My ISACA Sydney Chapter presentation on how a company rose from zero to hero status on portfolio governance, and practical actions that helped achieve this.

1. When Portfolio Governance goes bad –
A story of getting back on track
Ian Sharpe MAIPM CPPD PMP 1 November 2012
©UXC Consulting

2. Today’s story
• Getting senior management involvement
• Report overload!
• Effective governance meetings
• IT Portfolio governance - what happens when
the rest of the organisation gets involved....
• The Mega Project - what happens when
more than 2/3 of all effort is one
project/program
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3. Getting senior management involvement
Sometimes we need to disturb people for their own good
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4. Getting senior management involvement
Where ‘Organisation X’ was prior to Enterprise Portfolio Management
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5. Getting senior management involvement
Average time slippage was +96%, pr nearly 1 year beyond ;’planned’
Y1 Y2 Y3 Y4
Nov Dec Jan Feb M ar Apr M ay Jun Jul Aug Sep Oct Nov Dec Jan Feb M ar Apr M ay Jun Jul Aug Sep Oct Nov Dec Jan Feb M ar Apr M ay Jun Jul
A +546 d
B +349 d
C +151 d
D +457 d
E +213 d
F +151 d
G +91 d
H +90 d
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6. Getting senior management involvement
Forecasting a $1.5M capital overspend in 6 months*
$15000
$ 1 3 9 1 5 K , F o re c a s te d S p e n d
$14000
$1508 K over B udget
$13000
$12000 $ 1 2 4 0 7 B u d g e te d S p e n d
$11000
S p e n d (K )
$10000
O rig in a l D a te o f L a te s t C o m p le tio n
E s tim a te d D a te o f C o m p le tio n
$9000
$8000
$7000
$6000
$5000
J a n -0 5 A p r-0 5 J u l-0 5 O c t-0 5 J a n -0 6 A p r-0 6 J u l-0 6
* Not including hidden overspend from inadequately budgeting (over-estimating costs, cross-subsidising and misuse of
contingencies)
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7. Getting senior management involvement
Staff time - the hidden portfolio investment cost
• Adding an average of +1 working year ‘beyond
planned’, per project
• 63 staff typically engaged full-time across the planned
project portfolio (PMs, BAs, Program
Managers, testers, etc)
• Average base salary cost was $103,000
• The salaried burn rate was $540,750 per month!
• Opportunity missed was capitalisation of Opex
The business stopped calling staff time ‘cost neutral’
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8. Getting senior management involvement
The real forecast slippage in 6 months
• 1.5m forecast Capital
• 3.2m forecast Opex (previously hidden)
• Likelihood of being able to capitalise some of this, but
not until asset is into production (up to a year away in
most cases)
• Benefits -‘soft and fully absorbent’
• Treated as 4.7m loss off bottom line, until able to
proven otherwise
And then it got complicated ...
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9. Getting senior management involvement
Bought out by the Americans
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10. Getting senior management involvement
Acquisition and the Sarbanes-Oxley (SOX) Act
• As a result of SOX, top management must now
individually certify the accuracy of financial information
• SOX increased the independence of the outside
auditors who review the accuracy of corporate financial
statements, and increased the oversight role of boards
of directors
• In addition, penalties for fraudulent financial activity
are much more severe ...
©UXC Consulting

11. Getting senior management involvement
Acquisition and the Sarbanes-Oxley (SOX) Act
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12. Reporting overload!
Kept it simple, consistent and congruent
• Called out what really
matters for decisioning to
Executives
• Does this still make sense,
strategically?
• Is this still achievable with what
we’ll have?
• Worshiped meaningful
traffic lights
• Measure the future, not the
past
• Scope, Time, Cost, Risk, Benefits
• No subjectivity - simple rules
basis for status
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13. The Truth
Fortnightly releases prompted effective risk mitigating intervention
& performance management
Overview - Making the best use of this report Portfolio Time Tracking Matrix as at 26-May-06
Please ensure Macros are enabled in Excel, when opening this file, otherwise the navigation buttons and certain calculations will not function. The attached pdf file Choose a portfolio section to
shows how to easily enable Macros, if they are not already enabled (this is a 'do once' change). view:
Enabling Macros in
This report provides a hierarchy of data for each current project (the 'closed project register' can be found under the APO homepage under 'Dashboards'). Each level Excel Go to a Project Summary:
can be 'drilled down' to the data supporting it (by using the drop-down arrow choices in the cells below), enabling the journey from 'Traffic light' summation to root
cause(s), quickly and efficiently.
