them. KPI’s must be clearly defined. 1

Do you know how every project measures up against the strategic goals of the organization? How do you weight and score projects today? Are you able to consistently weight your portfolio against your organizational KPI’s and business objectives? Can a project be easily rescored as it progresses, or if there are changes in scope?

Complete Project Request Form Resource Requirements Business Case Development Cost Estimates Risk Assessment & Mitigation Macro Schedule Assessment ID Inter Project Dependencies Go / Kill InitiateSelectPlanManage Strategic Alignment Assessment Portfolio Prioritization Strategic Value Financial Value Risk Value Portfolio Optimization Charting Analysis Constraint Analysis Adv Portfolio Analytics Portfolio Sequencing Assess Surplus & Deficit Sequence Portfolio Run Staffing Scenarios Select Portfolio Develop Detailed Project Plan Schedule Resources Budget Risks Abatement Procurement Reporting etc Portfolio Tracking Change Request Mgt Status Reporting Portfolio Optimization Portfolio Management Project Management Send Project to Microsoft Project Server Go / Kill PPM Governance Phases Go / Kill Project Planning Project Tracking Time Reporting Portfolio Reporting Issues & Risk Mgt Document Mgt 5 6 Team Collaboration 7 Complete Resource Mgt 2 Benefit Forecasts 3 Close 8 Procurement Mgt 9 Financial Reporting Project Closure Portfolio Updates

Initial and on-going organizational change communication and education programs are required to ensure process improvement and cultural acceptance. 2

How well is the change control process defined, understood, and used? Is your organization prepared to make the cultural and process changes necessary to ensure adoption of and adherence to a PPM initiative? Is senior management visible to the organization in support of the PPM initiatives? Does your project office provide on-going education programs in support of PPM and PMM initiatives (i.e.; lunch-n-learns, internal seminars, templates, tools, etc.)?

Making a portfolio management process work requires strong governance, participant accountability, and relevant metrics. 3

Does your team understand your project management methodology and adhere to it? Do you use clearly understood and consistent metrics for measuring and managing projects? Are project goals and associated measures communicated clearly and consistently? What are your accountability standards for project participation, compliance, and management?

The project prioritization framework should include investment categories, risk-adjusted evaluation criteria, and strategic alignment. 4

How do you prioritize projects – and how do you communicate the prioritization to your team? What safeguards are in place to prevent “tag-along” projects from being improperly categorized / prioritized? Can you dynamically re-prioritize projects based on your changing business climate, and communicate that change to your project office / team? How do you prevent lower priority projects from keeping resources tied up that should be used for higher priority projects?

To facilitate the use of PPM, provide tools that make compliance easier. Tools ensure consistency and support group decision making. 5

What tools are you using today? Are they meeting your needs for PPM? Do you have ready access to tools that, with proper implementation planning, could meet these needs? What framework can be structured around your toolset to provide high level visibility to the PPM? Do your current tools provide you the best possibilities of projects that your organization can implement given the available budget and your organizational capabilities?

Prioritize projects by their business values as derived statistically Select the best portfolio by optimizing against risk, budget, and resource constrains Utilize “What If” analysis through advanced portfolio intelligence Provide drill down capability as to the reasons why a project may not qualify for portfolio selection Enable communication and sharing of portfolio data through automated, real-time distribution services Provide practical graphics and representations that are easily interpreted and modified to reflect a project’s current state within the portfolio, including project change requests. Through effective workflow management, insure and expedite scalable project governance

Portfolio Management is such a major undertaking that it needs to be treated as a strategic project to succeed. PPM needs a process owner and a qualified support team. 6

At what level of the organization will PPM be utilized – Departmental, Divisional, Corporate? How will oversight of the portfolio be governed and who will be accountable for the accuracy of data within the portfolio? What is the perceived value of the portfolio by varying levels of the organization? Does the business owner of the portfolio have the authority to determine and insure compliance to business processes that support the portfolio? Where does the expertise lie within your organization in developing a Project Portfolio solution? Can you field a qualified support team?

SupportingBusinessProcesses Work Plan Storage Deliverables Repository Time Tracking Services Resource Pool Financial Data Project Data Archives Earned Value Financial Time Reporting Compliance Statistics Resource Management Trending Project Management CMMI PMI Financial COBIT Time Tracking Business Compliance Forecasting Financial Data Distribution Dashboards Scorecards / Stoplight Reporting Portals Project Portfolio Management Components OCM Work Plan Storage Deliverables Repository Time Tracking Services Resource Pool Financial Data Project Data Archives Supporting Business Processes

Perform a Maturity and Readiness Assessment Evaluate your current Project Management maturity by reviewing existing process documentation and team usage. Determine Future State Requirements of the Enterprise Project Management (EPM) solution to include process improvements as well as tool requirements. Perform a Gap Analysis and make recommendations for a complete EPM solution with a Roadmap to get to the desired maturity level. Determine if a Project Management Office (PMO) is needed to champion the development of your Project Management Processes. It starts from Senior Management realizing the value.