Towards Project Portfolio Management in Centrelink

Transcription

1 Towards Project Portfolio Management in Centrelink J. Adu; B. Clark; M. McLarty; M. Hayes and B. McCarron. - Centrelink Projects Office, Canberra, ACT, Australia. Joyce Adu, Centrelink Project Office, P O Box 7788, Canberra Mail Centre, ACT, Australia Ph: (02) Fax: (02) joyce.adu@centrelink.gov.au Abstract Every organisation has limited resources, both financially and in human capacity, to meet all its business needs. The public sector reform since the 1980s in Australia with its associated reduction in government spending and increasing emphasis on "value for money" is evidence of the increasing need to achieve more with less in the public sector. For efficiency and effectiveness in business, there is the need for the prioritisation and funding of work to best meet strategic goals in a way that maximises value and minimises the overall risk to the organisation. Centrelink is currently embarking on the Portfolio Management approach to enable the effective allocation of priorities to deliver on its strategic goals through projects. Portfolio management is enabling a clear and full picture of the organisation s projects to achieve its strategic goals with a clear indication of the value each project provides. This paper discusses Centrelink s approach to the implementation of Portfolio Management. Introduction The need for efficiency and effectiveness in Centrelink business means that Centrelink can no longer steer projects on their individual merits, without consideration for the entire investment picture. More importantly, projects must support strategic goals and deliver value to the organisation. Project Portfolio Management is a powerful and structured organisationwide approach that is enabling the effective allocation of priorities to deliver on Centrelink s vision through projects (be they discretionary investments, mandatory projects from the Federal Budget process or specific initiatives from Client Departments). It will provide a full picture of the organisation s project investments with a clear indication of the value each one provides. This paper provides key information on Project Portfolio Management in Centrelink by answering the following basic questions: What is Portfolio Management? How will Portfolio Management benefit Centrelink? Where does Portfolio Management fit in business operations? How is Centrelink implementing Portfolio Management?

2 What is Portfolio Management? There are many definitions and models (Thorpe, 1998; Dinsmore, 1999; CPMG, 2002; Adu et al, 2003; OPM3, 2003) of Project Portfolio Management. Although expressed in different forms, the definitions and descriptions focus on effective prioritisation and management of organisational resources to optimise benefits from investments made. In Centrelink, Portfolio Management is a structured Centrelink-wide approach to the allocation of priorities to achieve Centrelink s Future Directions through Quality investment decision making including re-allocation of priorities/investments Effective governance Effective project resource planning and performance management (using the TeamPlay portfolio management tool). Practicable benefit management approach that balances Centrelink s overall risk exposure with value/benefits Improved organisational project management capability delivered through professional and organisational development initiatives in a formal project management competency framework. How will Portfolio Management benefit Centrelink? Operating in a multiple project environment requires an organised approach to ensure effective project delivery and realisation of project benefits. Centrelink expects the following benefits from implementing portfolio management: Increased visibility & transparency: a portfolio management tool is enabling increased visibility in organisational projects and some maintenance activities. Over time, it is expected that the transparency of effort, funding, risks and value of investments will be greater to meet the visibility needs of the Executive, Business Owners, Project Managers and other stakeholders. Better prioritisation and decision making: Portfolio Management enables good ideas to be assessed and prioritised on an "apples-to-apples" basis for the investment of scarce resources to best achieve business goals. The prioritisation process is allowing integrated decision-making and clarity of action in funding projects that most closely align with business goals. Overlapping project proposals are being identified upfront, synergies between projects are exploited and gaps between business goals and existing projects are being identified and invested in. Reduced cost through efficiency and effectiveness in the planning and use of resources: Portfolio Management facilitates efficient and effective planning and utilisation of business resources. The development of investment plans in human and other resources that benefit multiple projects is being taken up. Additionally, visibility in the Demand and Supply of Centrelink resources will greatly enhance decision making and save cost. Increased value: Portfolio management focuses on the value from investments made. The Centrelink project environment is experiencing a shift from a project delivery :\enterprise portfolio management\epfm Definition\paper4_revised

3 focus to a project benefits focus. This will assist the organisation in harvesting real business benefits from projects through the formal process of benefit identification, monitoring, realisation, measurement and accountability. Increased flexibility to respond to a dynamic business environment: Portfolio reviews and adjustments form an integral part of the portfolio management process in Centrelink. This will better allow the commissioning of new projects and cancellation of others that are no longer relevant to meet organisational needs as the business environment changes. Integrative and strategic management of projects: Portfolio management is enabling the bringing together of the organisational business strategy, technological directions and resources to manage business change to achieve organisational benefit. Common vocabulary and consistency in project implementation: Portfolio management is enabling a consistent and common framework for the planning, management and tracking of project portfolio, programs and projects. The use of common language, tools, templates, processes, policies, standards, reporting mechanisms within the organisation is providing a common basis for performance benchmarking between projects and across financial years and informing executive decision-making. Where does Portfolio Management fit in Business Operations The Centrelink s strategic plan (Future Directions) provides business strategies and priorities from which a portfolio of programs is created to bring about the business changes required to achieve the Centrelink vision. Each program comprises a collection of individual projects which deliver specific outputs. The utilisation of these project outputs enable the program benefits to be realised. Figures 1 shows how the Centrelink Future Directions decompose to become specific projects as we move down the hierarchy. Measuring of things that count in the delivery on the Centrelink vision (using the balanced scored approach) and holding the right people accountable for the results will enable Centrelink to achieve its vision. In Centrelink s complex business environment, each program contributes in different ways to achieve the goals of the organisation. The programs deliver specific business changes required to achieve the business goals. The better designed and managed the programs, the more efficiently the benefits/organisational goals are realised. Selecting and commissioning projects in the context of the integrated change programs provide overall coordination, control and integration in project delivery and benefit realisation. :\enterprise portfolio management\epfm Definition\paper4_revised

