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Making Benefits Happen:
Portfolio Leadership in Benefits Delivery
Stephen Parrett, on behalf of the APM Portfolio Management
(PfM) SIG
(SIG committee member)
APM Benefits Management SIG
National Conference May 2012
1
Agenda
Introducing the APM Portfolio Management (PfM) SIG
Positioning Portfolio Management for Benefits Delivery
PfM in Action 1 – 2012 SIG Survey....... results so far (PfM Principles & Challenges)
PfM in Action 2 – Some Personal Perspectives
Summary
Q&A
2
PfM SIG – some committee faces
We share a passion……..
"To develop and promote the professional discipline of Portfolio Management for
the public benefit.“
…..Promoting, Influencing, Communicating, and Sharing best practice……
Matt
Rawson
BG-Group
(Chair)
Achilleas
Mavrellis
Defra
(Secretary)
Adrian
Pyne
Pyne Consulting Ltd
Christine
Rigby
AstraZeneca
Stephen
Parrett
Right Change Consulting
Nigel
Bell
HP
Martin
Samphire
3pmxl Ltd
Chris
Beach
Transport for London
Dr Peter
Parkes
Peak Performance
David
Dunning
CPS
3
Assurance
Governance Programme
Management
Benefits
Management PMO
PfM
PfM SIG - interfaces with other SIGs
4
PfM SIG – Join the Debate.... Come and join us to find out more!
– Link to PfM SIG area on APM website
Become one of our Bloggers online...
Do you have some interesting PfM learning, tools, techniques or
a case study to share through a written article or presentation?
Please do complete the survey at
www.surveymonkey.com/s/LB93F9C
PfM SIG event in September…more on this soon…
PfM topics will keep flowing during 2012..................
5
Projects
Programmes
Portfolio
Specific
business
benefits
Outputs
Achieve Strategic
Objectives
Portfolio Management ensures
“right projects and optimises
investment in change”
Positioning PfM – BM Context
6
Positioning PfM – What is it?
Making the right investment choices and effectively optimising scarce resources
(money – technology – infrastructure - people)
APM
The prioritisation,
selection and
management of an
organisation’s
projects and
programmes in line
with its strategic
objectives and
business priorities,
taking into account
its capacity to
deliver them.
OGC
PfM is a
coordinated
collection of
strategic
processes and
decisions that
together enable a
more effective
balance of
organisational
change and BAU
National Audit
Office
Prioritisation of all
an organisation’s
projects and
programmes in
line with business
objectives and
matched to its
capacity to deliver
them.
Cranfield &
Open University
Managing a
diverse range of
projects and
programmes to
achieve the
maximum
organisational
value within
resource and
funding
constraints.
7
Positioning PfM – Some SIG Perspectives
‘Portfolio Management ensures the ‘right’ projects & programmes
are selected and managed for success….’ Portfolio Management SIG 2011
‘All Projects
Succeed’ APM Vision 2012
Supports timely
decision making
and re-orientation of
in-flight projects &
programmes so that
strategic benefits
are optimised
Ensures early
identification of Projects
& Programmes that
don’t add value/benefit
so they are not started /
stopped
Identification of
Projects & Programme
that are strategically
aligned. Those not
strategically aligned
are not started or
cancelled as early as
possible
Ensures visibility of all
projects & programmes
and their
interdependence and
enables tracking and
focus to ensure success.
Provides better
engagement with staff
Supports effective and
optimised allocation of
resources to better enable
the highest priority ‘right’
projects and programmes
to succeed
Ensures management
of risk at the collective
level increasing
success of the ‘right’
projects & programmes
and a link to business
risk management
Provides robust
governance of change
across the whole landscape
of change / projects
8
Positioning PfM – Integrated Cycles
Benefits Mgmt Maximise Portfolio
performance
Financial Mgmt Alignment with financial
business cycles
Risk Mgmt Mitigation …& opportunity…
Stakeholder
Engagement Maintaining
support for delivery
Resource
Mgmt
Management
Control Templates,
Assurance
Understand Strategic fit
Plan Portfolio strategy
& delivery…
The baseline…
Balance E.g. Overall risk,
return, coverage etc
Prioritise Ranking criteria
Categorise For easier
decision making
Organisational
Energy &
Willingness
Definition Delivery
Input
Results:
Influencing
Strategy
Output
Benefits:
delivering
Strategic
Objectives Performance
(Verify – Clarify –
Check – Respond) Diagram based on the Portfolio
Management cycles in OGC
Management of Portfolios (MoP™)
Governance Clarity for decision
making
9
Business Drivers
Portfolio Plan
BAU Work
Vision
Current State
Programmes and
Projects
Strategy Mission
Consensus?
Poorly
understood
Priorities
agreed? Poor
control
processes
Resources
Not Integrated
Not what
expected
Positioning PfM - where can it go wrong?
