MPA – GTA August 24, 2006 Understanding Portfolio Project Management A Case Study for Implementation

Agenda Welcome and introductions Agora Overview PPM and Portfolio Server Overview PPM Implementation Case Study Questions and Answers Welcome and introductions – Paul and Brad – 10 minutes Agora Overview – Paul 5 minutes PPM and Portfolio Server Overview – Paul 15 minutes Portfolio Server Demo – Gary - 50 minutes Create - 10 Select - 20 Plan - 10 Manage – 10 Questions and Answers – 20 minutes (open) Golf

What You’ll Learn Today An overview of Project Portfolio Management Concepts Introduction to Microsoft’s new solution Case Study review of a PPM Pilot How this can help your organization better align your project portfolio with the objectives of the organization Paul to review with audience

Introductions Name, Title, Company What are your top issues? What do you hope to get out of this seminar? Paul

Agenda Welcome and introductions Agora Overview PPM and Portfolio Server Overview PPM Implementation Case Study Questions and Answers Welcome and introductions – Paul and Brad – 10 minutes Agora Overview – Paul 5 minutes PPM and Portfolio Server Overview – Paul 15 minutes Portfolio Server Demo – Gary - 50 minutes Create - 10 Select - 20 Plan - 10 Manage – 10 Questions and Answers – 20 minutes (open) Golf

Agora Consulting Partners Agora [Gr. 'agora`.] An assembly; hence, the place of assembly, especially the market place, in an ancient Greek city. “Where Business Meets Technology”

Agora Consulting Partners We have been in business for 9 years We are located in Toronto and Guelph and have clients throughout Southern Ontario, New York and the UK

Microsoft Gold Certified Partner Certified in .Net Web Application Development Enterprise Project Management Advanced Infrastructure

Guiding Principles Create a collaborative relationship with the customer Deliver every project “On Time/On Budget” Maintain excellence through ongoing training and skill renewal Act with integrity in all interactions

Agora EPM/PPM Practice Industry leaders and consultants on Enterprise Project Management Services Process Assessment and Re-engineering EPM Design MS Project Server Implementation Project Server Customization and Integration Current EPM clients include: Sanofi Pasteur Apotex Canadian Institute of Health Information Royal Bank SSHA RIM BNS Moneris

Agora EPM Practice - The factors to a successful implementation of MS Project Server

Agora EPM Implementation Methodology

Agenda Welcome and introductions Agora Overview PPM and Portfolio Server Overview PPM Implementation Case Study Questions and Answers Welcome and introductions – Paul and Brad – 10 minutes Agora Overview – Paul 5 minutes PPM and Portfolio Server Overview – Paul 15 minutes Portfolio Server Demo – Gary - 50 minutes Create - 10 Select - 20 Plan - 10 Manage – 10 Questions and Answers – 20 minutes (open) Golf

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 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.) 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.

History of PPM Not New There has always been some form of project portfolio management; roots are in large program development and management Around for the last 20 years in PM, but only recently more formalized and linked up and down stream Expected significant focus This will be a significant growth area for the next 5-8 years Microsoft acquired UMT Portfolio Manager, Q1 2006. To be rebranded Q1FY07 as Microsoft Project Portfolio Server 2006, ...becoming Project Portfolio Server 2007 in December. Fully integrates TODAY with the current Microsoft Project 2003 and Microsoft Project Server 2003 tools.

Why Project Portfolios? Traditional Project Management Gaps: Financial benefit metrics prove insufficient More project ideas than resources ($ and people) Conflicting, dependent and redundant efforts Evolution: Measure alignment to business strategy Approval subject to resource constraints Standardize processes and aggregate visibility Efficient Frontier

Portfolio and Project Management Portfolio Management enables organizations to identify and select the investments that will maximize business value 100% 40 % Value Lost Portfolio Management Project Mgt. Project Management enables organizations to successfully deliver the selected business value opportunities Ability to Identify Business Value Potential (Portfolio Management) 60% Value Realized (average company today) Portfolio Mgt. leads to funding the right projects, and to designing the right projects in order to get funded. When project planners clearly understand the business drivers, they can better focus the project deliverable on what truly adds value to the business. 0% 100% Ability to Realize Business Value Potential (Project Management)

Successful Organizations Utilize Both Project/Program and Portfolio Management PORTFOLIO MGT. Portfolio Governance Business Case Development Benefits Forecasting Prioritization / Valuation Portfolio Optimization Adv Portfolio Analytics Capacity Planning Project Management answers : Who’s available to staff our new projects? When will the project really finish and what will it cost? What am I supposed to be delivering this week? PROJECT MGT. Project Planning Cost Management Resource Management Time Reporting Change Management Issue Management Project Reporting Collaboration Portfolio Reporting Benefits Realization Portfolio Management answers : Have I selected the right project investments? Do the project investments align with our strategic objectives? Do I have sufficient funds and resources to deliver the selected project investments? Are my project investments delivering the forecasted benefits?

