Post on 22-Apr-2015
description
Complete Perspective. Smart Decisions.
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@UMT360
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Gartner Shares the Most Important PPM Trends for 2014• Donna Fitzgerald
Gartner Research VP, Program & Portfolio Mgt.• Ben Chamberlain
UMT360 Chief Product & Marketing Officer
IntroductionsDonna Fitzgerald• Gartner Research VP focused on Project
& Portfolio Management• Combines a unique blend of thought
leadership & industry practitioner experience
Ben Chamberlain• UMT360 Chief Product & Marketing
Officer• Over 12 years experience of building
Portfolio Management solutions on-top of the Microsoft platform
The Value Driven Future
Doing What You’ve Done Successfully in the Past Will Generally Cause You to Fail in the Future
The bridge can be built by focusing on Value & better Portfolio Management
80% of PMOs are
below level 3
The 7 Steps Toward the Chasm and Why Most Managers Won’t see if Coming
The competitive landscape is in constant Flux
Organizations have already taken all the easy cost reductions
The focus shifts to competitive advantage
This makes the success of the planned investment more important
Success therefore isn’t completion of the project –it is Value Generated
Value Generated requires the project to deliver the things that enable the value generation
Maximum Value Generation generally entails CHANGE
Unless you know to look for it…
You won’t see the impact of these changes until your organization has passed step 4
Then by the time You see the need to change
it’s too late…
2 3 4 56 7
1
What Does This Focus on Speed and Value Really Mean for Your PMO?
• All projects need to be clear on what substantive value they are delivering before they are approved
• Post project value assessments are only meaningful if you understood what measurable value you were expecting
• True Value can be nebulous but the components that are used to build it out should be measurable. Techniques like value chain and results chain will help. 6
“I don’t want to see anything about on-time and on-budget
in your reports. Going forward it’s all about value delivered”
Midwestern insurance company CIO
Resources• Tacit Knowledge• Thought Leadership• Commissioned
Research
Curriculum• Outcome driven• Execution
alternatives
Member Success• Respect as
measured by press• Good
Compensation
Valu
e C
hain
How Do You Measure Value?
• Value is not always financial but it is most often expressed in financial or measurable terms
• The Project Manager is in the driver’s seat and requires the tools and information necessary to reach the Value destination
• The PMO must design systems and processes that support this goal• Virtual Business Case• Strategy or Value statements • Deliverable based progress
measurements
The average Level 2 PMO scores a 2.16% on the maturity curve for their value and financial expertise
How is Value Generation Different from Benefits Realization?
• Benefits are contingent on a host of factors that are external to the project
• The measurable Value delivered by a project might be a contributor to a benefit or it might the enabler of the benefit itself
• Value can be continuously checked over the life of the project to make sure all assumptions still “make sense”
Portfolio Focus
FinancialFocus
Product Focused
Value
When Gartner Measures Value & Financial Management Capabilities What are We Measuring?
• Projects and programs are approved in a portfolio context only
• Projects are evaluated for the degree to which they support strategy as part of the initial portfolio process
• Each project consciously defines how the benefit realization process will be tracked
• The portfolio supports dynamic reviews based on progress to date and benefit to be delivered
• Programs/projects are chartered to deliver the full scope of required change and are not siloed to a single area (i.e. IT runs one project and the business runs another)
The Value Based Portfolio Transcends IT
Begin by Adopting an Enterprise Perspective Even if You Still Work in IT
IT Centered Projects
Benefit Centered Business Projects
Customer Facing Apps
Business Capabilities
Measurable Benefits
Strategy Execution
IT PM Processes
Technology Deployments
Accounting for Value
Enterprise Portfolio
Roadmaps & Blue Prints
S/W Product Development
Clearly Delineate What Lever a Project will Turn to Generate Value
Benefits Realization Plan
Program Plan
Results Chain
Help Your Organization Invest First in What Delivers Maximum Value NOW….
