prakalp feb 14

PROJECT MANAGEMENT INSTITUTE - Mumbai ChapterUnit No. 642, Mainframe 1-B Wing, Royal Palm (India), Aarey Milk Colony, Goregaon (E), Mumbai - 400065Tel. +91-22-28792194 | Website: www.pmimumbaichapter.org | Email Id: [email protected]

Prakalp - PMI Mumbai Chapter JournalVolume 16 - Issue - February 2014www.prakalponline.com

PROJECT GOVERNANCEPROJECT GOVERNANCE

“To be recognized as

the organization of choice by

evangelizing Project Management”.

ßEvangelize project Management

ac ros s indus t ry, academia ,

community and government.

ßProvide a forum for project

management professionals to

promote the principles and ethical

standards of PMI.

ßPromote networking among

professionals, sharing project

experiences and best practices,

imparting training and enabling

PMI certifications.

ßProvide development of leadership

skills among its volunteer leaders,

members and society at large, and

thereby enhancing quality of life.

Disclaimer

The information contained in this magazine represents the views of individual writers on the issues discussed as of the date of this publication. It should not be interpreted as to be a part of commitment on the part of PMI Mumbai chapter and PMI Mumbai Chapter cannot guarantee the accuracy of information presented in the publication

The journal is for information purpose only

PMI MUMBAI CHAPTER MAKES NO WARRANTIES EXPRESS OR IMPLIED IN THIS JOURNAL

Without limiting rights under copyright, no part of this information should be reproduced, stored in or introduced to retrieval system or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or any means) or for any purpose without written permission of PMI Mumbai Chapter. Some data or images in this journal could be registered trademarks or property of respective owners. PMI Mumbai chapter does not claim any rights for the use of same as it is in the office of no profit serving the growth of Project Management across the region complying with all applicable copyright laws is the responsibility of the reader.

CONTENTS

Page 3 President’s Message

Page 4 From the Editorial desk

Page 5 Technical Paper 1

Page 13 Technical Paper 2

0 Highlights of 13th AGM

Page 22 PMIMC Initiatives

Theme:Project Governance

Managing Committee

Saurabh Parikh President

Yagna Boorada Secretary

Amitanand Silva VP - Finance

Mitra Wani VP - Marketing

Sreegith Nair VP - Professional Development

Dr. Sanjay Buch VP - Branches

Jay Raval VP - Volunteer Development

Manoj Sarasappan VP - Outreach

Ahmed Ashfaq VP - Membership

Bharat Bhagat VP - Certification training

V P Shah VP – Governance and Policies

Advisors

Rakesh Gupta

Ramesh Chandra V. Joshi

Editorial Board

Bhavesh Thakkar

Ahmed Ashfaq

Yagna Boorada

Sreegith Nayar

Mahesh Iyer

Mitra Wani


2

2


Dear Reader

THANK you is not ENOUGH for being associated with us.

As we all move to the new financial year and as the quarter end and year end

comes nearer, am sure you are very busy in your professional life delivering the

projects, programs, portfolios and realizing the revenue thereby trying your best

to not only impact the top and bottom lines of your respective business, but also

adding value to the to the clients (internal and external both), inspite of all these, i

appreciate your time reading this.

In this exciting journey of peaks and troughs, PMI Mumbai Chapter family will

always be there with you, thereby bringing some knowledge sharing gathered

from various experienced professionals like you in this edition.

AGM and Election is all over at PMIMC and I thank you for all your support by

voting the person of your choice. We do respect your choice and as a matured

professional, am sure you have made your best decision thereby electing the right

candidates suitable for the respective VP positions for the two years tenure.

We will start with our new board in the next financial year and we all BOD

members will try our best to maximize all our efforts which are beneficial for the

chapter.

Volunteerism is the CREDO of PMIMC. Our great existing volunteers have done

excellent job this year, on the way they sacrificed their social lives towards

benefits of the chapter which is quite recognizable and appreciable and hats off

to them!!!

My heartiest congratulations to my new volunteer friends who have recently have

become volunteers with PMIMC, am sure with all your help and support, the

chapter will grow further in every measurable parameter. This is an excellent

opportunity to do something different and get engaged into certain challenges

with different flora and fauna.

I, on behalf of PMIMC, welcome you again to an exciting journey of

professionalism.

With Warm RegardsSaurabh ParikhPresident-PMIMC

From the Editorial Desk

Volunteerism is the

CREDO of PMIMC.

Our great

existing volunteers

have done excellent job

this year, on the way

they sacrificed their

social lives towards

benefits of the chapter

which is quite

recognizable and

appreciable and

hats off to them!!!

3


Dear Readers

India completed its 64th year of its Constitution on 26th Jan 2014 on continued

improvements in governance of the Nation which created huge opportunities for

an inclusive growth.

With effective governance, India has put its place on global map as one of the

strong nation and likely to be big super power in another two decades of time.

This clearly indicates of our inherent governing practices and this applies to the

effective completion of Projects for achieving the intended objective.

In this edition, Emphasis is placed by our Valued Authors through classic case

studies how stakeholder like Vendors play vital ingredient for the project success

in its maturity value besides demystifying Governance in simple terms for the

seamless execution.

New Governing body of the Chapter has been constituted which has been

highlighted in this edition along with brief outline on Annual General Meeting

held on 15th Feb 2014.

I am sure that the Readers will get benefit from the contents of this edition and

request all to contribute more and more to the Chapter to make it more and more

interesting….

Wish all the Members and their family a glorious year 2014 ahead…

Happy Reading!

Editorial Team

From the Editorial Desk

With

effective governance,

India has put its place

on global map as

one of the strong nation

and likely to be

big super power

in another two decades

of time.

