corporate development and it - ethz.ch · (innovation, product range/breath and depth,...

Part 6

Corporate Development – Planning Process and Project Portfolio Management

Thomas GutzwillerSept., 2017

Corporate Development and IT

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Long-term Middle-term Short-term

TIME HORIZON

Products/services (innovation, product range/breath and depth, manufacturing depth/sourcing)

Regional markets/market entries

Distribution structure

Orientation to customer segmentsSTR

ATEG

Y

Process architecture/ business modelArchitecture ofinformation systemsProject portfolio

Projects

Incremental changes/maintenance

Operations

Strategic planning

Implementation planning

Implementation

From strategic planning to operations

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TIME HORIZON

Products (innovation, product range/breath and depth,manufacturing depth/sourcing)/services

Regional markets/market entries

Distribution structure

Orientation to customer segmentsSTR

ATEG

Y

Process architecture/ business modelArchitecture ofinformation systemsProject portfolio

Projects

Incremental changes/maintenance

Operations

Strategic planning

Implementation plan

Implementation

From strategic planning to operations

Long-term Middle-term Short-term

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TIME HORIZON

Products (innovation, product range/breath and depth,manufacturing depth/sourcing)/services

Regional markets/market entries

Distribution structure

Orientation to customer segmentsSTR

ATEG

Y

Process architecture/ business modelArchitecture ofinformation systemsProject portfolio

Projects

Incremental changes/maintenance

Operations

Strategic planning

Implementation plan

Implementation

Strategy management process Project development process

Operations Incremental improvement process

From strategic planning to operations

Long-term Middle-term Short-term

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Question:

How to plan a company's resources?

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Resource allocation

RUN CHANGE

Resources for daily business

Incrementalimprovements

Programs/projects

Control through business units Control through executive board

Operations Transformation

Investments

Control of resource allocation

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Project portfoliomanagement

External projectmanagement

Internal projectmanagement

Active and planned projects

Project A Project B

Sub Pro-ject A1

SubPro-jectA2

Phase 1

Phase 2

Phase 3

Activity

• Development and control of all active and planned projects

• Planning and managementof project teams and activities with the help ofa project process model(Beer Formula 1)

• Controlling of single projects (black box)

Levels of project management within CHANGE

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... Is oriented on company management targets and considers all change activities

... Arranges and prioritizes the projects and enforces the idea of manageable projects

... Aligns the personal and financial resources

Project portfolio management

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BOTTOM UP STREAM

Pushed from a business unit point of view, mostly for elimination of certain organizational deficiencies.

Part of the incremental development stream.

TOP DOWN STREAM

Out from the company’s strategy. Pushed from the executive team.

Part of the strategic/transformational development stream.

Often project initiatives are contradictory.

And often resources are not enough tosatisfy all projects.

Projects come up top down and bottom up

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• Step 1:

Differentiation of company wide strategic projects/programs and business unit specific initiatives

• Step 2:

Determination of resource allocation for individual business unit according to strategic priorities

• Step 3:

Within business unit specific projects business cases are to be created to identify projects with the best cost-benefit-relation

Prioritization method

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Responsibility of management in respect to resource allocation

Shared responsibility of exec. board

Busin. Unit 1

Individual responsibility

Busin. Unit 2 Busin. Unit 3 …… n

CH

ANG

ER

UN

Changing the business model

Running thebusiness model

Prioritization method

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Responsibility of management with respect to resource allocation

Busin. Unit 1

Individual responsibility

Busin. Unit 2

Individualresponsibilityfor operationalcost/profit

Busin. Unit 3 …… n

CH

ANG

ER

UN

Strategic programs/projectsD

esig

ning

inst

rum

ents

for c

hang

e

= Resources for strategic programs/projects= Resources for business-unit specific programs/projects and maintenance

Shared responsibility of exec. board

Prioritization method

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Urgency

Low Medium High

P1

P2

P3P4

P5M

ediu

mH

igh

Prioritization method – Importance/urgency grid

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Low Medium High

Med

ium

Hig

hP1

P2

P3P4

P5

Urgency

Prioritization method – Importance/urgency grid

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Steering committee

Project committee

Project manager

Sub project-manager

Sub project-team

Projectmanager

Project committee

Sub project-manager

Sub project-team

Projects

...

