Portfolio Management Breakthroughs

1. Portfolio Management Breakthroughs Shelley Gaddie President Project Corps Pacific Northwest Portfolio Management Roundtable November 07, 2006 v i s i o nACCOMPLISHED™

2. The Enterprise Framework External Assessment Goals A continual flow of planning and execution processes that support ongoing: • shifts for customer and marketplace driven changes. • analysis of progress against goals and objectives. • incorporation of improvements based upon lessons learned. Strategy Initiatives Strategy Objectives Internal Assessment Programs & Projects Business Case Ongoing Metrics Analysis Enterprise Governance Approval Lessons Learned Prioritization Implement Initiate Project Delivery Validate Analyze Build Design

3. In Theory it’s Simple but… …executive planning processes often stop short of providing the clarity required to execute effectively. Portfolio Management Strategy … program management organizations build project tracking systems rather than management decision making support systems. Program Management Enterprise Governance …project teams focus on timely, on budget delivery at the expense of market and customer priorities, quality and outcomes. Project Management Project Delivery

4. The Principles • ALIGNMENT: Support of the organization’s strategic direction. • VALUE: Return on investment and long-term benefit for the organization. • ACHIEVABILITY: Capacity to deliver successfully. • BALANCE: Diversification across multiple dimensions and competing priorities.

5. Three Companies • Financial Services • Dramatic growth by acquisition; • Redundant systems and services; • Bureaucratic and risk averse; • Declining margins in core business; and • Must make immediate improvements in financial performance or face take-over.

6. Three Cultures • Financial Services • Focus on Mission • Performance • Results • Bottom Line

7. Three Companies • Telecommunications • New market (Eastern Europe) start-up; • #3 against top two global contenders; • Young leadership and staff; • Customer and innovation focused; and • Goal to grow to #1 in three years.

8. Three Cultures • Telecommunications • Focus on Involvement and Adaptability • Team • Creativity • Risk

9. Three Companies • Insurance • Strong brand; • Declining membership; • Growth by merger resulting in divergent processes and systems; • Aging technology infrastructure; and • New leadership with strong transformational vision.

10. Three Cultures • Insurance • Focus on Consistency • Leadership • Processes • Systems

11. Three Questions • Financial Services asked WHY? • Build a direct relationship to the primary business problem, define the value statement for portfolio management in relationship to the bottom line and deliver immediate results. • Telecommunications asked WHO and WHAT? • Support shared ownership and development, apply a market focus in portfolio definition and management and deliver customer targeted results. • Insurance asked HOW? • Focus on effective structures, processes and systems for portfolio management, take iterative steps and establish and work toward long term results.

12. A Burning Platform Why? • Analyze, Document, Vet, Educate and Communicate • Build the business case for portfolio management in alignment with current strategies, goals and objectives. • Define standard terminology, minimize jargon. • Obtain executive ownership. • Enroll and educate key staff in the concept. • Communicate the vision, framework, plan and financial targets. Capture the bottom line impact

13. It’s Up to Us Who? Why? • Engage, Focus, Plan, Transfer Ownership and Prioritize • Establish anadvisory body that owns the portfolio management plan. • Identify and prioritize portfolio management challenges. • Develop a simple and iterative solution roadmap. • Establish a governing body that defines and oversees the portfolio. • Identify and prioritize the key enterprise-wide initiatives. Capture the bottom line impact Engage key leadership across multiple functions

14. We’re the Experts Who? What? and Why? • Research, Understand Capacity, Benchmark, Develop Metrics • Support portfolio management with market research. • Design the solution based upon industry best practice and organizational readiness. • Measure results of the process and system with customers and against past performance and the industry. Capture the bottom line impact Market demands balanced by company capacity Engage key leadership across multiple functions

15. The Devil’s in the Detail Who? What? Why? and How? • Promote, Define Roles, Establish Value, Prototype • Promoteportfolio management at the executive and staff levels • Define benefit of and leadership and staff roles and responsibilities for practices and processes. • Focus on reporting and providing meaningful information. • Design value added processes and tools. • Prototype. Capture the bottom line impact Market demands balanced by company capacity Engage key leadership across multiple functions Simplify and maintain the integrity of processes and data

16. Three Breakthroughs • Financial Services • A VALUE proposition with immediate bottom line impact. • Telecommunications • The right PEOPLEengaged in the right way for the right reasons. • Insurance • A new way of doing business built with attention to DETAILfrom the bottom up.

17. Finance - Value • A strategic alliance between the corporate PMO and Finance, Internal Audit and Risk Management. • Bottom line relative results oriented 3-year business case based upon past three years project data. • Small, centralized, directive executive level governance.

18. Finance - Differentiators • Neither PMO led or exclusive. • A business case built with cross functional participation and based upon real organizational experience. • Addressed the burning platform. • An executive team ready to make hard decisions.

19. Telecommunications - Engagement • A strategic alliance between Strategic Planning and Sales and Marketing. • Business planning aligned with corporate strategies, key financial targets and key performance indicators. • Large broad based multi-level collaborative governance. • Market, customer and industry focus.

20. Telecommunications - Differentiators • Positioned as support for annual planning. • Engaged widespread participation in first advisory and then governing roles. • Established priorities exclusive of capacity. • Market, customer and industry feedback and metrics.

21. Insurance - Leadership • A strategic alliance between units of the EPMO, executive leadership, Strategic Planning, Change Management and IT. • An EPMO and IT plan and project focused on designing, building and testing a prototype system. • Centrally coordinated parallel tracks of developmental work. • Transformation focused.

22. Insurance - Differentiators • Iterative strategic development steps implemented over time. • Multiple service department sponsorship. • A prototype with test and refinement time. • Introduced as a transformation delivery and measurement system.

23. Conclusion • Alignment • Value • Achievability • Balance • Values and Culture

24. Summation • Three unique approaches. • Three similar results. • Number of projects ▼ • Reduced by an average 37%. • Project on-time delivery ▲ • Increased by an average 20% in first two years. • Project on-budget delivery ▲ • Increased by an average 38% over three years. • Portfolio management is here to stay.

25. Portfolio Management Breakthroughs Questions? Shelley Gaddie President Project Corps 206.932.7077 www.projectcorps.com