4


Paper Abstract

This paper focuses on PPM maturity and Vendor relation maturity for IT industry since its evolution. As author

traverses through the evolution journey, attempts to establish inter relation between PPM maturity and vendor

relationship maturity. The author further proposes to add vendor relation dimension to PPM Maturity Model

and details the vendor relation dimension for each of the maturity levels. Also depicts the changing

governance scenario with vendor relation maturity. The paper provides case studies for higher maturity levels

in support of the combined maturity model. The paper concludes with why the two aspects should not be

looked in isolation and benefits for combined maturity model. The paper also touches upon the road ahead in

near future

Introduction

Along with the evolution of information technology, Project/ Program/ Portfolio Management (PPM) have

evolved and also IT vendor relationship has matured from mere resource provider to strategic partner. PPM

focus has shifted from “doing things right” to “doing right things” and vendor relationships have enabled

organizations to shift from “do it all” paradigm to “focus on core” to drive the business value. This paper

attempts to depict how PPM maturity and Vendor Relation maturity support each other and propose Vendor

Relation as one of the dimension for PPM maturity. The paper extends the PPM maturity model to add this

dimension and details the Vendor Relation maturity and vendor role in governance with PPM maturity levels. It

also touches upon road ahead.

History

Since the beginning of Information Technology (IT) era organizations have focused on having right processes in

place to better manage operational work and new initiatives termed as projects. In Y2K “staff augmentation” or

in crude terms “body shopping” became popular, vendor staffs were mere brought in as extension to existing

staff for low end tasks. Post Y2K, off-shoring started picking up and chunks of work were executed by vendors in

on-site/ offshore models necessitating a more structured project management approach for outsourcing

chunks of work.

As off-shoring model stabilized, entire technical projects were contracted to vendors, thus shifting the onus of

project management onto the vendor. With .com boom newer ways of conducting business came up, hence

project expanded from IT part to the business aspects and vendors moved up the value chain as well getting

into business requirements gathering, implementation& support. As tracking and monitoring projects,

programs, resource allocation, and asset utilization became important; a separate Project Management Office

(PMO) evolved as a support function.In order to include vendor skilled resources and assets in planning,

stronger vendor relation was called far.

Post the .com bubble burst, survival became a concern for many and focus shifted on cost savings and

improving core business using customer relation solutions and enterprise solutions. With Globalization, off

shoring became easy and apart from IT other back office work, routine call center operations, customer

Looking Beyond Traditional Project Governance:

Getting it right for your organizationBy Darshana Padghane, PMP

Arun Vasudevan

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support etc more complex Business Processes Outsourcing (BPO) started. Also in bid to save cost entire

production support, maintenance services, were outsourced. This necessitated more matured ways of

measuring the services; Service Levels Agreements (SLA), Operational Level Agreements (OLA) came into

picture. This paved way for more matured PMO office.

Current Scenario

Currently in the industry organizations are focusing on optimization along with cost, organizations are

exploring newer opportunities like Data Center Consolidation, Infrastructure Optimization etc. Business

process outsourcing (BPO) has matured to Knowledge Process Outsourcing (KPO) whereinmore complex data

analysis work and reporting required. With optimization focus, prioritization of projects/ programs within

portfolio became important and PMO matured from a support function to advisory function.

As organizations want to focus on core business and outsource the rest, they found themselves working with

too many vendors. Vendor Consolidation or Service Integration has become the need of the hour.With IT

companies getting into consulting space and product companies / business consulting companies getting into

IT and related services, there are more players in the market providing high end services. With organizations

partnering with such high end vendors, outsourcing host of IT & related services, vendors are now getting into

advisory mode. The models are changing and some organizations are looking at vendors as Center of

Excellence (COE) for technical, functional and in some cases even PM. Vendor is becoming integral part of

PMO with active role in tactical & strategic decision making

There is shift seen from cost optimization to business value creation and vendor is looked as extended partner.

The technology backed solutions offered by vendors like big data, analytics etc. are enabling enterprise wide

view, and enabling PMO’s to further expand their horizon and look at project portfolio across the entire

organization, clearly Enterprise wide PMO (EPMO) is the upcoming wave.

PPM Maturity Model

As we have seen historically and even current scenario how vendor relation maturity has been driving

maturity of project, program and portfolio management and how PPM maturity in turn have facilitated deeper

vendor relationships. Hence instead of looking both in silo’s author propose to include vendor relation as

additional dimension while looking at PPM maturity. After looking at various process maturity and PPM

maturity models available in the market, widely popular Gartner maturity model is selected which looks at

maturity in organizational context. Gartner’s PPM

maturity model is based on five dimensions namely

People, PPM Practices and Processes, Financial

management, Technology and Relationships.

Author herewith proposes to have a vendor-

relation as additional dimension and delve deeper

into how the model can be extended to include it.

Also details on vendor role in governance at each

level. Following diagram depicts the Vendor

Relation Maturity in relation to PPM Maturity and

changing governance scenario.

StrategicPartner

IntegratedPartner

ManagedService

Provider

ServiceProvider

ResourceProvider

CostSaving

Level 1

Level 2

Level 3

Level 4

Level 5

RelatiohshipFocus

Governance

Co-Innovation

Completelyoutward

DriveEqually

FullyEngaged

PartlyInvolved

VendorInformed

None

CompletelyInward

Reactive EmergingDiscipline

InitialIntegration

EffectiveIntegiation

EffectiveInnovation

Project, Program, Portfolio Management Maturity

Ve

nd

or

Re

lati

on

Ma

turi

ty

Figure 1: Vendor Relation Maturity vs. PPM Maturity

(Source for PPM Maturity Levels: Gartner: ITScore Overview for Program and Portfolio Management,2012, Published: 17 April 2012 Analyst(s): Lars Mieritz, Donna Fitzgerald)

6


Following is the detailed description of each level with specific details on vendor relationship and vendor

engagement in governance at each level:

Level 1:

PPM Maturity - Reactive: At level 1, the project management processes are used need basis specifically for

critical / big IT projects. The projects are usually in-house within specific function or department. There is no

dedicated focus on cost or scope tracking. Tools are generally limited to spreadsheets.

Vendor Relation Maturity - Resource Provider: Author has observed that parts of projects are outsourced in

staff-augmentation mode; vendor staff is part of extended project team. The vendors are mostly engaged due

to lack of resources within organization, time crunch.

Vendor role in Governance - None: The project governed completely within the organization mostly by an in-

house project manager; vendor in staff-augmentation mode may not play any role in project management.

Level 2:

PPM Maturity - Emerging Discipline: At level 2, there is massive swing from “anything goes, get it done” to very

process driven environment. Project discipline is established and dedicated project teams & collaboration

between various team is possible. Investment in Project Management tools is seen. Basic PMO established,

financial planning, capacity planning etc is rudimentary, portfolio management is weak.

