Introduction to Program Management James J. Jiang University of Central Florida, U.S.

Organizational Maturity in Project-based Organizations Definition: “the extent to which an organization practices organizational project management (OPM)”  Extent implies “levels”  Lets consider questions regarding different levels of success Was the project done right? Was the right project done? Were the right projects done right? Were the right project done right, time after time?

Introduction Financial portfolio Role of top management in creating purposeful project investments Link projects to business policy and organizational strategy  Terms portfolio and program are often used interchangeably

Why need Programs? In order to allow for autonomous projects on the one hand side But on the other hand side to assure the benefits of  organizational learning,  economies of scale, and  networking synergies in a program, A specific program-organization is required.

Program Definition A program is a temporary organization for the performance of processes of medium and high complexity, which are closely coupled by common overall objectives. (Gareis 2000)

Program Advantages The advantages cited by organizations using programs include:  greater visibility of projects to senior management and more comprehensive reporting of progress at higher levels  better prioritization of projects;  more efficient and appropriate use of resources;  projects driven by business needs;  better planning and coordination;  explicit recognition and understanding of dependencies

Program Examples Typical programs examples:  the development of a “product family“ (and not of a single product),  the implementation of a comprehensive IT- solution (such as SAP),  the reorganization of a group of companies in a holding structure, and  large investments, such as an oil platform.

Comparison of Programs and Projects ProgramProject An organizing frameworkA process for delivering a specific outcome May have an indefinite time horizon Will have a fixed duration Evolve in lines with business needs Has set objectives May involve the management of multiple related deliveries Involve the management of single deliveries Focus on meeting strategic or extra-project objectives Focus on delivery an asset or change Program manager facilitate the interaction of numerous managers Project manager has single point responsibility for project’s success

Major Perspectives of Program Management Program management (Pellegrinelli 1997)  The technical and planning aspects  Scarce resource management  Establishment of appropriate information systems

Program configurations Three archetypal configurations  Portfolio  Goal-oriented  Heartbeat

Portfolio programs Include relatively independent projects but have a common theme. Emphasis is efficient resource utilization and leveraging existing knowledge or skills.

Goal-oriented programs programs which enable the management of initiatives or developments outside the existing infrastructure or routine. provide a means of dealing effectively with situations where uncertainty prevails and learning is a prerequisite to making progress.

Heartbeat programs Enable the regular improvement of  existing systems,  infrastructure  or even business processes, via increments to functionality or occasionally an overhaul of the system or facility itself. Minimize disruption to operations, Maximizing the amount of new functionality or capability delivered to the business. E.g.: Projects related to core IT systems.

Program Management: Classification in IT Consulting firms Programs by technology/ platform Programs by client Programs by business vertical

Program Roles and Structure Typical program roles include:  program owner,  program manager, and  a program coordination team,  project Manager  Upper Management Typical program communication structures are program owner meetings and meetings of the program coordination team.

Program Manager’s Role and Responsibilities Program Manager EffectivenessCoordinationEfficiency Prior to project execution Identification of business opportunities 1. Resource planning 2. Synergy identification Resource selection Project execution Identification of bad projects 1. Participation in steering groups 2. Prioritization 3. Collection & aggregation of reports 1. Initiate reviews 2. Handling of reviews 3. Coaching of project managers 4. Process Improvement

Issues in Program management 1. Project selection 2. Maximizing value of project portfolio 3. Balancing/prioritizing project portfolio for resource allocation 4. Best practices for managing project portfolios

Project selection process Criteria for project selection  Production factors Time until ready to install Impact on business processes  Marketing factors Size of potential market for output Consumer acceptance  Financial factors  Personnel factors  Administrative and misc factors

Selection models Non-numeric models  Sacred cow, operating necessity, competitive necessity Numeric models  Payback, NPV, ROI Scoring models  Weighted factors models Risk models

2. Maximizing value Allocating resources for maximizing value of portfolio in terms of firm objective Expected commercial value (ECV) Function of (NPV, Strategic importance, probability of technical/commercial success, development costs, commercialization costs) Productivity index (Similar to ECV but also considers R&D expenditure remaining) Dynamic rank ordered list Rank projects according to importance, NPV, internal rate of return and cal mean Scoring models scale 1-5 on reward, strategy fit, strategic leverage, prob of commercial success, technical success

Balancing project portfolio Balancing high-risk breakthrough R&D projects versus Low-risk projects that produce near-term returns through incremental improvements to existing products Perform high quality analysis of each project  Identify appropriate level of problem: technology, portfolio, strategy  Generate creative, achievable alternatives  Develop reliable information  Establish values and trade-offs: time and risk  Apply logical reasoning  Build commitment to action

3.Balancing project portfolio Plot projects on a portfolio grid according to technical difficulty and commercial potential 4 quadrants  Bread and butter projects (low % and low value)  Oysters (low % of success but potential value)  Pearls (high success, high value)  White elephants (low potential value, long term)

4. Best practices in PPM Senior management buy-in Identify PPM focus areas and provide proof of concept Develop governance process for projects  Makes PPM implementation easier Use proven PPM tools Develop a “common currency” to evaluate projects based on contribution to business objectives Optimize portfolio against constraints

Comments? How does your organization select an project? Is there a common goal among the selected projects? Has the organizational goal been supported (i.e., aligned with) by those selected projects? Do your employees understand the differences between “project management” vs. “program management”? Do your organization implement the best “program management” practices?