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Webinar reporting findings of PPDE research.
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Project portfolio delivery performance: What really makes a difference
Initial findings from PA’s survey into the drivers of delivery effectiveness
Jon Hughes, Tim Pare
June 10, 2009
© PA Knowledge Limited 2009. Page 201020-6 PPDE webinar slides
A bit about us…
Jon Hughes
Jon is head of PA’s Business Transformation Group in North America and is a Member of PA’s Management Group. He specializes in helping clients deliver transformational change, and draws on a background in industry and consulting spanning over 20 years.
Tim Pare
Tim is one of PA’s leading program and change managers with over 20 years’ experience in successfully shaping and delivering large and complex initiatives.
Tim leads the survey team and its deployment across PA’s geographies.
© PA Knowledge Limited 2009. Page 301020-6 PPDE webinar slides
Seize the crisis – PA’s Cost Reduction webinar series
PA’s webinar series:
• Business process simulation: Forecasting the benefits of process change
• Improving portfolio delivery effectiveness in a downturn: What really makes a difference
• Business processes under the microscope
• Surviving a downturn through effective restructuring
• Getting real value from your support functions
“Surviving and thriving in the economic crisis”
A handbook for corporate leaders
We are now living through a major economic crisis, brought on by one of the most serious financial downturns in history. This book is about how to respond.
© PA Knowledge Limited 2009. Page 401020-6 PPDE webinar slides
Improving overall delivery is a key imperative for project-based organizations
Pressure to deliver projects continues to grow
Conventional improvement approaches may have reached their limits
Conventional approaches to improvement have tended to include:
• Intensive support for a few high profile projects/programs
• Investment in training or recruiting project managers
• Establishing PMOs
• Redesigning or buying new processes and systems to standardize the approach.
These changes will deliver benefit to specific programs but are often not sustained or do not deliver performance improvement across the organization.
In organizations that deliver projects, there is perpetual pressure to do it better.
This might be because customers want:
• Improved reliability: ensuring you can deliver on promises every time
• Results faster: and therefore cheaper
• New technology: driving rapid ‘ideation’ to product launch and shorter lifecycles
Or maybe you need:
• More capacity: to deliver more without increasing cost
• To focus effort on the ‘right things’: aligning better with strategy
• Increased profit: by doing things more cost effectively
• Greater market share often generated from breakout innovation
© PA Knowledge Limited 2009. Page 501020-6 PPDE webinar slides
Key questions:
1. Is there a simple model to define current state and required developments to become a high performer?
2. What are the critical elements in this model that differentiate the Great from the Bad (or the Good from the Not So Good)?
3. What is the optimum organizational model to deliver the most effective outcomes?
4. Where should an organization focus efforts to become a high performer based upon its starting position?
The aims of our survey were to answer a number of questions
The survey covered two key dimensions…
Practice Maturity:
a measure of the quality of practices organizations operate
And
Delivery Effectiveness :
a measure of the quality of outcomes organizations experience as a result
© PA Knowledge Limited 2009. Page 601020-6 PPDE webinar slides
The first dimension – maturity – is a key driver of delivery effectiveness – with caveats
A range of practices can contribute to, or impede, overall delivery performance:
• Design Authority practices
• Governance practices
• Portfolio management practices
• Project management practices
• Workforce management practices
• Resource management practices
• Financial management practices
Becoming more mature in these practices will, in general, improve effectiveness.
Organizational complexity and culture also play a part.
© PA Knowledge Limited 2009. Page 701020-6 PPDE webinar slides
The second dimension – delivery effectiveness – is measured across a range of outcomes
The ‘right’ resources are allocated to projects based on priority, availability, skills & experience and development potential. 95% of committed FTE resources delivered to projects.
Allocation
The quality of business cases is high. Project and business-as-usual demand estimates, and subsequent re-forecasts, are realistic, enabling variances and changes to be incorporated without excessive disruption. 95% of projects completed on budget.
