MoP Practice 5: Plan. How to create a portfolio plan?

The purpose of the ‘plan’ practice is to collate information from the portfolio definition cycle and create a portfolio strategy and portfolio delivery plan which will be approved by the portfolio direction group/investment committee. Both documents can be combined in a single document (Portfolio strategy and delivery plan). The objectives are to:

• Provide a longer term overview
• Provide clarity to stakeholders
• Motivate people to commit to the delivery of the shared goals
• Convert the balanced portfolio into a plan
• Provide a baseline (the portfolio delivery plan) against which progress can be monitored, reviewed and managed (via a portfolio dashboard).

The portfolio office will normally update the plan on at least an annual basis in close cooperation with the business strategy, finance and performance management functions in your organization to assure that the plan is still aligned with the corporate (mid term) strategic, financial and business plans.

This article is divided into the following paragraph:

• Portfolio delivery plan
• Examples
• Keys to successful planning

To download: MoP (practice 5 Plan, 141128) v0.1

This article will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice 4: Balance. How to get a balanced portfolio?

The purpose of the ‘balance’ practice is to ensure that the resulting portfolio is balanced in terms of factors such as timing, coverage of all strategic objectives, impact across the business, stage of initiative development, overall risk/return profile, and available resources.

You have to ask yourself if your prioritized list of initiatives (of all categories or segments) is still optimum.

This article is divided into the following paragraphs:

• Factors to take into account if your prioritized list of initiatives is still optimum
• Possible graphical representations to support decision making
• Keys to successful balancing

To download: MoP (practice 4 Balance, 141109) v0.1

This article will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

MoP Practice: Management control. To OTOBOS or not?

For many years already, the Standish Group describes in their Chaos report about the number of successful and less successful projects. How many projects are delivered On Time, On Budget and On Scope?

Many organizations are using these cpi’s as early warning indicators using RAG (Red, Amber, Green) to express if, e.g. the planning is at risk. Green when everything is running smoothly, Amber when the governance body, the project board, needs to know that problems are encountered but the project manager has options to solve, and Red when the project is off track and the project board has to make a decision. Because it’s an early warning indicator the indicator will switch from amber or red to green when the issue has been solved or a decision has been taken.

On a periodic basis many organizations look at their portfolio and calculate how many projects are at risk and use this information in their performance management systems to show how well they are performing.

Figure 1: Portfolio progress

If you look at figure 1, I could imagine a manager to say “we are doing pretty well with our projects, of course we do have our problems but on average between 10 and 20% of our projects have issues.” Does this sound familiar? In this example there are only two projects that report Amber in the last month, but what does this say? Are we really in control on all the projects? Let’s have a closer look. For initiative a we had some problems in July and as a consequence the end date was postponed. Initiative b is really a project at risk with several problems and the end date was moved more than once. Only initiative c will deliver at the original end date and I has been delivered at the original end date. Thus the manager had to say: “we really have problems with the delivery of our projects, only around 20% of our projects will be delivered On Time.” So if you report on your project portfolio progress it’s good to use the OTOBOS indicators but use the information from the original project portfolio plan as your baseline, and use e.g. changed end dates, to calculate how many of the projects in the portfolio are successful or not.

This post will be used in a new book MoP practices in practice, for portfolio managers who want to embed the MoP theory in their organization. In the coming months several blog posts and articles will be published waiting for your feedback. To see all, select the tag MoP_practices_in_practice.

Elementary project portfolio management in pictures

I came across an illustrative book published by Ursus Wehrli called the Art of Clean Up. I thought it was great to see how the author rearranged certain situations to create new structures. Now you may ask: “what does that have to do with portfolio management?” Well, I would say a lot. Let us have a look at some of these pictures.

The first picture shows a bowl with fruit. With this in mind, imagine you looking at all your projects in your organization. Are they all fresh or of recent date? Do you know how many pieces or projects you are looking at? Are there comparable pieces or projects?

To find out, you have to take piece by piece from the bowl and group similar pieces together or, in other words, categorize your projects. Which of your projects are there due to regulations, but also, which projects “smell” or, again in other words, which ones are overdue and not contributing to your strategy? Throw those pieces away; kill those projects, they will only draw on your scarce resources.

Assuming we know what projects we have, we can go one step further.

Do you know how many people are working on your projects? Are they moving from one project to another?

If there is a problem in one project, some team members from other projects will be trying to help (fire fighting), but at the same time create new problems in their own. Eventually, none of your projects may turn out to be successful. Who are the key players in your organization needed on several projects? Do we know how many people are needed for all our projects? Are they all available or do we have a few Supermen who could simply be assigned for at least 200% of their time? So, we need to understand how many resources and what skills are needed for all projects and how many of these skilled people we do have available.

Based on this information it becomes clear we have to cut in our project portfolio, as we most likely have too many projects going on or planned. So, we need to know which of these projects we can kill or postpone until a later date. What projects will bring the highest benefits to our organization, what are the risks in these projects and what will those projects cost? Based on this information we can prioritize our projects. Taking our resource constraints (People & Budget) into account, we can draw a solid line to see which of the projects in portfolio are feasible (“above the line”) and by that which projects need to be killed or postponed (“below the line”).

After we have gone through these steps, we should be looking at a portfolio of projects we are able to finish successfully. But will these all turn out to be a success? Do we know where we stand for each and all? Or are we only looking at some big bright stars leaving the rest in a dark black hole? To monitor our projects we need progress information and early warnings of a project becoming a risk for all of our projects. A simple dashboard with this kind of information will be helpful in managing the complete project portfolio.

When looking at the pictures you may conclude that the basics of portfolio management are not that difficult. But in reality it will prove to be much more difficult implementing these basic steps. Use these ingredients, these basic steps, to build your own implementation plan and make sure you communicate this plan to all your stakeholders. Let them know where you stand today, what route you will follow and where you most likely are to be ending.

Looking forward to your reactions. Feel free to share your own project portfolio management pictures.