Vendor Relation Maturity - Service Provider: At this level, author has observed that services like development,

testing, support are the primary consideration. The vendor staff usually works in staff-augmentation mode to

support requirements gathering, project management, project implementation & support, operations. As cost

reduction is main objective entire technical projects is outsourced and supported by well-defined processes.

Off-shoring capabilities of vendor are leveraged to lower the cost further, but onsite-offshore model

considered

Vendor role in Governance - Informed: Project governance includes cost & schedule tracking, decisions on

scope, cost, technology, architecture etc. retained within the organization. The vendors are informed on the

project delivery process as they need to align their processes to that of organization. They are also informed on

project decisions impacting them, their inputs may be considered for decision making but may not be involved

in actual decision making.

Level 3:

PPM Maturity - Initial Integration Discipline: At level 3, portfolio management starts holistic view for

investments, benefits, across functions are made jointly. Need for portfolio management tools to provide

visibility & transparency. Harmony between various organization functions for projects & programs

established, but lack sophistication in portfolio management practices.

Vendor Relation - Managed Service Provider: At this level, vendor relation is matured to outsource entire IT

services like application maintenance/support, implementation support; production support etc. in managed

services mode; vendor partners in enterprise solution implementation. Offshoreonly projects are considered.

Service level agreements (SLA’s); operational support agreements (OLA’s) and risks sharing considered in

vendor contracts. Managed services extended to business operations (BPO) as processes mature. Focus shifts

from cost arbitrage to process improvement & optimization. Master agreements are negotiated with vendors

providing multiple services.

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Vendor Role in Governance - Partly Involved: Portfolio governance remains within organization but vendors

are involved in governance of programs and services. Vendors are usually made accountable at operational

level and involved in tactical decision making. Vendors may not be engaged at portfolio level decisions but are

informed of the same so that they can plan ahead. Vendor aligns their project management processes and tools

with the organization

Level 4:

PPM Maturity - Effective Integration: At level 4,the enterprise begins to focus on being project-capable; benefit

realization is tracked; centers of competency for better workload management. Portfolio management is well

established; portfolio optimization looked at and starts looking at effective strategy execution.

Vendor Relation Maturity - Integrated Partner: At this level, vendor relation matures to integrated partner level

and is considered extension of the organizational logical unit. The vendor selection is of utmost importance

here as vendor plays a very crucial role in building & delivering value. Business value creation, i.e. co-creation

along with vendor is prime focus. Vendor contract & agreements are far more sophisticated and based on

business outcomes. As vendor is engaged across the organizational logical unit, vendor can come up with

untapped optimization opportunities. Instead of building in-house center of excellence (COE), vendor’s COE’s

are leveraged. Vendor knowledge base and experience are leveraged for newer opportunities to deliver more

business value.

Vendor Role in Governance - Fully Engaged: Vendor is engaged at all aspects of portfolio governance, although

final say on portfolio decisions still retained within organization. Vendor is made equally accountable for

program benefit realization. Business Strategy shared with vendor and based on which vendor provides

roadmaps. The PM processes are mutually agreed and help smooth functioning and better governance.

Integrated portfolio/ project management tools are considered to provide transparency at all levels.

Level 5:

PPM Maturity - Effective Innovation: At level 5, Enterprise Portfolio Management (EPMO) focus is innovation is

continuous process; change management and communication are core capabilities.An enterprise PMO

oversees strategy execution.

Vendor Relation Maturity – Strategic Partner: At this level, vendor relation maturity is at strategic partner level

to get most from vendor already at integration partner level. Vendor invest in research and development to

come up with innovative solution, co-innovation is focus. Vendor experience, knowledge base & expertise are

tapped in ways never explored before and newer business ideas come from vendors as well. External / internal

environment changes are monitored by vendors. At the same time vendors are given complete visibility and

access within organization. Contracts enable equal stake from vendor,revenue/loss sharing model are

considered.

Vendor Role in Governance - Drive Equally: Governance of strategy implementation and enterprise portfolio is

done along with vendors. Table top governance model adopted wherein vendor has equal say in decision-

making at all levels. There is seamless integration of processes and tools for open & transparent governance.

Vendor inputs can be considered for strategy formulation.

Following table summarizes the various PPM maturity levels, vendor relation maturity at each level and vendor

role in governance at each level:

8


Case Studies:

As PPM Maturity Levels 1 through 3 is widely common and many organizations have already established

PMO’s and have vendors managing some services or the other, I would like to focus here on Level 4 & Level 5.

Level 4: Passport Seva Project (PSP)

As part of National e-Governance Plan - the Passport Seva Project (PSP) - a Mission Mode Project which aims

“to deliver all Passport-related services to the citizens in a timely, transparent, more accessible, reliable manner

& in a comfortable environment through streamlined processes and committed, trained & motivated

workforce”. As part of Master Service Agreement (MSA), Service Provider is responsible for software,

hardware, infrastructure for passport system, sets up physical infrastructure for Passport Seva Kendra’s (PSK’s),

provides maintenance and support as well as operations staff to support PSK’s and set up and runs Call Center

Level PPM Vendor Relationship Vendor Role in PPM GovernanceMaturity Levels Relation FocusLevels (Gartner) Maturity

1 Reactive Resource Cost Reduction None :Provider No Involvement in Project Governance

Provide inputs to Project reports as required

2 Emerging Services Cost Arbitrage Informed : Discipline Provider Oversee Projects, Operations

Project, Operational Reporting as per PM ProcessesInformed on Process, Business Decisions related to Project

3 Initial Managed Optimization Partly Involved : Integration Services Oversee IT/ Business Operations, Project Programs

Provider Operational Decision MakingInvolved in Tactical Decisions makingConsulted for financial decisionsInformed on business plansReporting on SLA / OLA / Y-O-Y improvements and Project / Program MetricsProject Management Process & Tool synchronized

4 Effective Integrated Co-Creation Fully Engaged : Integration Partner Oversee Programs and participate in Portfolio governance

Part of various Portfolio Governance CommitteesInvolved in Financial Decision makingInformed on business strategy Provide IT Roadmaps based on Strategic decisionsIntegrated Process & ToolsReporting on Business Benefits & Value added

5 Effective Strategic Co-Innovation Drive Equally: (Tabletop governance )Innovation Partner Oversee Portfolio at Enterprise level (EPMO) alongside

Drive Enterprise Strategy Implementation Equal say in Financial Decision MakingPart of various BoardsProvide Inputs for Strategy Decisions Seamless integration of Processes & ToolsMarket Predictions & Forecasting Trends for Strategy Formulation

Chart 1:PPM Maturity with Vendor Relation Maturity and its role in PPM Governance

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and supports grievance handling. Also includes organization change management and communication,

training. It also included obtaining ISO certification and compliance to service level agreements (SLA’s). The

Project runs on the Build-Own-Operate-Transfer model wherein the initial investments are by the private

partner. There is minimal investment from the Government. As per the final agreement with service provider,

they will recover its cost through Service Charge per passport based on volumes and subject to 27 stringent

service delivery levels.

