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ETI 4448 Applied Project Management

ETI 4448 Applied Project Management. Prof. Roy Levow Session 12. Organizational Issues Chapter 20: Project Portfolio Management. Introduction to Project Portfolio Management Establishing a Portfolio Strategy Evaluating Project Alignment to the Portfolio Strategy

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ETI 4448 Applied Project Management

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  1. ETI 4448Applied Project Management Prof. Roy Levow Session 12

  2. Organizational IssuesChapter 20: Project Portfolio Management • Introduction to Project Portfolio Management • Establishing a Portfolio Strategy • Evaluating Project Alignment to the Portfolio Strategy • Prioritizing Projects and Holding Pending Funding Authorization • Selecting a Balanced Portfolio Using the Prioritized Projects

  3. Chapter Topics (cont.) • Managing the Active Projects • Closing Projects in the Portfolio • Preparing Your Submission to the Portfolio Management Process

  4. Learning Objectives • Understand current practices in corporate project portfolio management and how they are applied • Know how to deliver explicit business value through a strategically aligned project portfolio • Adapt the concepts and practices of project portfolio management Chapter 20

  5. What Is a Project Portfolio? • “A collection of projects that share some common link to one another.” • Examples of links • Same business unit or functional area • New product development • Same budget or resource pool Chapter 20

  6. What is Project Portfolio Management? • Establishing the investment strategy of the portfolio • Determining what types of projects can be incorporated in the portfolio • Evaluating and prioritizing proposed projects • Constructing a balanced portfolio that will achieve the investment objectives • Monitoring the performance of the portfolio • Adjusting the contents of the portfolio in order to achieve the desired results Chapter 20

  7. Major Phases of Project Portfolio Management Chapter 20

  8. Eight Different Stages For Projects In the Five Phases of Project Portfolio Management • Proposed • Aligned • Prioritized • Selected • Active • Postponed • Canceled • Completed Chapter 20

  9. Establishing a Portfolio StrategyFive Examples • Strategic Alignment Model: Aligns projects with the strategic goals of the organization • Boston Consulting Group Products/Services Matrix: Four categories of products based on growth rate and competitive position • Cash Cows • Dogs • Stars • ? • Project Distribution Matrix • Classifies projects by New, Enhancement, or Maintenance • Growth versus Survival Model: Projects to do better versus must-do projects • Project Investment Categories: • Infrastructure • Maintenance • New Products • Research Chapter 20

  10. Establishing a Portfolio StrategyTwo Questions • “Will projects be partially funded in order to include more projects in the portfolio, or will projects be funded only at the level of their request?” • “If an investment category has excess resources after project funding decisions have been made, can those resources be reallocated to other investment categories without compromising the portfolio strategy, and if so, how will they be reallocated?” Chapter 20

  11. Evaluating Project Alignment to the Portfolio Strategy • Is the project in alignment with the portfolio strategy? • Proposer does the evaluation • Intake person does the evaluation • Then project is placed in a bucket (either money or resources) • Best to use an objective, consistent criteria Chapter 20

  12. Prioritizing Projects and Holding Pending Funding Authorization • Many methods ranging from the very simple to complex mathematical models • Six Example Models • Forced Rankings • Q-Sort • Must-Haves, Should-Haves, Nice-to-Haves • Criteria Weighing • Paired Comparisons • Risk/Benefit Chapter 20

  13. Selecting a Balanced Portfolio Using the Prioritized Projects • Many ways to do this • But there are two basic approaches • One master list of prioritized projects • Could end up with less than satisfactory results • Separate projects into buckets and then prioritize the projects in the separate buckets. • Could end up with good projects in unpopular buckets • Author suggests second approach • Takes longer with one master list • Easier to allocate resources along different funding buckets Chapter 20

  14. Balancing Using Partial Funding or Staffing of Projects • Advantages • More projects into active status • Better chance to control risk • Weakness • Will extend delivery date into next funding cycle Chapter 20

  15. Managing Active Projects in Project Portfolio • Project Status • On Plan • Off Plan • In Trouble • Role of the Project Manager • Keep project on plan • Reasons for off plan • Deficient method of validating task status • Bad communication processes Chapter 20

  16. Managing Active Projects in Project Portfolio (Cont.) • Reporting Portfolio Performance • Schedule Performance Index and Cost Performance Index Trend Charts Chapter 20

  17. Closing Projects in the Portfolio • Acceptance Criteria • Checklist of Scope Items or Requirements • When all items on the checklist are checked off, the project is finished • Post-Implementation Audit • Attainment of Explicit Business Value • Lessons Learned Chapter 20

  18. Preparing Your Project for Submission to the Portfolio Management Process • Three Ways to Prepare Your Project Proposal • Adapt the Project Overview Statement • Parts of the POS • Problem / Opportunity Statement • Project Goal • Project Objectives • Success Criteria • Assumptions, risks, and obstacles • Include two attachments • Risk Analysis • Financial Analysis Chapter 20

