A Practical Approach To Project Portfolio Management, Part 1
PPM is a necessity, not a luxury. Here's how to set up a good, fast, and inexpensive program that will make the best use of pricey IT resources, without costly specialized software.
Your company is moving quickly to adjust to changing market conditions, tougher competition, regulatory pressures, or all of the above. Business leaders have requested dozens of new tech projects, all on tight timeframes, but no one is supplementing your limited resources.
Oh, and you need to keep normal operations up and running.
Sound familiar? There always seems to be more project work to be done than the resources necessary to accomplish it. The answer is prioritization, facilitated by project management offices (PMOs) that identify and prioritize the initiatives that best align with company strategy. However, a PMO is often viewed as a luxury item, especially in smaller companies — which is a shame, because they face the same challenges and competitive pressures as larger businesses.
Think a formal PMO requires pricey dedicated resources and sophisticated software tools to be effective? Not so. Yes, building a viable project management and prioritization capability takes time and effort, but it doesn’t have to be an expensive and daunting task. I call my approach “Blue Collar PMO,” and in this column and two more to follow, I’ll lay out a plan that any size organization can follow.
Ready? First, understand that the question is not: “How can we afford project management?” It’s: “How can we continue without it?” If you don't have a PMO, this is an excellent project going into the new year.
Sample Project Matrix
A spreadsheet of initiatives, including the requesting (owning) department, cost, ROI, and month needed, is helpful in reviewing the balance of work.
There are two top-level keys to success:
Executives who realize they have a responsibility to make the most effective use of company resources (people, capital investment, technology) and are willing to roll up their sleeves, work together, engage in healthy debate, and determine the most critical initiatives on which to focus those resources.
Some level of discipline around how project work is requested, approved, initiated, and tracked. Everyone needs to look beyond their silos of responsibility and make decisions that further the collective goals of the organization.
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Got these covered? Then jump into this four-step plan: Run an inventory, prioritize, assess, and review sourcing and scheduling. I’ll cover some foundational elements now; check back tomorrow for the next installment.
1. Set the foundation: Appoint a champion and develop a prioritization process. Even with an engaged executive team, you still need a PMO process champion. An IT leader can be a good choice because many initiatives are technology-oriented and will cross departmental lines. By the nature of its responsibilities, the IT team often has a wider view of the business and inter-relationships among systems and processes. But understand that this champion does not make decisions or set priorities. Rather, the champion owns the process, can supply necessary information, and can facilitate effective decision-making.
Speaking of process, managing a project portfolio requires a transparent, fluid prioritization methodology that responds to changes in the business and ensures that resources are aligned with goals and strategy. There’s a limit to how much capital any company can invest and how much change it can absorb. A working prioritization process lets the organization focus on the most important initiatives and quickly shift resources to the next priority as they become available.
There are four cornerstones of a prioritization process:
Inventory: Assemble a list of initiatives that are important to the business.
Prioritize: Rank the list of initiatives so everyone knows in what order the company will allocate its resources.
Assess: Determine the resource draw of a given initiative and propose ways to deliver the desired results
Source and schedule:Sourcing defines how we secure and allocate resources, while scheduling determines when we allocate those resources based on planned availability.
Next I'll address how to build an inventory and decide on priorities, then I’ll dive into the resource end of the program.
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