Project and Portfolio Management

3 03 2009

Today’s tough economic environment is bringing new challenges. And an absolute focus on performance. Investment decisions should be made with a complete understanding of the impact to cash flow, profitability, velocity, growth, and customer intimacy in your IT organization. Project and Portfolio Management can address these concerns Project and Portfolio Management addresses these concerns by adopting a combination of processes based on COBIT 4.1 and VAL IT management frameworks to ask the right questions.

In portfolio management we really want to know:

  • Are we doing the right things?
  • Are we realizing the benefits?

The answers will help guide us to approve the right mix of work to optimize contributions to strategic objectives while providing value, at affordable cost with an acceptable level of risk. And, focus our attention to the projects generating the most significant improvements in the five (and only five) essentials in business that matter: cash flow, profitability, velocity, growth, and customer intimacy.

We use project management when we really want to know:

  • Are we doing them the right way?
  • Are we getting them done well?

How effective and disciplined are my delivery and project management processes? Are we finding ways to continually boost the productivity of our project management teams? Does our organization have the capability to evaluate our initiatives in a systematic and objective manner?

Asking the right questions here is critical to success. Poor project and portfolio management practices can prevent even the best organization from performing in an optimal manner. Most of the real problems begin with execution in project management where the work is planned and managed. Since this is where most of the project activity originates and is recorded, it is a critical to measuring progress to plan and evaluating performance accurately. Without an effective and disciplined project management function unplanned work begins to overtake planned activity (see my prior post on Demand Management). Because intent is not communicated clearly to stakeholders and resources committed, a significant amount of risk can be introduced into every initiative undertaken. The results are inevitable and lead to:

  • Incomplete project definition leading to ongoing project extensions
  • Unclear work assignments, goals, objectives, and deliverables.
  • Non-value added essential work and unplanned activity ratios rise as more and more meetings and status reporting is required to communicate intent and progress.
  • Scope creep or frequently changing delivery targets
  • Budget overruns occur to meet the unplanned activity not accounted for
  • Missed deadlines on scheduled deliverables or slippage in cycle delivery occurs
  • Unusable new product or feature is created – expensive, costly rework is required
  • Failure to deliver on some elements of the project scope – focus is lost
  • Customer confidence and value is destroyed faster than it can be created

Now that we have met the enemy, what can be done? I plan to address some straight forward ways to improve fundamental blocking and tackling in project management practices in the coming weeks. Effective Portfolio management is built on this foundation, without getting this right you will only be left guessing at best when it comes time to make the right call.

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