closing the strategy to execution gap · strategy-to-execution gap slide 11. may 2009. constructing...
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Closing the Strategy to Execution Gap
May 2009
Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.
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May 2009Strategy-to-Execution Gap Slide 2
Topics
• Current Business Issues
• The Gap Between Strategy and Execution
• Project Portfolio Management (PPM)
• Conclusions
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May 2009Strategy-to-Execution Gap Slide 3
Business Problem
“90% of Corporate Strategies Are Never Implemented” – Balanced Scorecard
Collaborative, 2007
Companies struggle with formulating realistic strategic goals and turning strategy into
outcomes
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May 2009Strategy-to-Execution Gap Slide 4
Business Underachievement
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May 2009Strategy-to-Execution Gap Slide 5
Converting Business Goals into Action
Project Portfolio Management connects strategy to execution
Why? • Because it encourages a discipline of strategic investing• It provides transparency• It addresses a commonly neglected issue – ‘is the strategic plan feasible?’• It helps the organization focus on value delivery and execution
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May 2009Strategy-to-Execution Gap Slide 6
PPMPPMPPM
Turning Your Strategy into Reality
Envision
Strategic Planning
• Vision• Objectives• Priorities• How?
Project Execution
• PM Skills• Metrics• Change• Learning
Roadmap Development
• Governance• Projects• Outcomes• Resources• Barriers
Roadmap
Org. Alignment
• Accountability
• Teams• Direction
Align
Portfolio Oversight
• Stewardship• Risk Mgmt.• Performance
Manage Implement
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May 2009Strategy-to-Execution Gap Slide 7
What is Project Portfolio Management?
Applying the tools and discipline of
financial management to
project management
Value
ROI
Risk
DiversificationAlignment
Investment Strategy
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May 2009Strategy-to-Execution Gap Slide 8
Project Portfolio Management Goals
• Align projects to strategy
• Facilitate the transformation of strategy into results
• Eliminate marginal and poor project investments
• Provide a way to evaluate, prioritize, and sequence projects
• Optimize resource utilization
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May 2009Strategy-to-Execution Gap Slide 9
PPM Benefits
• Project investments discussed strategically
• Feasibility and risk issues mitigated before investing
• Transparency to stakeholders
• Resources deployed on only the highest-value projects
• Detailed trade-offs understood when new ideas are suggested
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May 2009Strategy-to-Execution Gap Slide 10
Breaking PPM Down
Construct Portfolio ExecuteEvaluate Assess
ResultsPrioritize
Match Investments to Opportunities, Align with Business
Program/Project Management
Financial Retrospectives, Project Post Mortems
Account For All Projects
Review Investment / Resource Allocations
The Process of PPM
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May 2009Strategy-to-Execution Gap Slide 11
Constructing a Portfolio
Business Info Financial
ProjectLine of
Bus. Business Initiative TypeFinancial
Contribution Motive Funded
Segment Gross Margin
Segment Growth
Investment (budget)
Investment as Percent of
TotalP14 Internal Fulfillment Throughput Maintenance Operational Discretionary Y 63% 15% 11,233,456$ 27%P18 LOB-A Customer Support Maintenance Operational Discretionary N 71% 5% 8,607,643$ 21%P4 LOB-A Fulfillment Throughput Enhancement Operational Discretionary Y 71% 5% 7,000,000$ 17%P3 Internal Customer Support Enhancement Revenue Discretionary Y 71% 5% 3,569,540$ 9%P7 LOB-B Grow US Sales New Operational Strategic Y 43% 7% 2,000,000$ 5%P16 LOB-D Grow US Sales Enhancement Revenue Discretionary Y 60% 13% 965,432$ 2%P19 LOB-C SOX Maintenance Operational Compliance Y 63% 15% 890,755$ 2%
Project Name Metadata Cost
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May 2009Strategy-to-Execution Gap Slide 12
The Portfolio is Your Strategy
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
LOB 1 LOB 2 LOB 3 LOB 4 Internal
Investment By Line of Business
Proposed
Funded
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
LOB 1 LOB 2 LOB 3 LOB 4 Internal
Investment By Line of Business
Proposed
Funded
$‐$200,000.00 $400,000.00 $600,000.00 $800,000.00
$1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 $1,800,000.00
Investment By Initiative
Proposed
Funded
$‐$200,000.00 $400,000.00 $600,000.00 $800,000.00
$1,000,000.00 $1,200,000.00 $1,400,000.00 $1,600,000.00 $1,800,000.00
Investment By Initiative
Proposed
Funded
Aligning Business and IT
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May 2009Strategy-to-Execution Gap Slide 13
Using PPM To Increase Strategic Results
Feasible?
