Portfolios and programmes: How are they different and does it matter?

Christopher Worsley

Portfolio & programme

management: Getting it right

© Projman cc, 2012 www.pi3.co.za Page

PPP…


Value Cost

The components…


Value Cost

How the bits fit...


Strategy

Operations

Programme challenges

The essentials of programme management

Seven ‘challenges’

Getting the structure of a programme right

Translating a vision to physical everyday actions

Creating paths of lowered resistance

From targets to commitment

Balancing the demands of design, delivery and change

On-boarding change teams

Delivery within a programme – managing a PORTFOLIO

…

Value

focus

Cost

focus 2

3

6

5

4

1

2

3

4

5

6

1

7

7


Portfolio management challenges

The essentials of portfolio management

Three fundamental areas of concern

Selecting the ‘best’ portfolio

Dealing with resource contention and

changing business priorities

Culling projects

…

6 ESPA.L10031 /

Executive Board

Sponsors

Project Boards

PSOs

Project

managers

Portfolio governance

Project governance

Project management

Portfolio

set up

Idea

evaluation

Project

preparation

Detailed

planning Project

execution

Project

control

Portfolio

control

Project

termination

TTO

Strategy definition

Senior managers

Portfolio committees

PMOs Selecting

maximum

value

portfolio

Managing

the

optimum

portfolio

Culling

projects

1 2

3

1

2

3

Portfolio and programme

management: The big ideas…


A portfolio

P

P P P

P P

I

ncre

asin

g v

alu

e P

P

P P P

Gold

en r

ele

ase

Gold

en r

ele

ase

P

P

P Gold

en r

ele

ase

Cu

rren

t sta

te

P Gold

en r

ele

ase

P


A portfolio

P

P P P

P P

I

ncre

asin

g v

alu

e P

P

P P P

Gold

en r

ele

ase

Gold

en r

ele

ase

P

P

P Gold

en r

ele

ase

Cu

rren

t sta

te

P

P

R

D

D

E

D

Tra

nsitio

n s

tate

Tranche 1

E

R E D

E

D

E

E D

D

D

Gold

en r

ele

ase

Isla

nd o

f benefit

Tranche 2 Tranche 3

A programme


Programmes

Different portfolios

Interdependent

projects portfolio

Resource optimisation

Value maximisation

Risk diversification

Benefit-driven

Risk determinate

Partitioning critical

Independent

projects portfolio


Interdependencies

Serial

Product visualisation high

Confident requirement capture

Confident do-ability

Bilateral

Unstable requirements

Products affect each other

Human factor will not allow for

‘ideal’ result

Difficulty of solution - matching

design need is HIGH

Continual review necessary


Programmes are NOT portfolios…

Programme

Benefits


Portfolio management

2: Resource optimisation

1: Value maximisation

3: Risk diversification

Strategically

Tactically

2: Contextualises data for governance groups

1: Maximises throughput

3: Manages the constraints


Harvesting

Achievement

Programme

navigation

Benefits

realisation

Programme

definition

Visioning

Benefit

assessments

Business

frameworks

Performance

measures

Set up

Programme

validation

Identify

quick wins

Options analysis

Programme

planning

Portfolio

scheduling

Programme

communications

Infrastructure

set up

Programme management


Different portfolios are different...

15

Cost leadership

Strategic alignment

Cost reduction

Increased revenue

Competitive advantage

Competitive response

Management Information

Regulatory risk avoidance

Financial risk avoidance

Backbone processes

Strategic IT Architecture

IT Infrastructure

Differentiation

Strategic alignment

Cost reduction

Increased revenue






Backbone processes


IT Infrastructure

Enterprise shared services

Strategic alignment

Cost reduction

Increased revenue






Backbone processes


IT Infrastructure

Production

Strategic alignment

Cost reduction

Increased revenue






Backbone processes


IT Infrastructure

High Medium Low High Medium Low


Resource optimisation

10

20

30

40

50

60

70

80

%

1 2 3 4 5

Concurrent projects

Pro

du

ctivity

Source: IBM

Time

Pro

ject e

ffic

iency

Plan assumption

Waiting for ‘key’ resource

Actu

al

NOT least idle time! ‘Time-slicing’ people ineffective ‘Scarce resources’ determine throughput

Impact of multi--tasking Impact on throughput

Questions:

1. Are the projects that are ahead in ‘key’ resource queue of higher priority?

2. What is the relative priority of RTB and CTB work? Who controls it?


Least idle time

0

5

10

15

20

25

30

35

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70

Upgrade sharetrading telephone toonline serviceMember-only, highinterest savings bond

Adopt new brand IDon all customercommunicationsCampaign to promotesavings products