4 Figure 1: Relationship between portfolio management and business operations Centrelink Future Directions (vision, mission, goals, strategies, priorities, key perfomance indicators) Centrelink Business Plan Team Business Improvement Plans Portfolio of Programs Balanced Scorecard (Measurement and Accountability) Projects How is Centrelink implementing Portfolio Management Having considered various models of Portfolio Management Implementation from various sources including practitioners and academics (Thorpe, 1998; Dinsmore, 1999; CPMG, 2002; Adu et al, 2003; OPM3, 2003; Stuart and Ziebell, 2003) six key threads were identified that formed the basis for the Centrelink Portfolio Management implementation model. These were developing and implementing: 1. Investment decision making framework 2. Governance framework 3. Benefit management 4. Enterprise scheduling and resource management via TeamPlay tool 5. Competency and training framework 6. Cultural change. :\enterprise portfolio management\epfm Definition\paper4_revised

5 Investment decision making framework Redeveloping a priority setting mechanism Implementing portfolio of investments (program/projects) eg. currently piloting support for two programs in 2004/05 financial year. Lessons leant through the pilot and earlier programs (Australians Working Together and Refresh Programs) will inform the framework for the wider application of program management in the 2005/06 financial year. Establishing mechanisms for tracking and monitoring investment decisions. Governance Reviewing and establishing Portfolio/Program/Project Management roles, responsibility and accountabilities Formalising and establishing Portfolio Management structure (eg formation & operation of program governance committees to govern programs etc) Reviewing and developing Portfolio/Program/Project Management Policy (initiation, management, finalisation, pertinent issues) Reviewing and developing Portfolio/Program/Project Management Methodology (process, procedures, tools, techniques, standards) to reinforce the emerging enterprise portfolio management culture Reviewing and establishing support structures eg, Enterprise Programs Office, Programs offices, projects offices and other support teams. Benefit management Establishing individual accountabilities for realising benefits Developing and implementing policies and processes for benefit realisation Designing and implementing an Enterprise Benefits Register (for identifying, optimising and tracking expected benefits with lead and lag indicators and links to the Centrelink Balanced Scorecard). Enterprise scheduling and resource management Developing Enterprise scheduling policies and procedures Creating and maintaining a resource pool :\enterprise portfolio management\epfm Definition\paper4_revised

6 Implementing a suite of applications to support effective scheduling and effort recording Integrating the portfolio management tool with other Centrelink data holdings Establishing data analysis capability in Portfolio Management. Competency and training framework: This involves Conducting competency needs analysis Introducing improvements where the greatest benefits can be realised, while maintaining the total picture of integrated project management principles and practices Providing professional development opportunities through training and mentoring in new tools, techniques and methodology for key stakeholders (project/program managers, schedulers etc). Cultural change: This involves Consulting with and involving key stakeholders as champions of the change resulting from the introduction of portfolio management Communicating extensively with stakeholders regarding the need for change, vision for change, change strategies, impacts/benefits of change, expected behaviour etc. Dealing with obstacles to change Showcasing/rewarding short-term successes in portfolio/program management etc. Ensuring that the changes become part of Centrelink culture for long-term transformation and growth. Summary Centrelink s multiple project environment has contributed to the adoption of Portfolio Management to ensure effective delivery and realisation of project benefits. This structured approach has increased Centrelink s confidence in its capability to make appropriate project investment decisions and use organisational resources effectively to achieve business goals. :\enterprise portfolio management\epfm Definition\paper4_revised

7 References Adu, Joyce; Divall, Greg; McCarron, Boyd and Oluwoye Jacob (2003) Enterprise Project Management in the Australian Public Sector World Project Management Week Conference Proceedings, Gold Coast. CPMG (2002) Training Notes: Organisational Change Driven by Project Management Dinsmore, Paul (1999) Winning in Business with Enterprise Project Management New York: Amacom Office of Government Commerce (2003) Managing Successful Programs OGC:London Project Management Institute (2003) Organisational Project Management Maturity Model (OPM) Knowledge Foundation, Project Management Institute:USA Project Management Institute (2000) A Guide to the Project Management Body of Knowledge, Project Management Institute:USA Thorpe, John (1998) The Information Paradox, McGraw-Hill:Toronto Workshop #4 (3rd of December 2003) Stuart, Don and Ziebell Sarah (2003) Benefit Realisation, Canberra Workshop, (View Sept 2004) :\enterprise portfolio management\epfm Definition\paper4_revised