91制片厂

Develop a Project Portfolio Management Strategy

Drive IT project throughput by throttling resource capacity.

Analyst Perspective

鈥淭actics without strategy is the noise before defeat.鈥� 鈥� Sun Tz怒

"Organizations typically come to project portfolio management (PPM) with at least one of two misconceptions: (1) that PPM is synonymous with project management and (2) that a collection of PPM processes constitutes a PPM strategy.

Both foundations are faulty: project management and PPM are separate disciplines with distinct goals and processes, and a set of processes do not comprise a strategy 鈥� they should flow from a strategy, not precede one. When built upon these foundations, the benefits of PPM go unrealized, as the means (i.e. project and portfolio processes) commonly eclipse the ends of a PPM strategy 鈥� e.g. a portfolio better aligned with business goals, improved project throughput, increased stakeholder satisfaction, and so on.

Start with the end in mind: articulate a PPM strategy that is truly project portfolio in nature, i.e. focused on the whole portfolio and not just the individual parts. Then, let your PPM strategy guide your process goals and help to drive successful outcomes, project after project." (Barry Cousins, Senior Director of 91制片厂, PMO Practice, 91制片厂)

Our understanding of the problem

This 91制片厂 Is Designed For:

• CIOs who want to maximize IT鈥檚 fulfillment of both business strategic goals and operational needs.
• CIOs who want to better manage the business and project sponsors鈥� expectations and satisfaction.
• CIOs, PMO directors, and portfolio managers who want a strategy to set the best projects for the highest chance of success.

This 91制片厂 Will Help You:

• Get C-level buy-in on a strategy for managing the project portfolio and clarify their expectations on how it should be managed.
• Draft strategy-aligned, high-level project portfolio management process description.
• Put together a strategic plan for improving PPM processes to reclaim wasted project capacity and increase business satisfaction of IT.

This 91制片厂 Will Also Assist:

• Steering committee and C-suite management who want to maximize IT鈥檚 value to business.
• Project sponsors who seek clarity and fairness on pushing their projects through a myriad of priorities and objectives.
• CIOs, PMO directors, and portfolio managers who want to enable data-driven decisions from the portfolio owners.

This 91制片厂 Will Help Them:

• Optimize IT鈥檚 added value to the business through project delivery.
• Provide clarity on how IT鈥檚 project portfolio should be managed and the expectations for its management.
• Improve project portfolio visibility by making trustworthy project portfolio data available, with which to steer the portfolio.

Executive Summary

Situation

• As CIO, there are too many projects and not enough resource capacity to deliver projects on time, on budget, and in scope with high quality.
• Prioritizing projects against one another is difficult in the face of conflicting priorities and agenda; therefore, projects with dubious value/benefits consume resource capacity.

Complication

• Not all IT projects carry a direct value to business; IT is accountable for keeping the lights on and it consumes a significant amount of resources.
• Business and project sponsors approve projects without considering the scarcity of resource capacity and are frustrated when the projects fail to deliver or linger in the backlog.

Resolution

• Create a coherent strategy to maximize the total value that projects deliver as a whole portfolio, rather than a collection of individual projects.
• Ensure that the steering committee or senior executive layer buys into the strategy by helping them understand why the said strategy is necessary, and more importantly, why the strategy is valuable to them.
• Translate the strategic expectations to specific, tangible goals, which are realized through a suite of project portfolio management processes tailored to your organization and its culture.
• Putting into place people, processes, and tools that are sustainable and manageable, plus a communication strategy to maintain the stakeholder buy-in.

Info-Tech Insight

1. Time is money; therefore, the portfolio manager is an accountant of time. It is the portfolio manager鈥檚 responsibility to provide the project portfolio owners with reliable data and close the loop on portfolio decisions.
2. Business satisfaction is driven by delivering projects that align to and maximize business value. Use Info-Tech鈥檚 method for developing a PPM strategy and synchronize its definition of 鈥渂est projects鈥� with yours.