Project owner

.....

Project owner

Program manager

Organization of major projects/programs

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Case Study "ROTOR Gourmet"

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„ROTOR GOURMET S.A.“ is set in the catering industry and runs more than 1’000 canteens in France. To ensure future profitability the group has to optimize its logistic.

The objectives of the corporate transformation program “Optimization of sourcing and distribution” (OSD) are:

(1) Empowerment of buying department to bundle the flow of goods and the information flow more efficiently and to optimize the number of suppliers as well. Result: 5% reduction of purchasing costs

(2) Relief of the canteens in purchasing and implementation of standardized menu plans

(3) Optimization of the whole supply logistic for the canteens

(4) Implementation of a new intranet supply system for the canteens

Organization of major projects/programs (Case “ROTOR GOURMET”)

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Question:

How to organize the transformation program?– Which are the appropriate projects?– Which are the appropriate project committees?

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Organization of major projects/programs(example project OSD of ROTOR GOURMET S.A.)

Steering Committee

Program Manager

SP OperationsSupport

SP Front System

SP Purchasing SP BackendSystem

SP Finance/Accounting

SP Training/Introduction to

Org.

Project Office

SP = Sub Project

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Organization of major projects/programs(example project OSD of ROTOR GOURMET S.A.)

Project committee„Business practices“

Project committee„IS/IT“

Project committee„Rollout“

1 Proj. M.

1 Project Owner 1 Project Owner 1 Project Owner

Steering Commitee

Project Office

Program Manager

SP OperationsSupport

SP PurchasingSP Finance/Accounting

SP Training/Introduction to

Org.

SP Front System

SP BackendSystem

1 Proj. M. 1 Proj. M. 1 Proj. M. 1 Proj. M. 1 Proj. M.

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Each transformation program is overlookedby the steering committee.

Steering committee…

• Groups multiple thematic similar, common planed and conducted projects into programs

• Governs as top board the project portfolio

• Is composed basically by the company’s executive board, the CIO and the program manager

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Each project has a project owner.

The Project owner…

• Develops the project request together with the project leader and theprogram manager

• Is responsible for the compliance – with the planned costs– the planned time line and – the realization of benefits out of the project

• Manages the project committee and thus guides the project inrespect of business benefits, in respect of time and financial resources

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For each project a project committee is defined.It is an essential instrument for “Psychology of transformation”.

The project committee...

• Observes project procedure, costs, benefits and deadlines

• Approves project results

• Is composed by – the project owner, – representatives of the concerned business unit (middle management) and – the project leader

• Represents two roles: – review committee and – conflict committee

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Phase end report

Review committee

Activities of project phase

next phase Project breakup

OK

not OK(to be revised)

not OK(recommendation)

Periodic project status report

Project committee as review committee…

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The program manager reportsthe steering committee.

The overall program manager...

• Is represented in the steering committee and has to report to it, prepares its agenda, performs its follow-up and pushes its decisions

• Is represented in the project committees (project supervision) and ensures the quality assurance regarding cross-project standards

• Coordinates all cross-project concerns and plans roughly the individual projects

• Leads the project leaders and observes the ongoing progress of individual projects

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Each project has a project leader.

The project leader…

• Observes and leads the project activities (internal project management) andensures the compliance of cost and deadlines

• Coordinates and leads the team members respectively – if existing – the sub-project leaders

• Represents the project and its results towards the project owner, the project committee (project supervision) and the program manager

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Business Unit specific steering committee

Steering Committee strategic programs/projects

Line organization of Business Unit

Steering committees to control change

Responsibility of management in respect to resource allocation

Shared responsibility of exec. board

Busin. Unit 1

Individual responsibility

Busin. Unit 2 Busin. Unit 3 …… n

CH

ANG

ER

UN

Changing the business model

Running thebusiness model