Observations:

Vendor is seen as integrated partner providing bundled solution. Apart from IT solution, vendor is overseeing

infrastructure setup, call center support, grievance handling cell.

Although it is outcome based model, it is build-own-operate-transfer model and vendor involvement is

specific to program.

Focus is co-creation here wherein organization is providing the functional knowledge and driving the business

strategy and vendor is helping in IT-enablement and setting up & running of PSK’s.

Dedicated PMO is setup to oversee various aspects of program and matured SLA’s, OLA’s identified & tracked

for development, implementation, operations, customer services & service improvement initiatives.

The governance structure is multi-level wherein executives from the Local Passport Office (LPO) / PSK,

Regional Passport Office (RPO) and Chief Passport Officer (CPO). From vendor side Local Project Manager,

Regional Program Manager, Program Director and Senior Management involved.

Vendor fully engaged in PMO activities; operational & tactical decisions taken up by vendor but strategic

decisions retained with government officials.

Level 5: Scandinavian Airlines (SAS) selects Strategic IT Partner

Leading IT services, consulting and business solutions organization, announced that it has been selected by

SAS, Scandinavia's leading airline, to help transform and optimize its IT processes, applications and

infrastructure. It will implement its proprietary cloud-based solutions to simplify and standardize the SAS IT

landscape. The initiative is a part of the SAS “4 Excellence Next Generation” strategy, aimed at improving the

competitiveness of the SAS Group. Through this partnership, SAS will also tap into its Aviation and Digital

Innovation Labs to develop solutions addressing the needs of the new digital consumer.

Observations:

Vendor is seen as Strategic IT Partner and would be implementing the IT Strategy for the organization.

The key focus here is co-Innovation wherein research & development from vendor is prime expectation.

The cloud based solutions will help in IT & infrastructure consolidation & business process optimization thus

enabling cost reduction & optimization.

The innovative aviation and digital solutions will help in enhancing the existing business and exploring &

tapping of newer business opportunities.

Table top governance model is ideal in this situation wherein,representatives from both sides will take

decisions in strategy execution.

Robust PMO setup required to oversee program prioritization, strategy alignment, program monitoring


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andtracking benefits realization.

Conclusion

As organizations seek to continuously improve, the PPM maturity provides the necessary backbone to support

it. Vendor relationship maturity should be one of key dimensions considered for PPM maturity along with other

dimensions so that journey of transition from one level to next level is smooth and provide exponential

benefits. In today’s market many organizations have reached level 3 in most dimensions of PPM maturity and

even matured to level 4 or even level 5 in few dimensions but they are unable to fully drive the business value

and innovation, as they may have ignored maturity in vendor relationship maturity. On the other hand many

organizations have progressed on vendor relation maturity but are not able to get the expected value from their

vendors even with most capable vendor as the underlying framework to support the same is missing as PPM is

not mature enough. There also have been few instances of joint research, innovations, joint IPR etc. where-in

they have partnered with vendors but organizations are not able to take it forward and realize business benefits

envisaged as vendor partnership is restricted to IT and solution identification and development. Thus both

PPM Maturity and Vendor relation maturity are critical and a combined maturity approach should be followed.

Road Ahead

With newer technology trendsMobility,Social Media, Cloud, Big Data and Analytics which are driving business

to explore newer ways of doing business; organizations have to come up with more innovative solutions to

retain and tap newer opportunities. With vendor as research partner in co-innovation and vendor’s vast

experience in domain, geographies, markets, they will move into “Trusted Partner” role working alongside in

organization transformation journey.The Enterprise PMO is currently in nascent stage, it will further mature

and become powerhouse of enterprise with “Effective EPMO”, and the functions of EPMO will completely

integrate with corporate functions. With dynamic market and ever changing business models the

organization’s agility and being nimble in adapting to newer process, business models will be of utmost

important. Effective transformation of organization to change & adapt will be a key focus. Strategy formulation

itself will become integral to the EPMO and scope expands to Corporate Governance, Corporate Ethics, and

Social Responsibility. Ethical, Social dimensions will be added to business strategy formulation and

implementation along with existing dimensions.

References:

Online References:

ITScore Overview for Program and Portfolio Management, 2012, Published: 17 April 2012, Analyst(s): Lars

Mieritz, Donna Fitzgerald

http://www.thorpnet.com/

Gartner PPM Maturity Model and EPM WorkEngine- A Roadmap to EPM Successby HeatherChampoux-

Rayner on 8/8/2010 9:19 PM

P a s s p o r t S e v a P r o j e c t ( P S P ) c a s e s t u d y d e t a i l s c a n b e f o u n d a t

http://www.tcs.com/news_events/tcs_news/Pages/e-governance-initiative-National-e-Governance-Plan-

Passport-Seva-Project-PSP.aspx

S c a n d i n a v i a n A i r l i n e s c a s e s t u d y d e t a i l s c a n b e f o u n d a t

http://www.tcs.com/news_events/press_releases/Pages/Scandinavian-Airlines-SAS-TCS-Strategic-IT-

Partner.aspx

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Book References:

Organizational Project Management Maturity Model (OPM3), Second Edition by Project Management

Institute © 2008 (202 pages)

The Complete Project Management Office Handbook, Second Edition by Gerard M. Hill, Auerbach

Publications © 2008 (750 pages)

Enterprise Project Governance: A Guide to the Successful Management of Projects Across the Organization by

