Practical Experiences in Portfolio Management evening

Transcription

1 Practical Experiences in Portfolio Management evening Christine Rigby (AstraZeneca) on behalf of the APM PfM SIG Institute of Arbitrators, London 20 th March 2012

2 Practical experiences in PfM -Introduction to this evening Purpose Share experience, collaborate, network learn something new.we already have something in common Format 18:00-18:40 PfM SIG Introduction & basics of PfM a little theory 18:40-19:00 Quick Break 19:00-20:00 Andy Ingleby (AZ) Practical experience & learning from PfM implementation in an Operations environment Housekeeping Toilets, mobile phones & Fire exits

3 Introduction to this evening Your role tonight there s no such thing as a free dinner...ask questions Provide feedback on tonight s event via APM feedback sent tomorrow Have your say & influence future events and focus by completing the PfM SIG online survey

4 The APM PfM SIG Committee- Who are we? Matt Rawson BG-Group (Chair) Achilleas Marvellis Defra (Secretary) Christine Rigby AstraZeneca David Dunning CPS Stephen Parrett Right Change Consulting Adrian Pyne Pyne Consulting Ltd Nigel Bell HP Martin Samphire 3pmxl Ltd What do we do.share a passion for Portfolio s Chris Beach Transport for London "To develop and promote the professional discipline of Portfolio management for the public benefit...promote, Awareness, Share best practice Dr Peter Parkes Peak Performance

5 Content PfM SIG survey- some interesting info A little bit of theory What is Portfolio Management and what makes a Portfolio? Where does it fit? Problems that PfM addresses What does good look like? and continuous improvement The Biology of PfM

6 PfM Survey- Information to date >120 responses from variety of P3 managers & organisations x-industry & public sector Formal PfM adoption by 58% of organisations who responded & a wide variety of PfM models in organisations (who owns PfM?) Small or large portfolios?...it all depends! 50:50 on whether BAU included in the portfolio 56% Feel Senior commitment to PfM is not what it should be The PfM community want to hear more about Prioritisation, tools & techniques, delivering benefits from Portfolio s (the latter seen as difficult to demonstrate)

7 What s a Portfolio? P3O publication states: A portfolio is the investment in the changes required to meet strategic objectives OGC Management of Portfolios (MoP ) states Portfolios represent the totality of an organisation s investment (or segment thereof) in the changes required to achieve its strategic objectives "P3O is a Registered Trade Mark of the Cabinet Office "MoP is a Trade Mark of the Cabinet Office"

8 What is Portfolio Management? APM The selection and management of all of an organisation s projects, programmes and related businessas-usual activities taking into account resource constraints. OGC PPM is a coordinated collection of strategic processes and decisions that together enable a more effective balance of organisational change and BAU. National Audit Office Prioritisation of all an organisation s projects and programmes in line with business objectives and matched to its capacity to deliver them. Cranfield & Open University Managing a diverse range of projects and programmes to achieve the maximum organisational value within resource and funding constraints. Process perspective Prioritisation & Alignment Value add & resources..projects, Programmes (and BAU?) aligned to bring best (Strategic) value to organisations and take resources into account.. Maybe it depends upon the level they are viewed from within an organisation?

9 (Values, picture of future state) Strategy Portfolio Management- Where does it fit? Vision Mission Strategy Current State Business Drivers Portfolio Management Pipeline Programmes and Projects BAU - Work Outcomes / Benefits / Future State

10 The Portfolio Management cycles Categorise For easier decision making Prioritise Ranking criteria Balance Eg Overall risk, return, coverage etc Definition Understand Strategic fit Plan Portfolio strategy & delivery The baseline Organisational Energy & willingness Management Control Templates, Assurance Resource Mgmt Benefits Mgmt Maximise Portfolio performance Delivery Governance Clarity for decision making Financial Mgmt Alignment with financial business cycles Risk Mgmt Mitigation & opportunity Stakeholder Engagement Maintaining support for delivery Performance Output Benefits Input Strategy Verify, Clarify, Check.. Diagram based on the Portfolio Management cycles in OGC Management of Portfolios (MoP )

