Adam Skinner, P2 Consulting & Steve Leary, TCS - How does a Portfolio Management Office differ from the Programme Management Office?
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APM PMO SIG Conference presentation 05/02/19
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Adam Skinner, P2 Consulting & Steve Leary, TCS - How does a Portfolio Management Office differ from the Programme Management Office?
- 1. What’s in a P? Portfolio Management Specific Interest Group Februaryb20181 How does the Portfolio Management Office differ from the Programme Management Office?
- 2. Introductions Adam Skinner Director – PMO & Portfolio Practice: P2 Consulting adam.skinner@p2consulting.com Steve Leary Managing Consultant: Tata Consulting Services Ltd. Stephen.Leary@tcs.com 1. What do an ‘office’ do in the context of the Programme and the Portfolio? 2. Where are they similar and where do they differ? 3. Does the delivery methodology make a difference? Portfolio Management SIG
- 3. Innovation coordination & continuous improvement PMO activities …. Value & benefits mgt KPIs, metrics & dashboards Management of governance Strategic alignment Quality assurance Plans and schedule mgt. Dependency mgt. Delivery mgt Scope and change control Financial monitoring & control Resource monitoring & control Stakeholder engagement & monitoring Communications mgt Progress & outlook Prioritisation Optimisation Processes & templates An ‘Office’ drives efficient and effective decision-making through
- 4. Portfolio management Portfolio management is the selection, prioritisation and control of an organisation's projects and programmes in line with its strategic objectives and capacity to deliver. The goal is to balance change initiatives and business-as-usual while optimising return on investment. This is a continuous process to achieve the evolving strategy of the organisation. Programme management Programme management is the action of coordinating, organizing, directing and implementing the temporary, flexible organization that consists of a dossier of projects and transformational activities to achieve outcomes and realise benefits of strategic importance to the business. Definitions 4 2018 Source: APM BoKSource: MSP Coordinate & Control Projects Strategic Objectives Similar • Co-ordination & control • Projects alignment • Strategic objectives & focus
- 5. Portfolio management Portfolio management is the selection, prioritisation and control of an organisation's projects and programmes in line with its strategic objectives and capacity to deliver. The goal is to balance change initiatives and business-as-usual while optimising return on investment. This is a continuous process to achieve the evolving strategy of the organisation. Definitions Programme management Programme management is the action of coordinating, organizing, directing and implementing the temporary, flexible organization that consists of a dossier of projects and transformational activities to achieve outcomes and realise benefits of strategic importance to the business. 5 2018 Source: APM BoKSource: MSP Similar • Co-ordination & control • Project alignment • Strategic objectives & focus Different? • Selection and prioritisation • Balance and optimisation • Permanent vs temporary
- 6. What supports good decision making? Programme MO Portfolio MO Analytics and reportingProgramme delivery focus Focused on achieving the strategic goals Planning & Dependency MgtProgramme delivery focus External dependencies, strategic plan GovernanceTranche end progress reviews & decisions Embedded into BAU organisation governance Stakeholder mgt & CommsS/h groups impacted by programme Executive levels across the organisation Risk & Issue ManagementProgramme & project risks & issues External organisational & systemic risks Change ControlFormal change process Decides which initiatives to stop & start Standards, Tools & TemplatesOrganisational or programme standards Ensures consistent standards across programmes Finance & Resource ManagementProgramme focus Overall investment budget & allocations Business Case & Benefits MgtKey programme responsibility Optimised overall value Delivery AssuranceAssures to organisation standards Delegated to programmes & projects Strategic Planning Continual, regular investment reviews Prioritisation & Optimisation Portfolio focus to achieve goals & max value ScopeIdentified programme All programmes & projects (& BAU)
- 7. Prioritisation & optimisation The portfolio mgt office continually prioritises the initiatives – stopping & starting projects & reallocating resource to meet the goals & optimise value The programme mgt office manages the costs & risks to deliver the desired programme outcomes and vision. Cost Risk Achievability Achieve the strategic goals Optimise value Maximise Benefits Cost Risk Achievability Achieve the programme outcomes Deliver Benefits
- 8. What’s the difference in mindset? Thinking in Lines Thinking in Wheels Risks are quantifiable Solutions derived from key principles & experience Clear Boundaries (cost/time) Limited impact of stakeholder perception Low complexity & interdependencies Risks are subject to wide confidence ranges Solutions derived from context & trial and error Fuzzy Boundaries Stakeholder perception has major impact on success High complexity & interdependencies Reductionist, rational approach is more effective when Holistic, empirical approach is more effective when There is a nominal solution There is an optimal solution Value is process & methodology driven Value is people & creativity driven There is a fairly high degree of predictability There is a low level of predictability