Paul C. Dinsmore and Luiz Rocha, AMACOM © 2012

Project Governance: A Practical Guide To Effective Project Decision Making by Ross Garland, Kogan Page ©

2009

Enterprise IT Governance, Business Value and Performance Measurement by Nan Si Shi and Gilbert Silvius

(eds), IGI Global © 2011 (300 pages)

Project Management Maturity Model, Second Edition (PM Solutions Research) by J. Kent Crawford

Advanced Project Management: Best Practices on Implementation, Second Edition by Harold Kerzner, John

Wiley & Sons © 2004 (864 pages)

IT Outsourcing: Concepts, Methodologies, Tools, and Applications by Kirk St. Amant (ed)

Business Strategy and Applications in Enterprise IT Governance by Wim Van Grembergen and Steven De Haes

(eds)

Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed by Gerald I. Kendall

and Steven C. Rollins, J. Ross Publishing © 2003 (434 pages)

About the Authors

Darshana is PMP Certified Professional with over all 13 + years of IT experience

with 10+ in TCS. She has extensive Program/ Project Management Experience and

successfully managed strategic programs / projects of varying sizes involving diverse

teams in a multi-vendor environment for client in PMO role. She is recognized as

high performing individual within TCS and completed Leadership program (Pragati)

and Level 2 Consulting Program.

She can be contacted at [email protected]

Arun has over 15 years of experience in areas of Business research, management

consultancy and policy research. He has lead and executed consulting and research

engagements across different industries – Energy & utilities, Aerospace & Defense,

Pharmaceutical. His work spans across various aspects of competitive market

development, competitive market analysis, PEST analysis, market entry strategy,

strategy review and program managed transformation initiatives.

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Introduction

Governance is nowadays a buzz word with lot of companies embracing it and using it to manage projects and

portfolios. And, Portfolios are becoming a norm and a rule where they are initiated to achieve some strategic

goals of the business.

There arelot of initiatives undertaken to achieve some strategic goals to help organizations succeed in the

marketplace. Managing the portfolio with the numerous stakeholders spread across the globe, adds to the scale

and complexity of portfolios. The demand for portfolio managers is ever increasing as it one of toughest things

to execute. This paper is going to discover some basic concepts and demystify the secret of managing the

portfolio.

However, with the dynamic changing business scenario, has any organization got it right? Do they understand

why we need governance in portfolio environment? How can governance help for portfolio – will it help better

or worse for the new initiatives undertaken? Well, the answer may not be easy if they do not know what is

governance? Or these organizations understand what a portfolio is supposed to do. Or maybe they do not have

to worry about these lexicons and jargons and rely on their experience and their guts. I would disagree as I

believe these terms matter and in turn, help to demystify the governance in portfolio environment and

ultimately, help to achieve you the strategic goals.

This paper deals with decoding the governance and portfolio terms and thereby, demystifying the governance

in portfolio. This paper will further illustrate governance model and the key components in a portfolio. To

prove a point, this paper uses software as a technology enabler and this software can be presented live to the

audience as part of the paper. This paper will in the end, summarize how governance works in a portfolio.

What is Governance?

Governance is a loosely used term much like project management, if I may say so. Governance is different to

different people. If you happen to ask some ten people to define the term "governance," you will most likely get

different answers and perhaps you may not get an answer!

Governance is one of those terms which "everyone knows" like project management, until you try to reduce it

to a few simple sentences. We will start with a solid understanding of governance in general; then we'll move

confidently to the subject of governance specifically limited to the context of portfolio management.

The word governance derives itself from the Greek verb kubernáo which means to steer. The other dictionary

meaning of governance is “method or system of government or management”

Hence, the governance if used in the context of portfolio means to steer the portfolio towards its achieved

goals. And therefore, to understand the governance in the realm of portfolio we need to understand what isa

portfolio and its goals.

What is a Portfolio

Portfolio again is a loosely used term. Portfolio as many would equate with programs or use it interchangeably

with programs. Portfolio from a PMI perspective has a very simple definition that it is a collection of projects

and programs.

Demystifying Governance in a PortfolioBy Ashish Sadekar

13


A typical illustration of portfolio is:

If you own more than one security, you have an investment portfolio. You build the portfolio by buying

additional stocks, bonds, mutual funds, or other investments. Your goal is to increase the portfolio's value by

selecting investments that you believe will go up in price.

According to modern portfolio theory, you can reduce your investment risk by creating a diversified portfolio

that includes enough different types, or classes, of securities so that at least some of them may produce strong

returns in any economic climate.

In a non-financial business context, projects and initiatives are the instruments of investment. An initiative, in

the simplest sense, is a body of work with:

• A specific (and limited) collection of needed results or work products.

• A group of people who are responsible for executing the initiative and use resources, such as funding.

• A defined beginning and end.

Managers can group together a number of initiatives into a portfolio that supports a business segment, product,

or product line.

These efforts are goal-driven; that is, they support major goals and/or components of the enterprise's business

strategy.

Managers must continually choose among competing initiatives (i.e., manage the organization's investments),

selecting those that best support and enable diverse business goals (i.e., they diversify investment risk). They

must also manage their investments by providing continuing oversight and decision-making about which

initiatives to undertake, which to continue, and which to reject or discontinue.

Portfolio management is about choices. These choices, as applied to organizational initiatives, affect (among

others) the degree to which the business (or agency) will be successful in meeting the strategic goals it has set in

its enterprise business strategy (or mission statement).

Connecting Governance to Portfolio

What is, then, the connection between the subject of this article -- governance -- and the space of portfolio

management for initiatives or projects?

In the previous section, I noted that:

Managers can group together a number of initiatives into a portfolio that supports a business segment, product,

or product line (or some other segmentation scheme).

And that:

They (the managers) must also manage their investments by providing continuing oversight and decision-

making about which initiatives to undertake, which to continue, and which to reject or discontinue.

It seems that, given our definition of governance, most organizations have already taken care to institute such a

function by appointing managers and giving them authority to manage their initiatives investments. Right?

Well, not entirely.

Managers do not exist in isolation. They are part of either a business or governmental entity -- that is, a

corporation or a government agency. These are legal entities. As part of their operation, they define and

authorize certain policies, and delegate the authority to implement them. Further, corporations and

14


governmental agencies have duties and obligations, and (in varying degrees) are regulated.

