Right-sizing Project Portfolio Management

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Given at the 2011 Project World conference in Orlando, Florida with a focus on right-sizing a portfolio management (PPM) implementations and processes.

Right-sizing Project Portfolio Management

  1. 1. How to Right-size Your Portfolio ImplementationHow to Right-Size Your Portfolio Management Implementation By Tim Washington Project World 2011 November 15-16th
  2. 2. How to Right-size Your Portfolio Implementation Agenda• Overview of Portfolio Management• Portfolio Magnitude and Project Criticality• Accountability Framework• Examples• Q&R
  3. 3. How to Right-size Your Portfolio Implementation What is“Project Portfolio Management”? (and why does it matter?)
  4. 4. How to Right-size Your Portfolio ImplementationProject portfolio management is a combination of variousmanagement disciplines: Business management General management Project and program management %Management Disciplines
  5. 5. How to Right-size Your Portfolio ImplementationProject portfolio management (PPM) is amanagement discipline that drivesstrategic execution and maximizesorganizational value through theselection, optimization, and oversight ofproject investments which align to businessgoals and strategies. PMI Quote
  6. 6. How to Right-size Your Portfolio Implementation “Portfolio management is the strategy-based, prioritized set of all projects and programs in an organization reconciled to the resources available to accomplish them.”Stanford Advanced Project Management Stanford Quote
  7. 7. How to Right-size Your Portfolio Implementation “Managing [the] composite groups of projects with the same rigor, balance, executive leadership, and decision-making involvement as the company’s financial portfolio. Portfolio Management is an ongoing process that includes decision- making, prioritization, review, realignment, and reprioritization.”-Renee Sommer Financial Portfolio Quote
  8. 8. How to Right-size Your Portfolio ImplementationThe Purpose of Portfolio Management • Execute Strategy • Maximize Organizational Value • Enhance Decision Making • Manage Organizational Change
  9. 9. How to Right-size Your Portfolio Implementation Portfolio Management Benefits:• Higher return on project investments• Lower organizational risk• Greater confidence of meeting customer commitments• Balanced project portfolio workload• Shorter project cycle times• Increased project throughput PPM Goals
  10. 10. How to Right-size Your Portfolio Implementation At the highest level, Project Portfolio Management has four basic components: Select the Right Projects Selected projects must align with the business strategy and meet other important criteria. Mature the Optimize the Portfolio Processes Portfolio The Goal: Higher portfolio maturity Maximize Value to the All the steps necessary to translates into a greater Organization construct an optimal portfolio realization of the benefits of given current limitations andproject portfolio management. constraints. Protect the Portfolio’s Value Project benefits must be protected in order to deliver maximum portfolio value.
  11. 11. How to Right-size Your Portfolio ImplementationA good governance structure is central to making PPM work. PORTFOLIO GOVERNANCE (Strategic Direction) Select the Right Projects “Portfolio management Mature the without governance is an Optimize the Portfolio Processes empty concept.” Portfolio Protect the Portfolio’s Value
  12. 12. How to Right-size Your Portfolio Implementation Agenda• Overview of Portfolio Management• Project Criticality and Portfolio Magnitude• Accountability Framework• Examples• Q&R
  13. 13. How to Right-size Your Portfolio ImplementationProject Criticality: Project importance(Examples: degree of increasing revenue, importanceof strategic execution, risk of failure, risk of not doingthe project, financial ramifications, criticaldependencies.)Portfolio Magnitude: Portfolio breadth(Examples: factors such as budget, total humanresources, breadth of organization/portfolio [local,regional, national, international, business units]).
  14. 14. How to Right-size Your Portfolio ImplementationHow Much Value Do You Need To Deliver? This will drive the scope of your implementation
  15. 15. How to Right-size Your Portfolio Implementation Large PortfolioPortfolio Magnitude Level 5 Manual PPM Process/Tool Level 1 Level 2 Level 3 Level 4 Very Critical Project Criticality Projects
  16. 16. How to Right-size Your Portfolio Implementation What is Driving Your PPM Implementation?Improve Demand Management? Project SelectionImprove Strategic Alignment? Prioritization Capacity ManagementImprove Project Execution? Project SequencingImprove Decision Making? Efficient GovernanceBalance Investments? Portfolio BalancingMaximize Organizational Value? Portfolio Optimization
