PPM Transparency. Hall of mirrors or the emperor s clothing?

Transcription

1 PPM Transparency Hall of mirrors or the emperor s clothing?

2 AGENDA Understanding PPM Aligning Projects with strategy Driving operational transparency & project governance Challenges, lessons, impacts

3 Critical Issues in Portfolio Transparency Know where money is being spent & on what. Spend the money on the right projects at the right time. Justify the allocation of resources and budget. Require visibility or control over running projects, resources and budget consumption. A single or common data source everyone sees the same picture. Visibility & Transparency Key enables for alignment.

4 Understanding PPM

5 Is it a bird, is it a plane??? Some say it s all just a process Others think you just need a software system Or is it just about the dollars and cents Then again, the world would be so simple if there weren t any people in it.

6 Project Management The discipline of organizing and managing resources in such a way that the project is completed within defined scope, quality, time and cost constraints. (PMI 2004) Program Management The management of a set of projects that are related by sharing a common objective or client, or that are related through interdependencies or common resources. (PMI 2004) Project Portfolio Management A group of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. (PMI 2004) Project management focuses on Doing Project Right Portfolio Management focuses on Doing the Right Projects

7 PPM Objectives Maximize value by appropriate project selection based on the value contribution & the effective allocation of resources to these projects Balance the risk exposure with the appropriate mix of projects. This will include high and low risk projects as well as long-term and short-term projects. Ensure strategic alignment of projects so that they contribute to the overall business strategy.

8 Process PPM is a business decision making process enabling the prioritization & management of initiatives PRIORITIZE & BALANCE DELIVER PORTFOLIO IDENTIFY & DEFINE INITIATIVES EVALUATE INITIATIVES APPROVE RESOURCES

9 Identify, Define & Evaluate Initiatives Gather data about each initiative using a uniform format - Uniform data required so that competing initiatives can be compared Use a combination of financial and non-financial measures to evaluate initiatives objectively EXAMPLES: Business Value Financial Return Strategic Fit Technical Fit Implementation Risk

10 Prioritize Investments Use investment categories to group initiatives and align with corporate strategy EXAMPLE Strategic Reliability Environmental Profit Generating Evaluation Criteria Score Weight Use a scoring model that reflects Management objectives Weighted Score Return on Investment Strategic Fit Implementation Risk Project Score 71

11 Balance Investments Categorize by risk and reward Balance portfolio to optimize overall for an acceptable risk level

12 Allocate Resources Match initiatives to resources Initiative Name Weighted Score Estimated Cost ($M) Cumulative Cost ($M) Initiative A Initiative B Initiative C Initiative D Initiative E Initiative F New Initiative Budget: $100m Deferred Initiatives

13 Aligning Project with Strategy

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15 Aligning Projects

16 Tracking strategy execution

17 Driving operational transparency

18 Triple Constraints Baselines of Projects Time Quality Cost

19 Triple Constraints Baselines of Projects Time Project start date Gate Phase start & end dates Decision point dates Gate Project end date Cost 3% - 12% total cost of project 97% - 88% total cost of project Quality Gate Gate Gate Gate Gate Gate Gate

20 Project data Types Type Components Elements Project Info Time Cost Quality Description Justification Classification Screening Implementation Risk Risks Dates High-level Milestones Financial Planning Operational Planning Phases Checklist Items Decision Points Project Description, Reason, Goals & Benefits Directorate, Department, Responsible Person, Project Manager Strategy Alignment, Technical Readiness, Financial Readiness, Implementation Readiness. Complexity (Risk) of project Type, Scope, Schedule, Dependencies, Resourcing, Procurement & Stakeholders Unique Identified risks and risk management strategy Start and end dates Project lifecycle start and end dates by phases Tender planning Spend plans by month over multi years by fund source Operational impact by Salaries, Wages, Repairs, Maintenance etc. Project lifecycle Scoping, feasibility, conceptual etc. Deliverables per phase. Confirmation points by phase.

21 Depts Project data Types Plan Gates Types Classes Strategy Allocations Targets Skills Capacity Design Quality Locales ROI s Labour BOM Assure Project Resources Materials Plan Forecast Plant Plan Infrastructure CBS Cost Actual Time Milestones Actuals Committed Availability Budget Control Cash flow Forecast Deliverables Phases PO s Recon

22 Copyright 2014 SP Practice Consulting. All rights reserved.

23 Enables: Linking business plan - projects execution and actuals Alignment of projects with strategy and real time monitoring of execution One version of the truth with multiple dimensions

24 Challenges, lessons, impacts

25 Challenges Middle earth epic battles! Not everyone wants to be aligned; Broken telephone; Don t make me look bad. Parlez-Vous Anglais? Bean counters, rain makers, captains, soothsayers; Universal translator please. Who turned the lights on! Where s my shirt; Emperors clothing or hall of mirrors.

26 Key Lessons? Be careful what you wish for, you just might get it. PPM gives senior leadership an effective means to direct the spending of the organisation, aligned with their strategy..they will use it. Critical to ensure that you have executive sponsorship with management buy-in across the organisations.

27 Key Lessons? Avoid creating islands its difficult to join continents later. Ensure cross-functional team involvement and integration, create one common language; Structure the debate don t avoid it; Become a translator.

28 Key Lessons? Know who is who in the. Understand organisational reporting lines and clearly decided to either build the portfolio accordingly or change it based on a clear strategy. If you build it they may not come! Expect resistance not everyone wants transparency; Manage carefully for effective implementation.

29 Conclusion There is more to it than just technology, but an integrated solution based on your financial system, HR system, procurement system etc. is critical. It is a game changer, if designed and implemented correctly taking into account the following: Clear organisation vision and purpose of the portfolio; Organisational Culture; Cross functional business team involvement in process design; Industry specific requirements; Breadth of PPM process and depth of PPM maturity required. Know where to start and the business value being targeted.

30 Questions? Thank you.

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