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Pragmatic portfolio management, 25th september 2012

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Pragmatic Portfolio Management, 25 Sept 2012
Martin Samphire and David Dunning, on behalf of the APM
Portfolio Management (PfM) SIG, APM Portfolio Management (PfM) SIG, APM Thames Valley Branch

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Pragmatic portfolio management, 25th september 2012

  1. 1. Pragmatic Portfolio Management 25 Sept 2012 Martin Samphire and David Dunning, on behalf of the APM Portfolio Management (PfM) SIG APM Portfolio Management (PfM) SIG APM Thames Valley Branch 1
  2. 2. APM Presenters 2 Martin Samphire MIOD Chairman of APM Governance SIG Owner and MD – 3pmxl Ltd Sectors – FS, police, defence, energy David Dunning CMC APMG Registered MoP™ and P3O® Consultant CPS Director (APM Portfiolio Mgmt SIG Committee Members)
  3. 3. Agenda Introducing the PfM SIG and PfM background Portfolio Management concepts How to introduce / improve PfM PfM survey – some results and insight Group discussions – key insights from survey Q&A Summary and close 3
  4. 4. PfM SIG and background 4
  5. 5. PfM SIG – some committee faces Our passion - "To develop and promote the professional discipline of Portfolio Management for the public benefit.“ …..Promoting, Influencing, Communicating, and Sharing best practice…… Achilleas Mavrellis Defra (SIG Secretary) Christine Rigby AstraZeneca Stephen Parrett Right Change Consulting (SIG Chairperson) Nigel Bell HP Martin Samphire 3pmxl Ltd David Dunning CPS 5 Rebecca West City of London Corporation
  6. 6. Change Management AssurancePeople Governance Programme Management Benefits Management PMO Portfolio Management (PfM) PfM SIG - interfaces with other SIGs 6
  7. 7. Directing Change 2nd edition 2011 7 Co-Directing Change 2007 Sponsoring Change 2009 Free to APM members at www.apm.org.uk/memberdownloads PfM – strong link to governance GovSIG – Publications to date
  8. 8. APM PfM SIG focus for 2012 Survey – update, analyse and provide insights (more later) Enhance relationship with external bodies to influence business leaders Spread good practice to APM members and beyond – events, papers, website, case studies
  9. 9. PfM SIG – Join the Debate.... Come and join us to find out more! – Link to PfM SIG area on APM website Become one of our Bloggers online... Do you have some interesting PfM learning, tools, techniques or a case study to share through a written article or presentation? Please do complete the survey at www.surveymonkey.com/s/LB93F9C PfM “Fest” on 2 October 9
  10. 10. PfM – some key concepts 10
  11. 11. Which world do you live in? Business as unusual? 11 Business as usual? Inconvenient period of change Current steady state Future steady state
  12. 12. The Black Death, PM and PfM The Black Death has a parallel with project management….the signs of something going wrong were well known and yet the same medicine was applied – Project March 2012 Heavy investment in PM and change delivery framework, tools and skills Success rate for projects not improved Need new “medicine” Could that be more focus on Portfolio Management? Successful Portfolio Management leading to better Benefits Delivery? 12
  13. 13. 13 Change in context Mission Strategy & Objectives Portfolio Mgmt – Definition & Monitoring Operational Planning & Mgmt Programme and Project Mgmt of authorised P&Ps Operational Mgmt of on-going operations (BAU) Organisational and External Resources delivering tasks Vision Portfolio Management “Doing the right projects” Programme & Project Management “Doing the projects right”
  14. 14. Projects Programmes Portfolio Specific business benefits Outputs Achieve Strategic Outcomes Portfolio Management ensures “right projects and optimises investment in change” Positioning PfM 14
  15. 15. Positioning PfM – Definitions Making the right investment choices and effectively optimising scarce resources (money – technology – infrastructure - people) APM The prioritisation, selection and management of an organisation’s projects and programmes in line with its strategic objectives and business priorities, taking into account its capacity to deliver them. OGC PfM is a coordinated collection of strategic processes and decisions that together enable a more effective balance of organisational change and BAU National Audit Office Prioritisation of all an organisation’s projects and programmes in line with business objectives and matched to its capacity to deliver them. Cranfield & Open University Managing a diverse range of projects and programmes to achieve the maximum organisational value within resource and funding constraints. 15
