portfolios and programmes: how are they different and does it matter?
DESCRIPTION
Presentation made at PMSA evening event by Dr Christopher WorsleyTRANSCRIPT
Christopher Worsley
Portfolio & programme
management: Getting it right
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PPP…
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Value Cost
The components…
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Value Cost
How the bits fit...
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Strategy
Operations
Programme challenges
The essentials of programme management
Seven ‘challenges’
Getting the structure of a programme right
Translating a vision to physical everyday actions
Creating paths of lowered resistance
From targets to commitment
Balancing the demands of design, delivery and change
On-boarding change teams
Delivery within a programme – managing a PORTFOLIO
…
Value
focus
Cost
focus 2
3
6
5
4
1
2
3
4
5
6
1
7
7
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Portfolio management challenges
The essentials of portfolio management
Three fundamental areas of concern
Selecting the ‘best’ portfolio
Dealing with resource contention and
changing business priorities
Culling projects
…
6 ESPA.L10031 /
Executive Board
Sponsors
Project Boards
PSOs
Project
managers
Portfolio governance
Project governance
Project management
Portfolio
set up
Idea
evaluation
Project
preparation
Detailed
planning Project
execution
Project
control
Portfolio
control
Project
termination
TTO
Strategy definition
Senior managers
Portfolio committees
PMOs Selecting
maximum
value
portfolio
Managing
the
optimum
portfolio
Culling
projects
1 2
3
1
2
3
Portfolio and programme
management: The big ideas…
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A portfolio
P
P P P
P P
I
ncre
asin
g v
alu
e P
P
P P P
Gold
en r
ele
ase
Gold
en r
ele
ase
P
P
P Gold
en r
ele
ase
Cu
rren
t sta
te
P Gold
en r
ele
ase
P
© Projman cc, 2012 www.pi3.co.za Page
A portfolio
P
P P P
P P
I
ncre
asin
g v
alu
e P
P
P P P
Gold
en r
ele
ase
Gold
en r
ele
ase
P
P
P Gold
en r
ele
ase
Cu
rren
t sta
te
P
P
R
D
D
E
D
Tra
nsitio
n s
tate
Tranche 1
E
R E D
E
D
E
E D
D
D
Gold
en r
ele
ase
Isla
nd o
f benefit
Tranche 2 Tranche 3
A programme
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Programmes
Different portfolios
Interdependent
projects portfolio
Resource optimisation
Value maximisation
Risk diversification
Benefit-driven
Risk determinate
Partitioning critical
Independent
projects portfolio
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Interdependencies
Serial
Product visualisation high
Confident requirement capture
Confident do-ability
Bilateral
Unstable requirements
Products affect each other
Human factor will not allow for
‘ideal’ result
Difficulty of solution - matching
design need is HIGH
Continual review necessary
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Programmes are NOT portfolios…
Programme
Benefits
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Portfolio management
2: Resource optimisation
1: Value maximisation
3: Risk diversification
Strategically
Tactically
2: Contextualises data for governance groups
1: Maximises throughput
3: Manages the constraints
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Harvesting
Achievement
Programme
navigation
Benefits
realisation
Programme
definition
Visioning
Benefit
assessments
Business
frameworks
Performance
measures
Set up
Programme
validation
Identify
quick wins
Options analysis
Programme
planning
Portfolio
scheduling
Programme
communications
Infrastructure
set up
Programme management
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Different portfolios are different...
15
Cost leadership
Strategic alignment
Cost reduction
Increased revenue
Competitive advantage
Competitive response
Management Information
Regulatory risk avoidance
Financial risk avoidance
Backbone processes
Strategic IT Architecture
IT Infrastructure
Differentiation
Strategic alignment
Cost reduction
Increased revenue
Competitive advantage
Competitive response
Management Information
Regulatory risk avoidance
Financial risk avoidance
Backbone processes
Strategic IT Architecture
IT Infrastructure
Enterprise shared services
Strategic alignment
Cost reduction
Increased revenue
Competitive advantage
Competitive response
Management Information
Regulatory risk avoidance
Financial risk avoidance
Backbone processes
Strategic IT Architecture
IT Infrastructure
Production
Strategic alignment
Cost reduction
Increased revenue
Competitive advantage
Competitive response
Management Information
Regulatory risk avoidance
Financial risk avoidance
Backbone processes
Strategic IT Architecture
IT Infrastructure
High Medium Low High Medium Low
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Resource optimisation
10
20
30
40
50
60
70
80
%
1 2 3 4 5
Concurrent projects
Pro
du
ctivity
Source: IBM
Time
Pro
ject e
ffic
iency
Plan assumption
Waiting for ‘key’ resource
Actu
al
NOT least idle time! ‘Time-slicing’ people ineffective ‘Scarce resources’ determine throughput
Impact of multi--tasking Impact on throughput
Questions:
