Home | Search | Contact Us

News Articles

Effective Execution Through Project Portfolio Management Published: Sunday, November 14, 2010 8:00 am By: Ramón L. Rivera, President & CEO

Business leaders want the business to be successful. They want sound business processes they can depend upon. Project managers want their projects to be successful, so the company will be successful. So it sounds like we’re all on the same page, right? Wrong. Here’s where the age-old dilemma rears its ugly head for the business leader and project manager alike—there are limited resources, lots of ideas and projects, only so much time in a day and . . . oh yes, things keep changing.

What we have seen all too often is that managers decide to move forward with a project solely on the merits of the individual project, while hoping the business can do the job. Without a way of looking at the landscape of projects, it is virtually impossible to know if a new project can even be done given the availability of our current resources for it to gain the company any benefit at all.

This is when it becomes important for us to be able to make tough decisions: which projects do we invest in (and over what timeframe) to be successful? This requires good facts to make the right decisions. We need to be able to examine the facts when changes and issues arise that require a decision be made and acted upon. And these facts need to be weighed against our gut feel for the situation (sometimes called ‘‘experience’’)—by both business leaders and project managers—and then a decision made.

PPM can be defined as the integrated management of one or more portfolios of initiatives, which includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work to achieve specific strategic business objectives. PPM accomplishes its purpose by adhering to some fundamental actions as: ensuring that projects and programs align with the strategies, goals, and objectives of the business; communicating project and program details, including costs and benefits; managing projects and programs as a whole, providing a holistic, systems approach to business projects execution.

PPM forces us to think strategically: what we want our organizations to be, and what we should be doing to get there. It invariably changes the culture of the business because it demands we ask the hard questions. Five such questions rise to the top of the list:

  1. Are we investing in the right things?
  2. Are we optimizing our capacity?
  3. How well are we executing?
  4. Can we absorb all the changes?
  5. Are we realizing the promised benefits?

We must figure out a way to invest in the right things. This is a balancing act between the desire to fulfill the business strategies, the limited money we have to invest, and knowing when is the right time to start a project. Along with deciding which new projects deserve investment, we need to monitor the progress of active projects so that, if they’re not reaping the expected benefits, they can be closed down, and their allocated capital can be recovered to apply to more beneficial projects.

However, this is not all. Businesses operate in a dynamic environment that shifts strategic objectives over time. Projects that are strategically aligned today may not be tomorrow. So PPM must also be a dynamic process. Ideally, the portfolio would be optimized in real-time (or near real-time).  Also, since not all good projects can be approved immediately, what is ‘‘right’’ for the portfolio may not be optimal for all the potential projects competing for funding.

One of the keys to making the best decision is understanding the criteria used to judge and prioritize projects. The company already has projects under way, and usually has a list of possible projects to add to that inventory. So how do you decide which ones to add, and when to add them? The business case is your fundamental tool for providing facts and data about each decision criterion to enable apples-to-apples comparisons to be made among projects in determining which ones should become part of the portfolio.

Resources can be grouped into three categories: Skills (availability of sufficient people with the right skills and experience), Technology environment (the capacity of the computer systems or platforms to cope with the demands of the portfolio), Facilities (physical infrastructure, networks, office space, real estate, and the like needed to deliver projects and that will be impacted by project outputs).

In effectively implementing PPM we realize we can engage four levers that help us to manage resource capacity constraints: Changing timescales: shifting projects within the portfolio to flatten resource demands, Decoupling development from roll-out: helping to flatten technical resource demand, Descoping: helping reduce the absolute need for resources, Removing projects from the portfolio: if none of the above options are sufficient in managing resource capacity, then projects may have to be cancelled.

There are several different types of change we need to consider when looking at whole portfolio as well as individual projects. There’s change that impacts technology, there’s change that impacts physical assets (such as real estate), and then there’s change that impacts people. It’s this last category that really matters, as it’s only people who get unsettled by change.

There’s clearly a world of difference between people undergoing change once a year compared to once a month. PPM provides a fact-based methodology that enables us to look at change in terms of what (the degree of disruption), when (the timing of these changes), and who (both individuals and groups of people) is impacted. This is a determining element to increase the capacity of the entire organization to handle more change.

PPM is about strategic action. Strategy development is not just a linear process. You should constantly scan the environment and adjust direction.  You also need feedback on how the strategy is working. This is one of the critical roles of PPM. By informing strategy makers, PPM makes strategy development and execution a more interactive and meaningful process.

Copyright 2010 QBS, Inc.
Search | Register | Privacy Policy | Survey poweredby