  16. 16. Positioning PfM – Some SIG Perspectives ‘Portfolio Management ensures the ‘right’ projects & programmes are selected and managed for success….’ Portfolio Management SIG 2011 ‘All Projects Succeed’ APM Vision 2012 Supports timely decision making and re-orientation of in-flight projects & programmes so that strategic benefits are optimised Avoids projects being seen as the province of a specific department – decisions based upon business not ‘local’ criteria Identification of Projects & Programme that are strategically aligned and add value 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 Supports robust governance of change across the whole landscape of change / projects 16
  17. 17. Positioning PfM – Integrated Cycles Understand Strategic fit Plan Portfolio strategy & delivery… The baseline… Balance E.g. Overall risk, return, coverage etc Prioritise Ranking criteria Categorise For easier decision making Organisational Energy & Willingness Definition Delivery Input Results: Influencing Strategy Output delivering Strategic OutcomesPerformance (Verify – Clarify – Check – Respond) Diagram based on the Portfolio Management cycles in OGC Management of Portfolios (MoP™) Benefits Mgmt Maximise Portfolio performance Financial Mgmt Alignment with financial business cycles Risk Mgmt Mitigation …& opportunity… Stakeholder Engagement Maintaining support for delivery Resource Mgmt Management Control Templates, Assurance Governance Clarity for decision making 17
  18. 18. Demand Management Process 18 3pm Project Lifecycle Performance KPIs
  19. 19. Portfolio definition – categorise Identify alignment with strategic objectives – segment where possible into categories of similar type Strategic Investments which are critical to sustaining future business strategy High Potential Key Operational Support With tailored investment criteria Investments which may be important to achieving future success Investments on which the organisation currently depends for success Investments which are valuable but not critical to success 19
  20. 20. Portfolio “filter” Portfolio Plan BAU Work Vision Current State Programmes and Projects StrategyMission Consensus? Poorly understood Priorities agreed? Poor control processes Resources Not Integrated Not what expected Positioning PfM - where can it go wrong? Business Strategy Changes 20 Business Performance Benefits
  21. 21. Key principles for success 21 Senior management commitment – Senior champion and clear roles / accountabilities – Active engagement - Fast decision making – Rewards and recognition alignment Alignment with governance framework – Portfolio direction group / Investment Committee – Portfolio Progress Group / Change Management Committee – PPM Forum – project progress Alignment with strategic objectives – Portfolio segmentation – Prioritising (weighting, rating, pair-wise comparisons, decision conferencing – Link benefits to strategic objectives – value led Use of a portfolio office – Process and standards, support, challenge, assurance, reporting, lessons – Evidence Energised culture – Collaborative working, proactive communications, learning and improving Adapted from OGC MOP
  22. 22. Positioning PfM – The Benefits of PfM More “right” programmes / projects Removal of redundant, duplicate, poorly performing projects More effective implementation of programmes / projects – consistent approaches and improved dependency management Better resource utilisation and collaborative working (both projectrs and bau) Holistic risk management Enhanced transparency, accountability and governance Improved engagement and communication between senior management and staff Greater benefits realised (and that support strategic objectives) Reference: MoP™ Office of Government Commerce, 2011 22
  23. 23. PfM – how to introduce and improve 23
  24. 24. 24 Vision…What is our expected future state? Requirement…How does it piece together? Readiness…Have we checked we can do this? Approach…Opening, mid & end game? Roadmap…How do we get there?
