PROJECT PORTFOLIO MANAGEMENT

PRESENTATION TO KENYA-PMP

By: Lawi Sultan Njeremani

CONTENT:• Why PPM- What is PPM

• The PPM Pyramid

• Operating in the Value Zone

• Defining the Value Zone

• PPM & Resource Management

• 5-Steps to successful PPM

• Benefits & Challenges of PPM

• Why PPM•Align resources with business objectives (Strategy)•Build strong Governance structure•Ensure proper executive & business support of projects•Maximize investments•Reduce No. of redundant projects•Make it easier to cancel projects•Set expectations•Develop Plans and Budgets

The PPM Pyramid

RulesPower

Culture

Goals

Operating in the Value Zone

The Zone

Portfolio Management

Project Management

OrganizationalInfrastructure

& Culture

Defining the Value Zone

• Alignment – Do the projects

contribute to the strategic

goals of the company?

Innovation – are we

receptive to and do we

invest in something New?

Fit – is this project doable

with the resources we

have now?

Fit

Value – is the value received

worth the effort?

Value

Zone

PPM Pyramid and the Language of

Resource Management

• The Role of Executive Management is to Allocate the money and the people

• The Role of Functional Management is to Managethe money and the people

• The Role of Project Management is to spend the money and support the people

PMs and Project Teams

Functional

Management

Executive

Mgmt

5-Steps to Successful Project Portfolio

Management

1. Gather a detailed inventory of

all projects

Some companies using PPM, begin with taking a complete inventory of current requested projects.

Other companies benefit from starting from scratch with the process and require that all projects be re-requested and re-assessed through PPM.

5-Steps to Successful Project Portfolio

Management

2. Set strategic objectives for the company

+ One 3 hour meeting with all company HoDs & CEO

+ Operating Plan structure is set at 3 levelsObjectives (Why?)Initiatives (What?)Projects (How?)

+ Objectives are brainstormed and decided upon in this meeting with all attendees prepared with 3-5 recommended objectives.

+ Discussion serves as kick-off to next year and a chance to openly, informally discuss company strategies and challenges.

5-Steps to Successful Project Portfolio

Management

2. Set strategic objectives for the company… Continued

+HoD’s brainstorm initiatives in support of the objectives with direct reports

(Supervisors and Team Leaders) within their department.

+Another 3 hour meeting is held with all HoD's and direct reports to review all

recommended initiatives by department. Initiatives are discussed and agreed

upon in this meeting.

+A good amount of cleanup is required on this list after the meeting (deleting

duplicates, merging similar initiatives, etc.

+Finalized list is distributed to all HoD's and direct reports.

+Involvement of direct reports at this level serves the purpose of generating

early buy-in to the Operating Plan process by senior management.

5-Steps to Successful Project Portfolio

Management

3. Align projects with objectives

1. HoD’s and their direct reports are responsible for recommending projects that will support each initiative in alignment with the company objectives.

2. Only HoD approved projects are entered into the system, cutting down drastically on frivolous project requests.

3. Each project entry requires a high level justification including project description, business benefits, executive sponsor, business manager, estimated quarter of completion, etc.

4. The projects are then assigned owners and estimate costs are established

5. All proposed projects are then reviewed in individual departmental meetings chaired by the CEO together with Head of Finance with attendees being the department VP and their direct reports.

6. Department VP’s and direct reports are given this opportunity to introduce the project and “sell” it to the chairs for approval.

5- Steps to Successful Project Portfolio

Management

4. Score and categorize projects & Budget

During the project review meetings, each project is assessed based on

strength of support for initiative/objective, estimated business benefits, and

estimated costs.

As a closing to the discussion on each project, the project is assigned a status

and an action level.

The action level is assigned first and drives the status and next steps, as

outlined below:

Action Level: Status: Next Steps:

1. Start Project Accepted Begin projects in order of priority

2. Start after validation* Proposed Begin validation process

3. More research needed Proposed Continue research and propose again

4. Unlikely to start this year Proposed Hold (candidate for Q4 if resources allow)

5. Do not start this year Deferred Hold for next year and propose again

5- Steps to Successful Project Portfolio

Management4. Score and categorize projects & Budget……continued

+After all projects are reviewed and scored, the HoD’s are tasked with

prioritizing all action level 1 and 2 projects for their department. The priorities

are simply high, medium and low.

+The Operating Plan is then handed over to the respective Head of Portfolio

to schedule all action level 1 and 2 projects that require Portfolio support into

the four quarters of the year with estimated start and complete quarters. This

scheduling is based on priority and action level with the high priority, action

level 1 projects at the top. Resource leveling is done at this time.

+This schedule is the first draft of the respective plan for the coming year. It is

then tweaked as needed when looked at on paper for anomalies, special

considerations, etc. This schedule will also become the basis for the

respective Portoflio budget.

5- Steps to Successful Project Portfolio

Management

5. Actively manage portfolio

Monthly Steering Committee (Executive Committee) chaired by CEO. Members of committee include CEO, CFO and Head of Investment. All other HoD’s attend as needed based on agenda of items to be discussed.

Purpose of committee:Business owners and HoD’s present projects requiring validation before approval. Steering Committee approves or denies these projects.

Monthly status given on large-scale, strategic projects from the Operating Plan.

Provides forum for strategic spending decisions and updates on critical system issues/concerns.

Provides forum for reprioritizing projects based on mid-year changes in company priorities/strategies.

5- Steps to Successful Project Portfolio

Management5. Actively manage portfolio… continued

Quarterly review of entire Operating Plan at standing Executive Committee

meetings. All HoD’s are required to give status of initiatives and projects

quarterly.

Quarterly review by CEO of high-level Operating Plan at Board of Directors

Meetings.

“Portfolio Management without governance is an empty concept”

PPM PROCESS SUMMARY

BENEFITS OF PPM

1. Justifies “Killing” projects that don’t support Company strategy

2. Balances Risk across projects

3. Prioritizes project proposals across a common criteria rather than emotions

or politics

4. Allocates resources to projects that align with strategic direction

5. Improves Communication and supports agreement on project goals

6. Builds discipline into project selection process

7. Provides Executive oversight of Company

8. Provides the structure/process for project portfolio Governance and avoids

waste/duplication

CHALLENGES OF PPMTeam: Many executives are initially uncomfortable having their decisions

scrutinized. It requires real teamwork at the executive level to support portfolio

management and governance. Executive buy-in is absolutely required up front.

Complexity: The desire to overcomplicate this process with complex scoring

and red tape is overwhelming. Keep it simple at first then improve upon the

process as participants become familiar with the steps.

Software: Do not rely on project portfolio management tools to manage this

process for you. No one tool does everything and many tools complicate the

process. Sage wrote their own tool in an attempt to keep it simple.

Time: This requires an additional time commitment from Executives above and

beyond their usual constraints. Coming to meetings prepared is the key to

keeping this process time sensitive.

THANK YOU FOR YOUR PATIENCE

VELOCITY Project Management

http://www.velocityprojectmanagement.com/