  17. 17. How to Right-size Your Portfolio ImplementationPPM Components Level 1 Level 2 Level 3 Level 4 Level 5Project SelectionPrioritizationPortfolio BalancingEfficient GovernanceCapacity ManagementPortfolio Optimization Implementation objectives will help determine maturity targets
  18. 18. How to Right-size Your Portfolio ImplementationAt What Caliber Does Your Organization Need to Perform? Level 1—Ad hoc, “Street Ball” Level 2—Developing, “High School Level” Level 3—Defined, “Collegiate Level” Level 4—Managed, “Professional Level” Level 5—Optimized, “Championship Level”
  19. 19. How to Right-size Your Portfolio Implementation Agenda• Overview of Portfolio Management• Portfolio Magnitude and Project Criticality• Accountability Framework• Examples• Q&R
  20. 20. How to Right-size Your Portfolio Implementation Critical Components of Accountability Leadership to Drive AccountabilityGovernance as A Shared Visionthe Framework With Strategic GoalsWhich Enables to Demonstrate Accountability Accountability
  21. 21. How to Right-size Your Portfolio Implementation What Kind of Governance Do You Need?PPM is only bureaucratic if you have the wrong infrastructure
  22. 22. How to Right-size Your Portfolio Implementation What Kind of Direction Do You Need?“Informed Intuition” Strategic Goals Strategic Roadmap with Metrics
  23. 23. How to Right-size Your Portfolio Implementation What Quality of Leadership Do You Have? Disengaged Very Engaged Short-sighted ProactiveWeak Communicator Strong Communicator Leadership Quality Will Drive PPM Quality
  24. 24. How to Right-size Your Portfolio ImplementationStrategic leadership requires:1) Active engagement2) Being proactive3) Balancing long-term and short-term needs4) Communicating a consistent message
  25. 25. How to Right-size Your Portfolio Implementation Critical Components of Accountability Leadership to Drive AccountabilityGovernance as A Shared Visionthe Framework With Strategic GoalsWhich Enables to Demonstrate Accountability Accountability
  26. 26. How to Right-size Your Portfolio Implementation Agenda• Overview of Portfolio Management• Portfolio Magnitude and Project Criticality• Accountability Framework• Examples• Q&R
  27. 27. How to Right-size Your Portfolio Implementation Example #1 Hewlett-Packard Fortune 500 Rank: #10 $114.5 Billion revenue, $7.66 Billion in profit in 20104/3/2010 4/28/2010 9/30/2010 HP Bought Palm for $1.2 Léo Apotheker Named CEO Billion and President of HP • “Palm’s innovative operating "Léo is a strategic thinker system provides an ideal with a passion for platform to expand HP’s technology, wide-reaching mobility strategy…” global experience and • “Advances in mobility are proven operational discipline offering significant - exactly what we were opportunities, and HP intends looking for in a CEO." to be a leader in this market.”
  28. 28. How to Right-size Your Portfolio Implementation Example #1 Hewlett-Packard Fortune 500 Rank: #10 $114.5 Billion revenue, $7.66 Billion in profit in 2010 8/18/2011 9/22/2011 Léo Apotheker Fired • "We are at a critical moment and we need renewed leadership to successfully implement our strategy…” • “The problem with Apotheker wasnt lack of vision as much as a lack of execution and communication”
  29. 29. How to Right-size Your Portfolio Implementation Example #2 City of Bellevue Ranked 4th Best City of Live In (2010) Population: 124,000 $1 Billion Bi-annual budget• Local initiatives cut tax revenue down to 1% annually• The Bellevue city council proactively made plans to address the recession by developing a new budgeting process called “Budget One”• Open and frank communication—“Our traditional way of developing a budget—department by department—must make way for a process that targets spending with specific community needs”• Budget One was a ‘fundamental reset’: Instead of asking the traditional question of “what are we going to cut?”, the new question was “what are we buying?”
  30. 30. How to Right-size Your Portfolio Implementation
  31. 31. How to Right-size Your Portfolio Implementation
  32. 32. How to Right-size Your Portfolio Implementation Summary• Consider project criticality and portfolio magnitude• Understand what the ‘end state’ of your portfolio process should be based on organizational needs• Understand the level of caliber needed to be successful• Enable accountability with solid governance• Demonstrate accountability with well thought-out goals and roadmaps• Drive accountability with good leadership
  33. 33. How to Right-size Your Portfolio ImplementationQuestions?
  34. 34. How to Right-size Your Portfolio Implementation Thank You for listening and forproviding feedback
  35. 35. How to Right-size Your Portfolio Implementation Contact InformationName: Tim WashingtonEmail: twashin@costco.comWeb: www.ppmexecution.com @ppmexecution http://www.linkedin.com/in/timawashington

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