Drill down to the source data
MY PORTFOLIO Passport Portfolio for a project:
(Recommended level of Choose a portfolio section to view:
detail for Corporate /
(Includes all projects. Traffic
Senior Executive Review
light driven – key messages)
Actual Forecast
of current projects)
2003 2004 2005 2006
Project Name Date Project Original Target Date for Latest Estimated Date Total slippage (to
Drill-down Commenced completion for completion forecast date, in months)
Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MY PROJECT Project Choose a Project Summary to view:
(Recommended level of Summaries
detail for Project
Sponsors) AIMS Pronto 01-Nov-04 31-Aug-05 31-May-06 9.1
(Project-specific, summary
report) Apollo 01-Jun-03 30-Nov-04 16-Jun-06 18.8
Pegasus 04-Mar-05 30-Sep-05 30-Jun-06 9.1
Drill-down
RoleCall 01-Apr-04 01-Mar-05 29-Sep-06 19.2
Source Data Drill down to the source data for the project: Code Red 05-Dec-04 29-Oct-05 15-Aug-06 9.7
(Recommended level of
(Detailed data for each Customer Service 13-Mar-06 31-Dec-06 31-Dec-06 0.0
detail for Project
project)
Manager use)
Comcare 15-Mar-06 30-Jun-07 30-Jun-07 0.0
IPCC TBD TBD TBD TBD
On Hold' Projects Recently Closed Projects Pending Projects
Planned Project Duration Average Timeline Slippage - 78% Average Timeline Slippage - 90%
Projects that are presently on hold Forthcoming Projects in the pipeline
To Date Forecasted for Completion
due to other Business requirements
Actual slippage to date:
Current Projects Forecast slippage
Active Passport-
governed projects On Hold' Projects
Projects that are
Date last Anticipated
presently on hold due Project name Date Closed Project name
actioned PP0 Date MY PORTFOLIO - EXECUTIVE SUMMARY 26-May-06
to other Business
Choose a portfolio section to
requirements view:
Go to a Project Summary:
AIMS Pronto DRP 10-Mar-06 Mastermind TBD Drill down to the source data for
a project:
Apollo Server Consolidation 10-Mar-06 Maestro 02-Jun-06 APO PERFORMANCE ASSESSMENT
OWNERSHIP AND
REPORTING
SCOPE AND PROGRESS ISSUES AND RISKS TIME PHASE COST OVERALL COST BENEFITS
APO Commentary Perceived Current Date Date of last Planned % Actual % Major and Strategic Issues Tactical Issues Stakeholder Issues % Time variance from Estimated cost at Completion Estimated cost at Completion Latest Projection of once Latest Projection of
Code Red PROJECT
Performance
R - Immediate
performance
trend
Dashboard last PRB
updated by
Complete Complete original schedule of Phase ($K) of Project ($K) off benefits ($K) annually recurring benefits
($K)
intervention requ'd, PM?
Pegasus Y - close monitoring
requ'd
Rolecall AIMS Pronto Ownership and Reporting:
Sound ownership is demonstrated by obtaining leadership's agreement to put this project on hold rather than to push ahead with roll-out
This project is now at a stage where None at present.
it can be put on hold status pending
None at present
in view of anticipated change of business processes. The critical milestone of UAT signoff to which this agreement was conditional has the decision on another emrging
Customer Service been achieved.
GREEN g
business initiative.
No further dashboard reporting is planned for until new directions are obtained regarding this project's priority and/or other emerging
Comcare business initiatives.
Scope and Progress:
IPCC It is a great achievement to finally have obtained UAT sign-off.
Completion of the upload into production will make variable payments viable and readily available functionality for when the business is
ready and stable enough to justify a roll-out. GREEN k
However, the agreed freeze on the project can be overruled by new directions from leadership at any time in which case the business
continues to be obliged to progress remaining scope and/or report to the PRB.
22-May-06 29-Oct-05 100% 100% -90% RED - $138 GREEN NIL - $162 RED
Issues and Risks:
It is important to complete the final outstanding task (production upload) to ensure the current solution's viability regardless of further
Pronto development.
As no commitment towards a currently proposed business initiative has been made yet, the anticipated change processes (which
justified a 'hold') have not yet eventuated. Should the business not undergo significant change at all, the ongoing 'hold' status will not be
YELLOW g
warranted and a revival needs to be initiated to benefit the business from the additional functionality.
Portfolio Spend Chart as at 26-May-06 Metrics:
May deliverables are near completion without additional cost or time requirements.
