Beyond Project Management Portfolio

No matter how well executed the wrong item is, it is still wrong. To ensure that you are doing the right project, you must align the project with the company's overall strategic vision; Project Portfolio Management (PPM) and its tools can help you achieve this.

The traditional project management emphasizes "how to do the project", and adopts a bottom-up management method, that is, the data is collected from the bottom of the project management, and sent to the high-level to manage and control the project after analysis. This is a tactical project management approach that fails to detect in time projects that deviate from the company's goals or exceed the company's ability to execute and control. Portfolio management, on the other hand, emphasizes "what to do", and adopts a top-down management approach, that is, first determine the strategic goals of the enterprise, and give priority to selecting projects that meet the strategic goals of the enterprise, which are effective within the scope of the enterprise's capital and resource capabilities. execute project.

"There's pressure on every company to have to show that every dollar spent on a project will pay off and fit within a certain strategy," said Baldwin, managing partner of portfolio management consultancy Fountain Group. (John Baldwin) said, "I don't see any other way to do this than portfolio management. The most important development in the evolution of project management is portfolio management.

Data is the foundation

For effective project portfolio management, companies need tools to help top executives "collaborate with each other, prioritize projects, and formulate what projects will maximize business value or return on investment." unanimous opinion. Portfolio strategy expert Jean Miller said.

Miller said a dedicated project information database is the foundation of project portfolio management, which project managers can easily use to search and maintain information for enterprise-wide Make informed decisions when conducting project justification, resource allocation, and strategic alignment (see sidebar "Project Portfolio Management Tools Checklist").

In fact, the key to project portfolio management is having the project manager work closely with the CIO. Boards often don't get project information when doing strategic planning. "You have to have the right data, and it determines whether you understand your resources," said Pat Durbin, CEO of management software company PlanView. "As a Managers, you can't do portfolio management without high-quality data from the grassroots. You have to pull the projects together, review and prioritize the projects. You must use resources wisely, master and share knowledge, and reuse knowledge. "

Miller considers project portfolio management to be a continuous, four-phase process that begins with identifying a set of projects and collecting data to support project analysis and selection in the second phase. The third phase is Coordination --- Eliminate repetitive projects, balance resources, reduce risk, then Phase 4: Manage all projects, start new projects, and restart the process.

Communication is necessary

Combination Management makes a major shift in corporate culture, and organizations have to educate their employees over and over again, and it cannot be avoided. "There are communications that we may consider clichés, but are absolutely necessary to clarify what we want to do and why we do it. "says Julie Kester, Portfolio Manager at Hewitt Associates.

When Portfolio Management stops a project, you have to communicate even more." People associate themselves with Projects are linked, and they get frustrated if projects are terminated early," said Steve Weidner, vice president of program management at consulting firm Program Navigators, "but companies should tell them that stopping a failed project is also a form of success. If management has the courage to reallocate resources to more needed projects, people will work on the best projects. It's a win-win. "

Nevertheless, Christion Rosenstock, vice president of technology solutions at BNY Clearing Services, admits that reallocating resources is a tough job. When the IT Governance Council calls for changes, he says , it will release the request to the resource manager, who will then make adjustments to the schedule and assignments. IT project managers initially refused to accept the process because some of their power was taken away, but now they embrace this practice. "It's a protection mechanism," Rosenstock said, "because we're not working directly for the sponsors of the projects, we're not going to be called by them again. "

Training courses on portfolio management are also very important to allow project managers and project teams to embrace portfolio management more quickly. Ford runs a series of courses, hosts "lunch workshops" and offers an active website , which includes pages such as process overviews, templates and FAQs. "It's one of the busiest sites on our intranet," said Jon Lane, Ford's director of project management and global operating costs. "

The benefits are huge

Project portfolio management advocates say that after adopting and operating a project portfolio management system, a number of beneficial changes can occur. Some companies can see real benefits , while for other companies, although the rewards are not always visible and tangible, project portfolio management is really important.

Rosenstock said that in the first part of applying project portfolio management In one year, BNY's number of "abandoned" projects (abandoned projects are those that were discontinued before completion) fell by more than 50%. He estimates the company saved 7,000 man-hours, or about $35,000 in Cost.

A key benefit of portfolio management is that scarce resources can be used centrally. "Portfolio management enables businesses to perform well in difficult times," said Sally Colby, director of portfolio analysis for North America, Ford Motor Company Credit. Colby said, "We've always wanted to cut spending, and now we have a more rational way to do that. "She said Ford has successfully reduced the number of projects.

How valuable is it to grasp the company's projects from a global perspective? Jeanna Stavas, program director at software development company Metrowerks, can't give a firm figure, but she says the payoff is huge. "The most successful thing about portfolio management is that it allows us to do what we do." have a comprehensive view of the work of the company."

In addition, project portfolio management can prioritize and subordinate competing projects, says Stewarth: "It helps Metrowerks navigate between strategic and tactical projects. To strike a balance," she said, "we need to have a long-term plan and work for it, but we also need to achieve near-term goals."