Projects that deliver on strategic goals of the business is the #1 driver of business satisfaction for IT

Info-Tech鈥檚 CIO Business Vision Survey (N=21,367) has identified a direct correlation between IT project success and overall business satisfaction with IT.

Reported Importance: Initially, when CIOs were asked to rank the importance of IT services, respondents ranked 鈥減rojects鈥� low on the list 鈥� 10 out of a possible 12.

Actual Importance: Despite this low 鈥渞eported importance,鈥� of those organizations that were 鈥渟atisfied鈥� to 鈥渇ully satisfied鈥� with IT, the service that had the strongest correlation to high business satisfaction was 鈥減rojects,鈥� i.e. IT鈥檚 ability to help plan, support, and execute projects and initiatives that help the business achieve its strategic goals.

On average, executives perceive IT as being poorly aligned with business strategy

Info-Tech鈥檚 CIO Business Vision Survey data highlights the importance of IT projects in supporting the business achieve its strategic goals. However, Info-Tech鈥檚 CEO-CIO Alignment Survey (N=124) data indicates that CEOs perceive IT to be poorly aligned to business鈥� strategic goals:

• 43% of CEOs believe that business goals are going unsupported by IT.
• 60% of CEOs believe that improvement is required around IT鈥檚 understanding of business goals.
• 80% of CIOs/CEOs are misaligned on the target role for IT.
• 30% of business stakeholders* are supporters of their IT departments.
(Source: Info-Tech CIO/CEO Alignment Diagnostics, * N=32,536)

Efforts to deliver on projects are largely hampered by causes of project failure outside a project manager鈥檚 control

The most recent data from the Project Management Institute (PMI) shows that more projects are meeting their original goals and business intent and less projects are being deemed failures. However, at the same time, more projects are experiencing scope creep. Scope creeps result in schedule and cost overrun, which result in dissatisfied project sponsors, stakeholders, and project workers.

Meanwhile, the primary causes of project failures remain largely unchanged. Interestingly, most of these primary causes can be traced to sources outside of a project manager鈥檚 control, either entirely or in part. As a result, project management tactics and processes are limited in adequately addressing them.

Project portfolio management (PPM) can improve business alignment of projects and reduce chance of project failure

PPM is about 鈥渄oing the right things.鈥�

Interrelated organizational processes by which an organization evaluates, selects, prioritizes, and allocates its limited internal resources to best accomplish organizational strategies consistent with its vision, mission, and values. (PMI, Standard for Portfolio Management, 3rd ed.)

Selecting and prioritizing projects with the strongest alignment to business strategy goals and ensuring that resources are properly allocated to deliver them, enable IT to:

1. Improve business satisfaction and their perception of IT鈥檚 alignment with the business.
2. Better engage the business and the project customers.
3. Minimize the risk of project failure due to changing organizational/ project vision, goals, and objectives.

"In today鈥檚 competitive business environment, a portfolio management process improves the linkage between corporate strategy and the selection of the 鈥榬ight鈥� projects for investment. It also provides focus, helping to ensure the most efficient and effective use of available resources." (Lou Pack, PMP, Senior VP, ICF International (PMI, 2015))

PPM is a common area of shortcomings for IT, with much room for improvement

Info-Tech鈥檚 IT Management & Governance Survey (N=879) shows that PPM tends to be regarded as neither an effective nor an important process amongst IT organizations.

55% ... of IT organizations believe that their PPM processes are neither effective nor important.

21% ... of IT organizations reported having no one responsible or accountable for PPM.

62% ... of projects in organizations effective in PPM met/exceeded the expected ROI (PMI, 2015).

In addition to PPM鈥檚 benefits, improving PPM processes presents an opportunity for getting ahead of the curve in the industry.