- 10. The Agile Management Office? 1 Continuous Flow of value 2 Frequent Customer interaction 3 Iterative & adaptive 4 Creativity & innovation 5 Shared Responsibility For results 6 Situational Specific strategies Business Agile Mindset - Source: Gartner, 2018 Portfolio Programme Delivery Vehicle PrioritisationofValue Source: Agile Business Consortium, 2018
- 11. 2019 Conference 201812 • Five case-study presentations, speakers arranged and confirmed • private and public sector organisations • Structured break-out sessions to exchange delegates’ views & capture key learnings • The launch of the APM's official - “Guide to Portfolio Management” • sneak peaks at its content and case-studies • Walk-through of the outputs of our Portfolio Director Dinner • focused on ‘The Agile Portfolio’ • Opportunities to network with colleagues and speakers • drinks reception after the event at the Marquis Cornwallis Thursday 23 May 2019 Holiday Inn, Bloomsbury, London, near Russell Square tube Portfolio Management in a Digital Age - Delivering the portfolio in a world of rapid value delivery and constant change
- 12. Questions?
- 14. Agile Business Consortium Six core behaviours Focus on creation of value Review the portfolio continuously Involve the right people to shape & manage the portfolio Clearly & continuously demonstrate that the portfolio is delivering optimum value Encourage innovation & creativity Encourage collaboration and empowerment Copyright APM Portfolio Management SIG 201815
- 15. Portfolio management Manage risks Vision Corporate goals & strategy Deliver benefit s Achieve goals Portfolio governance Create strategic plan Construct & prioritise portfolio Review portfolio Assess performance of portfolio Develop, monitor & control the portfolio (Manage & deliver the programmes & projects) Reporting on the portfolio Management of different delivery methods From vision to achieving the goals
Editor's Notes
- Programmes are likely to have a lifespan of several years. We will focus on some of the principles today (highlighted in red).
- Focus of pfm is to deliver the corporate goals and achieve the strategy. Managing the investment in programmes & projects &, sometimes, BAU. Stopping projects and programmes where the resources can be used more effectively elsewhere. Redirecting resources. Deciding whether to start new initiatives. Measuring actual benefits to inform those decisions. Extra complexity of dealing with corporate-wide business units to understand full impact of portfolio – eg planning, strategy, risk, finance, products, services Contrasting with programmes, portfolio management continues until the goals are achieved, it’s an ongoing process. Q: How many have portfolio management in their organisation? Q: Roughly what % of in-flight projects or programmes are stopped?
- Programmes are likely to have a lifespan of several years. We will focus on some of the principles today (highlighted in red).
- Programmes, by nature, are complex in so many ways. How a programme is organised, Inter-dependencies, the best strategies to deliver a successful outcome. stakeholder relations, inter-related project and programme risks all require careful consideration. Many organisations will focus on a few ‘critical elements’ of a programme, which may be an area within their comfort zone. For example, a number of clients responsible for delivering major infrastructure programmes tend to focus on scheduling and resourcing and hope that everything else will just fall into place. To be successful, however, programmes require exponential levels of effort (people, processes and systems) in all programme and project management disciplines in order to maintain their course. Programmes are complex because of the number of interactions between projects and between levels of organisation. A complex programme therefore needs to be guided, nurtured and managed so that it has every opportunity to succeed. This is best achieved by proper planning at the programme’s initiation. Programmes must focus early on developing effective programme strategies, such as stakeholder management, design & delivery, commercial, performance monitoring and operational integration – and lock these strategies down. Many programmes fail due to a lack of cohesive strategies leading to at best misinterpretation of the intended approach or worse, the adoption of competing strategies by project teams within the programme; the outcome of which is often chaotic. A crucial component in supporting the finalisation and communication of programme strategies is a comprehensive suite of Programme Management Plans. These should be clearly and succinctly drafted so that they engage the wider programme. The style should be journalistic and professionally presented which makes the embedding of the strategies within the programme a far easier task. Many project disciplines are very applicable to a programme and risk management is very much one of them. The principles are the same, but just applied at the most appropriate level so that risks are mitigated properly. In terms of critical skills, I would suggest two that are important. In a complex environment, keep solutions simple. Over complicating just adds to the complexity. Softer skills are very important. Having a focus on outcomes is not as black and white as being output focussed (which is what a project manager must be). Flexibility, agility, not being afraid of change are necessary attributes required by programme leaders.