Two Key Pitfalls PPM Can address:
• Inadequate Resource Management
• Inadequate Risk Management
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May 2009Strategy-to-Execution Gap Slide 14
Supply and Demand
Projects
People
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May 2009Strategy-to-Execution Gap Slide 15
Capacity Planning
Do you have enough of the right resources?
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1,000.00
1,200.00
1,400.00
1,600.00
1,800.00Jul
Aug Sep
Oct
Nov Dec
Jan '08
Feb
Mar
Hrs
Total Staffing
Adj. Supply Total Demand Proposed Funded
0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00
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1,800.00Jul
Aug Sep
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Nov Dec
Jan '08
Feb
Mar
Hrs
Total Staffing
Adj. Supply Total Demand Proposed Funded
0.00
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Jul Aug Sep Oct Nov Dec Jan '08 Feb Mar
Hrs
UI
UI Adj. Supply UI Total Demand UI Funded UI Proposed
0.00
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Jul Aug Sep Oct Nov Dec Jan '08 Feb Mar
Hrs
UI
UI Adj. Supply UI Total Demand UI Funded UI Proposed
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May 2009Strategy-to-Execution Gap Slide 16
The Project Investors Gamble
Probability of Technical
Success
Probability of Customer
Success
Yes
No
Adapted from Cooper, Product Development Institute Inc., 2001-2007
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May 2009Strategy-to-Execution Gap Slide 17
Portfolio Risk Management
Key Factors Contributing to Risk
Degree of change
Internal / external politics
Experience, skill
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May 2009Strategy-to-Execution Gap Slide 18
Risk DNA – Contributing Factors
Risk Profile Ability to Deliver
Organizational Acumen and Experience
Requirements
Resource Capacity
Schedule Flexibility
Quality Control
• Do we control the plan?
• Do we know what we are doing?
• Do we have the commitment to deliver?
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May 2009Strategy-to-Execution Gap Slide 19
Assessing Risk
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May 2009Strategy-to-Execution Gap Slide 20
Visualizing Risk Using PPM
Balance?
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May 2009Strategy-to-Execution Gap Slide 21
PPM Summary
• Project Portfolio Management involves applying the tools and discipline of financial management to project management
• PPM requires competencies in strategic planning, financial and project management
• Overall objective of PPM: Manage projects, people, processes, and information assets for maximum business benefit
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May 2009Strategy-to-Execution Gap Slide 22
Call to Action
• Are your business strategies advancing your company?
• Is your project portfolio producing significant value?
• Can you count on your current project portfolio to align business and IT?
If not, then consider applying project portfolio management to bridge the gap between strategy and execution.
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May 2009Strategy-to-Execution Gap Slide 23
Contact Information
• For a copy of these slides or other questions, contact:• Gaylord Wahl
[email protected] 206.517.2762
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May 2009Strategy-to-Execution Gap Slide 24
About Point B
Point B is the first professional services firm focused on project leadership and execution. Founded in 1995, the firm provides a diverse and experienced team of locally-based project leaders to companies in Seattle, Denver, Portland, Phoenix, San Francisco, Los Angeles and Chicago. Organizations ranging in size from startups to Fortune 100 corporations turn to Point B for its ability to step into any segment or role of a mission-critical project and help lead it to success. And, unlike many professional services firms, Point B works exclusively for its clients and does not enter into alliances, reseller agreements, or other relationships that might compromise the firm's objectivity. Point B has attracted top project leaders from various industries by offering a culture that promotes flexible work schedules and well-rounded lifestyles for its more than 300 professionals. Additional information on the firm and its offerings can be viewed online at http://www.pointb.com.