PROJECTPORTFOLIO

MANAGEMENT

Concepts Généraux

PPM Definitions

The first is a direct quote from the PMI PMBOK – “ the selection and support of projects or program investments guided by the organization’s strategic plan and available resources.”

This involves a decision making process. The concept of being guided by the organization’s strategic plan and the available resources which means being very aware of the organization’s goals and objectives and also all types of resources that are available for projects.”

Second definition comes from the Managing Multiple Projects book published by the Center of Business Practices which defines PPM “as a process for ensuring the consistent selection, prioritization and planning of the right projects for the organization”. This particular definition begins to shed light on the different components of PPM – which include evaluation, selection, prioritization, budgeting and planning once again based on value and strategic fit with the organization.

PPM

It uses… An identification of Projects An evaluation of Projects A prioritization of Projects

So as to … Check if projects meet the Enterprise Strategic Goals and Objectives Optimize Resource allocation Provide different analysis (Cost and ROI analysis, Risk Analysis,

Strategic value analysis)

Which provides … Visibility Standardization Measurement Process Improvement

PM and PPM Value

Ability to Realize Business Value Potential75% 100%

66%

100%

0%

Portfolio Management

Project Management

50%Value Realized

Portfolio Management –

to identify and select the investments that will

maximize organizational value

Project Management -

to successfully deliver

the selected business

value opportunities

•Optimal integration of

portfolio and project level

capabilities allow

maximization of business

value

Ab

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y t

o I

den

tify

Org

an

izati

on

al V

alu

e P

ote

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al

PPM Steps

1. Construire le Portfolio : Nouveaux Projets ou idées

2. Prioriser / Sélectionner

3. Planifier / Affecter

4. Mettre à jour et Piloter

5. Revues, Priorisation / Sélection

6.En attente ou arrêté ou clos

Construire le Portfolio

Standardiser la définition des projets Définir et mettre en œuvre des modèles de

fiches projets / idées (Project Charter) Définir les propriétés Définir les business drivers

Définir les processus de collecte des informations

Project Registry

Minimum information requirements for the Project Registry include Project Sponsor name Project Manager name Project priority ranking Target milestone schedule Resource requirements Identified domain within the

project portfolio

Prioriser / Sélectionner

Prioriser Définir les Business Drivers Valoriser les Business Drivers (Donner un poid à

chaque BD)

Evaluer la valeur stratégique de chaque projet

Sélectionner Définir les contraintes

Ressources (Compétences) Budget Techniques

Optimiser les ressources en respectant les contraintes

Business Driver

Strategic Goal:

Business Driver Name:

Retain existing clients Grow Customer Share of Wallet

Dedicate our resources to those market areas where we can maintain our existing client base and increase share of market of current clients

Business Driver Definition:

Sell additional products to existing clients

Maintain clients and remain competitive in existing markets

KPI’s:

• Client Satisfaction Rates• Client Retention Rates• Variance in % Market Share

• % Increase of Market Share• Increase in Revenue

Business Driver Name:

Business Driver Definition:

KPI’s:

Tan

gib l

e

Int

angi

b le

Typical Project Criteria

Strategic Proprietary Position - how easily copied Support of Core Competencies Brand Enhancement Commercial Market Impact Market Need Market Timing Technical Feasibility Complexity Financial Earned Commercial Value (ECV) Net Present Value (NPV) Internal Rate of Return (IRR) Return on Investment (ROI)

BD Priorisation

Indicates relative importance of Driver A vs. Driver B (row vs. column)

Compares the relative importance of Driver B vs. Driver C (row to column)

The Pairwise Comparison is a proven technique for deriving relative priorities or weights for Business Drivers through performing one-to-one comparisons.

Priorisation

High RiskHigh Risk

Low RiskLow Risk

Fort BénéficeFort BénéficeFaible bénéficeFaible bénéfice

CC

BB

EE

DD

GG

JJ

HH

KK

II

AA

FF

LL

NN

MM

OO

QQ

PP

RR

Example:Example: Size - Effort Size - Effort Color - Organization Color - Organization

1

Cost

L -

Pri

ori

ty -

H

Portfolio Analysis/Optimization

2 3

Optimization techniques allow organizations to select portfolios that will deliver the maximum strategic and financial value

Use charting techniques to analyze the portfolio

Optimize the portfolio under varying budgetary constraints

Break constraints and reach the Efficient Frontier

Sélectionner les bons projets

Requirements For PPM Success

Well defined enterprise goals and objectives Established and maturing PM processes Project reporting and analysis capabilities Integration of project (enterprise) resources Executive support of portfolio process Reevaluate Project Portfolio on a Regular

Basis As Project datas are changing quickly Market is changing quickly Enterprise Objectives can change

The Project Portfolio must be reviewed very often

Benefits Of Portfolio Management

Validate business strategy and align projects

Eliminate redundancies Improve resource utilization Improved schedule performance

and time-to-market

Reduced staff overload and attrition

Facilitate the process of adding, sorting, killing projects so as to meet the Enterprise Objectives

Consistent Progress Towards Best in Class

2001 2002 2003

25%

50%

75%

100%Effi

cie

ncy

41%

Prioritization Only

62%

Prioritization & Optimization 81%

Prioritization, Optimization & Adv Analytics

Alignment with Best Practice

Low

Medium

High

Annual Planning

89%

Prioritization, Optimization & Adv Analytics

2004