After implementing project portfolio management, the relationship between IT and the rest of the company has improved, Luo said. "In the past, we had so many requests for projects that we didn't have time to look at them all, and people were all agitated," Sunstock said. "Everyone in the company now knows how to rate a What are the standards for the project."

Craig Ellerbroek, director of enterprise architecture at Lockheed Martin, the largest arms dealer in the United States, appreciates the project portfolio. Management makes IT departments more accountable. "It makes business growth a driver for us," he said. "As technologists, we spend a lot of money for fun, but if we can push the business to gain more market share or shorten the time to market, It's more fun."

Kester found that, in general, project portfolio management brought more attention to project work. "Having leadership focus on how our projects are performing on a monthly basis has really boosted the understanding of project management," she said. In addition, the relationship between project managers and project sponsors has improved.

Finally, portfolio management naturally leads to process improvement. Portfolio management has taught Lockheed managers how they can do their jobs better, Elle Brock said. In particular, it improves the application process for programs, allowing businesses to better serve customers in new ways.

Best-in-class tools

The best tools to effectively link project work to decision makers throughout the portfolio management process enable bottom-up and top-down Analysis becomes possible. "Management tools must provide easy-to-understand, at-a-glance charts and metrics that make information easily accessible to senior managers," said Mike Metcalf, vice president of marketing at software company Pacific Edge. "Tools must integrate portfolio management data with Project-specific data."

To achieve this goal, many portfolio management solutions summarize the specific project planning done by project managers into key metrics that can be easily analyzed by senior executives. When senior management makes any changes at the portfolio level, such as changes to budget, schedule or risk data, the project plan is automatically updated accordingly.

"It's an iterative process," Metcalfe said. "Our clients want this closed-loop solution to apply portfolio management to the planning process. Businesses don't just want an analytical process; When top management decides to make a change in the business, they also want to make the change actionable. They want to assign new goals to project managers at the executive level."

Essentially, portfolio management is a Projects are viewed at the enterprise level, or at least the department level, so many project portfolio management software vendors focus on improving the scalability and ease of use of their products. In large enterprises, project portfolio management tools must be available to hundreds of thousands of users in various locations.

The solution must also be able to break down information according to the different roles of users, said Metier CEO Doug Clark. Metier has developed a report generation tool that can be used to predict job performance. "The first step is to acquire the data; the second step is to present the data to decision makers in the form of scorecards, forecasts and trend analysis, enabling them to make quick, informed decisions about what the organization should be doing." Clark said, "While project teams have been providing this data, it is much more effective if the information is integrated from a portfolio management perspective and made available to decision makers at all levels down to the CIO."

According to the project Providers of portfolio management tools say the importance of project portfolio management is being recognized by more and more industries, and the scale of implementation is growing. In some cases, depending on the complexity of the organization, the number of users, and service agreements, project portfolio management software can be worth more than a million dollars. In order for the investment to pay off, portfolio management must first be supported by the company's top executives, who approve the funding.

"If management spends money on a solution and then spends months waiting for it to work, there's a problem here," Metcalfe noted. But in a stop-and-go way, however we're touching on what's most important to the customer. Once that's solved, you can see what other areas of the organization need to improve the process to improve execution. But you can't Let the mature and stereotyped operating mechanism of the enterprise become an obstacle to your strategic planning."

The process is dynamic

Portfolio management is not only suitable for dozens of business units, hundreds of projects, hundreds of A global company with a million dollar budget. Many solutions are aimed at small businesses, such as independent professional services organizations.

Durbin believes that the centralization of project information and management will lead to a change in corporate culture, whether it is a small company or a large company implementing project portfolio management. "To implement this transformation, there must be an iterative process. Doing this work step-by-step will reduce confusion, and as the work unfolds you can create a process that helps to apply and disseminate knowledge and experience."

Durbin recommends that companies implement portfolio management solutions in segments, centered on business units, departments or offices, rather than rolling them out across the enterprise at the outset. He recommends starting the training only a few weeks after the project has been implemented. This allows users to be trained with real data, "rather than introducing new systems on paper," Durbin said.

"Successful businesses always have a dynamic project plan when implementing software systems in stages," Durbin added. "New centralized systems are applied across the enterprise, and processes and business rules will follow. Change happens. At first, portfolio management is just an inducement for change to happen, but as the system matures, it becomes an achievable goal."

Most portfolio managers are satisfied with the progress they have made so far , but they all say there is still a lot of work to be done. "Portfolio management is often misunderstood as a static process," said Weidner. "To be truly effective, portfolio management must be a dynamic, iterative, interactive system."

Rosenstock says BNY liquidation The company will strengthen the financial analysis of the project; Stewarts said that Metrowerks hopes to do a better risk assessment; Kester mentioned that Hewitt hopes to expand the assessment of project performance to all projects.

Everyone seems to be looking forward to further improving portfolio management in the future. "Portfolio management can never really be done," Rosenstock said. "Things are always changing, including company priorities and the competitive landscape."

Reprinted with permission from Aaron Smith Get It Together article in the January-February 2003 issue of Projects@Work magazine (http://www.projectsatwork.com). Copyright Projects@Work 2003. Translated by Gong Hao.