  19. Preparing Your Project for Submission to the Portfolio Management Process (Cont.) • Three Ways to Prepare Your Project Proposal (Cont.) • Two-Step Submission Process • First step is to submit the POS • If the POS has been accepted, then the second step is submit a detailed project plan Chapter 20

  20. Preparing Your Project for Submission to the Portfolio Management Process (Cont.) • Three Ways to Prepare Your Project Proposal (Cont.) • New Submission Process • Project Name • Sponsor Name • Project Manager Name • Project Funding Category • Project Goal • Project Objectives • Explicit Business Value • Risks • Estimated Total Project Cost • Estimated Project Duration Chapter 20

  21. Chapter 21: Project Support Office • Background of the Project Support Office • What Is a Project Support Office • Naming the Project Support Office • Establishing Your PSO’s Mission • Framing PSO Objectives • Exploring PSO Functions • Selecting PSO Organizational Structures • Organizational Placement of the PSO • How Do You Know You Need a PSO? • Establishing a PSO • Challenges to Implementing a PSO

  22. Learning Objectives • Describe a Project Support Office (PSO) • Understand the signs that you need a PSO • Know the missions, objectives, and structures of the PSO • Know the functions performed by the PSO • Know how to establish a PSO • Understand the challenges to establishing a PSO • Know how to grow and mature your PSO Chapter 21

  23. Background of the Project Support Office • Early adopters use the new project management process • Adoption of project management spreads • Management takes notice • There are uneven proficiency levels of project management • Senior management introduces some common tools and metrics for project management • Some adopt the common processes and some don’t causing confusion • Thus the need for a Project Support Office Chapter 21

  24. Four Reasons to Implement PSO • Projects grow in number and complexity • The need for more qualified project managers • Lack of standards and policies leads to increased inefficiencies and lowered productivity • Greater demand on resources requires more coordination Chapter 21

  25. Definition of the Project Support Office “A temporary or permanent organizational unit that provides a portfolio of services to support project teams that are responsible for a specific portfolio of projects.” Chapter 21

  26. Temporary or Permanent Organizational Unit • Temporary • Usually called Program Offices • Support the administrative needs of a group of projects • Disbanded when projects are over • Permanent • Handle a changing stream of projects Chapter 21

  27. Portfolio of ServicesFrom the POS • Project Support • Consulting and Mentoring • Methods and Standards • Software Tools • Training • Project Manager Resources Chapter 21

  28. Specific Portfolio of Projects of a POS • Linked through their goals and purposes • Departmental or organizational unit basis • Projects that are funded out of the same budget Chapter 21

  29. Establishing Your PSO’s Mission • The author recommends a mission statement that is supportive of project managers • Rather than compelling compliance of standard practices • Supportive statements can be sold easier to project managers and senior management Chapter 21

  30. Framing PSO Objectives • Make the objectives specific • Make the objectives measurable • Provide business value Chapter 21

  31. PSO Functions • Project Support • Consulting and Mentoring • Methods and Standards • Software Tools • Training • Project Manager Resources Chapter 21

  32. Selecting PSO Organizational Structures • Virtual versus Real • Proactive versus Reactive • Temporary versus Permanent • Program versus Projects • Enterprise versus Functional • Hub versus Hub and Spoke Chapter 21

  33. Organizational Placement of PSO • Centralized – Enterprise-wide • Decentralized – Enterprise-wide PSO with Satellite PSOs • Unit-Level – Services specific department or project Chapter 21

  34. How Do You Know You Need a PSO? • Standish Group Report • Top Ten Reasons Why IT Projects Fail • Symptoms That You Need a PSO • Project failure rates are too high • Training is not producing results • HR project staff planning isn’t effective • Inability to leverage best practices • Lack of control over the project portfolio • No consistency in project reporting • Too many resource scheduling conflicts • Gap between process and practice Chapter 21

  35. Establishing a PSO • Three major questions • Where are you? • Where are you going? • How will you get there? • PSO Stages of Growth Chapter 21

  36. Planning a PSO Chapter 21

  37. Planning a PSO (Cont.) Chapter 21

  38. Planning Steps For a PSO • Forming the PSO Task Force • Measuring Where You Are • Metrics to determine current project management maturity • Metrics to determine current proficiency of project managers • Establishing Where You Want To Go • Establishing How You Will Get There Chapter 21

  39. Planning Steps For a PSO (Cont.) Chapter 21

  40. Planning Steps For a PSO (Cont.) Chapter 21

  41. Challenges To Implementing a PSO • Speed and Patience • Leadership From the Bottom Up • A Systems Thinking Perspective • Enterprise-Wide Systems • Knowledge Management • Learning and Learned Project Organizations • Open Communications Chapter 21

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