Demand estimating
The organization's capability profile (staff skills, numbers) is the desired shape, with sourcing used to augment capacity.95% achievement of FTE targets for project vs business as usual activities.
Supply capacity
Resource management goals are measured to show progress against a balanced scorecard (e.g. utilization, recruitment and sourcing targets). 85% utilization achieved for key project resources.
Utilization
Accountability is well understood. Achievement of respective portfolio, resource and project delivery targets drives behaviors across the organization.
Accountability
Highly transparent, dynamic tracking facilitates realignment of portfolio according to current needs, constraints. Actual value delivered meets/exceeds targets
Portfolio adaptability
The overall portfolio is optimized to maximize value and achieve a good strategic fit. 90% of projects meet strategic project criteria; aggregate value meets/exceeds targets.
Portfolio balance
Iterative/concurrent development, multi-disciplinary collaboration and streamlined decision-making optimize delivery. 20% annual reduction of projects failing to meet their objectives (cost, time & scope).
Process effectiveness
Stakeholder feedback is routinely obtained. 90% of stakeholders give a satisfaction rating of at least 8/10.Stakeholder satisfaction
Work is initiated in waves, focused on delivering quickly and regularly, with visible results through the year. 95% of projects completed to budget, on time and scope.
Delivery reliability
Portfolio outcomes
Resourcing outcomes
Project outcomes
© PA Knowledge Limited 2009. Page 801020-6 PPDE webinar slides
Significant at 1%
All the practices influence effectiveness – but not all have an equal impact
Significant at 5%
2x impact of other domains
3x impact of other domains
Portfolio adaptability
Accountability
Workforce management
Project management
GovernanceDesign authorityPortfolio
management
Supply capacity
Overall effectiveness
Process effectiveness
Stakeholder satisfaction
Delivery reliability
Financialmanagement
Resourcemanagement
Utilization
Allocation
Demand estimating
Portfolio balance
Outcomes Practices
© PA Knowledge Limited 2009. Page 901020-6 PPDE webinar slides
Organizations in each performance quartile exhibited stark differences
4th quartile
3rd quartile
2nd quartile
1st quartile
1. The best performers did everything appreciably better – indicating a focus on getting their organizations to work as a system
2. The essential differences between 2nd & 3rd quartile firms were in workforce, resource and financial management –the practices concerned with adequate staffing and funding of the portfolio
3. The most significant differences between 3rd and 4th quartile firms were in governance, portfolio and project management – indicating a focus on conventional areas of improvement
4. The least effective – 4th quartile –firms did most things poorly (although the Design Authority domain was a relative strength)
Mat
uri
ty
Practice domains
Design authority process
Governance practices
Portfolio management
practices
Project management
practices
Workforce management
practices
Resource management
practices
Financial management
practices
© PA Knowledge Limited 2009. Page 1001020-6 PPDE webinar slides
Resource and financial management are key differentiators
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0
Financial management score
Res
ou
rce
man
agem
ent
sco
re
Quartile 4 (lowest)Quartile 3Quartile 2Quartile 1 (highest)
Performance quartiles
© PA Knowledge Limited 2009. Page 1101020-6 PPDE webinar slides
Organizational complexity and culture play parts in improving performance
¾ of centralized organizations were in Quartiles 3 & 4
⅔ of decentralized organizations were in Quartiles 2 & 3
¾ of hybrid organizations were in Quartiles 1 & 2
© PA Knowledge Limited 2009. Page 1201020-6 PPDE webinar slides
Foundational practices:
• The fundamental building blocks of delivery• Key source of data to enable other domains
Overall maturity
• Consistency is key – deficits in the underlying practice domains impede overall effectiveness, but not in equal measure
Integrating practices:
• With the fundamental building blocks in place, these add demonstrable additional value – up to a point
• These domains are where organizations have traditionally focused efforts at improving overall delivery
Differentiating practices:• Ensures projects are adequately staffed and funded to deliver• The domains that appear to be under-managed by over half
of the respondents• Dependent on underlying domains and require significant
additional effort and focus
The findings suggest a layering in how organizations apply the practices
All practices
Design
Authority
practices
Governance
practices
Workforce
Management
practices
Portfolio
Management
practices
Financial
Management
practices
Resource
Management
practices
Project Management practices
© PA Knowledge Limited 2009. Page 1301020-6 PPDE webinar slides
Rapid improvements are possible – with efforts focused on specific improvement objectives
Time
Ove
rall
del
iver
y ef
fect
iven
ess
Gain control
Improve reliability
Increase effectiveness
Continuously improve
© PA Knowledge Limited 2009. Page 1401020-6 PPDE webinar slides
Improving effectiveness requires a clear idea of where you currently stand
Maturity vs Effectiveness
0%
50%
100%
0% 50% 100%
Effectiveness
Mat
uri
ty
ACME
How do you compare to your peers?