In recent years, we have seen some spectacular corporate and public accountancy failures, ethical violations,

and illegal actions, as reported in the press. We have also seen new laws (e.g., Sarbanes-Oxley) that provide for

substantial penalties related to the implementation and use of internal controls for financial reporting. It is

within this context that calls for "better governance" have originated.

Simply installing managers and giving to them authority to "manage" their investments in initiatives is no longer

considered going far enough to provide better governance. Worse, simply installing managers and granting

them authority may result in a variety of standards and practices applied to the organization's initiatives, and to

the assessment of their continuing value. The variety of standards and practices may (by design or

inadvertently) expose the organization to risk as a result of poor information reaching the executive level as an

input to enable effective oversight.

It is necessary, then, to create some mechanism for governance that will provide a framework for action, for

information, and for decision-making as it affects initiatives. These initiatives are created to enable and to

achieve the goals of the organization, and are organized into portfolios for management and control.

Portfolio management is concerned with effective, timely, and continuing investment decisions about

initiatives that enable goals and goals components of the enterprise business strategy. Portfolio management

governance, on the other hand, is both the structure and the exercise of authority for the initiatives and the

portfolios within the portfolio management domain, which defines and enables decision-making, assesses

metrics on initiatives value and alignment with business strategy, and is responsible for effective and legitimate

oversight for the contributions to business success of these initiatives and portfolios.

The next topic will elucidate the proper framework for governance to achieve the portfolio goals.

Governance Model

Governance, as applied to business or governmental operations, is hardly an entirely new idea. Corporate

entities generally put in place a structure that consists of a board of directors, an executive office of a chief

executive officer (CEO), and a number of senior "CX"-level executives: chief financial officer, chief counsel, and

so on. This structure, with its defined roles (and their incumbents), provides the general or overall governance

that drives the business direction of the corporation.

Beyond that general governance, there is the need for exercising specifically focused governance activities. For

example, a corporation engages in a number of initiatives and efforts that require the expenditure of large

capital sums. The goals, the justification, the expected returns for proposed initiatives and efforts must be

thoroughly examined (and approved). These must be in the best interest of the enterprise and also conform to

applicable laws and regulations.

Accordingly, those who exercise general or overall governance will create permanent (or temporary) entities or

functions. Specific or focused authority to exercise an aspect of governance is delegated to these entities or

functions.

In this example (initiatives that require the expenditure of large capital sums), an investment review board is

created as part of the overall governance structure of the enterprise to review and approve proposals to spend

significant capital sums.

This concept of specific or focused authority -- applied to govern the application of portfolio management to

15


the organization's initiatives -- is where discussion ensues as to "how" this mechanism must operate and "who"

must operate it.

Typically, the enterprise has determined to make use of the discipline and its practices of portfolio management

as a means to ensure the alignment of new and ongoing initiatives with the business strategy and direction.

Portfolio management is also seen as a vehicle for providing improved insight and oversight into the initiatives

contained within the portfolios.

In order to ensure that the proper results from an adoption of portfolio management are obtained, authority is

delegated, entities or functions are created, and policies and practices are developed and implemented.

Additionally, roles and responsibilities are defined and filled, and decision-making rules and powers are

identified. In other words, we establish portfolio management governance.

The work of defining and establishing portfolio management governance does not proceed as an isolated

effort. Rather, it is part of a larger work effort, which deals with:

• Identification of organizational needs around initiatives and investment.

• Determination to adopt portfolio management as an organizational process.

• Understanding of the organizational readiness to embrace portfolio management as a discipline.

• Construction of a roadmap for adoption of portfolio management.

• Execution of multiple, parallel workstreams that complete various adoption initiatives.

• Oversight and continuing control and adjustment to refine the work effort to achieve the defined success

components.

The exercise of portfolio management governance must proceed from some shared vision of what governance

is, together with its role, its aims, and its expected results. At a practical level, this vision must align with the

realities of the corporate culture and what is possible within that culture.

To cite an example, one of the big portfolios I had managed revolved around introducing Business Intelligence

solutions for a large telecom company. The strategic goals were very simple to exceed the target in the fierce

competitive telecom world and increase the market share. We had to study the telecom industry and come out

with the right business intelligence solutions for the company. This telecom company had 40 circles with 40

heads managing P & L units reporting to equal number of competent managers cutting across different

verticals. We quickly realized that developing the right business intelligence solution was not the only work to

do but how we use the governance framework which can be adopted by different stakeholders and

subsequently, how the users will adopt the solution will make the difference of the goals being achieved. All the

above points of making a right governance model, with a complete roadmap were undertaken. A top executive

in the ranks of president was overseeing the entire execution of the portfolio and any oversights was reported

and due action was immediately taken. An overseeing executed committee to have regular interaction with

portfolio manager was constituted. Various adoption initiatives and their scorecards were developed and

reported on. Truly, the governance was adopted as an organization process to make the portfolio work.

Regardless of the selected technique or artifact, clarity around what decisions are made and who is authorized

to make (and to review or validate) them is an essential component in our portfolio management governance

mechanism.

To summarize, key components of a strong governance model are:

• A set of governance principles

16


• A governance framework or structure

• Controls implementation that enables and sustains an oversight capability

• Definition of decision-making authority

• Ensuring the legitimate exercise of authority and decision-making

• Identification of needed enabling and sustaining functions, and governing roles and responsibilities

The next section will deal with how technology can act as a key enabler and can be game changer for

governance in portfolio.

Technology as key enabler

Today, the technology plays a major role in our lives. I can easily state that technology has become necessity in,

and for our lives. In fact, we cannot survive without technology. For instance, mobile is an essential part of us

and is a key enabler to do our work in a day. Similarly, technology will play an important role for governance of

portfolios and projects.

Technology offers a lot of benefits but would like to point the most important 2 in this paper

Consolidation of Portfolio – the software helps to integrate the many programs and projects for the portfolio.

This can prevent scattering of data across multiple projects and hence, aid in decision making process. Further,

isolated chambers of data are abolished and you have integrated data stop where everything related to

portfolio or projects can be found at one single place. It helps to create the governance model and the

hierarchy & reporting structure blend seamlessly to enhance the probability of meeting the objectives.

