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Portfolio Management Discussion

Portfolio Management Discussion. Joe Chang Professor Defense Systems Management College. What Is a Portfolio?. Working definition: Collection of programs or projects Grouped together to facilitate meeting strategic objectives Components need not be interdependent or related

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Portfolio Management Discussion

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  1. Portfolio Management Discussion Joe Chang Professor Defense Systems Management College

  2. What Is a Portfolio? • Working definition: • Collection of programs or projects • Grouped together to facilitate meeting strategic objectives • Components need not be interdependent or related • Components can be measured, ranked and prioritized • Portfolios are longer lasting • Programs and projects are more temporary Portfolio Project Portfolio Program Project Program Project Program Project Project Project The Standard for Portfolio Management, 2nd edition, Project Management Institute, 2008

  3. Portfolio Manager Environment Empower Lead Mentor Senior Decision Making Processes Strategic Plan Stakeholder Rqmts Measures Risks Apply Mgt Processes - Tech/Business/Risk-Opp Prioritize Provide Feedback Reprioritize/Balance Share Best Practice INFO • Stakeholders • Users/Operators • Congress • Media • Industry Functionals/ Matrix Support

  4. BLUF Portfolio Manager: Doing the Right Work Program Managers: Doing the Work Right

  5. Adding Value • Establish Strategic Plan – Plan out Further Than Subordinate Programs • Align Components With Strategic Goals And Priorities • Higher Headquarters/Front Office/PMs/Functionals • Establish Portfolio Mgt Process Framework - Focus on basics • Organization: How do I organize for success? • Health Metrics: How do I know when we’re doing well? • Battle Rhythms: How do I status? • Business management • Technical management • Risk and opportunity management • Continuously reviewing, reallocating, reprioritizing • Establish Biz Ops/Program Control/Execution Group • Help Subordinate PMs See Big picture…see forest from trees (Top -Down & Bottom Up Help) • Ensure SME support to your portfolio • Share best practices from other parts of the portfolio • Take as Many Actions as you give out 5

  6. Adding Value—Cont’ • Actively Engage in Personnel Management • Includes recruitment, performance evaluation, recognition, succession planning and employee development • Morale Builder/Cheerleader • Pat on the back/Gold Star/Cash Awards • Management as Mentoring…not Micromanagement • Coaching relationship – PM’s Lifeline • Forging Relationships with Functionals Home Offices • Supporting/Participating in Senior Decision Making Process • Providing Key Stakeholders Timely Assessments

  7. Common Challenges • Strategic Thinking/Planning Deriving Integrated Capability • Maintaining Internal Alignments—Diverse/Disparate • Establishing Battle Rhythm for Metric • Portfolio Level Blended Health • Program Health Metrics • Risk and Opportunity Management • Distinguish portfolio vs program risk mgt • Prioritizing and Allocating Resources • Engaging Leadership and Stakeholders • Measuring and Reporting Progress • Workforce Management And Development Train/Org/Equip Super PM

  8. Portfolio and Program Battle Rhythm Portfolio Level Metrics IMS Reallocate Resources Portfolio Program Metrics Earned Value Risk/Opportunity Program Level Documentation KPP (Capability) Assessment Schedule (Delivery) Assessment Risk/Opportunity Trends Stop Light Funds Workforce/Manning

  9. Portfolio Level Metrics Examples

  10. Portfolio IMS -- A Strategic Look Program X Program Y Program Z Program AB t Driven by MS Project type data

  11. Portfolio Functional Status Example No Significant Issues or Risks Identified Identified Issues are being worked Issues need Management attention Assessment not Performed

  12. Portfolio EV Trends Example SPI CPI SPI CPI SPI CPI Prog A Prog B Prog C t

  13. Portfolio Level Risk and Opportunity Management • Diagramming Portfolio Risk HIGH • Business Risks • Funding • Execution • EVMS • Staffing • Org Competency • Stakeholder views • Etc Program 2 • Size of circle indicates investment funding Program 1 Program 3 LOW LOW HIGH Technical Risks TRLs, Drawing Completion, Status of Reviews, DT&E, etc

  14. Balanced Score Card ( from Kaplan & Norton, The Strategy-Focused Organization) • Customer Care Abouts • C-S-P • EVMS • KPPs • Fit with strategy • Financial & Business • Budget • Execution • Internal Perspective • Strategic View • MS Reviews • Transition to Production • Cost Estimating • K types and Incentives • Learning & Growing Organization • DAWIA certification • Career development • Organizational evolution

  15. Program Review DataExamples

  16. Technology vs Cost Top Cost Drivers Performance (KPPs & select KSAs) KPP 1 KPP Title KPP 2 KPP Title KPP 3 (e.g,, NR-KPP) KSA 2 KSA Title KSA 5 KSA Title • A, % of program cost • B, % of program cost • C, % of program cost • D, % of program cost • E, % of program cost O T N N – No Capability T – Threshold O - Objective Technology Readiness Assessment MS B Date: M/Yr MS C Date: M/Yr Acquisition Program Baseline (APB) Baseline • Cost • PAUC • - APUC • Schedule • IOC or FOC • (Next Major Evt) Baseline +10% +15% Baseline Baseline +6 mos +9 mos