11 What are the Benefits of Portfolio Management? More right programmes / projects Removal of redundant, duplicate, poorly performing projects More effective implementation of programmes / projects consistent approaches and improved dependency management Better resource utilisation and collaborative working Holistic risk management Greater benefits realised Enhanced transparency, accountability and governance Improved engagement and communication between senior management and staff Reference: MoP Office of Government Commerce, 2011

12 Portfolio Management is just about managing & delivering change? Global market and financial challenge: - More for less - Wastage not tolerated APM Vision all projects succeed Projects & programmes now a board level concern as a key to delivery of strategy Businesses looking to transform / change and want / need a coherent mgmt approach Ability to change strategic direction quickly with awareness & control 'In this world nothing can be said to be certain, except death and taxes. Benjamin Franklin 1789.and Change is the only constant 12

13 How can Portfolio management go wrong? Business turbulence Strategic direction changes Consensus? Not what expected Vision Mission Strategy Priorities not agreed? Poor control processes Current State Business Drivers Not what expected Issues in Resource Management & capabilities Pipeline Programmes and Projects Work Outcomes / Benefits

14 Some common misconceptions about PfM Portfolio Management only happens at the Enterprise level Most guidance focuses at the organisational level of Business Change Management (the totality of an organisation s Change), there is no reason why Portfolio Management cannot be used at directorate level, within specific business units and even within individual Programmes. It s easy to implement it Implementing Portfolio Management will bring about Changes to Management Board decision making and Organisational Governance processes. Therefore, it is critical that the person or team leading the development of Portfolio Management has the necessary skills and experience. Easy peasy A group of Project people that sit in isolation and produce a plan every year. Portfolio Management must integrate seamlessly within the Organisational Governance decision-making and Strategic planning.

15 Some common business issues in Portfolio s Too many projects/programmes? Unclear benefits Poor justification/business cases for projects/programmes Not aligned with Business Strategy Duplication of efforts Inconsistent approach / process Too few synergies taken Lack of awareness/ visibility of all projects/programmes? Poor value for money / reducing company value Little prioritisation of resources Lacking & best use of the right skills and capabilities Poor governance

16 Success - Portfolio Management perspective Ensures early identification of Projects & Programmes that don t add value/benefit so they are not started / stopped Identification of Projects & Programme that are strategically aligned. Those not strategically aligned are not started or cancelled as early as possible Ensures management of risk at the collective level increasing success of the right projects & programmes and a link to business risk management Provides robust governance of change across the whole landscape of change / projects All Projects Succeed APM Vision 2011 Ensures visibility of all projects & programmes and their interdependence and enables tracking and focus to ensure success. Provides better engagement with staff Supports effective and optimised allocation of resources to better enable the highest priority right projects and programmes to succeed Supports timely decision making and re-orientation of inflight projects & programmes so that strategic benefits are optimised Portfolio Management ensures the right projects & programmes are selected and managed for success. Portfolio Management SIG 2011

17 What does good portfolio management look like? OGC MoP states 5 key principles: Senior management commitment Alignment with governance framework Alignment with strategic objectives Use of a portfolio office Working within an energised change culture Reference: MoP Office of Government Commerce, 2011

18 Environment Governance Process People Technology Build the foundations for good Portfolio Management measure performance & then continuously improve it Good practice components

19 The Biology of Portfolio Management??? Your PfM Journey..

20 APM PfM SIG PfM SIG event in September watch this space Join our Bloggers online..you ll need to be a SIG member If you enjoy tonight please encourage others to become involved & join the SIG Do you have some interesting PfM learning, tools, techniques or a case study to share through a written article or presentation? You re welcome to contact us.and join in! Link to PfM SIG area on APM website Complete the PfM Survey

21 Appendix slides 1-2 Examples of Portfolio analysis tools

22 Appendix slide 1 - Align Investment to strategic priorities Unaligned Optimised

23 Appendix slide 2 - Tools - Efficient Frontier Analysis How this Works: Activities are first ranked and then stacked up one at a time by value and cost, moving from left to right. As one moves further right, one reaches a point of diminishing returns.