Project portfolio management is more about process and behavior than tools.
IT project portfolio management can be messy. Picture a consultant selling it to your executives, sticking around for 18 months at $200 an hour, and then running away when things go wrong--leaving you with the broken promises and unrealized investments.
That's too bad, because a practical PPM implementation, sized correctly for your organization, can boost IT's credibility and overall effectiveness. As we're discussing it here, PPM is the set of practices and processes IT organizations use to prioritize their projects. It also defines methodologies for tracking and managing resources, including people and capital investments, throughout those projects' life cycles.
How do you get started, and avoid the disaster we described? PPM software tools can help you track and compare things like budget expenditures, how you're using staff time, what business problem is being solved by the project, and so on. Or a gung-ho staff member could write a tool or manage your portfolio of projects through Google Docs. Or a good consultant can help you define the problem and figure out what you're willing to invest and what your organization will tolerate. In other words, there's no one right way to do it.
PPM tools, even when you're talking about on-premises software, aren't all that expensive--depending upon the size of your organization, you can start for less than $20,000. Software-as-a-service tools, starting at about $50 per month per user, aren't a huge expense either. The dollar cost isn't as big a barrier as the difficulty of changing organizational culture and a limited time budget for trying new things. To maximize your effort, here are nine best practices we've observed.
1. Decide on what problem you're solving and how to know when you've solved it.
PPM is complex, and it can soak up time and money. It can cause people to get irritated with you because you're trying to change their work habits. Why would your people get on board with it if they don't get something in return? That pot of gold at the end of the rainbow will provide great motivation for you and your co-workers to get past the headachey parts of PPM. And, as with any initiative, if you know what the end goal is, you can start to quantify how close you are to that goal.
2. Fit your PPM governance to either a grassroots or top-down approach.
PPM purists (usually those selling consulting services or tools) will tell you that your chances for success are highest when the initiative comes directly from the CEO, and when all organizational projects, not just IT's, are under a project management office umbrella. Ideally, of course, it's best to have the CEO available to knock obstacles down for you. But in the spirit of picking priorities, we suggest that if the problem you're trying to solve hasn't already bubbled up to the CEO, he or she will be reluctant to jump in.
A grassroots approach can work, with a few caveats. Your goals must be pretty modest. That's OK, because it's easier to tackle fewer PPM goals at a time. But be careful if you have more ambitious goals, particularly if you're hoping to push PPM out to all projects, not just IT projects. In a grassroots scenario, you won't be able to use the king's scepter to affect behavior, so you'll need other tools to coax the right behavior out of staff. The way we've seen this play out is for savvy CIOs to build coalitions at the senior management team level.
3. Implement a governance framework, but keep your perspective.
We know many folks who have successfully implemented governance using a framework such as the Project Management Institute's. A framework can be important because it provides a common language to talk through common portfolio and governance concepts. They just haven't fallen for it hook, line, and sinker.
Frameworks that may be helpful include the PMI's "Standards For Portfolio Management" and the IT Governance Institute's Val IT framework. Think of them like this: These are high-quality maps of many excellent mountain trails, but are you going to hike every single one of them in a weekend? Um, no.
4. Match the implementer to the initiative.
Wanted: Detail-oriented, yet flexible, individual who is excellent with process, yet can step outside process when required. Yeah, we know--sounds a bit like the clean-shaven bearded man, overweight yet slim.
But think of it as a balance of soft skills and technical acumen, which are critical for PPM leaders. These people are rare, but to be successful with PPM, you must find them, either inside or outside your organization, and put them to work. Don't limit yourself to IT. Are there savvy people in line departments who have an interest in solving the problem?
5. Get real about work capacity and financial management.
It's easy to get lost in the esoteric parts of project portfolio management--discussions about the relative merits of projects, their priorities, and so on. But the rubber won't meet the road until you focus on supply and demand of two things: human capital (people) and fiscal capital (money). Or in even simpler language: Can you afford the portfolio of projects that your organization is planning, and do you have the staff to carry them through?