Hopefully, the roll-out of variable payment functionality (including training of staff) will eventually be undertaken (at no or minimal costs)
GREEN g
to deliver the targeted benefits to the business and its customers.
Choose a portfolio section to
Ownership and Reporting: 1.need to ensure that the Business 1. Further software upgrades to be 1. Contractor user acceptance,
view: Apollo Lack of owner-/leadership at state level is evident with stagnating usage levels and insufficient use of state improvement plans as either has taken ongoing ownership of rolled out to States to further particularly regional areas (SNG)
no responsible persons are assigned or close out dates are well overdue. This raises questions as to the sustainability of day to day HHT Usage Levels improve 'functionality' 2. Engagement/ consistent
management by states only without the continued drive of a central project team. 2.Blackbay contract review and sign 2. Continued lack of user involvement of SNG representation
YELLOW m off yet to be completed, including acceptance reflected in usage into project Steering Committee
Go to a Project Summary: The continued need to drive HHT usage centrally versus the limited value add of an actual project environment will need to be taken into after-hours support - Jose on levels 3. ALT Leadership require further
consideration when deciding on criteria for project closure. annual leave 3. GPRS Network unplanned improvement in the key usage
4.Delay in managing poorly downtime - lack of improvement metric, with particular focus on
Scope and Progress: performing providers out of the 4. Blackbay Software and Server provider use.
Final outstanding project tasks including ELS savings analysis and the report on Monitoring software benefits are overdue and need to operation support not on a 24/7 basis, 4. Completion of pre PRB 5 tasks,
be completed. currently contracted to 24/5. particularly contract sign off
Drill down to the source data HHT usage levels are stagnating again.
YELLOW m Weekend coverage to be 5. State Ops completion of the
Preparation of the 5 June PRB meeting has effectively stalled with the absence of the PM. negotiated during final signoff of metric improvement plan
for a project: contract.
Issues and Risks: 5. Apollo server setup has not met
19-May-06 21-Mar-06 100% 95% UTC Security standards review. -103% RED $114 - $2235 GREEN NIL - #VALUE!
Leadership and state ownership issues continue to affect targeted accomplishments.
Upon server compliance testing the
The risk of potentially adverse developments as the business faces other change/priorities will need to be mitigated by continued YELLOW g server lost connectivity to the
resourcing of a national driver and/or continued inclusion in SGM agendas regardless of whether project closure will be obtained at PRB HHTs. The system was immediately
Total Budget or not. restored and server compliance
testing will be resumed on 22 May
Metrics: 06, with Blackbay on site to assist
Actual Spent To Date Following the negative conclusion from assessment of optional monitoring software, the project is not expected to incur any more costs with addressing any IP /
and tracks favourably against budget. connectivity settings.
Estimated cost at Completion
GREEN m
Besides the principal goal of compliance achievement no more savings are anticipated (pending a final report from the ELS review).
With project closure still being questionable at the 5 June PRB review, further time slippage is anticipated.
$5000
Ownership and Reporting: 1.Financial targets for 2006 will not 1. Ability to gain sufficient 1. ALT Leadership will require a
Pegasus A PRB scheduled for 5 June may bring this project to closure provided that the PM will be able to adquately prepare for it. be in line with initial project information on original project PRB presentation recommending
estimations . Joint SMC/CMS NOC outcomes. closure based on findings around
Besides the obvious question around project scope, of particular interest will be data analysis around NOC performance and further management with cost reduction financial expectations and current
improvement opportunities (including savings as per the Mastermind business case). YELLOW g initiatives implemented to mitigate. NOC performance to previous pre
2. Resource limitations on project consolidation performance.
$4404 The PRB/NOC SC will provide a forum to share realistic views (fact based) with all stakeholders involved (incl. CES, SMC and CPS). management continues.
Scope and Progress:
$4000 Project closure in June will require a solid preparation of the PRB5 which will be a challenge given the PM's return from A/L with only 5
days left and many other commitments.
YELLOW m
$3965
Issues and Risks:
Key risks include
- PM's inability to prepare sufficiently for the PRB leading to yet another 'Redirect' with action items that are likely to be dragged out.
19-May-06 30-Jun-05 100% 75% -130% RED TBD - $709 GREEN NIL - $575 RED
- Pursuit of further improvement potential being mandated as part of Pegasus although it is not part of the original scope
YELLOW g
- Error of inflated business case assumptions (overstated synergy/consolidation effects) being repeated in other emerging business
cases including Mastermind
$3111
$3000
Metrics:
The delay in closing this project out is merely due to the inability to resource the final effort required for a final PRB presentation.