Info-Tech鈥檚 methodology for developing a PPM strategy delivers extraordinary value, fast

Our methodology is designed to tackle your hardest challenge first to deliver the highest-value part of the deliverable. For developing a PPM strategy, the biggest challenge is to get the buy-in of the executive layer.

"Without senior management participation, PPM doesn鈥檛 work, and the organization is likely to end up with, or return to, a squeaky-wheel-gets-the-grease mindset for all those involved." (Mark Price Perry, Business Driven Project Portfolio Management)

In the first step of the blueprint, you will be guided through the following steps:

1. Choose the right PPM strategy: driven by the executives, supported by management.
2. Objectively assess your current project portfolio with minimal effort to build a case for the PPM strategy.
3. Engage the executive layer to get the critical prerequisite of a PPM strategy: their buy-in.

A PPM strategic plan is the end deliverable of this blueprint. In the first step, download the pre-filled template with content that represents the most common case. Then, throughout the blueprint, customize with your data.

Use this blueprint to develop, or refine, a PPM strategy that works for your organization

Get buy-in for PPM strategy from decision makers.

Buy-in from the owners of project portfolio (Steering Committee, C-suite management, etc.) is a critical prerequisite for any PPM strategy. This blueprint will give you the tools and templates to help you make your case and win the buy-in of portfolio owners.

Connect strategic expectations to PPM process goals.

This blueprint offers a methodology to translate the broad aim of PPM to practical, tactical goals of the five core PPM processes, as well as how to measure the results. Our methodology is supported with industry-leading frameworks, best practices, and our insider research.

Develop your PPM processes.

This blueprint takes you through a series of steps to translate the process goals into a high-level process description, as well as a business case and a roadmap for implementing the new PPM processes.

Refine your PPM processes.

Our methodology is also equally as applicable for making your existing PPM processes better, and help you draft a roadmap for improvement with well-defined goals, roles, and responsibilities.

Info-Tech鈥檚 PPM model consists of five core processes

There are five core processes in Info-Tech鈥檚 thought model for PPM.

These processes create an infrastructure around projects, which aims to enable:

1. Initiation of the 鈥渂est鈥� projects with the right resources and project information.
2. Timely and trustworthy reporting to facilitate the flow of information for better decision making.
3. Proper closure of projects, releasing resources, and managing benefits realization.

PPM has many moving pieces. To ensure that all of these processes work in harmony, you need a PPM strategy.

De-couple project management from PPM to break down complexity and create flexibility

Tailor project management (PM) processes to fit your projects.

Info-Tech鈥檚 PPM thought model enables you to manage your project portfolio independent of your PM methodology or capability. Projects interact with PPM via:

• A project charter that authorizes the use of resources and defines project benefits.
• Status reports that feed up-to-date, trustworthy data to your project portfolio.
• Acceptance of deliverables that enable proper project closure and benefits reporting.

Info-Tech鈥檚 PPM strategy is applicable whether you use Agile, waterfall, or anything in between for PM.

Learn about project management approach for small projects in Info-Tech鈥檚 Tailor PM Processes to Fit Your Projects blueprint.

Info-Tech鈥檚 approach to PPM is informed by industry best practices and rooted in practical insider research

Info-Tech uses PMI and ISACA frameworks for areas of this research.

笔惭滨鈥檚 Standard for Portfolio Management, 3rd ed. is the leading industry framework, proving project portfolio management best practices and process guidelines.	COBIT 5 is the leading framework for the governance and management of enterprise IT.

In addition to industry-leading frameworks, our best-practice approach is enhanced by the insights and guidance from our analysts, industry experts, and our clients.

33,000+ Our peer network of over 33,000 happy clients proves the effectiveness of our research.

1000+ Our team conducts 1,000+ hours of primary and secondary research to ensure that our approach is enhanced by best practices.