  25. 25. 25 Problem Outcome Benefit Resource management – unsuitable model for managing going forwards • Central place – for resources, skills, plans. • Process for long term planning and resource allocation. • Update cycle to control allocations for plans ‘in flight’ • More efficient use of resource pool. • Ability to be more agile • Reduce the cost of managing issues resulting from ineffective resource management. • Increase delivery certainty from greater timescale predictability Lack of visibility of work in flight / approaching and lack of visibility of timescales. • Central place for plans and other project controls. • Common reporting portal. • Replace current manual reports with more automated / on demand report solutions. • Reduce cost of reporting • Increase predictability for the business leading to less time spent introducing changes • Improve reputation with the business Incomplete approach to forecasting the forward load, unsatisfactory transition from possible to real plan • Provide a portal through which work requests can be registered. • Introduce planning standards for long terms and near term work. • Review priority model to require alignment to strategy • More predictability of project starts from greater visibility of resource demands now and into the future leading to more efficient use of resources • Less management time spent resolving issues which could have been avoided. • Enables more effective prioritisation – more if the important work is done. Ineffective collaboration on project controls and no central configuration management approach for document • Project Collaboration environment. • Document Library, common project controls. • Cross project issue, risk, lesson learned reports • Less time managing documents, less issues resulting. • Less storage space needed. • One place to look for documents, less time searching for the right version. • Better learning. • Less time spent assembling cross project reports Ineffective Performance measurement and management • Common progress cycle from common plan structures, supporting common metrics • Less time spent capturing status. • Less time spent starting up plans and project controls. • More reliable planning leading to less issues to manage. • Increased predictability leading to reputation benefits and business time saving.
  26. 26. Base Capability Tools – planning tools, collaboration environments, reporting platforms, user capability. Architecture, installation, performance assurance, trained users following basic procedures for use, simple quality assurance checks. Data – Databases and data stored, reporting data sources, basic quality assurance. Base data model defined, access controls, data aggregation and integration facilities in place. In addition to the data and tools, basic usage guidelines and support will need to be provided. People & Process Controls – definition of the right information needed at the appropriate moment of processes. The right management information, commonly used, and relied upon by the business. For example, business case documents, change registers, risk logs, etc. Operation – execution of the appropriate processes and roles to deliver work. Common, joined up procedures carried out by people, where capability is not an issue. Insight & Management Reporting – definition of common reports delivered from common process using common tools & data. Integration - Progress from manual data through to integrated reports linking related data stores (like planning and finance data), to snapshotting and data capture / trend analysis. Collaboration – Common ways of sharing all kinds of information (Risk, Issue, etc.), linking of unstructured information. Organisation & Leadership Organisation - The ecosystem which delivers projects and programmes. Tools and processes owned, support and governance in place, scrutiny and oversight of the portfolio active. Leadership - Initial link between strategy & delivery visible, capability hiring approach in place, executive level use of information for decision making, strategy drives delivery and delivery of benefits informs strategy.
  27. 27. Recommend not to take on too much change at once. Enable Improve Change Choose a sensible scope in each of the areas of Base Capability, People & Process, Insight & Management and Organisation. (Also - We might not need to do everything) INSIGHT & MANAGEMENT ORGANISATION PEOPLE & PROCESS BASE CAPABILITY Higherorder engagementwiththe organisation CHANGE – improvements possible with fundamental organisation changes IMPROVE – capability benefits derived from basic building blocks ENABLE – basic capability building blocks in place Fromcurrentstateto ultimatesolution SOLUTION COMPONENTS TRANSFORMATION • Consider the problem statements and the desired outcomes against each of the solution components. • Do we need to consider tactical en-route to strategic solutions. • Will the solution offered really help achieve the benefit expectation.
  28. 28. Capability / Maturity enabled building blocks • Depending on the circumstances, there are changes that it is sensible to make first, and changes it is sensible to delay. • It may be sensible to introduce some changes only after others have settled into business as usual. For example, resource planning before resource management. • It may well be that: • there are bandwidth constraints which will limit what can be led or absorbed by staff. • we cannot reach or influence the stakeholders until they have seen initial benefits. • It is sensible therefore to plot out a sequence of change respecting these constrains: INSIGHT & MANAGEMENT ORGANISATIONPEOPLE & PROCESSBASE CAPABILITY Key Business Issues Demonstrable Business Benefits CHANGE IMPROVE ENABLE Phase 1 Phase 2 Phase 3Not in Scope