Apart from the issue around falling short of planned NOC savings by 50% (inflated business case), the project is likely to be closed
(K)
$2385 below budget (pending the PM's clarifications of the actual spend). YELLOW g
$2360 These metrics do however not reflect the detrimental effects suffered by the business (i.e. customer attrition, extra resourcing etc.) from
previous failures during the initial Go-Live period.
$2235
$2235 $2147 Ownership and Reporting: 1. System performance over the 1. The Rollout plan needs to be No issues at this time
$2000 RoleCall A concerted effort is underway to bring RoleCall back on track. With leadership dedicating substantial time to this recovery process it is network will drive the decision for critically evaluated to ensure the
important not to let 'politics' get in the way and to 'cut to the chase' at all times. parallel. process for rollout is smooth and
easy with respect to business
$1923 Regional business ownership has been bumped up substantially with increased involvement/hands-on-management from FD to 2. Sustenance of parallel will resources required for setup and
application user level. Integration is strengthened with SMEs from invoiving and payroll.
YELLOW k depend on the application parallel data entry.
knowledge within the SA team.
Daily project review meetings are now in place to intervene as needed with weekly SCs providing a forum to escalate WIPRO
performance issues. 3. Quality of bug fixes received from
Wipro will influence the progress of
Scope and Progress: the Pilot. Steps put in place to
Parallel processing in the SA pilot is still on hold for until the following primary criteria are met: ensure rigorous testing offshore
- Requote bug fixed (nearly complete) before code is released onsite.
$1000 $874 - Auto Time Card change delivered or viable workaround identified
- Proven ability from WIPRO to perform against SLAs to cope with more unexpected challenges in roll-out.
RED k
Piloting may be resumed in approx. one week. 08-May-06 13-Apr-06 78% 73% -173% RED TBD - $4404 RED NIL - $1200 GREEN
$709 $709
Issues and Risks:
Following weeks of stagnation, there is now first evidence for real issue resolution and effective risk mitigation.
$275
Strong sponsorship by the business' FD and other leaders helped with initiating remedial interventions. Following this recovery, the no
$20 doubt still 'bumpy' road going forward will continue to require close management attention and hence substantial time investments. YELLOW k
$138 $ $63 $
$138
$ $ $ $ $ WIPRO performance remains the single biggest risk factor which we can only manage effectively with adequate backing from WHQ
AIMS Pronto Apollo Pegasus RoleCall Code Red Customer Service Comcare IPCC Metrics:
Whilst there are early signs of recovery, the still stagnating piloting (status red) remains and for until solid traction has been regained, no
$ specific deltas/implications can be estimated yet.
YELLOW g
Besides the obvious cost implications from time slippage, extra costs may be added by proceeding with work arounds (e.g. Citrix)
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14. Value achieved 6 months in...
Fortnightly cost slippage down from $31K to $0.4K
Agreggate effect of Pre-APO
YE 2005 ENDQ1 cost performance trend
$500
Pre-APO Ǿ budget overruns per fortnight: $31K
Actual Ǿ budget overruns per fortnight: $0.4K $409
$400 $378
$346
$315
$283
$300
$252
$220
$189
$200
$157
$195 Aggregate effect
$126
of actual cost
$94 $136 $136 $136 slippage to date
$100
$63 $105 since handover
$105
Apollo $72 Code Red RoleCall
$72 $49 $87 $90
$30
$ $30
DB 2 DB 3 DB 4 DB 5 DB 6 DB 7 DB 8 DB 9 DB 10 DB 11 DB 12 DB 13
Quickcomm Apollo
-$23 -$31
-$100 Pegasus
-$165
-$200 Fortnightly Dashboard Releases, showing those projects suffered cost over/underruns
Cost overruns as per increased Estimates for Cost at Completion
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15. Value achieved 6 months in...
Fortnightly time slippage down from 64.5 days to 4.2 days
Agreggate effect of Pre-APO
schedule performance trend
YE 2005
ENDQ1
900
839
Pre-APO Ǿ schedule overruns per fortnight: 64.5 days
800
774
Actual Ǿ schedule overruns per fortnight: 4.2 days
710
700
645
581
600
516
500 452
427 427
387
400
323 306 391
300 258 247
Aggregate effect
194 185 185 Pegasus, 60
169 of actual schedule
200
Code Red, 14 slippage to date
129 Code Red, 89
Apollo, 47 since handover
89 Code Red, 65 Pegasus, 32
100
89
Apollo, 15 Apollo, 30 RoleCall, 59 Apollo, -11
0 0 Apollo, 16 Pegasus, -25
0
DB 2 DB 3 DB 4 DB 5 DB 6 DB 7 DB 8 DB 9 DB 10 DB 11 DB 12 DB 13
-100 Fortnightly Dashboard Releases, showing those projects suffered schedule over/underruns
Schedule overruns as per increased Estimated Date at Completion
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16. Portfolio Cost Effectiveness
Effective portfolio governance can have a high return
SG&A EBIT / P&L
Effect Effect

Actual contributions Budget compliance*
by BU to fund the 3% less spend (within or
$252 K above budget) -$252K
APO:
Delivering Value
Benefits/Savings
BU % of AU$ PA
Break-even point ($0 P&L
performance*
OR Actual recurring savings
being 5% greater
-$252K
?