PPM Participant Industries Banking & Fin. Services Lets take a look at today’s participants by industry and what comes to mind are two really interesting dimensions about both the participants and the verticals that you see here. The first is that the highest number of participants come from more or less evenly Financial Services, Government and Utilities sectors who were all early adopters and industries with a track record in Portfolio Management. The second point is the sheer number of verticals which just like the number of participants today is setting new records at UMT with 14 different sectors represented. The large number of verticals and participants today is consistent with a trend in the marketplace of wider adoption of portfolio management concepts, methodologies, and tools. The industry analyst firm IDC’s latest market analysis for 2005 indicates that in 2004 alone the Project Portfolio Management market was approximately $2.2 billion in software tool spending with significant growth projected for this and coming years. Three key reasons for this include: Increased Software Vendor consolidation and Commoditization of the PPM software products More educated clients on software and governance process. In the past UMT was focused on educating its clients and potential clients. Today we are receiving more and more sales queries and RFP’s that are very specific in nature indicating that clients are clearly educated and already focused on improving their capability maturity curve position in areas such as Demand management, Workflow configuration, Business Case definition, or Efficient Frontier optimization. This specificity is indicative of a growing adoption rate and increasing utilization trend. A dynamic, synergistic relationship between project and portfolio management which is making the framework a critical day to day part of organizations management tools. Government Energy & Utilities Manufacturing Professional Services Pharmaceutical Technology Insurance Other Transportation Healthcare Food & Beverage Chemicals Media & Entertainment 0% 2% 4% 6% 8% 10% 12% 14% Source: February 17, 2006 survey of UMT PPM Webinar Participants

PPM Selection Today How are Projects Currently Selected in Your Organization? Ad hoc or random Selected individually on case by case basis Evaluated against other projects based on financial ROI Evaluated against other projects based on strategic goals Evaluated against other projects based on financial ROI AND strategic goals Financial ROI, strategic goals AND optimized given budget and resource constraints 0% 5% 10% 15% 20% 25% 30% 35% Source: UMT Poll Responses from 128 Webcast Attendees, February 7th, 2006

Which of the Following is the Biggest Pain Point in Your Organization? PPM Concerns Today Which of the Following is the Biggest Pain Point in Your Organization? Governance –Inconsistent Portfolio Management governance processes across the organization Monitoring – Lack of reporting/monitoring capabilities around portfolio execution and post deployment value realization Consistent Valuation – Difficult to compare projects because of inconsistent valuation framework Alignment – Ineffective process to align investment ideas to business strategies Transparency –Poor visibility and missed opportunities 0% 5% 10% 15% 20% 25% 30% 35% Source: UMT Poll Responses from 94 Webcast Attendees, February 7th, 2006

Alignment of Strategy Different perspectives with an SBU can conflict In direction And in priorities CEO Strategy Mgt Office Human Resources CIO CFO LOB A Executive LOB B Executive COO Job Security Outsourcing Middle Market Luxury Branding Platform Renewal Expense Reduction

Strategic Consensus Clear articulation of the enterprise strategy; Fosters executive consensus on strategic priorities Focuses project idea generation

Align Investment to Strategy Optimization of project selection promotes strategic priorities Optimized Unaligned

The PPM Organization Strengths Centralized goals for alignment Pooled financial and human resources for scale economy Standardized processes and metrics for visibility Leveraged project management expertise/experience Resource, schedule and scope controls First, the organization must build consensus on the business drivers for investment and their relative priorities. The alignment process fosters consensus building, Insight analysis quantifies the business impact of funding decisions Pooling improves the skill mix and volume of human resources. Projects are more effective when one team has all the right skills. Pooling also enables larger projects and programs that unify the project efforts of all business units. The PPM organization establishes standards to leverage the Project Teams’ learning curve; they don’t have to learn a new routine for every project. Responsibilities are more clear. Standard metrics enable Stakeholders to evaluate project performance in a larger context. Scarce expertise in project management (planning, estimating, troubleshooting) can be leveraged when there is centralized project oversight. Project selection implies that the project business case is static. To the extent there are changes to the resources (funding or human), schedule, or benefits of a project, commitment to that project must be subject to review. The business case may no longer be justified compared to other project ideas. Change control is the really the renewal of the project selection process and should be subject to the same analysis (ignoring sunk costs). All of these practices require a unified governance model. Sponsorship principles should be uniform across the enterprise; aligned to the corporate strategy and subject to corporate constraints. LINK GOVERNANCE TO THE TOOL AS A FRAMEWORK FOR BEST PRACTICE The issue is Governance

EPM Solution PPM Process & Architecture Gov Phases: Create Select Plan Manage Complete Project Request Form 1st Review 2nd Review Portfolio Prioritization Detailed Planning Portfolio Tracking 1 Strategic Value 1 Develop Project Plan 1 Change Request Mgt 2 Financial Value 2 Assign Named Resources 2 Status Reporting 3 Risk Value 3 Define Inter-dependencies PPM Lifecycle Steps: 3 Portfolio Re-Optimization Business Case Development 1 Resource Requirements Portfolio Optimization Project Tracking 2 Cost Estimates 1 Charting Analysis Final Approval Baseline 1 Project Tracking 3 Benefit Forecasts 2 Constraint Analysis 2 Resource Mgt 4 Strategic Alignment Assessment 3 Adv Portfolio Analytics 3 Time Reporting 5 Risk Assessment Completed 6 Phase & Milestone Planning Portfolio Selection 4 Issues & Risk Mgt 5 Document Mgt 6 Team Collaboration Microsoft EPM Solution: Portfolio Builder Portfolio Optimizer Portfolio Dashboard