Analytics Powerhouse - One of the major challenges which can inhibit the performance of portfolio is to

present the data as required by different stakeholders, and further forecast the key trends arising out of the

same which will give indicators about goal achievements of portfolio. The ability to unify these data & further

slice and dice the data to help the stakeholders take a decision is one of the key criteria for successful

governance. A simple example can be the variances against the planned and actual effort at every task level for

every project and program and rolled up to a portfolio level; which is reported by each hierarchical level in the

organization.

I believe it can be best expressed when seen or demonstrated as the technology would be true enabler for

achieving the strategic goals of portfolio.

Screenshots

Cross Project Portfolio View indicating variances metric

17


Typical Challenges

Having now connected governance with Portfolio, it is never easy to implement the governance in practical

scenarios. You come across myriad challenges and with repetition and efficiency; you get better at establishing

the right way of governing the project. And to contradict my earlier statement, there is no “right” way of

governance and cannot be replicated in other portfolios. What best can be replicated can be the frameworks or

mechanism to implement the governance.

The typical challenges you can expect in governing a portfolio initiative can be summarized below.

âOpportunities are missed, or a correction is not applied, because lack of decision-making abilities results

in time-consuming meetings, discussions, and escalations.

âMetrics and measurements are not defined and validated

âLack of availability of Time to make effective decision making.

âScattered data across different projects and no consolidated view of the data

âStandardization of Processes, Templates and even Methodologies

âCustomer Culture and their understanding of project governance

Sometimes, the essence of time is not understood well as the context for the portfolio is not well understood.

For example, in a pharma industry for a new product launch, the end date is very important and the earlier you

target the market the better sales you can have. The Sales of the new product typically are the highest in the first

few months till a competitor comes and flattens your share. And for big pharma companies, with large scale,

numerous stakeholders and complexity of portfolios, the decision making typically is lethargically slow. It is

slow because there is no structure or framework which results in lack of decision making. The data is scattered

across projects, different individuals in isolated chambers, absolutely no metrics and validations, makes

governance extremely difficult. This obviously results in lack or no decision making and delay in timelines and

further, non-achievement of your portfolio goals.

One other typical challenge is customer culture. This is very important for a portfolio manager to implement

the proper framework. Culture is specific to a company, to an industry and to geography. For example, putting

the same governance framework in Telecom Company and a government company will not work. Their

cultures are diametrically opposite, i.e., telecom is an aggressive industry and government is a risk averse

industry. The way a telecom manager will respond to a situation will be completely different to a government

project manager will respond. The geography also influences the decision making process and thereby, the

mechanism or structure for governance in portfolio also undergoes significant changes.

18



As a manager, you need to be aware of these different paradigm shifts to get the right framework or governance

models. And the right mechanism or the framework is the first and key stepping stone to achieve your set target

of strategic goals.

Summary

Portfolio management is concerned with effective, timely, and continuing investment decisions about

initiatives; which enable goals and goals components of the enterprise business strategy.

This definition contributes elements to a completion checklist to see if our effort to establish portfolio

management governance has been successful. That contribution is that we are concerned that our efforts be

effective, timely, and continuing.

The portfolio management governance effort must first deliver the mechanisms and components to define, to

adopt, to use, and to assess that these qualities of effectiveness, timeliness, and continuity are achieved.

Additionally, the governance effort must then ensure that these mechanisms and components are applied, and

(when needed) adjusted and corrected.

Effective decision-making implies that the right decisions are made rightly. Our governance mechanism

identifies types of decisions and who may make them. Moreover, it will provide the processes to reach such

decisions together with the feedback mechanisms to ensure that the processes are correctly and completely

applied.

Decisions are timely when they can be successfully applied to an existing situation -- that is, before events carry

an organization on beyond either acceptance or correction of that situation. The achievement of decisions in a

timely fashion depends in part upon clear, well-established lines of authority and a clear statement of who

decides. Often in organizations, opportunities are missed, or a correction is not applied, because a lack of

decision-making clarity requires time-consuming meetings, discussions, and escalations. In many situations,

that time is simply not available.

Portfolio management governance provides the elements of continuity, adjustment, and evolving relevance,

which is necessary if an organizational process is to continue to be used. With the right use of technology, the

returns can be significant.

The return on the effort to establish portfolio management governance is significant and well worth the effort to

incorporate as part of an overall adoption of portfolio management in your organizational process.

About the Author

Ashish Sadekar is extremely passionate about project and program management

and aspires to be a thought leader in the project management space. He is an

accomplished public speaker, writer and a coach and has been invited to top Project

Management forums. He has executed projects and programs across the breadth

and depth of technology, especially in ERP, CRM and BI & Analytics space.

He can be contacted at [email protected]

19


Yagna Boorada

Secretary, PMI Mumbai Chapter

13th Annual General Body Meeting of the Chapter was held

on 15th February 2014 at Hotel VITS, Mumbai at 6.0 PM.

Hon’ble Secretary, Mr. Yagna has welcomed all the chapter members on the unusual rainy date sparing their

personal time for the AGM and set the agenda by inviting Chapter President Mr. Saurabh Parekh for the

evening to transact various activities pertaining for this event.

Chapter President in his opening key note address presented the glimpse of overall events held throughout the

year at various locations and branches which includes ‘ PM Conclave 2013’ and Student Event’ Ideate 5.0’

The Major Issues deliberated were

a) To Read and Confirm the minutes of the last Annual General Meeting held on 5th Jan 2013

b) To Receive, Consider and adopted the Audited Statement of Accounts of Project Management Institute,

Mumbai Chapter for the Financial Year April 2012 to March 2013

c) To Appoint new Auditors for the next financial year, if necessary

In principle, Chapter Members have accepted the proposal and Board will formally approve the same.

The other important agenda of discussion during this meet was to announce the Election Results of the vacant

positions and felicitating Volunteers for the priceless contribution in improving the contribution

1. Conduct of Elections for Vacant Posts of BOD due to expiry of the Term:

President appointed Election Committee comprising of Mr. Satish Dhoiphode as Chairman along with

Ms. Roopali Shrivastav and Ms. Darshana Purbey to oversee the Election process of Vacant Posts due to

expiry of term or due to separation as per bylaws of the Chapter.

