Project Portfolio Management

The beauty of portfolio management is that ultimately, the prioritization process will allow you to fund the projects that most closely align with your companys strategic objectives

Why?

Align IT resources with business objectives Build strong IT governance structure Ensure proper executive & business support of IT projects Maximize IT investments Reduce # of redundant projects Make it easier to cancel projects Set expectations Develop IT plan and IT budget
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Steps to Successful Project Portfolio Management

There is no single right way to do portfolio management.

Steps
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Gather a detailed inventory of all projects

Set strategic objectives for the company Align projects with objectives Score and categorize projects
IT Plan, Budget

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Actively manage portfolio

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Inventory of Projects

Software upgrades New systems Policy changes Product development Internal controls Workflow automation Infrastructure Facilities

Some companies using PPM, begin with taking a complete inventory of current requested projects.
Other companies benefit from starting from scratch with the process and require that all projects be rerequested and re-assessed through PPM. This presentation outlines the process for starting from the beginning with all projects being requested as new and therefore we skip to the next step Set Strategic Objectives.
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Set Strategic Objectives

One 3 hour meeting with all company Vice Presidents and President/CEO
CEO, CFO, CIO, EVP, VP HR, Division President, VP Books, VP Journals, VP Reference, VP Sales/Mktg

Operating Plan structure is set at 3 levels

Objectives (Why?) Initiatives (What?) Projects (How?)

Objectives are brainstormed and decided upon in this meeting with all attendees prepared with 3-5 recommended objectives.
Discussion serves as kick-off to next year and a chance to openly, informally discuss company strategies and challenges.
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Set Strategic Objectives

Sample Operating Plan Objectives
(Publishing Company)

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Create specific competitive advantages to attract and retain the best co-workers, authors, editors and societies Develop global business practices and systems to increase revenue, reduce costs and improve coordination between sites

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4 5 6 7

Ensure our book product lines are coherently organized and effectively resourced to generate substantial growth in our markets
Position company to take greatest advantage of growth opportunities in journals business Develop Marketing and Sales organization in line with changing product needs, customer relations and technology opportunities Grow through the purchase of lists and/or companies Develop local infrastructure to mitigate risk and obtain operational efficiencies

Set Strategic Objectives

1.Objective 2.Initiative 3.Project

VPs brainstorm initiatives in support of the objectives with direct reports (directors and senior managers) within their department. Another 3 hour meeting is held with all VPs and direct reports to review all recommended initiatives by department. Initiatives are discussed and agreed upon in this meeting. A good amount of cleanup is required on this list after the meeting (deleting duplicates, merging similar initiatives, etc. Finalized list is distributed to all VPs and direct reports (now referred to as the Operating Plan Team). Involvement of direct reports at this level serves the purpose of generating early buy in to the Operating Plan process by senior management.

Set Strategic Objectives

1.Objective 2.Initiative 3.Project

Ensure our book product lines are coherently organized and effectively resourced to generate substantial growth
Improve process for managing the rollover of adoptions to new editions Improve integration of the Reference line throughout the organization Reduce costs and improve transactional efficiencies in the book life cycle Grow the XYZ brand VP Books VP Reference CFO Division President

Align Projects

1.Objective 2.Initiative 3.Project

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2.

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3.

4. 5.

6.

Department VPs and their direct reports are responsible for recommending projects that will support each initiative in alignment with the company objectives. Each senior manager must enter recommended projects into the Operating Plan system. Only VP approved projects are entered into the system, cutting down drastically on frivolous project requests. Each project entry requires a high level justification including project description, business benefits, executive sponsor, business manager, estimated quarter of completion, etc. The projects are then turned over to IT to assign IT owners and estimate costs for all projects requiring IT support. All proposed projects are then reviewed in individual departmental meetings chaired by the CIO, CFO and EVP with attendees being the department VP and their direct reports. Department VPs and direct reports are given this opportunity to introduce the project and sell it to the chairs for approval.
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Align Projects

1.Objective 2.Initiative 3.Project

Objective

Ensure our book product lines are coherently organized and effectively resourced to generate substantial growth
Improve integration of the Reference line throughout the organization Develop reference production tracking module within existing books production tracking system Develop and implement plan for electronic reference databases as part of the on-line journals platform Director of Books Production VP Reference

Initiative

Projects

Provide Reference editors with a project management tool for managing reference works in development

Reference Manager

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Score Projects

1.Objective 2.Initiative 3.Project

During the project review meetings, each project is assessed based on strength of support for initiative/objective, estimated business benefits, and estimated costs. As a closing to the discussion on each project, the project is assigned a status and an action level. The action level is assigned first and drives the status and next steps, as outlined below:
Action Level: 1. Start Project 2. Start after validation* 3. More research needed 4. Unlikely to start this year 5. Do not start this year Status: Accepted Proposed Proposed Proposed Deferred Next Steps: Begin projects in order of priority Begin validation process Continue research and propose again Hold (candidate for Q4 if resources allow) Hold for next year and propose again

* Validation refers to a more in-depth cost/benefit analysis required of the

business owner before a project is formally accepted or deferred

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Page 1 of Project Proposal Form in Operating Plan System

Page 2 of Project Proposal Form in Operating Plan System

Assigned by IT

Status: Proposed Accepted Deferred (All project requests default to proposed. Only Department VPs can change this field) Action Level: 1 Start Project 2 Start after validation 3 More research needed 4 Unlikely to start this year 5 Do not start this year

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IT Plan and Budget

1.Objective 2.Initiative 3.Project

After all projects are reviewed and scored, the Department VPs are tasked with prioritizing all action level 1 and 2 projects for their department. The priorities are simply high, medium and low. The Operating Plan is then handed over to IT to schedule all action level 1 and 2 projects that require IT support into the four quarters of the year with estimated start and complete quarters. This scheduling is based on priority and action level with the high priority, action level 1 projects at the top. IT resource leveling is done at this time. This schedule is the first draft of the IT plan for the coming year. It is then tweaked as needed when looked at on paper for anomalies, special considerations, etc. This schedule will also become the basis for the IT budget.
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Actively Manage Portfolio

Portfolio Management without governance is an empty concept

Monthly IT Steering Committee (ITSC) chaired by CIO. Members of committee include CEO, CFO and EVP. All other VPs attend as needed based on agenda of items to be discussed. Purpose of committee:

Business owners and department VPs present projects requiring validation before approval. ITSC approves or denies these projects. Monthly status given on large-scale, strategic IT projects from the Operating Plan. Provides forum for strategic IT spending decisions and updates on critical system issues/concerns. Provides forum for reprioritizing projects based on mid-year changes in company priorities/strategies.
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Actively Manage Portfolio

Quarterly review of entire Operating Plan at standing Executive Committee meetings. All VPs are required to give status of initiatives and projects quarterly.

Quarterly review by CEO of high-level Operating Plan at Board of Directors Meetings.

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Hurdles to Portfolio Management

Democracy aint easy

Hurdles

Team: Many executives are initially uncomfortable having their decisions scrutinized. It requires real teamwork at the executive level to support portfolio management and governance. Executive buy-in is absolutely required up front. Complexity: The desire to overcomplicate this process with complex scoring and red tape is overwhelming. Keep it simple at first then improve upon the process as participants become familiar with the steps. Software: Do not rely on project portfolio management tools to manage this process for you. No one tool does everything and many tools complicate the process. Sage wrote their own tool in an attempt to keep it simple. Time: This requires an additional time commitment from executives above and beyond their usual constraints. Coming to meetings prepared is the key to keeping this process time sensitive.
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