Project Portfolio Management The new strategic role of Project Managers Roberto Toledo, MBA, PMP México [email_address]
What is a Project Portfolio? <ul><li>A collection of projects and/or programs and other related work, grouped to facilitat...
Organizational Context ©2006 Project Management Institute Goals and Objectives Definition Rule every organizational effort...
Projects vs. Portfolio Project Management Portfolio Management Tactic task Strategic Task Usually performed by Middle Mana...
The PMI Standard for PPM <ul><li>Strategic Plan: </li></ul><ul><li>Goals </li></ul><ul><li>KPI’s </li></ul><ul><li>Capacit...
Strategic Planning: The Basics <ul><li>Mission </li></ul><ul><ul><li>Gives meaning to the work of the organization’s membe...
Balances Scorecard Kaplan & Norton
Selection and Prioritization New Products Financial Canceled Initiatives Postponed Initiatives Customer Internal Learning ...
<ul><li>The easiest way to create alignment between the Strategic Plan and the Project Portfolio </li></ul><ul><li>Provide...
Possible Subjects Customer Perspective Financial Perspective Internal Processes Strategic Intent Learning and Growth Proje...
<ul><li>International Market Research Company </li></ul><ul><li>Project Portfolio for the Mexico, Central America and Cari...
Prioritization Matrix
Other Criteria Implementation Complexity Added Value Strategic Alignment Value Contribution <ul><li>Government Regulations...
Evaluation Criteria (example)
Evaluation Results
Investment Map Complexity Added Value Low Low High High Note:  Bubble size represents investment in the project .
New Portfolio Integration <ul><li>Make a list of all  official  company projects </li></ul><ul><li>Make an organization-wi...
Other Issues <ul><li>Risk Management can be included in the analysis </li></ul><ul><li>Portfolio Monitoring and Control pr...
Conclusions <ul><li>Strategic Planning (SP) is of paramount importance nowadays </li></ul><ul><li>Establishing simple mech...
<ul><li>OBRIGADO!! </li></ul><ul><li>THANK YOU!! </li></ul><ul><li>GRACIAS!! </li></ul><ul><li>QUESTIONS???? </li></ul>Rob...
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Portafolio Management Six Sigma Brasil Rt 0409

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Portafolio Management Six Sigma Brasil Rt 0409

  1. 1. Project Portfolio Management The new strategic role of Project Managers Roberto Toledo, MBA, PMP México [email_address]
  2. 2. What is a Project Portfolio? <ul><li>A collection of projects and/or programs and other related work, grouped to facilitate effective management of that work to meet strategic business objectives. </li></ul><ul><li>The “Portfolio components” (projects and programs) may not necessarily be interdependent or directly related (PMI’s Portfolio Management Standard). </li></ul>©2006 Project Management Institute
  3. 3. Organizational Context ©2006 Project Management Institute Goals and Objectives Definition Rule every organizational effort Processes to establish proper actions to accomplish goals and objectives Components that guarantee an efficient and effective execution Vision Mission Organizational Strategy and Objectives High-Level Operations Planning and Management Project Portfolio Management PPM Management of On-Going Operations (recurring activities) Value Generation Management of Authorized Programs and Projects (projectized activities) Increasing value and production capability Organizational Resources
  4. 4. Projects vs. Portfolio Project Management Portfolio Management Tactic task Strategic Task Usually performed by Middle Management Usually performed by Senior Management Preceded by the Definition of the Project Portfolio of the organization Preceded by the Strategic Planning of the Organization Are we doing the project right? Are we doing the right projects? Main Goal: Contribute to the fulfillment of the Organization’s Goals and Objectives
  5. 5. The PMI Standard for PPM <ul><li>Strategic Plan: </li></ul><ul><li>Goals </li></ul><ul><li>KPI’s </li></ul><ul><li>Capacity </li></ul>Identification Evaluation Selection Categorization Strategic Change Prioritization Portfolio Balancing Authorization Component Execution and Reporting Strategic Aligning Controlling Components No Yes Portfolio Reporting and Review ©2006 Project Management Institute
  6. 6. Strategic Planning: The Basics <ul><li>Mission </li></ul><ul><ul><li>Gives meaning to the work of the organization’s members </li></ul></ul><ul><li>Vision </li></ul><ul><ul><li>Desired position and Strategic Intent </li></ul></ul><ul><li>SWOT Analysis </li></ul><ul><ul><li>Internal: Strengths and Weaknesses (+,-) </li></ul></ul><ul><ul><li>External: Opportunities and Threats (+,-) </li></ul></ul><ul><li>Values </li></ul><ul><ul><li>Decision making support for the organization’s members </li></ul></ul><ul><li>Resources </li></ul><ul><ul><li>Budget linked to the strategy defined </li></ul></ul><ul><li>People </li></ul><ul><ul><li>Incentives linked to the strategy defined </li></ul></ul>