Re-position IT as the 鈥渇acilitator of business projects鈥� for PPM success

CASE STUDY

Industry: Construction
Source: Info-Tech Client

Chaos in the project portfolio

At first, there were no less than 14 teams of developers, each with their own methodologies and processes. Changes to projects were not managed. Only 35% of the projects were completed on time.

Business drives, IT facilitates

Anyone had the right to ask for something; however, converting ideas to a formal project demand required senior leadership within a business division getting on board with the idea.

The CIO and senior leadership decided that projects, previously assigned to IT, were to be owned and driven by the business, as the projects are undertaken to serve its needs and rarely IT鈥檚 own. The rest of the organization understood that the business, not IT, was accountable for prioritizing project work: IT was re-positioned as a facilitator of business projects. While it was a long process, the result speaks for itself: 75% of projects were now being completed on time.

Balancing the target mix of the project portfolio

What about maintaining and feeding the IT infrastructure? The CIO reserved 40% of IT project capacity for 鈥渒eeping the lights on,鈥� and 20% for reactive, unplanned activities, with an aim to lower this percentage. With the rest of the time, IT facilitated business projects

Three key drivers of project priority

1. Does the project meet the overall company goals and objectives?
   鈥淚f they don't, we must ask why we are bothering with it.鈥�
2. Does the project address a regulatory or compliance need?
   鈥淗alf of our business is heavily regulated. We must focus on it.鈥�
3. Are there significant savings to be had?
   鈥淣ot soft; hard savings. Can we demonstrate that, after implementing this, can we see good hard results? And, can we measure it?鈥�

"Projects are dumped on IT, and the business abdicates responsibility. Flip that over, and say 鈥榯hat's your project鈥� and 鈥榟ow can we help you?鈥�"

Use these icons to help direct you as you navigate this research

Use these icons to help guide you through each step of the blueprint and direct you to content related to the recommended activities.

This icon denotes a slide where a supporting Info-Tech tool or template will help you perform the activity or step associated with the slide. Refer to the supporting tool or template to get the best results and proceed to the next step of the project.

This icon denotes a slide with an associated activity. The activity can be performed either as part of your project or with the support of Info-Tech team members, who will come onsite to facilitate a workshop for your organization.

Info-Tech offers various levels of support to best suit your needs

Diagnostics and consistent frameworks used throughout all four options

Develop a PPM strategy 鈥� project overview

	1. Get executive buy-in for your PPM strategy	2. Align PPM processes to your strategic goals	3. Complete your PPM strategic plan
Best-Practice Toolkit	1.1 Choose the right PPM strategy for your organization 1.2 Translate PPM strategy expectations to specific process goals	2.1 Develop and refine project intake, prioritization, and resource management processes 2.2 Develop and refine portfolio reporting, project closure, and benefits realization processes	3.1 Select a right-sized PPM solution for supporting your new processes 3.2 Finalize customizing your PPM Strategic Plan Template
Guided Implementations	Scoping call: discuss current state of PPM and review strategy options. How to wireframe realistic process goals, rooted in your PPM strategic expectations, that will be sustained by the organization.	Examine your current-state PPM process and create a high-level description of the target-state process for each of the five PPM processes (1-2 calls per each process).	Assess your PPM tool requirements to help support your processes. Determine the costs and potential benefits of your PPM practice.
Onsite Workshop	Module 1: Set strategic expectations and realistic goals for the PPM strategy	Module 2: Develop and refine strategy-aligned PPM processes	Module 3: Compose your PPM strategic plan
	Phase 1 Outcome: Analysis of the current state of PPM Strategy-aligned goals and metrics for PPM processes	Phase 2 Outcome: PPM capability levels High-level descriptions of near- and long-term target state	Phase 3 Outcome: PPM tool recommendations Cost-benefit analysis Customized PPM strategic plan

Workshop overview

Contact your account representative or email Workshops@InfoTech.com for more information.

Develop a Project Portfolio Management Strategy

PHASE 1

Get Executive Buy-In for Your PPM Strategy