Portfolio Management

Denis Hellewell

4 March 2005

This presentation

A review of portfolio management & the Centre of Excellence (COE)

• Some background

• What we did – and the supporting rationale

• What it looks like

• Where this fits with our COE and how it is scalable.

Purpose

• To share the approach taken

• To outline how this approach was implemented

Desired outcomeA common view of where we are now and how we got there.

A few definitions

We began using these definitions

Portfolio:

“A grouping or bundle of projects, collected together for management convenience. They may or may not have a common objective, they are often related only by the use of common resources”

Portfolio Management:

“The management of a number of projects that do not share a common objective”

Found that these definitions weren’t fit for our purpose… so now

A few definitions

We now uses these definitions

Portfolio:

“A series of strategically aligned programmes and fixed life-span projects that deliver beneficial change.”

Portfolio Management:

“The co-ordinated control of connected or unconnected programmes of work that change the organisation to achieve objectives detailed in our corporate strategy and deliver benefits that are of strategic importance.”

Benefits of Portfolio Level Management

Improved organisational performance

• Motivate staff, customers and suppliers through better communications

• Assure continued organisational development

Reduce boardroom-level “surprises”

• Provides robust governance, applied across all projects

• Avoid many common failures on programmes and projects

Avoid hardship to stakeholders

• Minimise risks that arise from projects

• Maximise benefits realised from programmes and projects

Delivering Corporate Benefits Through portfolio management

initiatives

Benefits

objective objective objective

Benefits Benefits Benefits Benefits Benefits

DeliveryProject

DeliveryProject

DeliveryProject

DeliveryProject

DeliveryProject

Project stopped as no identifiable benefit deliveryProgramme and Project Portfolio

The purpose of Portfolio Management

• ‘Tying it all together’

• delivering the business benefits across the portfolio

• coordinating the project portfolio in consideration of the business

• Increasing overall performance of the portfolio

• Facilitate visibility of the business to the board and stakeholders

• So how is this actually done ?

Portfolio Management; the link to Governance

organisation

corporate governance

project management

portfolio management

• Portfolio management is a subset of corporate governance

• Project Management activities generally lie outside the concerns of corporate governance

• Portfolio management connects project management activities into those of the corporate body

Portfolio ‘touch-points’ portfolio management considerations – tying it all together

Effective projectmanagement

Alignmentto strategy

Releasemanagement

Companyplanning &forecasting

Budget management

Resource allocation & commitment

Portfolio of projects

Business as

usual

Business as

usual

Business programme

Business education

Best practice Project R

egister

Connecting Projects to Corporate Governance

• Reporting structures

• Getting the correct level of information to the decision maker

• Risk management structures

• Getting risks assigned at the correct levels

• Business benefits management

• Realisation of benefits across the whole organisation

• Financial management

• Managing across the investments not in isolation

• Governance structures

• Having the correct functions making the correct levels of decision

Coherent reporting structuresProgramme/Project/Portfolio Governance and Control

Projects

OperationsBoard

Programme Board

Programme Manager

Business Health Check

Business Sponsor

SRO

Minister

report

report

report

report

• Interdependencies• Risk• Cost• Schedule• Progress

feedback

feedback

feedback

feedback

Portfolio Management Principal players

• Corporate level programme/portfolio board

• The SRO

• The Programme Manager

• The Business Sponsor

• The Customers

• Major Stakeholders

So how was this actually implemented

Single Portfolio Management and the CoE

CoE

Programmes & projects

CoE

Programmes & projects

CoE

Programmes & projects

Basic CoE with a lack of definition within the organisation

Formalisation and bounding of the role of the COE

Proceeded to grow the functionality by adding functional heads & strengthening the boundaries

Identified, reviewed & rationalised the current set of projects & programmes

Integrated/migrated the projects and programmes into the CoE over a short period of time

Defined portfolio management processes around the CoE

This then expands the CoE to incorporate portfolio management processes

Sitting outside the CoE is the overall governance in the form of the Corporate Programme Board

The Corporate Programme Board report directly into the Corporate board

Portfolio Governance Structure

Corporate Programme Board

SRO

PM PBS

SRO

PM PBS

SRO

PM PBS

Supplier (IT) Chief Financial Officer (Director of Finance)

Supplier (PDU)

PjM BS PjM BS PjM BS PjM BS PjM BS

PjM BS PjM BS

Ass

ura

nce

(P

DU

)C

oo

rdin

ation

(PD

U)

Work Package

Development Team

Work Package

Development Team

Multiple Portfolios and the CoE

CoE

Programmes & projects

CoE

Programmes & projects

CoE

Programmes & projects

Portfolio manager Portfolio manager Portfolio manager

Corporate board

So What Does a Portfolio Look Like ?

• Like a CoE

• Like a piece of corporate governance

• Like an optimised delivery system

• Like a group of projects and programmes

• Like something that fits the organisation and works ….

Summary: our Outcomes

• Governance

• Prioritisation

• Shared resource allocation

• Unified Risk Management

• Silo breakdown