  7. 7. Balances Scorecard Kaplan & Norton
  8. 8. Selection and Prioritization New Products Financial Canceled Initiatives Postponed Initiatives Customer Internal Learning SELECT PRIORITIZE STRATEGY Resources and Budget Authorized Projects (Project Charter) Project Portfolio Initiatives
  9. 9. <ul><li>The easiest way to create alignment between the Strategic Plan and the Project Portfolio </li></ul><ul><li>Provides an objective selection mechanism using both objective and subjective criteria </li></ul><ul><li>Deals with difficult to evaluate subjects such as: </li></ul><ul><ul><li>Implementation complexity </li></ul></ul><ul><ul><li>Added value </li></ul></ul><ul><ul><li>Strategic consistency </li></ul></ul><ul><ul><li>Customer perspective, </li></ul></ul><ul><ul><li>Knowledge and growth </li></ul></ul>A Strategic Questionnaire
  10. 10. Possible Subjects Customer Perspective Financial Perspective Internal Processes Strategic Intent Learning and Growth Project Portfolio Balancing
  11. 11. <ul><li>International Market Research Company </li></ul><ul><li>Project Portfolio for the Mexico, Central America and Caribbean subsidiary </li></ul><ul><ul><li>Approximately 4,000 employees in the subsidiary </li></ul></ul><ul><li>Dominant player of the niche </li></ul><ul><li>Main Strategic Objectives </li></ul><ul><ul><li>Consolidation of operations </li></ul></ul><ul><ul><li>Automation and optimization of internal processes for cost reduction (IT) </li></ul></ul><ul><ul><li>Product portfolio growth (new services) </li></ul></ul><ul><ul><li>Increase in the the reported quality of client satisfaction </li></ul></ul>A Real Case
  12. 12. Prioritization Matrix
  13. 13. Other Criteria Implementation Complexity Added Value Strategic Alignment Value Contribution <ul><li>Government Regulations </li></ul><ul><li>Organizational Interactions </li></ul><ul><li>Processes </li></ul><ul><li>Technology </li></ul><ul><li>Alignment </li></ul><ul><li>Orientation </li></ul><ul><li>Organization </li></ul><ul><li>Operations </li></ul><ul><li>Technology </li></ul><ul><li>Financial Efficiency </li></ul><ul><li>Processes </li></ul>
  14. 14. Evaluation Criteria (example)
  15. 15. Evaluation Results
  16. 16. Investment Map Complexity Added Value Low Low High High Note: Bubble size represents investment in the project .
  17. 17. New Portfolio Integration <ul><li>Make a list of all official company projects </li></ul><ul><li>Make an organization-wide information sharing campaign </li></ul><ul><ul><li>Be aware that there may be confidential projects though </li></ul></ul><ul><li>Seek balance between goal accomplishment and available resources (more with less) </li></ul><ul><li>In organizations where resources are limited, always focus most resources on main strategic objectives </li></ul><ul><ul><li>Pareto Rule!! </li></ul></ul><ul><li>This new Portfolio is by no means static! </li></ul><ul><li>Use always the same process for reviewing the portfolio </li></ul>
  18. 18. Other Issues <ul><li>Risk Management can be included in the analysis </li></ul><ul><li>Portfolio Monitoring and Control processes must be established once it’s authorized and execution begins </li></ul><ul><ul><li>Periodic analysis of the Project Portfolio composition (which Projects are included?) </li></ul></ul><ul><ul><ul><li>Anual  Quarterly </li></ul></ul></ul><ul><ul><ul><li>Senior Management responsible of making adjustments </li></ul></ul></ul><ul><ul><ul><li>Based on benefit realization and changes to the Strategic Plan </li></ul></ul></ul><ul><ul><li>Also a Periodic Analysis of the Components (Projects and Programs) </li></ul></ul><ul><ul><ul><li>Quarterly  Weekly </li></ul></ul></ul><ul><ul><ul><li>Basically: Scope, Time and Cost </li></ul></ul></ul><ul><ul><ul><li>PMO and Project Managers responsible of making adjustments </li></ul></ul></ul>
  19. 19. Conclusions <ul><li>Strategic Planning (SP) is of paramount importance nowadays </li></ul><ul><li>Establishing simple mechanisms for SP and PPM processes is more efficient </li></ul><ul><li>Organizations must know at all times where their resources are being invested </li></ul><ul><li>It does not necessarily mean having a new department, but it does mean assigning this responsibility to someone! </li></ul>
  20. 20. <ul><li>OBRIGADO!! </li></ul><ul><li>THANK YOU!! </li></ul><ul><li>GRACIAS!! </li></ul><ul><li>QUESTIONS???? </li></ul>Roberto Toledo, MBA, PMP Socio Director de Alpha Consultoría [email_address] (52-55) 5211.6828
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