• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
Trends in Portfolio Management: How organisations are learning new ways to balance risk and reward
 

Trends in Portfolio Management: How organisations are learning new ways to balance risk and reward

on

  • 5,298 views

 

Statistics

Views

Total Views
5,298
Views on SlideShare
5,268
Embed Views
30

Actions

Likes
3
Downloads
0
Comments
0

4 Embeds 30

http://www.longhaus.com 19
http://www.slideshare.net 9
http://lhdc 1
http://www.longhaus.com.au 1

Accessibility

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • 22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved
  • With over 115 completed surveys the results are statistically representative of the Australian and New Zealand Enterprise Market.22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved22/05/09Copyright 2006 Encode Services Pty Ltd - All Rights Reserved
  • Planning over emphasises “new investment”Less than 30% of the typical ICT budgetProjects fail to meet their objectivesUp to 2 in 3 projects are challengedFirms focus on annual measurement90% assess performance only once per annumFinancial measures dominate8 out of 10 organisations rely solely on finance metricsRegulation is increasingIn 2008 local CIOs will be faced with e-discovery, data disclosure and counter terrorism legislation
  • COBIT includes the Val IT Framework.22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved22/05/09Copyright 2006 Encode Services Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2006 Encode Services Pty Ltd - All Rights Reserved
  • PPM is governance at the earliest stages of the investment cycle.
  • In 2006 Longhaus found that 31% were in the process of adopting, so piloting PPM and only 24% of Australian Enterprises were interested in PPM.In terms of timeframe 48% of organisations interested in PPM expect to do so in the next 12 to 24 months. This is not far behind the early adopters of which only one third claim to have had a PPM approach in place for more than 1 year.22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • Existing approaches such as Six Sigma, PRINCE and ITIL don’t always integrate and so the process of unification is made more difficult. There is no one standard PPM method to rule them all. As a result the opportunity to create a managed and optimised process is virtually non-existent. But the fact that organisations are not mature does not prevent them seeking the benefits of PPM.22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • Often the business case for PPM is built on quantitative improvements in resource utilisation in the short term to gain traction to address the quantitative benefits of more “effective” prioritisation and alignment.44% of organisation have realised the expected benefits from PPM with the balance claiming it is still too early to tell.22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • Inability to get training was the least likely to impede organisations in adopting PPM.As a process and measurement oriented approach that attempts to make the subjective objective and the qualitative quantitative, PPM often suffers due to cultural barriers. Both at the staff level in terms of the direct benefit their participation will yield (i.e. Will it make my life easier?) and for Executives in terms of accountability (i.e. I’m paid to make the hard decisions using my extensive experience!).22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • 20% to 45% reduction in project costsThrough:Elimination of redundant and rogue projects Corrective action on “in trouble” projectsSelection of projects with the strongest paybacksGreater window for forward planning10% to 30% reduction in application maintenance costsThrough:Increased application knowledge to extend useful lifeFaster scoping and execution of changeMore intelligent decisions in relation to upgrade, retire, replace, rewrite20% to 30% reduction in infrastructure operational costsThroughEliminate redundant software licensesStreamline asset inventory through consolidation and rationalisationOptimize operations staffing levels22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved22/05/09Copyright 2006 Encode Services Pty Ltd - All Rights Reserved
  • Portfolio management concepts are applicable to a wide range of domains, so remember that sponsors may be hiding in strange places22/05/09Copyright 2006 Encode Services Pty Ltd - All Rights Reserved
  • Data fragmentation and islands of information is the enemy of PPM!
  • Do you use external support for your Project Portfolio Management activity?22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved
  • 22/05/09Copyright 2008 Longhaus Pty Ltd - All Rights Reserved22/05/09Copyright 2006 Longhaus Pty Ltd - All Rights Reserved

Trends in Portfolio Management: How organisations are learning new ways to balance risk and reward Trends in Portfolio Management: How organisations are learning new ways to balance risk and reward Presentation Transcript