Overall outcomes – how effective is your overall delivery
Q3Q2Q1
Process – achieving efficiency/effectiveness in delivery
Accountability – taking ownership of delivery
Portfolio adaptability – tracking and adapting the portfolio to current needs
Stakeholder satisfaction – how well your delivery is perceived
Delivery reliability – how well you deliver on your promises
Portfolio balance – defining what you want to achieve
Allocation – matching demand and supply
Demand estimating – understanding what you need
Supply capacity – understanding what resources you have
Utilization – understanding what you use
Q4Outcomes
Overall outcomes – how effective is your overall delivery
Q3Q2Q1
Process – achieving efficiency/effectiveness in delivery
Accountability – taking ownership of delivery
Portfolio adaptability – tracking and adapting the portfolio to current needs
Stakeholder satisfaction – how well your delivery is perceived
Delivery reliability – how well you deliver on your promises
Portfolio balance – defining what you want to achieve
Allocation – matching demand and supply
Demand estimating – understanding what you need
Supply capacity – understanding what resources you have
Utilization – understanding what you use
Q4Outcomes
What is driving your performance ?
0%
10%
20%
30%
40%
50%
60%
70%
80%
Design Authoritypractices
Governancepractices
PortfolioManagement
practices
Project Managementpractices
WorkforceManagement
practices
ResourceManagement
practices
FinancialManagement
practices
Average - Cordis 90th percentile 75th percentile 25th percentile 10th percentileACME
Where should you focus improvements ?
PA’s survey remains open and can be accessed at: www.portfoliodiagnostic.com.
© PA Knowledge Limited 2009. Page 1501020-6 PPDE webinar slides
In summary, our key findings are
1. Maturity is a key driver of delivery effectiveness – with caveats
2. All the practices influence effectiveness – but not all are equal
3. Lower quartile performers appear to have focused on a subset of practices –the conventional areas
4. Resource and financial management are key differentiators
5. Non-centralized planning and delivery models appear to deliver better results
6. Focus on what you need to do to improve outcomes.
© PA Knowledge Limited 2009. Page 1601020-6 PPDE webinar slides
What’s next?
We will:
• Send you a copy of these slides
• Follow up with the interim report at the end of June
• Issue the next report and webinar Q3 09.
• Send you a copy of our Surviving and Thriving publication – E-mail: [email protected]
We would like you to:
• Invite colleagues and contacts to complete the survey
• Identify anyone else who may want to attend another webinar
• Provide any feedback to [email protected]
Tim Pare4601 N Fairfax DriveSuite 600 Arlington, VA 22203Tel: +1 571 227 9273Mobile: +1 571 215 1332E-mail: [email protected]
Jon Hughes4601 N Fairfax DriveSuite 600 Arlington, VA 22203Tel: +1 571 227 9800Mobile: +1 202 459 8970E-mail: [email protected]