  29. 29. INSIGHT & MANAGEMENT ORGANISATIONPEOPLE & PROCESSBASE CAPABILITY • Tools joined up with other tools • Data integrity • IT strategy alignment • Interpretation not a gamble • Processes relied upon by the business • People capability not an issue • Flexible Insight to spot issues • Meaningful analysis on reliable information from reliable process • Supporting key business processes • Scrutiny and oversight of the portfolio • Strategy drives delivery and delivery informs strategy • Future resource needs from strategy CHANGE • Tools aggregate information easily • People use tools & follow basic usage model • Accuracy and reliability • Common Information • Processes joined up and operated • People capable of following processes • Common data schemes in different systems • Common reports extended to integrated information • Aggregated information for further collaboration • Support and governance in place • Exec level use of information for decision making • Skill development / acquisition IMPROVE • Common planning & collaboration tools • People have base tool capability • Data Accuracy • The right management information • Common procedures • Enough of the right people • Common reports defined • Information sources understood and manually worked together • Common ways of collaborating around information • Standard tools & processes owned • Initial link between strategy & delivery visible • Capability hiring approach ENABLE
  30. 30. Transformation Phase 3 Vision = CHANGE – deliver benefits beyond what is possible with improvement alone. • Design • Change Phase 1 Enable Phase 3 Change Phase 2 Improve Design Change Realise Benefits S Design Change Realise Benefits Design Change Realise Benefits F Assessment Initiation Define Identify • Identify – the problems to be solved • Assess – what the implication is • Define – the solution and the roadmap Phase 1 Vision = ENABLE • Assessment • Design • Change Phase 2 Vision = IMPROVE – build upon the capability enabled. • Design • Change
  31. 31. PfM – survey and insights 31
  32. 32. PfM Survey – Principles(*) Considered Proactive and visible senior management commitment Consistent and effective governance alignment Alignment of the Portfolio with strategic objectives Co-ordination through a Portfolio Office Energised change culture and associated behaviours (*) Principles from: MoP™ - Office of Government Commerce, 2011 PfM Survey asked how each of these were perceived in organisations in terms of their Importance and Effectiveness 32
  33. 33. Principle Importance Effectiveness Alignment of the Portfolio with strategic objectives 63% 37% Proactive and visible senior management commitment 57% 42% Consistent and effective governance alignment 43% 27% Shared change culture and associated behaviours 29% 18% Co-ordination through a Portfolio Office 28% 22% 33 Reasonable correlation Senior focus? We don’t need PMOs? Poor show – need to improve Most important No to culture change? Principles(*) Rated
  34. 34. PfM Survey – Challenges Faced 1. Gaining Board buy-in to a single agreed view of business objectives 2. Developing an initial portfolio 3. Getting portfolio management started 4. Securing and sustaining business unit management commitment 5. Prioritising and balancing the portfolio 6. Dealing with tensions between Portfolio and BAU/Operational objectives 7. Securing and developing people with the right portfolio skills/capabilities 8. Putting in place the right tools & techniques to support PfM 9. Delivering overall portfolio benefits 10. Setting up, and gaining compliance with, portfolio management processes 11. Achieving the goals set for a portfolio management function 12. Applying lessons learnt from regular reviews of PfM performance 34
  35. 35. Challenge Rated High Interest Developing an initial portfolio 40% 15 Gaining Board buy-in to a single agreed view of business objectives 37% -- Getting portfolio management started 36% 42 Securing and sustaining business unit management commitment 20% 38 Prioritising and balancing the portfolio 20% 58 Delivering overall portfolio benefits 18% 58 Putting in place the right tools/techniques to support PfM 18% 61 Dealing with tensions between Portfolio and BAU/Operational objectives 17% 46 35 All their fault? Top 3 topics Little correlation A long way to go in many areas, but significant interest in more debate/learning about how to improve performance Are Challenges being met?
  36. 36. Exercise – survey insights 36
  37. 37. Exercise – objectives and process In groups – Take a Portfolio Management Principle – Discuss it’s importance Together – Each group - Make a short ‘champion’ presentation – Vote! 37
  38. 38. Q&A and summary 38
  39. 39. Summary Effective PfM is about delivering Strategic Objectives This implies: – Executive ownership of the Portfolio – Integrated governance and decision-making – Commitment to the underpinning and active processes This requires: – Objective > Problem > Outcome > Benefit mapping - value led – Vision and roadmap – Organisational will – active and fast decision making – Change Programme to implement / improve Getting PfM right should result in: – Clear links between strategy, plans and the change portfolio – Optimisation of all change resources – Better overall benefits delivery and strategic outcomes 39
  40. 40. For follow-up contact 40 Martin Samphire msamphire@3pmxl.com +44 7798 700314 David Dunning David.dunning@CPS.co.uk +44 7767 803540

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