FSA reportingregulations

Database cleanse

Upgrade call centresystems


Meeting the CAPEX constraint

0

5

10

15

20

25

30

35

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64

Upgrade share trading to online service

Member-only, high interest savings bond

Adopt brand on all customer communications

Campaign to promote savings products

FSA reporting regulations

Database cleanse

Upgrade call centre systems

Call centre refurbishment

Introduce new child savings account


Full portfolio: CAPEX minimised

0

5

10

15

20

25

30

35

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73

Upgrade share trading to

online service

Member-only, high interest

savings bond

Adopt brand on all

customer communications

Campaign to promote

savings products

FSA reporting regulations

Database cleanse

Upgrade call centre

systems

Call centre refurbishment

Introduce new child

savings account

Website enhancements


Problem cases

No-fail projects

- Increase resource buffer

- Increase project buffer

- Protect your scarce resources

Unknown capacity (e.g. contractors)

- Incentives for resource availability

- Penalties for lateness

- Explicit control of scarce resource

‘Must’ projects

- Allocate resources to these first!


Enterprise perspective

21

Programme:

Focused on a single vision for the future

SRO is accountable for the vision

Funding decisions are interrelated and self-

consistent – collaborative behaviours

Portfolio:

Diverse set of projects: no single agenda

Accountability is diffuse – multiple agendas

Funding and governance for individual

projects encourages competitive behaviours

Independent portfolios suit

maintenance (RTB) projects

Portfolio

management

Programme

management

‘Perfect’ enterprise portfolio

- minimum set of programmes

- each aligned with one element of the strategy

Principles:

Discourage independent portfolios

Minimise the number of programmes

Programmes manage their projects

All constituents of a programme must

contribute to its vision and benefits


Programme directorate

Delivery manager

Programme manager

Design authority

Change manager

Programme management office

Discipline &

visibility sustained

by properly

structured projects Balancing

complexity of

design with

ability to deliver

& sensitivity to

change

Co-ordinated

change made

in do-able

steps

SRO Benefit

realisation

Benefit

delivery

Solution

delivery

Programme governance roles


Planning a programme

Strategy

Customer

value

proposition

Impacts

Benefits

Outputs

Consequential ‘outcomes’

avoidable costs of change?

Blueprint

The new

operating

model


Project Line

Line Line

Programme roles

Consequential ‘outcomes’

avoidable costs of change?

Blueprint

The new

operating

model Strategy

Impacts

Benefits

Outputs

Programme directorate Programme manager Design authority Change manager Delivery manager


Programme types

Functional e.g. Infrastructure

upgrades

Embedded e.g. transformation

Isolate e.g. new division,

start-up

Stakeholder

management

Strategy

management

Resource

management

Delivery

management

< 5 stakeholders

Operational level

Negotiation

6-20 stakeholders

Senior level

Conflict resolution

3-12 stakeholders

Typically peers

Long standing

relationships

Tactical

Constraint driven

Short timescales

CPI view

Linked to vision

Strategic focus

Benefits determine

flexible approach

Attached to bigger

strategy

Longer timescales

Benefits driven

Own resources

Dedicated support

Line manager role

Obtain resources

Wide spread

Multiple business

functions

Assigned resource

Obtain resources

Dedicated teams

May be outsourced

Establishes

partnerships

Delivery focus

Internal focus

Technical risks

Communication

& buy-in

Delivery passed

downwards

Full risk outlook

External focus

Domain knowledge

Responsible for

delivery

Less integration

focus

Internal & external

risks


Metrics

Style

Manages

Delivers

Focus

Benefits

Scope

Plan

Role

Project Programme

Programme management is not 'big project management’

Issue resolution Progress

Accept ambiguity/collaborate Control & efficiency

Other managers Regular resources

Outcomes Outputs

Business strategy Single objective

Determine deliverables Linked to deliverables

Change inevitable Controlled

Architectural Bounded

Powerful facilitator Directive leader

Programme versus project


The differences

27

A set of projects and programmes

supporting one or more functions.

A set of projects and programmes

supporting a single business vision. Alignment

Separate benefits statements - only RoI

can be aggregated at portfolio level.

A single set of benefits related to

programme vision. Benefits

A portfolio schedule made up of

independent project plans A single programme plan coordinating

all the projects Control

Diverse risk assessments. Portfolio-

level risk exposure varies by design Single programme risk assessment,

risk exposure defined by solution Risks

Portfolio Programme

Aggregated costs of constituent

projects and programmes.

Aggregated costs of constituents plus

overhead costs of programme. Costs

Projects have individual sponsors

accountable for the projects’ benefits

A single business sponsor accountable

for realisation of programme benefits. Accountability

Resource and dependency conflicts

hard to manage.

All resources and dependencies

planned and committed. Resources

Attribute