Portfolio management


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Nigel Bell gave an overview of portfolio management and the work of the APM Portfolio Management SIG at a recent APM East of England branch event. You will learn,
Some portfolio management definitions
Portfolio management principles
Seven simple steps which guarantee portfolio management success in three weeks
portfolio management challenges

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Portfolio management

  1. 1. Portfolio Management Nigel Bell East of England Branch 21st February 2012 Marshall Aerospace, Cambridge
  2. 2. Portfolio Management Proposed Agenda  Scene-setting and credentials  Some portfolio management definitions  Some portfolio management principles  Some portfolio management challenges  Where we are today (recent survey)  Seven simple steps which guarantee portfolio management success in three weeks*  Remaining dialogue * not really 2
  3. 3. Portfolio Management Scene-setting  Portfolio management (PfM) has been around for many years in various forms and for various purposes  Since the turn of the century its profile has risen exponentially ...  ... perhaps because we live in increasingly turbulent times  The APM established its Portfolio Management (PfM) SIG mid-2010. 3
  4. 4. Nigel Bell Credentials  Founding committee member, sower of seeds since 2000  BSc computing > MBCS > CEng > MSc Managing Change > FBCS > MAPM  Systems devt projects  IT-enabled change projects  change projects  Do > lead > coach  PWC consultancy > European IS Dir Low & Bonar > Global IS Dir Drug Devt Astra(Zeneca) > CEO NHSIA > Cabinet Office > independent/Gateway RTL (+Logica interlude) > Managing Partner HP (Jan 2012)*  PfM: R&D > IS > NHS IS > Business Development 4
  5. 5. Portfolio management Some definitions  P3O® publication states ‘A portfolio is the investment in the changes required to meet strategic objectives’  OGC Management of Portfolios® (MoP) states ‘Portfolios represent the totality of an organisation’s investment (or segment thereof) in the changes required to achieve its strategic objectives’  APM defines Portfolio Management as: ‘The selection and management of all of an organisation’s projects, programmes and related business-as-usual activities taking into account resource constraints’. 5
  6. 6. Portfolio management ... and some more  OGC adopts a more process perspective: ‘PPM is a co- ordinated collection of strategic processes and decisions that together enable a more effective balance of organisational change and business as usual.  National Audit Office emphasises the key aspects of prioritisation and strategic alignment: ‘Prioritisation of all an organisation’s projects and programmes in line with business objectives and matched to its capacity to deliver them’.  Cranfield MS and Open University define it as ‘Managing a diverse range of projects and programmes to achieve the maximum organisational value within resource and funding constraints.’ 6
  7. 7. The Portfolio Management cycles Define Benefits Mgmt Financial Mgmt Risk Mgmt Stakeholder Engagement Resource Mgmt Management Control Understand Plan Balance Prioritise Categorise Organisational Energy Source: OGC Management of Portfolios, pub TSO 2011
  8. 8. Success – a Portfolio Management perspective Portfolio Management ensures the ‘right’ projects & programmes are selected and managed for success….’ Portfolio Management SIG 2011 ‘All Projects Succeed’ APM Vision 2011 Supports timely decision making and re- orientation of in-flight projects & programmes so that strategic benefits are optimised Ensures early identification of Projects & Programmes that don’t add value/benefit so they are not started or are stopped Identification of Projects & Programme that are strategically aligned. Those not strategically aligned are not started or cancelled as early as possible Ensures visibility of all projects & programmes and their interdependence and enables tracking and focus to ensure success. Provides better engagement with staff Supports effective and optimised allocation of resources to better enable the highest priority ‘right’ projects and programmes to succeed Ensures management of risk at the collective level increasing success of the ‘right’ projects & programmes and a link to business risk management Provides robust governance of change across the whole landscape of change / projects
  9. 9. Portfolio management My 4 contexts and experiences  Common factors in prioritisation – Strategic fit – Costs to go – ROI/benefits – Achievability/confidence  Differences – Pharma R&D: complexity, “failure” rate, maturity – Pharma IS: dependencies, scale diversity – NHS IS: politics and Politics! – Bus Devt: two tier – client and opportunity  Common outcomes – Critical, tier 2, tier 3, parked 9
  10. 10. Portfolio management Some principles  Proactive and visible Senior Management Commitment  Consistent and effective Governance Alignment  Alignment of the Portfolio with Strategic Objectives  Coordination through a Portfolio Office  Shared change culture and associated behaviours 10 *ource: OGC Management of Portfolios, pub TSO 2011
  11. 11. Portfolio management Some challenges (1)  Getting Portfolio Management started  Developing an initial portfolio  Prioritising and balancing the portfolio  Delivering overall portfolio benefits  Dealing with tensions between Portfolio and BAU/Operational objectives  Securing and sustaining business unit management commitment 11
  12. 12. Portfolio management Some challenges (2)  Securing and developing people with the right portfolio skills/capabilities  Putting in place the right tools & techniques to support Portfolio Management  Achieving the goals set for a Portfolio Management function  Applying lessons learnt from regular reviews of Portfolio Management performance 12
  13. 13. Portfolio Management SIG – 2011/12 Membership Survey (Preliminary Results)  The PfM survey was launched in December 2011, at which time there were 575 SIG members.  Initial 50 responses have undergone initial analysis.  Those that took part have provided a very good series of responses, across all 15 questions.  Summary results follow.  We are keen to encourage ongoing contributions to this rolling survey – your APM needs you! 13
  14. 14. 1. Which best describes your role? 14
  15. 15. 2. To which sector does your organisation belong? 15
  16. 16. 3. How would you describe the approach to portfolio management in your organisation? 16
  17. 17. 4. In which part of the organisation is the main Portfolio Management (PfM) function domiciled? 17
  18. 18. 5. In what units do you structure your portfolio of change / investment initiatives? (multiple selections apply) 18
  19. 19. 6. How many projects comprise your change / investment portfolio? 19
  20. 20. 7. How large (£) are your projects? (multiple selections apply) 20
  21. 21. 8. How many programmes comprise your change / investment portfolio? 21
  22. 22. 9. How large (£) are your programmes? (multiple selections apply) 22
  23. 23. 10. Do you also include services/BAU within your change/investment portfolio? 23
  24. 24. 11. Please rate the importance your organisation attaches to each of the following PfM principles 24
  25. 25. 12. Please rate how successfully you believe these principles are being applied in your organisation 25
  26. 26. 13. Please rate how successfully the following common PfM challenges have been or are being addressed 26
  27. 27. 14. Which (up to 3) topics in Q13 are most worthy of further discussion/ debate through the APM? 27
  28. 28. 15. Up to 3 topics in Q13 for which you are prepared to draw up a short outline of what has worked well or not so well in your organisation? 28
  29. 29. End of core presentation 29
  30. 30. Portfolio Management SIG Forthcoming Events Practical Experiences of Portfolio Management London, 20th March, 5.30pm Visit www.apm.org.uk/events for more details 30
  31. 31. Portfolio Management SIG Your next steps  Please do complete the survey at  www.surveymonkey.com/s/LB93F9C  If you are interested in joining the SIG www.apm.org.uk/group/portfolio-management-sig  Join in the debate – Blog etc  To follow up on any other aspect of this evening’s presentation – email nigel.bell@hp.com 31
  32. 32. Thank you for your attention and engagement Travel safely Nigel Bell 32