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Management of Portfolios (MoP™)Overview

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Executive Guide - Published June 2010

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“Many times small thing are…well…small. This small, new, OGC guide, however, is right on target for executive education in portfolio management.”

“Executives in organizations that are considering an implementation and use of project portfolio management (or who are not satisfied with the current use of that discipline) should get and use this publication as a “concept document”, and as a communication mechanism, for input and iterative refinement to a discussion of both thevalue and impact potential to its adoption.”

Gartner Short Standard 07/08/10 Michael Hanford

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MoP - What are we talking about?

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Portfolio: The totality of an organization’s investment (or segment thereof) in the changes required to achieve its strategic objectives.

Portfolio Management: Portfolio Management is a co-ordinated collection of strategic processes and decisions that together enable the most effective balance of organizational change and Business As Usual.

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MoP - Where does it fit?

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© Crown Copyright 2011 Reproduced with permission from OGCM_o_R® is a Registered Trade Marks of the Office of Government Commerce in the United Kingdom and other countriesPRINCE2® is a Registered Trade Marks of the Office of Government Commerce in the United Kingdom and other countriesMSP® is a Registered Trade Marks of the Office of Government Commerce in the United Kingdom and other countriesITIL® is a Registered Trade Marks of the Office of Government Commerce in the United Kingdom and other countriesP3M3® is a Registered Trade Marks of the Office of Government Commerce in the United Kingdom and other countriesP3O® is a Registered Trade Mark of the Office of Government CommerceMoP™ is a Trade Marks of the Office of Government Commerce in the United Kingdom and other countriesMoV™ is a Trade Marks of the Office of Government Commerce in the United Kingdom and other countries

MoP - The Target Audience

Anyone with an interest, and/or role, in delivering programmes and projects, and organizational strategy from inception to delivery. This includes: Members of Management Boards and Directors of

Change; Senior Responsible Owners (SROs); Portfolio, Programme, Project, Business Change and

Benefits Managers; Business Case writers and Project appraisers; and Those in other functions/departments with a role in

delivering strategic objectives.

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1. An overview of Portfolio Management

2. The Principles upon which successful approaches to Portfolio Management are built

3. Descriptions of the Practices contained within the two Portfolio Management cycles

4. Role Descriptions and key Portfolio Documentation

5. Real life examples of Portfolio Management

MoP - Main contents

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2 cycles

5 Principles

© Crown Copyright 2011 Reproduced with permission from OGC

MoP - Portfolio Management Model

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UnderstandCategorize

Prioritize

Balance

Benefits Management

Financial Management

Management Control

Resource Management

Portfolio DefinitionPortfolio Definition Portfolio DeliveryPortfolio Delivery

Risk Management

Stakeholder Engagement

Organisational Governance

Plan

Organizational Energy

Doing the ‘right’ things Doing things ‘right’

© Crown Copyright 2011 Reproduced with permission from OGC

MoP – Cycles & Practices

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Business Applications

Justified on Cost-Benefit terms i.e. does the economic value of the

benefits exceed the costs?

Mandated Justified on Cost-Benefit terms -

any shortfall in benefits represents the implied ‘Political

Value’ of avoiding non-compliance with the law,

regulation or policy.

Replacement InfrastructureJustified on Cost-Effectiveness terms

i.e. does the replacement enable

resources to be re-directed to other

value-adding activities?

New InfrastructureJustified on Cost-Benefit terms

by taking into consideration both the infrastructure and

the applications (both planned and potential) that

will run on that infrastructure.

Name ID Type Priority Project Owner

Business Unit Owner

Stage Gate

Management & Control Delivery Notes Finish date

R

This mth Last mth This mth Last mth

Project 1 11 Efficiency 1 B. Wilson Div C Deploy R A A G PM not allocated since last month’s request

Feb-11 Project 2 21 Compliance 3 F. Petrou Div B PIR A R G A Critical systems issue

addressedJun-09

Project 3 35 Revenue 2 P. Ternouth Div A Initiate A A A A Reporting not improved since last month, review

scheduled

Mar-10

Portfolio indicators

Project indicators

management & control (i.e. how well the project is being managed, project health)

actual performance/delivery (i.e. how well the project is delivering benefits)12

1 2

Summary of the actual status of the project compared to its approved plans as at the reporting date. For example:• actual progress against planned schedule• actual spend against planned budget (& use of contingency)• benefits realisation progress• level of risk

R

A G

A ABenefits realisation – 20/130 projects benefits at risk ($20M)

Risk – 20/130 projects not managing risks effectivelyResource – 10/130 projects are short of critical resources

Time – 90/130 projects behind schedule

Embedding Change – 30/130 projects are following the project mgmt standards

Force Ranking of project priority against strategic drivers, complexity [risk] and planned benefits

Consolidated & Analysed

R Budget – 20/130 projects over budget ($10M at risk)

The project’s alignment to agreed strategic drivers

Summary of how well the project complies with embedded project management standards e.g. Schedule, risk, quality etc.

Key project ownership information

Has reporting been submitted on time and to the required quality?

MoP - Tools and techniques

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1. Improved strategic contribution - more of the ‘right’ projects are undertaken

2. Removal of redundant, duplicate and low value adding projects

3. More effective implementation of projects and programmes

4. More efficient utilization of scarce resources including skilled project managers

5. Greater benefits realization

6. Improved accountability and corporate governance.

Benefits of Portfolio Management

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• Executive Guide – Published 2010

• Main Guide – February 2011

• Foundation Exams – Launched February 2011

• Practitioner Exams – Launch: Canberra, Sept 9th 2011

MoP – The next steps

Any questions?

For more information please visit:

www.best-management-practice.com

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