Strategy A Strategy B Strategy C Strategy D
Finance Project 1Project 5Project 10
Project 4
Customer Facing Project 3Project 12
Process Improvement
Project 2Project 9
Project 8Project 13
Project 11Project 14
Project 6Project 15
Innovation/Learning and Growth
Project 7
And no – this isn’t short term thinking – This is real prioritization
Ensure Your Tracking System Is Measuring the right things• Track the time (Estimate to
Complete)• Track the dollars (Actuals and
Forecast)• Track the deliverables
• Forget about gates – Projects live or die by milestones
• Track the people – • the good ones are rare and can
only be spent once
This is a simultaneous equation requiring optimizing forMaximum Value across competing priorities. Finally remember…
It’s you, rather than Management, who is responsible for the analysis
Use an Integrated Portfolio Approach Once You’ve Mastered the Other Disciplines
Re-orient Your PMO to Successfully Cross the Chasm
The Investment Units of the Future Will be Defined Differently Than in the Present
• Today everything is either a Project or it’s operations• Tomorrow there will be:
• Programs for large change• Projects for Intra-organizational change (which includes IT)• New Product Develop efforts for software that touches the
customer (and might produce revenue)• Product Releases for continuous change to maintain business
capabilities• Continuous change efforts (Kaizan, Workouts) and IT bug fixing• Initiatives – speculative, exploratory work that might produce
something new but also might determine that something shouldn’t be done
The Investment Units of the Future Will be Defined Differently Than in the Present
• Today everything is either a Project or it’s operations• Tomorrow there will be:
• Programs for large change• Projects for Intra-organizational change (which includes IT)• New Product Develop Efforts for software that touches the customer
(and might produce revenue)• Product Releases for continuous change to maintain business
capabilities• Continuous change efforts (Kaizan, Workouts) and IT bug fixing• Initiatives – speculative, exploratory work that might produce
something new but also might determine that something shouldn’t be done. An
d it
will a
ll ta
ke m
oney
that
mus
t be
acco
unte
d fo
r in
the
portfo
lio
And to Make it Worse Current Funding Models will Change in the Future
Operations/Production
Product Dev &
Evolving Shared
Value chain
Control &complianc
eCorporate
CAPEX
Emergent Responses
withinSBUs &
Functions
Coordinated &/or Shared Budgets
Frequent Ad Hoc Funding
Planned FundingCycle
Independent Budgets
The PMO of the Future:
• Will be a Portfolio Office
• Will think and speak in the language of “Money”
• Will be consultative and analytical
• Will understand Value and how the business can generate it
• Can judge when an investment is going south before it’s too late and is not afraid of confrontation
• Understands that projects/programs and products are complex adaptive systems and that uncertainty and possible failure are a normal part of the equation
• Is regarded as a trusted advisor and honest broker by everyone involved.
20
Action Plan for PPMLeadersMonday Morning:
• Adopt a financial focus to support the generation of value and to support “speaking the language of money”
• Develop a collaborative approach to business cases that focuses on the measurable value from the project.
Next 90 Days:• Use a portfolio tool that will support a value and strategy
focus.• Provide transparency and visibility of the portfolio and
ensure that funding decisions are made in a portfolio context
Next 12 Months:• Insure your analysis includes all interdependencies
(including impacts on the application portfolio and your service portfolio)
• Encourage the adoption of product management by requesting a road map to assist with the portfolio process
Enterprise Portfolio Management
Take Your PMO to a New Level
2011 2012 2013 2014$0.00
$400,000,000.00
$800,000,000.00
$1,200,000,000.00
$1,600,000,000.00
$2,000,000,000.00
Demand vs. Capacity ChallengeOperational costs limit innovation
Run
Run
Total Demand for Growth
Overall Capacity for Growth
The Gap is Growing!