Business Strategy
Changes
Effective PfM leadership (at all levels) will ensure governance
works to overcome barriers and to protect portfolio benefits 10
Business
Performance
Benefits
Positioning PfM – The Benefits of PfM
More “right” programmes / projects
Removal of redundant, duplicate, poorly performing projects
More effective implementation of programmes / projects –
consistent approaches and improved dependency management
Better resource utilisation and collaborative working
Holistic risk management
Enhanced transparency, accountability and governance
Improved engagement and communication between senior
management and staff
Greater benefits realised
Reference: MoP™ Office of Government Commerce, 2011 11
PfM Survey – Principles(*) Considered
Proactive and visible senior management commitment
Consistent and effective governance alignment
Alignment of the Portfolio with strategic objectives
Co-ordination through a Portfolio Office
Energised change culture and associated behaviours
(*) Principles from: MoP™ - Office of Government Commerce, 2011
PfM Survey asked how each of these were perceived in
organisations in terms of their Importance and Effectiveness
12
PfM Survey – Principles Rated
Principle Importance Effectiveness
Proactive and visible senior management
commitment
59% 44%
Consistent and effective governance
alignment
46% 28%
Alignment of the Portfolio with strategic
objectives
63% 39%
Co-ordination through a Portfolio Office
28% 22%
Energised change culture and associated
behaviours
29% 19%
(% of survey participants rating the Importance/Effectiveness as “High”, being a rating of 5 or 6)
13
PfM Survey – Challenges Faced
1. Gaining Board buy-in to a single agreed view of business objectives
2. Developing an initial portfolio
3. Getting portfolio management started
4. Securing and sustaining business unit management commitment
5. Prioritising and balancing the portfolio
6. Dealing with tensions between Portfolio and BAU/Operational objectives
7. Securing and developing people with the right portfolio skills/capabilities
8. Putting in place the right tools & techniques to support PfM
9. Delivering overall portfolio benefits
10. Setting up, and gaining compliance with, portfolio management processes
11. Achieving the goals set for a portfolio management function
12. Applying lessons learnt from regular reviews of PfM performance
14
PfM Survey – Challenges being met?
Challenge
Rated High Interest
Gaining Board buy-in to a single agreed
view of business objectives
35% --
Developing an initial portfolio 37% 9%
Getting portfolio management started 35% 30%
Securing and sustaining business unit
management commitment
22% 30%
Prioritising and balancing the portfolio 21% 43%
Delivering overall portfolio benefits 18% 40%
A long way to go in many areas, but significant interest in more
debate/learning about how to improve performance 15
Some Personal Perspectives - 1
Introducing sustainable PfM is a “long game”.....
But, it can be started quickly with:
– The right leadership & direction
– The right people & processes
– The right focus (on achieving the overall benefits expected)
However, maintaining momentum requires:
– Persistence – selling & telling (structured PfM/BM framework)
– Pragmatism – integrating with other processes
– Participation – getting all stakeholders to recognise WIFM/Org
If possible, demonstrate with an “exemplar” model
– Willing and important business unit
– Showing how all stakeholders can benefit 16
Some Personal Perspectives - 2
Embedding PfM can be tough.....
But, good leadership from the top will help to:
– Clarify business objectives, vision etc
– Secure cross-business commitment to process & information
– Ensure PfM adequately resourced
While focusing on strategic objectives will:
– Highlight projects that do not “fit” (getting portfolio balance right)
– Identify where synergies might exist (less risk – more benefits)
– Sharpen portfolio reporting – impact on Benefits Delivery
Establish what will work for your organisation
– PfM is more than just a set of processes
– It must deliver ongoing improvement in investment performance
17
Some Personal Perspectives – 3
Some PfM operating issues encountered:
– Poorly defined funding limits & budget allocations
– Inconsistent Business Cases (ramping of benefits)
– Business Units “doing their own thing” – avoiding governance
– Incomplete information poor portfolio analysis
– Projects masquerading as something else (“When is a project not
a project? When I say so!”)
– Mis-allocated resources (ignoring prioritisation decisions)
– PfM not taken seriously – patchy Portfolio Office coverage
– Question: “So who owns these benefits?”
– Answer: “Not me, or us - it was them; they have moved
on......somewhere”
18
The Black Death, PM and PfM
The Black Death has a parallel with project management….the signs of something going
wrong were well known and yet the same medicine was applied – Project March 2012
Heavy investment in change delivery
framework, tools and skills
Success rate for projects not improved
Need new “medicine”
Could that be more focus on Portfolio
Management?
Successful Portfolio Management
leading to better Benefits Delivery?
19
Summary
Effective PfM is about delivering Strategic Objectives
This requires:
– Executive ownership of the Portfolio
– Integrated governance and decision-making
– Commitment to underpinning processes
Getting PfM right should result in:
– Clear links between strategy, plans and the change portfolio
– Optimisation of all change resources
– Better overall Benefits Delivery
Portfolio Management needs to become an integrated and rolling
process, adapting to changes in the organisational environment
Questions.........? 20