  • Trends in Portfolio Management How organisations are learning new ways to balance risk and reward Sam Higgins Research Director December 2008 Copyright © 2008 Longhaus Pty Ltd
  • Who is Longhaus? • Longhaus is a research publisher and • Strong international and technology advisory company with a specialty in research experience technology • Leading industry voice in press and • We publish business reports and media broadsheets advise executives and management across Australia's government, business, • Queensland founded and headquartered and consumer sectors on the application and direction of technology – Website: 5,000+ site visits per month – Website: 12,000+ page visits per month • Our directional research reports are utilised by both SME and major – Website: 7-10 minutes per visit organisations across the world – Blog: 3,500+ hits – Newsletter: 2,500+ distribution per month – Downloads: 1,000+ per month • Through our AAA (Access All Areas) advisory service we answer big business – 8,400+ SlideShare visits questions that most often pertain to customer, product or services markets – strong focus on government 2 Commercial-in-confidence
  • What was the Longhaus 2008 Project & Portfolio Management Study? • Jointly launched January 2008 with CA • Created to provide insights into the local PPM practices • Included both business and technology professionals • Organisations from across Australia and New Zealand • Large organisations (200+ employees) • Mix of private and public sector (50-50) 3 Commercial-in-confidence
  • Agenda • The need for Project Portfolio Management (PPM) • Understanding PPM • PPM adoption in Australia and New Zealand • Implementation of PPM • Challenges facing PPM adoption • Questions 4 Commercial-in-confidence
  • The facts are brutal, but must be faced • Planning over emphasises “new investment” • Projects fail to meet their objectives • Firms focus on annual measurement • Financial measures dominate • Regulation of economic, social and environmental factors is increasing 5 Commercial-in-confidence
  • Organisations are using a variety of tools in an attempt to improve the status quo 6 Commercial-in-confidence
  • With PPM being a key to effective integration between the various approaches • Providing integrated governance from the strategic to the operational level •Determine the type of work Strategic •Assess the impact on the firm & resources •Assess the impact on the portfolio Are we doing the right work? •Approve the investment •Manage the production of results Tactical •Govern the activity PPM PPM •Control and manage tasks Is the work being done right? •Determine the process used to generate outputs Operational •Defines standards and procedures •Ensures control at the task and team level Is the work getting done? 7 Commercial-in-confidence
  • But remember…Portfolio Management is not just Program or Project Management • Longhaus defines Portfolio Management as: The process of identifying, prioritising, authorising, directing and controlling projects, programs and other related services using quantitative analysis to achieve business goals and objectives while balancing risk and reward. 8 Commercial-in-confidence
  • In Australia and New Zealand Interest and adoption of PPM continues to increase 9 Commercial-in-confidence
  • Unfortunately existing approaches don’t ensure PPM success 10 Commercial-in-confidence
  • So what is driving PPM adoption? • Top 5 Perceived Benefits of PPM 1. Better alignment of projects to outcomes 2. Effective and objective prioritisation 3. Increase executive reporting and visibility 4. Supporting business growth plans 5. Accurate budgeting and forecasting • And 44% of firms who adopted PPM realised these benefits 11 Commercial-in-confidence
  • But …barriers do exist for implementation of PPM • Top 5 Perceived Barriers for adoption of PPM 1. Skill level of existing staff 2. Maturity of the organisation 3. Not considered mission critical 4. End user resistance to change 5. Entry of data multiple systems • As a result organisations then struggle with the basics such as effective prioritisation, management of resources and project dependencies 12 Commercial-in-confidence
  • Prioritisation and alignment are not achieved through simple reviews 13 Commercial-in-confidence
  • Portfolio Management is not just about Projects 14 Commercial-in-confidence
  • Maybe Project Portfolio is the wrong starting point • The biggest savings can be found in optimising existing assets • Begin with Asset Portfolios! – ITIL driven CMDBs make an ideal data source • These areas can yield average savings of 20% 15 Commercial-in-confidence
  • Project Portfolios do not only exist in IT making PPM a key tool for business decisions What level of Project Management Organisation exists in your firm? 16 Commercial-in-confidence
  • And in most organisations PPM is not just used by IT and the CIO • Sponsored by the CIO • Sponsored by the CFO when: when: – Project management in – Activity base costing is place in place – Centralised IT services – Decentralised or outsourced IT services 17 Commercial-in-confidence
  • Ultimately effective PPM cannot be implemented with a spreadsheet • PPM requires well managed information – Software support is crucial to successful PPM • Key features include: – Flexible value criteria beyond just dollar value – Risk assessment capability – Workflow to support the PPM processes – Integration from high level data to project level detail – Shared repository for planned versus actual data – Headless implementation for portal / dashboard integration • Partner with experienced organisations – Without a standard method software + services are important 18 Commercial-in-confidence
  • Yet Australian and New Zealand firm are still taking the PPM journey alone Do you use external support for your Project Portfolio Management activity? 19 Commercial-in-confidence
  • Challenges for the PPM in Australia and New Zealand • Organisations see value in PPM, but existing frameworks alone are not enough • Effectively addressing the people (cultural) barriers for adoption • Addressing the largest cost areas by including Assets not just Projects • Development of a consistent PPM method • Breaking the perception that PPM is only about better IT management 20 Commercial-in-confidence
  • Source Material • Successful Portfolio Management Unifies ICT Management Practices, Longview, September 2006 • Increasing Digital Regulation will drive ICT spending In already saturated market, Longview, December 2007 • Portfolio Management - How Australian and New Zealand organisations are learning new ways to balance risk and reward, Whitepaper, July 2008 21 Commercial-in-confidence
  • Thank you Longhaus Head Office Sam Higgins Level 30, AMP Place Research Director 10 Eagle Street sam.higgins@longhaus.com Brisbane QLD 4000 +61 412 621 014 Longhaus Research Centre 7/269 Abbotsford Road Bowen Hills QLD 4006 p: +61 7 3868 4796 f: +61 7 3303 8445 inquiry@longhaus.com 22 Commercial-in-confidence