cost (K)
effect) only required ONE of

A 2.90% $7 Time performance*
the following, modest Average 11 days less
OR time slippage in project -$252K
achievements delivery (recent Ø=225
days)

Time performance*
B 18.80% $47
C 5.90% $15 OR 5 weeks less time in -$252K
b usiness case
preparation
* Portfolio with $15M budget (50%
D 15.00% $38 CAPEX), ØIRR 33% and approx.
E 4.20% $11 $252K p.a. Portfolio management
costs PA
F 29.00% $73 300% ROI on annual investment already achieved, 6 months in
G 22.70% $57
H 1.50% $4
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17. Governance meetings
Despite Portfolio rationalisation, Governance behaviours were still broken
• Power games were normal
• No trust
• New projects and programs were kicked off, without
consultation between Executives ( Portfolio analysis
caught and shut down a duplicate asset management
system and saved $7m)
• Some real behaviours observed in meetings...
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18. I find your lack of faith disturbing
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19. Shoot-outs
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20. Tantrums
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21. Governance meetings
Resource hoarding was the norm
An Executive ‘of very little brain’ cost the
company $3m of benefit to preserve a $50k
bonus, by refusing to allow their staff to be
seconded for a project that helped another
Executive
Executive Tantrums
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22. Governance meetings
What they really wanted to experience...
… Working together without friction or
unnecessary stress
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23. Governance meetings
What it was really like for them
… I asked them
‘Do you want more
of this?’
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24. Fixing it
Worked with the Executive team on several fronts
• Realigned vision, strategy and investment
• Aligned their KPIs to organisational level goals, and remove war-causing
KPIs
• Implemented a performance management system that tied performance
of the portfolio to a significant component of the Executive bonus
• Measured the effectiveness of collaborative behaviours anonymously,
every three months
• Relocated all PM resources to the Portfolio Office’s control (reported
directly to CEO)
And then it became even more complicated ...
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25. The Mega Project
Global outsourcing opportunity
US purchase accounting window was a
major chance to transform and claim most
back ...
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26. The Mega Project
Global outsourcing program becomes ‘the game’
• Global outsourcing program
• During SOX implementation!
• Australia picked to ‘go first’ (largest operations globally)
• Initial 3 year ‘consolidate, fix, outsource’ program
• Becomes 18 month ‘consolidate via outsource, fix while lifting’ program
• Initially seen as a major distraction in Portfolio (eats 2/3 of the
resources, top Executive priority)
• Executive reframing presents this as a chance to fix long-term
frustrations
Suddenly, the Executive behaviour changed...
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27. The Mega Project
Major Lolly-Scramble for a slice of the program budget to ‘fix their woes’!
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28. The Mega Project
Restoring sanity
• You must control the money and resource time, to choke off bad ideas
• ‘Game keeper’ program office established to prevent poaching
• Executive Program board established
• Governance meetings at this level tracked progression towards value and
future business state, not just ‘spend’
• Supported by Change Configuration Board to keep investment safe and
promote ‘governance of ICT’, not ‘ICT Governance’
• Additional tangible benefits sought by changing scope required phased
operational budget reductions factoring the promised gains
An orderly queue was restored
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29. A much easier journey
Restoring sanity via VAL-IT – Are we doing the right things?
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30. A much easier journey
Maintaining sanity via COBIT5 – Are we doing them in the right way?
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31. Closure
Never doubt that a small
group of thoughtful,
committed people can change
a Business.
Indeed, it’s the only thing that
ever has.
Margaret Mead,
Anthropologist
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32. Help me share your story and voice
– at the click of a button
Join me and an international group of peers including NASA
(isdsharpe)
Follow and help me share your voice and leading insights
(@Ian_Sharpe)
Where I share the latest PM, change and leadership insights
to ‘pay it forward’ http://iansharpe.blogspot.com.au/
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