- Programmes, by nature, are complex in so many ways. How a programme is organised, Inter-dependencies, the best strategies to deliver a successful outcome. stakeholder relations, inter-related project and programme risks all require careful consideration. Many organisations will focus on a few ‘critical elements’ of a programme, which may be an area within their comfort zone. For example, a number of clients responsible for delivering major infrastructure programmes tend to focus on scheduling and resourcing and hope that everything else will just fall into place. To be successful, however, programmes require exponential levels of effort (people, processes and systems) in all programme and project management disciplines in order to maintain their course. Programmes are complex because of the number of interactions between projects and between levels of organisation. A complex programme therefore needs to be guided, nurtured and managed so that it has every opportunity to succeed. This is best achieved by proper planning at the programme’s initiation. Programmes must focus early on developing effective programme strategies, such as stakeholder management, design & delivery, commercial, performance monitoring and operational integration – and lock these strategies down. Many programmes fail due to a lack of cohesive strategies leading to at best misinterpretation of the intended approach or worse, the adoption of competing strategies by project teams within the programme; the outcome of which is often chaotic. A crucial component in supporting the finalisation and communication of programme strategies is a comprehensive suite of Programme Management Plans. These should be clearly and succinctly drafted so that they engage the wider programme. The style should be journalistic and professionally presented which makes the embedding of the strategies within the programme a far easier task. Many project disciplines are very applicable to a programme and risk management is very much one of them. The principles are the same, but just applied at the most appropriate level so that risks are mitigated properly. In terms of critical skills, I would suggest two that are important. In a complex environment, keep solutions simple. Over complicating just adds to the complexity. Softer skills are very important. Having a focus on outcomes is not as black and white as being output focussed (which is what a project manager must be). Flexibility, agility, not being afraid of change are necessary attributes required by programme leaders.
- The end-to-end view of portfolio management, from vision to achieving the benefits and strategic goals. Key is to understand the corporate goals and strategy – is it clear and unambiguous? - if not then clarification needs to be sought from the Exec or Board. Does the organisation have a clear investment prioritisation model across: BAU (operations); Existing change programmes, projects and initiatives, i.e. those already in progress; New change initiatives required to meet the corporate goals and strategy; New initiatives with strong business cases and ROI? Organisations may choose to define broad levels of investment, for example 60% of their overall investment for BAU, 40% for change. This gives a means of measuring and tracking investment levels and can be adjusted by the Board if necessary. A more rigorous approach would be to rank all initiatives (or groups of initiatives) including BAU by contribution to goals and levels of benefit. Prioritisation guidelines should therefore be developed by and/or agreed with the Board. Typically this would be determined by several factors, including: Prioritisation of the corporate goals – some will be more important than others Benefits anticipated, and these will need to be in comparable formats Timing - investment in short term gains may take priority over longer term, or vice versa. Regulatory, compliance or upgrades to non-supported versions of software may be initially perceived as ‘must do’, but need to have business cases, even if brief. It may be a better use of resources to remain non-compliant and pay the fines, or hire specialist techies to support older versions of software rather than upgrade, at least in the short term. Risk, performance and capability will also be an input to this process, however this is the ‘second stage’. Prioritisation to meet the strategic goals should be separate to decisions about risk, capability and achievability. Critical to the success is complete alignment of the Execs behind the approach and the prioritisation criteria, they all need to be fully committed and have ‘cabinet responsibility’. Ref key success factors later in the presentation. The vision and goals need to be communicated and cascaded clearly and unambiguously.