Grow & Transfor
m
Grow & Transfor
m
Sp
en
d in
$b
n
2011 2012 2013 2014$0.00
$400,000,000.00
$800,000,000.00
$1,200,000,000.00
$1,600,000,000.00
$2,000,000,000.00
Demand vs. Capacity ChallengeOperational costs limit innovation
Run
Total Demand for Growth
Overall Capacity for Growth
Closing the Gap!
Grow & Transfor
m
Run
Sp
en
d in
$b
n
Run
Grow & Transfor
m
Business Process / Capability
Application
IT Services
Projects
Maintenance
Rationalizing Run InvestmentsPortfolio Relationships & Financials Intelligence is Key!
$
$
$ Application
IT Services
Projects
Maintenance
$
$
$
$ $
$
Integrate Business
& IT Portfolios
Drive Complete Financial
Transparency
Assets & Projects are
Business Investments
Synchronize Roadmaps & Gauge
Cross Portfolio Impact
Maximize ROI from Strategic InitiativesTraditional PPM is Failing to Deliver Anticipated Results
18%
43%
33%
33%
Of projects fail to get implemented
Of completed projects have cost overruns
Of all projects are delivered late or over budget
Of projects do not meet their goals or business intent
Gartner
PMI
Standish Group
Standish Group
54%46%Unrealize
d Business
Value
Realized Business
Value
Maximize ROI from Growth InitiativesTrifecta of Business Value Erosion
54%46%Unrealize
d Business
Value
Realized Business
Value
PPM+
Innovation & Estimating
Project Success Rates
Budget Utilization
Traditional PMO Enterprise PMO
Investment Focus Responsible for discretionary spend for projects
Visibility across all spend, both lights-on and discretionary
Portfolio Focus Responsible for managing project portfolios only
Responsible for integrating all portfolios and mapping to business capabilities
Innovation & Portfolio SelectionDemand is consolidated from bottom up requests from across the business
Higher quality demand is generated from analysis of business capabilities / products
Funding & AllocationFunding allocated by department and organization utilizes an annual planning model
Funding allocated by business capabilities and teams empowered to adopt a dynamic planning model
Portfolio Tracking & Measurement
A tactical focus on managing schedules, resources and scope
More emphasis on tracking project financial performance & maximizing ROI across the investment portfolio
Benefits TrackingBased on project level ROI and often no process for tracking actual benefits
Benefits realization framework established at program or capability level
The Essential Shift from PPM to EPMTake Your PMO to a New Level
UMT360 – Enterprise Portfolio Mgmt.Digitalize Investment Planning & Controls
Financial Transparency
Connected Enterprise Portfolio Intelligence
Synchronize Roadmaps
PPM+
PPM+
PPM+
Financial Intelligence
Application Portfolios
IT Business Mgmt.
UMT360 Solutions
in the Magic Quadrant for Integrated IT Portfolio Analysis (IIPA).
Visionary
2013 in Project and Portfolio Management.
Partner of the Year2013 in Program and
Portfolio Management.
Cool Vendor2012
UMT360 - Project Financial IntelligenceIntegrated Project & Portfolio Financial Controls
Investment Governance & Controls
Business Case
Analysis
Allocation & Funding
Cost Tracking& Variance Analysis
Change Request Mgmt.
ERP Connector / Integration
Program Mgmt.
Chargeback Reporting
Benefits Realization
Financial Dashboards & Reports
PerformanceMetrics
Project Financial Intelligence
Cross Portfolio
Mappings
Application Catalog
Portfolio Analytics
Cost Takeouts &
Benefits Realization
PerformanceMetrics
Application Portfolio Mgmt.
Chargeback Reporting
Cost Tracking & Variance Analysis
Demand Generation
Budgeting, TCO &
Funding
Application Roadmaps
Change Mgmt.
Dashboards & Reports
Investment Governance & Controls
UMT360 - Integrated APM & PPMGet More Business Value from your Applications
Thank YouVisit www.UMT360.com to learn more.
Ben Chamberlain
UMT360 Chief Product & Marketing Officer
ben.chamberlain@umt360.com