Introduction to Program Management

1. Introduction to Program Management James J. Jiang University of Central Florida, U.S.

2. Organizational Maturity in Project-based Organizations • Definition: “the extent to which an organization practices organizational project management (OPM)” • Extent implies “levels” • Lets consider questions regarding different levels of success • Was the project done right? • Was the right project done? • Were the right projects done right? • Were the right project done right, time after time?

3. Introduction • Financial portfolio • Role of top management in creating purposeful project investments • Link projects to business policy and organizational strategy • Terms portfolio and program are often used interchangeably

4. Why need Programs? • In order to allow for autonomous projects on the one hand side • But on the other hand side to assure the benefits of • organizational learning, • economies of scale, and • networking synergies in a program, • A specific program-organization is required.

5. Program Definition • A program is a temporary organization for the performance of processes of medium and high complexity, which are closely coupled by common overall objectives. (Gareis 2000)

6. Program Advantages • The advantages cited by organizations using programs include: • greater visibility of projects to senior management and more comprehensive reporting of progress at higher levels • better prioritization of projects; • more efficient and appropriate use of resources; • projects driven by business needs; • better planning and coordination; • explicit recognition and understanding of dependencies

7. Program Examples • Typical programs examples: • the development of a “product family“ (and not of a single product), • the implementation of a comprehensive IT-solution (such as SAP), • the reorganization of a group of companies in a holding structure, and • large investments, such as an oil platform.

8. Comparison of Programs and Projects

9. Major Perspectives of Program Management • Program management (Pellegrinelli 1997) • The technical and planning aspects • Scarce resource management • Establishment of appropriate information systems

10. Program configurations • Three archetypal configurations • Portfolio • Goal-oriented • Heartbeat

11. Portfolio programs • Include relatively independent projects but have a common theme. • Emphasis is efficient resource utilization and leveraging existing knowledge or skills.

12. Goal-oriented programs • programs which enable the management of initiatives or developments outside the existing infrastructure or routine. • provide a means of dealing effectively with situations where uncertainty prevails and learning is a prerequisite to making progress.

13. Heartbeat programs • Enable the regular improvement of • existing systems, • infrastructure • or even business processes, via increments to functionality or occasionally an overhaul of the system or facility itself. • Minimize disruption to operations, • Maximizing the amount of new functionality or capability delivered to the business. • E.g.: Projects related to core IT systems.

14. Program Management: Classification in IT Consulting firms • Programs by technology/ platform • Programs by client • Programs by business vertical

15. Program Roles and Structure • Typical program roles include: • program owner, • program manager, and • a program coordination team, • project Manager • Upper Management • Typical program communication structures are program owner meetings and meetings of the program coordination team .

16. Program Manager’s Role and Responsibilities

17. Issues in Program management 1. Project selection 2. Maximizing value of project portfolio 3. Balancing/prioritizing project portfolio for resource allocation 4. Best practices for managing project portfolios

18. Project selection process • Criteria for project selection • Production factors • Time until ready to install • Impact on business processes • Marketing factors • Size of potential market for output • Consumer acceptance • Financial factors • Personnel factors • Administrative and misc factors

19. Selection models • Non-numeric models • Sacred cow, operating necessity, competitive necessity • Numeric models • Payback, NPV, ROI • Scoring models • Weighted factors models • Risk models

20. 2. Maximizing value • Allocating resources for maximizing value of portfolio in terms of firm objective • Expected commercial value (ECV) Function of (NPV, Strategic importance, probability of technical/commercial success, development costs, commercialization costs) • Productivity index (Similar to ECV but also considers R&D expenditure remaining) • Dynamic rank ordered list Rank projects according to importance, NPV, internal rate of return and cal mean • Scoring models scale 1-5 on reward, strategy fit, strategic leverage, prob of commercial success, technical success

21. Balancing project portfolio • Balancing high-risk breakthrough R&D projects versus • Low-risk projects that produce near-term returns through incremental improvements to existing products • Perform high quality analysis of each project • Identify appropriate level of problem: technology, portfolio, strategy • Generate creative, achievable alternatives • Develop reliable information • Establish values and trade-offs: time and risk • Apply logical reasoning • Build commitment to action

22. 3.Balancing project portfolio • Plot projects on a portfolio grid according to technical difficulty and commercial potential • 4 quadrants • Bread and butter projects (low % and low value) • Oysters (low % of success but potential value) • Pearls (high success, high value) • White elephants (low potential value, long term)

23. 4. Best practices in PPM • Senior management buy-in • Identify PPM focus areas and provide proof of concept • Develop governance process for projects • Makes PPM implementation easier • Use proven PPM tools • Develop a “common currency” to evaluate projects based on contribution to business objectives • Optimize portfolio against constraints

24. Comments? • How does your organization select an project? • Is there a common goal among the selected projects? • Has the organizational goal been supported (i.e., aligned with) by those selected projects? • Do your employees understand the differences between “project management” vs. “program management”? • Do your organization implement the best “program management” practices?