Vacant Posts available at the time of announcement of Election Date:

1) Secretary

2) Vice President – Finance

3) Vice President – Certifications and Training

4) Vice President – Professional Development

5) Vice President – Branches

6) Vice President – Outreach

7) Vice President – Volunteer Development

Except the post of Vice President, Volunteer Development all other positions were having single nominations

and declared elected. In case of position for Vice President – Volunteer Development, two nominations were

Highlights of 13th AGM of PMI –Mumbai Chapter

20


received and it had undergone online Electoral Voting Process. 258 Chapter Members participated in the

Electoral Process. Mr. Jay Raval was polled with 157 Votes and Ms. Darshana Padghane with 101 Votes. As

Such, Mr. Jay Raval was elected as VP – Volunteer Development.

With the above Process, New Committee Members of the Chapter are listed below which will be effective

from 1st April 2014 on expiry of the current term:

President Mr. Saurabh Parekh

Secretary Mr. Yagna Boorada

Vice President - Finance Mr. Ketan Vyas

Vice President – Certifications and Training Mr. Bharat Bhagat

Vice President – Professional Development Mr. Sreegith Nair

Vice President - Branches Mr. Oscar D Souza

Vice President - Outreach Mr. Manoj Sarasappan

Vice president – Volunteer Development Mr. Jay Raval

Vice President - Membership Mr. Ahmed Ashfaq

Vice President - Marketing To be Nominated

2. Felicitation of Volunteers

PMI – Mumbai Chapter runs effectively on the thankless job of Volunteers who takes their time off from their

busy work schedule to devote their valuable time for ensuing the success of chapter.

The Chapter felicitated to all the 74 Nos active Volunteers and 73 Nos Speakers at various PMP Club meets

with Certificate of appreciation and Momentos to all the contributors in the following areas

a) Functioning of Chapter including BODs, Committee members, Branch Development, Training etc.

b) Advisory Role

c) Upgradation of material from PMBOK 4 to PMBOK 5

d) PM Conclave 2013

e) Elections

f) Speakers

g) Chapter Development including Student Chapter

In order to encourage more and more volunteers for widening the base and spreading the awareness of PM

Principles, the Board has felicitated the following members with special Awards as below:

Volunteer Name Award Category

Anandkumar Subramaniam Volunteer of the Year 2013

Yagna Boorada Volunteer Excellence of the Year 2013

Minaxi Vaishnav Volunteer Excellence for Ahmedabad Branch Program 2013

Ahmed Ashfaq Volunteer Excellence for Membership Program 2013

Nimish Panchal Student Volunteer of the Year 2013

Rohan Gupta Student Volunteer Excellence of the Year 2013

The Entire AGM ended with good networking opportunities and Dinner at 10 PM.

21


Location

Mukesh Patel

school of

Technology

Management and

Engineering, Ville

Parle, Mumbai

Wellingkar Institute

of Management,

Matunga, Mumbai

Evolves Global

School, Vashi, New

Mumbai

Baroda

Management

Association Hall,

Vadodara

Hotel Vits,

Andheri, Mumbai

Sreegith Nayar

Vice President - Programs

Date

22nd Dec 2013

25th Jan 2014

5th Jan 2014

2nd Feb 2014

8th Dec 2013

12th Jan 2014

9th Feb 2014

19th Feb 2014

22nd Dec 2013

11th, 12th, 18th,

19th Jan 2014

Topic

Secrete of Six Sigma Management on

Mumbai Dabbawallah

"ISO 21500- New ISO standard on Project

management."

The changing rules in Software outsourcing

Project Management, Quality, Process

Excellence, Agile Scrum Consulting

Effective Leadership for Project Success

Meeting Project Delivery Challenges

Transitioning to Managed Services

1ST Anniversary Meet : MoV - Project

Management Buzz & Communication

Operations of Engineering Project Company

PMP Certification Training

Presenter

Mr. Raghunath

Ms. Girija Pillai

Mr. Swaminathan

Mr. Ajay Kabra

Dr.Hemjit

Balakrishnan

R. Gopalakrishnan

Shilpa Salunkhe

M/s. Minaxi V,

Utkarsh P, Pramod

Pandey, Pankaj P

Mr. K. Sudhakar,

CEO – L&T

Chiyoda, Vadodara

Mr. Bharat Bhagat

and Team

PMIMC Initiatives -PMP Club Events

22


Membership Benefits of PMI

Activities of PMI Mumbai Chapter

Organizes Weekly talks by industry professionals to share their experiences with the members. These talks

are held at Matunga, Vile Parle, Thane, Vashi, Baroda and Ahmedabad;

Single and multi-day training programs for a range of subjects including, but not limited to, PMP exam,

CAPM exam, MS Project, Soft skills including NLP and Emotional Intelligence;

Quarterly magazine Prakalp, with article written by members;

As a member you can attend most of events free, or at a discounted rate;

Access to the comprehensive library at the Chapter office

Member Resources on PMI Website.

Access to PMI's PathPro®, a career framework - use it to assess your skills and prepare to move ahead

Free digital editions of all PMI standards.

Knowledge sharing and networking opportunities through PMI chapters and communities of practice (COP)

Online access to business and project management books and articles in eReads & Reference

Articles on the Knowledge Shelf, written by your peers and reviewed by a panel of practitioners, to help you

practice project management more effectively

Leadership and volunteer opportunities through PMI communities, certification program, research

program, standards program and other areas

Quality Publications from PMI

PM Network®, a popular monthly publication that covers the project management profession, thought

leaders, news and trends

PMI Today ®, a monthly newsletter focused on Institute news, events, community activities and a column

from the PMI Board of Directors.

Project Management Journal ®, a peer-reviewed research journal that advances the understanding of

project, program and portfolio management.

Community Post, a semimonthly e-newsletter focused on project management knowledge and PMI news.

Manage India - an electronic publication on the practice of project management for members in India.

APAC e-link, Korea e-Link, Latin America e-Link and EMEA e-Link – aregional e-newsletter covering PMI

activities and news in Asia Pacific, Korea, Latin America, Brazil and EMEA (Europe-Middle East-Africa), for

members in those locations.

23


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