Project Portfolio Strategic Planning

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Presenting a mental framework for strategic analysis of project portfolios in an organization. The example used is IT-Business alignment, but many components of this framework may be used in other applications.

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Project Portfolio Strategic Planning

  1. 1. Project Portfolio Management and Strategic Planning Vladimir Makarov, PhD, MBA
  2. 2. Introduction <ul><li>This is a talk about a mental technique for project portfolio planning </li></ul><ul><li>This method is highly algorithmic </li></ul><ul><ul><li>More science than art </li></ul></ul><ul><ul><li>Can be taught </li></ul></ul><ul><li>Broadly applicable </li></ul>
  3. 3. One Important Application <ul><li>One possible application of this analysis is for finding IT-Business alignment </li></ul><ul><li>It is a goal that is frequently pursued by organizations, but is easily lost in daily details </li></ul><ul><li>I shall illustrate a highly structured approach for identification of the path to IT-business alignment </li></ul>
  4. 4. How to Interpret This Presentation <ul><li>What this presentation is: </li></ul><ul><li>Material for creative interpretation </li></ul><ul><li>What it is not: </li></ul><ul><li>Dogma, standard recipe, universal solution, … </li></ul>
  5. 5. Symptoms <ul><li>When is this strategy analysis useful? </li></ul><ul><li>Need for a better understanding of what’s possible </li></ul><ul><li>Future state unclear or misunderstood </li></ul><ul><li>Perception of inadequate tools </li></ul><ul><li>Perception of slow progress </li></ul><ul><li>Need for a roadmap </li></ul><ul><li>Is attention focused on the right portfolio of projects or activities? </li></ul>
  6. 6. 4 Column Framework <ul><li>Attributed to Whitaker Consulting </li></ul><ul><ul><li>Unfortunately I cannot locate exact reference </li></ul></ul><ul><li>Very broadly applicable </li></ul><ul><ul><li>Example used here is based on Knowledge Management in IT, but it may be anything in your organization </li></ul></ul>
  7. 7. 4 Column Framework <ul><li>Algorithm: Draw this table and fill it out </li></ul>Order of completion: start at column 1 and proceed to 2, 3, and 4 Tactical delivery The HOW The WHAT Business environment Column 4 Operation Plan Column 3 Strategic Means Column 2 Strategic Ends Column 1 Analysis and Givens
  8. 8. Column 1: Analysis and Givens <ul><li>Description of the Current Business Environment </li></ul><ul><ul><li>Industry environment </li></ul></ul><ul><ul><li>Trends </li></ul></ul><ul><ul><li>Uncertainties </li></ul></ul><ul><ul><li>Externalities </li></ul></ul><ul><ul><li>Competitor positioning </li></ul></ul><ul><ul><li>Key stakeholders </li></ul></ul><ul><li>Seek SMEs, publications, reviews, competitive intelligence materials, etc. </li></ul>
  9. 9. Column 2: Strategic Ends <ul><li>This is the End Goal (or Goals) that we desire to achieve </li></ul><ul><ul><li>Mission </li></ul></ul><ul><ul><li>Vision </li></ul></ul><ul><ul><li>Strategic intent </li></ul></ul><ul><ul><li>Core competencies </li></ul></ul><ul><ul><li>Goals and objectives </li></ul></ul><ul><ul><li>Key metrics, targets </li></ul></ul><ul><ul><li>Business lines </li></ul></ul>For project, program or business unit and the overall organization } From general To more specific
  10. 10. Column 3: Strategic Means <ul><li>The “HOW” on a High Level </li></ul><ul><ul><li>Value cycle </li></ul></ul><ul><ul><li>Key value proposition </li></ul></ul><ul><ul><li>Programs </li></ul></ul><ul><ul><li>Capabilities </li></ul></ul><ul><ul><li>Key relationships </li></ul></ul><ul><ul><li>Organizational architecture </li></ul></ul>
  11. 11. Column 4: Operation Plan <ul><li>The “HOW” on a Lower, Specific Level </li></ul><ul><li>Tactical Delivery Plan </li></ul><ul><ul><li>Processes </li></ul></ul><ul><ul><li>Projects </li></ul></ul><ul><ul><li>Sites </li></ul></ul><ul><ul><li>Budgets </li></ul></ul><ul><ul><li>Targets </li></ul></ul><ul><ul><li>Tasks </li></ul></ul><ul><ul><li>Resources </li></ul></ul><ul><ul><li>Schedules </li></ul></ul>
  12. 12. Application Example: Knowledge Management in Biotechnology IT <ul><li>Used in a Fortune-500 biotech firm to brainstorm IT project portfolio and to improve the Knowledge Management (KM) capabilities </li></ul>
  13. 13. Populating Column 1 <ul><li>SME interviews </li></ul><ul><li>Publications </li></ul><ul><ul><li>Example in biotechnology: </li></ul></ul><ul><ul><ul><li>“ The Bioprocessing Industry: Increasing Capacity, Production, and Efficiency” </li></ul></ul></ul><ul><ul><ul><li>2nd ed., 08/2006 </li></ul></ul></ul><ul><ul><ul><li>By Alex D. Kanarek, PhD </li></ul></ul></ul><ul><ul><ul><li>D&MD Publications </li></ul></ul></ul>
  14. 14. Column 3: Strategic Means <ul><li>For column 3, in Information Technology, analyzing programs and capabilities makes the most sense (as opposed to organizational architecture or value proposition; these other items are present in the methodology because it is quite general and may be used for any business) </li></ul><ul><li>Define key capabilities based on information in Columns 1 and 2 </li></ul>
  15. 15. Populating Column 3 <ul><li>Create an hierarchy of key IT and Knowledge Management (KM) capabilities </li></ul><ul><li>See next pages for examples </li></ul><ul><li>These are typical for pharma or biotech KM, but may of course differ for your organization </li></ul>
