I was conducting a portfolio management workshop at one of my favorite clients , VWR, a couple of weeks ago when the topic of classifying portfolios came up. The usual investment class options came up, namely the MIT model and the Run Grow Transform model.
The MIT model (Strategic, Informational, Transactional, and Infrastructure) was first developed [...]
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OK – so the whole idea of project portfolio management stemmed from the concept of treating projects like an investment portfolio. Since companies invest a lot of money in these projects, we should monitor them as such. In most PPM practices I’ve come across, this metaphor is applied to project selection (which projects will give [...] This week, I encountered an age old debate: which is better, planning from the top down or the bottom up? It happened to emerge during a discussion about resource planning, but it also applies to cost and budget estimates. While project portfolio management owes its genesis to financial portfolio management, there are some key differences. The first is the outcome of the portfolio. With a portfolio of financial assets, such as stocks, the return is measured in the same common denominator: dollars. This allows us to create some common key measures of performance, such as return on assets, price/earnings ratios, ROI, etc. Projects, however, are not all directly tied to dollars. Some projects improve employee moral, some increase market share, and some simply make current operations more efficient. Another way to look at this is to think of each project as a business outcome. Companies invest in a project to achieve a certain goal. Recent examples from EIG clients include: Here’s a typical conversation from a manager to an exec: Manager: “I need 2 more project managers” Exec: “How do you know?” Manager: “Because my PMs are overloaded. They tell me they’re really busy and can’t handle the workload.” Exec: “So, how overloaded?” Manager: “REALLY overloaded.” Exec: “Prove it!” Oops – all the manager has is anecdotal evidence from his or her overloaded PMs. They say they’re overwhelmed, but the manager doesn’t really know by how much, and therefor doesn’t know how many PMs they really need to hire. Same thing with bringing on new projects. A new project request comes in, and the PMO Director tells the CIO they’re already overwhelmed and can’t take on new work. How do you know? Where’s the evidence? Most PMOs I work with face the same problem: too many project requests and not enough time to do them all! I will admit, I’ve worked with one group that did not have this problem. They have plenty of money and were told that if it’s a worthwhile project, there’s ample funding and they can hire all the people they need. If you’re in that situation, no need to read on. Rest assured – the rest of us are envious! But, if you’re like the other 99% of PMOs in the world, you need a way to manage this onslaught of potential work. In the sales world, they have what’s known as the sales pipeline or sales funnel. This is a process whereby potential opportunities are matured, step by step, to fruition as a completed sale. Along the way, opportunities fall by the wayside. They may not have budget to buy, may not need the products on offer, or just don’t have enough interest. Sales will draw this process as a funnel that has several stages. At each stage, a number of opportunities will fall out of the pipeline. Hence, the funneling effect. They start as opportunities (hey – I’ve got someone’s phone number!), progress to prospects (they actually my call!), become qualified prospects (they have budget!), and finally customers (wow – they actually signed the contract!) I’ve had this one come up twice in the last couple of weeks. What do you do if, even with all the resource allocations and assignments, all the planning and matching project demand to resource supply – what if there is still a lot of churn? You know, resources are still continually reassigned. Or worse, [...] An oft-heard refrain in IT Project Management circles: If the business would get their requirements right, we’d be able to deliver this project on-time!” How many project delays have come from shifting scope and requirements? More than a few, based on my experience. So how does one approach this problem? Part of the answer lies in the question itself. It assumes that the business is responsible for imparting their requirements to IT in such as manner that IT can successfully deliver. Yet “the business” often knows little about the underlying technology, and thus has a hard time articulating their requirements in terms the technologists in IT will understand. What is needed – and what works in successful project and IT departments – is a translator. We often think of the business analyst role fitting the bill perfectly. Their job, after all, is to understand the business issues and help determine the technical requirements that will fit the bill. The problem is, they are not driving the project – the project manager is. In my “Maximizing IT Capacity” webinar the first poll asks “How much of your time do you log? Of the choices, “none” is the most common response, with “project time only” running a distant second. Yet when it comes to understanding resource issues, actual time is the most valuable information around. By analyzing the prior 12 months time records at PeopleSoft IT, we increased our project capacity 30%, and staved off drastic staff cuts during the Oracle battle. Why is this information so valuable? Properly analyzed, it provides insight into 3 key areas. There seem to be a couple of immutable truths in the PMO world, especially in IT departments. First, there is always more work than can possibly be done. This usually surfaces in the form of an insatiable appetite for projects. Second, no matter how you prioritize the work, someone’s going to be unhappy – and they’ll try to make your life miserable by becoming the squeakiest wheel in the company. The answer, as we PMO practitioners all know, is to elevate the prioritization decisions up to the company executives. This usually means some sort of cross-functional steering committee or other governing body. It’s great theory, with one major flaw. Those execs don’t readily participate. I can’t count the number of poorly attended steering committee meetings I’ve run across. So, how do you get these all-too-busy executives to pay attention and take responsibility for prioritization? The best process I’ve found is what I call “shock therapy for the executive team” . . . |
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