On the face of things, this may seem like a simple process, but it can be complex. It's not just a matter of matching project work to available total labor. It's about matching skills and worker availability to project work needs. In some cases, it might mean matching geography to workers--not everything can be handled through WebEx.
Obviously, matching budgets with needs is equally important, but organizations tend to be better at that. Organizations tend not to plan for operational needs to support a capital project; the supply-demand process is a good time to build this planning into the portfolio evaluation process. For example, a building security system might cost $500,000, but you also want to build in the future costs and labor demand of maintaining that system.
We can't overstate this: If you don't express either supply or demand realistically, you're going to fail.
6. Pick your buckets and battles.
One key misstep of a new PPM initiative is to try to keep track of too much. There's merit to knowing where all the time is being spent, if that relates to the problem that you're solving, but what level of detail do you need? A common theme of successful organizations we spoke with is the abstraction or grouping of data.
It can be tempting to try to consider all work data from all sources. That is, instead of considering that you have three 40-hour-per-week employees working on XYZ project, you might want to dig down into their time sheets or into the time-tracking system that they use. We spoke with many folks who have mature timekeeping and task-tracking systems, but consider the uses of the data. It may only be necessary to know that you have 120 hours a week of employee time on the XYZ project. Sure, if you start having problems, knowing the specifics of the time utilization can be gold. But it's not always necessary. Again, what problem are you trying to solve? If you can do it with high-level instead of detail data, so much the better.
You also may have to treat different organizational units differently. Unless you're serving a law firm that keeps track of contributors' time in 6-minute intervals, don't make the mistake of thinking that line-of-business folks have the same timekeeping or cost-allocation discipline that IT does.
7. It's not about the tool, but it's important to define a toolset.
Like with all information systems, tasks can be accomplished with very simple tools, starting with paper forms, leading to Excel spreadsheets, graduating to enterprise databases, and culminating with purpose-built PPM software. You can't do PPM without systems; it's just a question of which systems fit your organization's level of ambition and maturity.
We suggest, however, a few dimensions to think about when considering toolsets:
Complexity. The PPM system must be simple enough to allow quick data entry and updates. Training costs also go up directly in proportion to a system's complexity.
Accessibility. Web-based tools, whether they're interactive and complex SaaS tools or an internally hosted intranet for document sharing, are the way to go.
Cost And Risk. Cost doesn't just include acquisition costs. A very real cost of any enterprise system is the training. Again, complex systems will cost more. Simple systems will cost less.
8. Don't get hung up on automated integration.
Product vendors love to tout system integration and automation--that is, the notion that you have to integrate PPM with your financial and HR management systems. But a sensible PPM initiative, though it may include a process to integrate the data from these systems, may put a low priority on automated integration of these systems.
Don't take it just from us. Consider the PPM initiative we know of at a major financial services company. The company's project to integrate its PPM system with some of its other databases didn't make the cut when it was considered in the context of its project governance and priorities. The company still intends to do it--someday.
9. Educate, close the loop, and begin again.
Both your staff and your customers need to be on board the PPM ship, and they won't be unless you're constantly reminding them why PPM matters to them.
It's one thing to educate. But you need to reinforce the education with periodic reports of your level of success. Go back to the metrics, sure. But also tell stories to your community, in simple language, without three-letter acronyms like PPM. Ask for feedback so that you can address any problem. For example: "It's amazing! After three quarters of our new approach to projects, we have reached an 80% success rate with our quarterly project goals, versus 40% before this new approach. We are also 20% more responsive to user calls. We hope that the new system is working well for you. Please let us know whether your experience is lining up with what we're measuring."
Finally, just as educating your stakeholders is important, don't neglect the key participants: the PPM team, the supporting executive, and those in the business units. It will help you to tune and continuously improve the initiative. Don't be afraid to revisit your PPM processes and tools every so often. Experience, of course, is one of the great educators.
Jonathan Feldman works with IT governance, strategy, and leadership in North Carolina.
You can write to us at firstname.lastname@example.org.
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