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

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 4 3 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 Prioritize Projects Investment Maps Cost

Efficient Frontier Modeling Business Alignment Analysis Portfolio Optimizer Select: Portfolio Optimization & Advanced Analytics Benchmark the selected portfolio against the Efficient Frontier Utilize sophisticated optimization algorithms to maximize the portfolio’s strategic value under varying budget constraints (i.e. cost, resource etc.) 8 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 Dashboard Manage: Track & Measure the Portfolio Performance 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. Automatically drill down to the project to view periodic status reports. 10 11 Portfolio Scorecard Project Status Report Utilize intuitive generators to define and publish report templates to standardize and streamline the reporting process across the organization. 12 Portfolio Reporting

Gaining Control: Portfolio Optimization Led to Gains of $137mm EBIT, 24% Strategic Value for Same Budget # Portfolio Strategic Value Total EBIT Original Selection 51% $389 M Optimal Selection 82% $564 M Final Selection (includes mandated projects) 75% $526 M 1 2 3 2 3 1 Strategic Value Gain = 24% EBIT Increase = $137 MM

Competitive Strengths Pure, top-down PPM functionality, not an add-on Analytics / “What If” scenario modeling very strong, can generate multiple Efficient Frontiers Business Driver prioritization and consensus building capabilities Ability to compare one Executive's opinion to another Governance workflow functionality Easy to use / intuitive

Competitive Strengths Built on real, practical approaches to real client needs Strong customer references Bi-directional integration to MS Project Professional / MS Project Server 2003 Users of Microsoft's Enterprise Project Management solution that require portfolio analytics should look no further than Microsoft's Project Portfolio Server Aggressive Microsoft pricing

Agenda Welcome and introductions Agora Overview PPM and Portfolio Server Overview PPM Implementation Case Study Questions and Answers Welcome and introductions – Paul and Brad – 10 minutes Agora Overview – Paul 5 minutes PPM and Portfolio Server Overview – Paul 15 minutes Portfolio Server Demo – Gary - 50 minutes Create - 10 Select - 20 Plan - 10 Manage – 10 Questions and Answers – 20 minutes (open) Golf

Case Study Background Moneris Background Co-owned by Royal Bank and Bank of Montreal Processes more than 1.8 billion credit and debit card transactions a year, Over 350,000 merchant locations across North America. Engagement background Interested in piloting UMT Tool to improve Project Portfolio Management processes and reporting Hired Agora in early July to guide pilot engagement using UMT Portfolio Manager 3.3 (Microsoft PPM solution) First UMT Implementation in Canada

Pilot Objectives Scenario Had 4 portfolios organized by Business Objective Status Reporting was done using a variety tools and formats Project Selection was ad hoc based on individual project merits Do not use MS Project Server Objectives Optimize project selection within each portfolio to maximize business value Improve status reporting to senior management Optimize for upcoming budget cycle

Pilot Outcomes One Caveat: Still in progress Outcomes to date PPM Environment is implemented Business drivers are defined for the organization These drivers are used to help evaluate the relative business value of each proposed project Have identified Portfolio Risks Also used to assess relative project value Underway Profiling projects in the portfolios Assess portfolio mix based on drivers, risks and resource constraints

Lessons Learned This is an implementation of process and procedure enabled by technology Never lose sight of the Process and People Change Management issues Do not let the technology drive the process Identify a strong internal champion Involve key stakeholders (Senior Management) from the beginning Buy-in and People Change Management is very important Build a common understanding and vision of Portfolio Management for your organization Prepare key stakeholders for a large time commitment Keep people focused on the tasks at hand

Lessons Learned Work to the right level of detail to avoid getting bogged down Focus on key business drivers and try and limit the list to 5 to 8 essential measures Build consensus across business units and management levels Identify key information for evaluating projects Determine method of capturing this information about each project Be consistent with information across projects Make sure required information is feasible Structure the Portfolio Server implementation as a project Identify the project team Build and work a project plan Communicate, communicate, communicate

Implementation Recommendations Do a pilot first Start small – focus on key functionality to your business first Document the configuration thoroughly Train on use of tool and PPM concepts Manage the People Change Management process through the implementation

Thank you David Wright Paul Estabrooks Kevin Walker President dwright@agorainc.com (416) 304-1338 x14 Paul Estabrooks Vice President, Sales pestabrooks@agorainc.com (416) 304-1338 x11 Kevin Walker Technology Director kwalker@agorainc.com (416) 304-1338 x12 Now is the time to ask any questions you may have about the material presented in this module. Thank you