1. Are the projects that are ahead in ‘key’ resource queue of higher priority?
2. What is the relative priority of RTB and CTB work? Who controls it?
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Least idle time
0
5
10
15
20
25
30
35
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70
Upgrade sharetrading telephone toonline serviceMember-only, highinterest savings bond
Adopt new brand IDon all customercommunicationsCampaign to promotesavings products
FSA reportingregulations
Database cleanse
Upgrade call centresystems
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Meeting the CAPEX constraint
0
5
10
15
20
25
30
35
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64
Upgrade share trading to online service
Member-only, high interest savings bond
Adopt brand on all customer communications
Campaign to promote savings products
FSA reporting regulations
Database cleanse
Upgrade call centre systems
Call centre refurbishment
Introduce new child savings account
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Full portfolio: CAPEX minimised
0
5
10
15
20
25
30
35
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73
Upgrade share trading to
online service
Member-only, high interest
savings bond
Adopt brand on all
customer communications
Campaign to promote
savings products
FSA reporting regulations
Database cleanse
Upgrade call centre
systems
Call centre refurbishment
Introduce new child
savings account
Website enhancements
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Problem cases
No-fail projects
- Increase resource buffer
- Increase project buffer
- Protect your scarce resources
Unknown capacity (e.g. contractors)
- Incentives for resource availability
- Penalties for lateness
- Explicit control of scarce resource
‘Must’ projects
- Allocate resources to these first!
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Enterprise perspective
21
Programme:
Focused on a single vision for the future
SRO is accountable for the vision
Funding decisions are interrelated and self-
consistent – collaborative behaviours
Portfolio:
Diverse set of projects: no single agenda
Accountability is diffuse – multiple agendas
Funding and governance for individual
projects encourages competitive behaviours
Independent portfolios suit
maintenance (RTB) projects
Portfolio
management
Programme
management
‘Perfect’ enterprise portfolio
- minimum set of programmes
- each aligned with one element of the strategy
Principles:
Discourage independent portfolios
Minimise the number of programmes
Programmes manage their projects
All constituents of a programme must
contribute to its vision and benefits
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Programme directorate
Delivery manager
Programme manager
Design authority
Change manager
Programme management office
Discipline &
visibility sustained
by properly
structured projects Balancing
complexity of
design with
ability to deliver
& sensitivity to
change
Co-ordinated
change made
in do-able
steps
SRO Benefit
realisation
Benefit
delivery
Solution
delivery
Programme governance roles
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Planning a programme
Strategy
Customer
value
proposition
Impacts
Benefits
Outputs
Consequential ‘outcomes’
avoidable costs of change?
Blueprint
The new
operating
model
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Project Line
Line Line
Programme roles
Consequential ‘outcomes’
avoidable costs of change?
Blueprint
The new
operating
model Strategy
Impacts
Benefits
Outputs
Programme directorate Programme manager Design authority Change manager Delivery manager
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Programme types
Functional e.g. Infrastructure
upgrades
Embedded e.g. transformation
Isolate e.g. new division,
start-up
Stakeholder
management
Strategy
management
Resource
management
Delivery
management
< 5 stakeholders
Operational level
Negotiation
6-20 stakeholders
Senior level
Conflict resolution
3-12 stakeholders
Typically peers
Long standing
relationships
Tactical
Constraint driven
Short timescales
CPI view
Linked to vision
Strategic focus
Benefits determine
flexible approach
Attached to bigger
strategy
Longer timescales
Benefits driven
Own resources
Dedicated support
Line manager role
Obtain resources
Wide spread
Multiple business
functions
Assigned resource
Obtain resources
Dedicated teams
May be outsourced
Establishes
partnerships
Delivery focus
Internal focus
Technical risks
Communication
& buy-in
Delivery passed
downwards
Full risk outlook
External focus
Domain knowledge
Responsible for
delivery
Less integration
focus
Internal & external
risks
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Metrics
Style
Manages
Delivers
Focus
Benefits
Scope
Plan
Role
Project Programme
Programme management is not 'big project management’
Issue resolution Progress
Accept ambiguity/collaborate Control & efficiency
Other managers Regular resources
Outcomes Outputs
Business strategy Single objective
Determine deliverables Linked to deliverables
Change inevitable Controlled
Architectural Bounded
Powerful facilitator Directive leader
Programme versus project
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The differences
27
A set of projects and programmes
supporting one or more functions.
A set of projects and programmes
supporting a single business vision. Alignment
Separate benefits statements - only RoI
can be aggregated at portfolio level.
A single set of benefits related to
programme vision. Benefits
A portfolio schedule made up of
independent project plans A single programme plan coordinating
all the projects Control
Diverse risk assessments. Portfolio-
level risk exposure varies by design Single programme risk assessment,
risk exposure defined by solution Risks
Portfolio Programme
Aggregated costs of constituent
projects and programmes.
Aggregated costs of constituents plus
overhead costs of programme. Costs
Projects have individual sponsors
accountable for the projects’ benefits
A single business sponsor accountable
for realisation of programme benefits. Accountability
Resource and dependency conflicts
hard to manage.
All resources and dependencies
planned and committed. Resources
Attribute