  17. EXECUTIONCONTRACT EARNED VALUE METRICS[give short contract title] Historical Predictive Y Y(3) Axxxxx-YY-Cxxxx Contractor Name [Prime or Significant Sub] [TCPIEAC = 0.76] CV = $2.0 M SV = $2.9 M 04/00 04/02 01/02 04/04 08/04 Total Calendar Schedule PM’s EAC $M 100% 108% 0 % 50% 42% 122% $110 EAC 1.18 Ahead of Schedule and Underspent $100 TAB 111% Behind Schedule and Underspent 1.14 100% $90 BAC 04/99 07/99 (-0.95, 1.1) (1.1,1.1) 1.10 10/99 04/00 1.06 PM’s Projected Performance at Completion for CPI and Duration. 01/00 07/00 10/00 1/01 1.02 02/02 04/01 CPI 56% $50 03/02 07/01 0.98 05/02 ACWP 04/02 0.960 (-0.95, -0.95) (1.1, -0.95) 0.94 EV % Spent 10/01 01/02 0.90 Total Spent 0.86 0.940 Behind Schedule and Overspent Ahead of Schedule and Overspent 0% 0 0.82 KTR’s EAC: 104M 0.82 0.86 0.90 0.94 0.98 1.02 1.06 1.10 1.14 1.18 1.18 YYMMDD SPI Date of Last Award Fee: MMM YYDate of Next Award Fee: MMM YY Date of Last Rebaselining: JAN XXNumber of Rebaselinings: 1Date of Next Rebaselining: MMM YY

  18. PM’s Assessment Examples Nov Apr Jul Assessment Areas • Personnel • Performance Characteristics • Cost • Schedule • Funding • Contracts • Combat Readiness • Logistics Indicators • Test and Evaluation R R R G G G G G G G GA GA Y Y Y G G G G G G Y Y Y Y G G = Improving = Worsening A = Advisory G Y R Green Yellow Red

  19. PM’s Workforce Assessment -- An Example -- LEGEND Col John Big Guy x5437 COL 63A3 #14795 L3 PM DAS JUL 96 STABLE OUTBOUND (HAS ASSG/ON VUL LIST VACANCY INBOUNDS Vacant GS-318-5 #293011 Lt Col Gerald x2573 LTC 63A3 #14812 L3 PM, L1 SPRDE, DAS DEC 00 L1 TEE, L1 Comm Network Development (ND) Systems Engineering & Integration (NE) Capt x6032 CAPT 62E3H #14913 L2 SPRDE DAS SEP 97 Code 56/MAY 01 Vacant LTC 13S3D #14773 Vacant LTC 62E3G #314562 Vacant LTC 63A3 #14792 Vacant CAPT 63A3 #14754 Capt Ryan Mantz x2028 CAPT 63A3 #14872 L2 PM DAS 23 AUG 99 Code 39/AUG 03 Vacant MAJ 63A3 #314588 Maj Michael x5421 MAJ 62E3G #314579 L2 PM, L2 SPRDE DAS 18 JAN 00 Maj Taylor x1798 MAJ 62E3C #14837 L3 SPRDE, L1 PM DAS NOV 95 Retire 1 AUG 01 Vacant CAPT 62E3E #14922 Capt Meggett x3145 CAPT 63A3 #14877 L1 PM DAS 8 AUG 97 Code 39/AUG 01 Capt Amy Ireland x5612 CAPT 63A3 #14764 DAS 31 AUG 00 Capt Cynthia x0914 CAPT 63A3 #14876 DAS 10 Jul 00 Vacant CAPT 62E3E #14841 Lt Cheryl x3853 LT 62E3E #273419 L2 SPRDE DAS 25 AUG 97 Code 56/AUG 01 Vacant CAPT 62E3E #314636 Lt Roger CAPT 33S3C #14928 RNLTD 30 JUN 01 Vacant CAPT 62E3E #14818 Vacant CAPT 62E3G #14813 Lt Mark x6811 LT 63A3 #14843 L2 PM DAS JUL 98 Code 56/AUG 02 Vacant CAPT 62E3C #14823 Vacant CAPT 62E3G #14927 Lt Angel x0486 CAPT** 62E3E #273434 L2 SPRDE DAS 8 SEP 97 Code 39/AUG 01 Lt Dimeatrius x1156 CAPT 63A3 #14875 DAS 15 OCT 00 Lt Mike x0383 LT 62E3B #14857 L1 PM DAS 10 AUG 99 Lt Johnny Harris x0214 CAPT 63A3 #14851 L1 PM DAS 1 AUG 97 Code 39/Aug 01 Vacant CAPT** 62E3E #273435 Lt Mark x2542 LT 62E3H #14856 L1 PM DAS 22 NOV 99 Lt Eric x2345 LT 63A3 #14903 L1 PM DAS 2 SEP 99 Lt Jeremy LT 63A3 #14844 DAS 19 Mar 01 Lt Heather x1240 LT 63A3 #14758 L1 PM DAS 31 MAY 99 Lt Brian x3178 LT 63A3 #14879 DAS 27 NOV 00 Lt Heather x2742 LT 63A3 #14862 DAS 30 MAY 00 Mr Kevin x2060 GS303-7 #14802 L2 PM Lt Jason x1260 LT 62E3C #14840 L1 SPRDE DAS 21 JUL 99 VacantLT 62E3E #14921 Lt Jarod x6565 LT 62E3G #14902 (62E3H) DAS 17 APR 00 Lt William x0081 LT 63A3 #14844 DAS 1 JUL 00 * Lt Humphrey and Lt Trum are double booked. ** Position recently upgraded

  20. Summary • Establish Your Role Play -- Balance • Super PM Train/Organize/Equip • Execution Support • Disciplined Time Management • Have a Plan & Be Seen • Make Time to Network – Strengthen Relationships • Insist on Thinking Time – Strategic Thinking • Plan to deal with Emails/Drive Bys/Drop Bys • Think Big -- Keep Big Picture Perspectives • Visualize End-to-End/Integrated Capability • Set Priorities and Reprioritize as Necessary • View Yourself as…. • Mentor/Coach Be Viewed as Value Added

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