  16. 16. Sample capabilities for KM - 1 Training Collaboration – internal Collaboration – across sites or acquired units Collaboration – across business functions Collaboration with external industry partners Users Platform definition Process simplification Deployment of standards Characterization of compounds and process engineering Compound life cycle management Technology transfer Processes Capabilities Category or Group
  17. 17. Sample capabilities for KM - 2 Usability Systems integration Enables strategic decision making Enable tactical (in process) decision making Enable work flow Create IT platform standards Tools and Systems Timeliness Accessibility Information integrity Extraction of structured information from unstructured data Ability to maintain context Complete traceability Data acquisition Data retention Integration of GxP and non-GxP Data and Information Capabilities Category or Group
  18. 18. Analysis of capabilities <ul><li>Core = critical business process that delivers competitive advantage, given the firm’s strategic intent and vision. These must be run at the absolute best level. </li></ul><ul><li>Strategic = business processes that support the core ones, important, but not mission-critical. These must be managed to best support and leverage the core work processes. </li></ul><ul><li>Essential = business processes that must be done to keep the lights on and to maintain a viable business, but do not directly leverage the core work. May outsource these. </li></ul><ul><li>Non-essential = business processes that are not required to keep the business viable. Drop. </li></ul>To each capability identified in the previous step, assign a category based on these definitions:
  19. 19. Capabilities and gaps <ul><li>Define the desired state for each capability (“TO BE”) </li></ul><ul><li>May base this definition on data gathered while working on column 1 </li></ul><ul><li>Describe the same capability in the organization being analyzed </li></ul><ul><li>Determine whether there is a gap between the “AS IS” and “TO BE” </li></ul><ul><li>Sample gap scoring scheme is below: </li></ul>Large Med Small Below Med Small None At parity Small None None Above Core Strategic Essential Capability Assessment
  20. 20. IT-Business Alignment <ul><li>Next we shall relate capabilities identified and analyzed in the prior steps to the portfolio of projects in the IT organization </li></ul><ul><li>The end goal is to perform a strategic analysis of the quality of the project portfolio, and to re-design it for a better alignment with business </li></ul>
  21. 21. Column 4: Assessment of projects <ul><li>Assess each project in the project portfolio on how well it addresses gaps identified in the previous step </li></ul><ul><li>One project may contribute to closure of many gaps </li></ul><ul><li>Some gaps may be not covered by existing projects </li></ul><ul><li>May be useful to assign numeric scores as in the example below: </li></ul>Project delivers FULL capability 3 Project delivers SOME or HALF capability 2 Limited or low contribution 1 Project does not contribute to capability 0
  22. 22. Example of capability - project matrix Disclaimer: All data is fictitious Large Large Med Small Gap 1 1 2 1 0 Lifecycle management 1 0 0 0 1 Extract structured from unstructured 0 2 1 0 3 Charact. & PE 0 1 1 0 3 Collaboration Prj 5 Prj 4 Prj 3 Prj 2 Prj 1 Capability
  23. 23. Example of capability - project matrix Project that addresses multiple capability gaps Large Large Med Small Gap 1 1 2 1 0 Lifecycle management 1 0 0 0 1 Extract structured from unstructured 0 2 1 0 3 Charact. & PE 0 1 1 0 3 Collaboration Prj 5 Prj 4 Prj 3 Prj 2 Prj 1 Capability
  24. 24. Example of capability - project matrix Project that addresses only one capability gap, and even that poorly Large Large Med Small Gap 1 1 2 1 0 Lifecycle management 1 0 0 0 1 Extract structured from unstructured 0 2 1 0 3 Charact. & PE 0 1 1 0 3 Collaboration Prj 5 Prj 4 Prj 3 Prj 2 Prj 1 Capability
  25. 25. Example of capability - project matrix Small capability gap addressed by many projects Large Large Med Small Gap 1 1 2 1 0 Lifecycle management 1 0 0 0 1 Extract structured from unstructured 0 2 1 0 3 Charact. & PE 0 1 1 0 3 Collaboration Prj 5 Prj 4 Prj 3 Prj 2 Prj 1 Capability
  26. 26. Example of capability - project matrix Large capability gap poorly addressed by projects in current portfolio Large Large Med Small Gap 1 1 2 1 0 Lifecycle management 1 0 0 0 1 Extract structured from unstructured 0 2 1 0 3 Charact. & PE 0 1 1 0 3 Collaboration Prj 5 Prj 4 Prj 3 Prj 2 Prj 1 Capability
  27. 27. Subsequent steps <ul><li>From the capability-project matrix: </li></ul><ul><li>Make conclusions on the quality of the current project portfolio </li></ul><ul><li>Consider projects that may be eliminated </li></ul><ul><li>Propose new projects </li></ul>
  28. 28. Limitations <ul><li>This method only demonstrates fit of projects to strategy </li></ul><ul><li>Other factors, such as </li></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Return (NPV, IRR) </li></ul></ul><ul><ul><li>Technology maturity </li></ul></ul><ul><ul><li>Skill level with a particular technology </li></ul></ul><ul><ul><li>Ease of implementation </li></ul></ul><ul><ul><li>etc </li></ul></ul><ul><li>are not taken into account and must be analyzed separately </li></ul>
  29. 29. Questions? <ul><li>Please feel free to contact me: </li></ul><ul><li>[email_address] </li></ul><ul><li>cell: 626-222-5642 </li></ul><ul><li>web: www.ifxworks.com </li></ul>

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