Project Portfolio Management Insights and Lessons Learned itsmf seminar January 2017

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1 Project Portfolio Management Insights and Lessons Learned itsmf seminar January 2017 Vesa Kirjavainen Global Portfolio Manager Metso

2 Metso a world leading industrial company We deliver solutions for 12,000 committed employees worldwide MINING AGGREGATES PROCESS INDUSTRIES Net sales EUR 2.9 billion in 2015 Leading technology and services provider for end-to-end minerals processing Leading flow control provider with offerings for oil & gas, mining and process industries 63% of revenue from service business

3 Extensive global presence close to our customers 51 Countries with Metso operations 192 Locations 6,400 Service experts >80 Service centers Operating countries Developed markets Emerging markets Net sales by market area Europe 23% North America 22% South and Central America 20% Asia-Pacific 16% China 7% Africa and Middle East 12% *All data based on Annual Report 2015

4 Benefits and objectives of portfolio management Few picks in general Strategic guidance - Focus on right things Common processes - Doing things right - Common criteria, priority setting, reporting visibility, KPIs - Operational efficiency Better transparency and predictability - Management reporting - Common selection criteria / scoring Keep in mind: - Role of IT, Global PMO and IT organization maturity (functional vs. partner) - What you want out from the function, what will be your scope?

5 Building up global portfolio management in Metso Starting point: Moving from segments to corporate function History: Independent business segment ITs - No visibility across segments - Business specific processes - Good practices in various areas in all segments Business environment changes, from holding company to corporate - Valmet demerger IT re-organization Metso level global IT established, global portfolio function for business development IT projects coordinate activities in a planned way

6 Storyline From different practices to one process From different practices to one common IT development project portfolio Two rounds done to get current level Portfolio management recognized today by business stakeholders Change 2014 First round Second round First full year Future Organizational change Initial setup Organization update Major part of projects initiated from roadmaps Development continues

7 Building up global portfolio management Changes were needed to set up global portfolio management Project and portfolio management function established to manage all global development projects Portfolio management: first focus on global development projects - From bottom up to top down - Build visibility where development money is used Common project portfolio process - Metso gate model, one higher level process references to previous project models, PMBOK and PRINCE2 - Project initiation and execution in focus Stakeholder identification Governance - Ownership, prioritization, technology,... Tools and reporting - Templates and Metso wide on-line tools

8 Building up global portfolio management Challenges while setting up Country vs. region vs. business area vs. global Change management - Actively abandon old legacy - Various processes, tools, technologies - Cultural aspects and previous ways of working - Missing processes Find the right stakeholders - Sponsors, business owners, SteCo members Data Governance - Decision making - From bottom up (operative) to top down (strategic) Project classification what is important and gets priority? Communication and reporting needs

9 What is important to get things work? Clarity in operations Common processes - Apples vs. oranges Initiation clear guidance how to get projects to portfolio Financing process and governance - Who pays the bills - Investment rules - Possible recharging (Metso specific, separate service company) Tools to support the process - Templates - On-line Communications and reporting Ownerships - Ownerships may be hard to define though (e.g. business owner over global organization) - Clear information ownership Approvals - Initial investment approval - Finance - Architecture - Change management (SteCo)

10 Project initiation What and Why? How to guide and select the right projects? Project definition - Development request evaluation: is this a project? Templates to guide preparations: - costs, scope, resources, int/ext,... Questions to be asked - Strategic fit, business case and ownership? - Architectural/technical fit? - Service/support need, new or existing services? - Scope: Globa/local, business unit,... - Project mode and delivery responsibility - Classification Priority Risk Business value -... Project proposal (charter) and approvals Business demand Change management Roadmaps Project proposal review Ideas / project requests Final investment approval Project execution

11 Project initiation and dependencies Look around before decision making Service management - Release cycles Support - New or exiting processes Preferred platforms - Architecturals compliance, security Agreements Legistlation - E.g. Personal data Infrastructure - Capacity Competences / key contributor availability - Some key people availability Business commitment

12 Project execution Follow-up in portfolio level Project plan finalization Change management Financials - Recharging SteCo decisions - Gate decisions - Change management approvals - Remark: SteCo role is not always clear for all to keep things in track Project status reports Closing - Closing report/lessons learned

13 Storyline summary From different practices to one portfolio process From different practices to one common IT development project portfolio Two rounds done to get current level Portfolio management recognized today by business stakeholders Change 2014 First round Second round First full year Future Organizational change Portfolio management established Process Governance Forums Initial tools Governance, revised Concept management started Roadmap work Stakeholders Reporting Roadmap and domains Major part of projects initiated from roadmaps Financial visibility Stakeholder meetings Development continues Implement learnings to take portfolio management to next level

14 Lessons learned Tips to keep in mind Process need continuous facilitation to run - Follow-ups, in person, not just - Communications! - It takes one year to see real results Definitions and guidelines help, make those available Governance and approvals: simple and clear as possible - Require formal approvals, keep records for reference and for audit purposes Single source of information - Multi-user multi-site environment to share the same references - On-line tools (web and mobile access, chatter) help a lot Portfolio report is as good as data - Clear information ownership to keep data up-to-date Business case validation after projects is hard, payback time varies, access to business data not always possible There is always room for better communications Portfolio management can add value: stakeholder comms from push to pull as an indicator

15 company/metso metsoworld metsogroup metsoworld metsogroup