PPfM-01-V1-Apr06 - Project Portfolio Management - Framework

Project Portfolio Management

Framework – Cambridgeshire County Council

Programme, Project and Change Management

Capacity Building Programme

Supported by Communities and Local Government 4

Project Portfolio Management

PPfMFramework

Cambridgeshire County Council Efficiency Programme

Supported by the Office of the Deputy Prime Minister through the eInnovations Programme

Page 1 of 58©Cambridgeshire County Council

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http://www.odpm.gov.uk/index.asp

TABLE OF CONTENTS

INTRODUCTION...............................................................................................5

SECTION 1 - ABOUT THE FRAMEWORK......................................................7

1.1 What is Project Portfolio Management?..................................................................................7

1.2 What is the PPfM Framework?.................................................................................................7

1.3 Why a Framework?....................................................................................................................7

1.4 How will the Framework help?.................................................................................................8

1.5 High Level PPfM Framework.................................................................................................10

ILLUSTRATIVE HIGH LEVEL PPFM FRAMEWORK....................................11

2 SECTION 2 –PPFM OVERVIEW..............................................................12

2.1 Getting Started..........................................................................................................................12

2.2 What are the benefits and drivers of PPfM?..........................................................................122.2.1 Linkage with CPA...............................................................................................................142.2.2 Mitigating risk of project failure...........................................................................................172.2.3 Addressing common inefficiencies.....................................................................................19

2.3 What are the Organisational Barriers for PPfM?.................................................................20

2.4 What are the prerequisites of PPfM?.....................................................................................21

2.5 Where is PPfM positioned?......................................................................................................22

2.6 What are the Portfolio Management processes?...................................................................25

2.7 Corporate Level PPfM process – page 1.................................................................................26



3 SECTION 3 – MATURITY ASSESSMENT MODEL.................................29

3.1 Introduction...............................................................................................................................29


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3.2 What is the maturity assessment model?................................................................................30

3.3 Benefits of the maturity assessment model.............................................................................31

3.4 The tool is not intended as a.....................................................................................................32

3.5 Quick Maturity Assessment.....................................................................................................34

3.6 Detailed Maturity Assessment...........................................................................................36

4 SECTION 4 – PPFM EXPERIENCE IN CAMBRIDGESHIRE COUNTY COUNCIL........................................................................................................44

4.1 Background.............................................................................................................................44

4.2 The Challenges.......................................................................................................................44

4.3 Response to Challenges......................................................................................................45

4.4 Summary..................................................................................................................................46

4.5 Experiential learning assessment tool.............................................................................47

4.6 LESSONS LEARNED FROM CAMBRIDGESHIRE..........................................................53

5 SECTION 5 – TOOLS..............................................................................56

6 Acknowledgements...................................................................................59


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Conditions of use

All material in these documents, unless otherwise stated, and in any materials developed using or based upon these documents, including without limitation text, logos, icons, photographs and all other artwork, is copyright material of Cambridgeshire County Council or its partners. Use may be made of these documents and materials for non-commercial purposes without permission from the copyright holder on condition that the ownership of CCC or its partners is identified in any material so used. Commercial use of this material may only be made with the express, prior, written permission of Cambridgeshire County Council and subject to such conditions as the Council may determine.

Material contained in these documents provided by any third party, including material obtained through links to other sites, is likely to be the copyright material of the author. Permission to copy or otherwise use such material must be obtained from the author.

In no event will Cambridgeshire County Council be liable for any loss or damage including, without limitation, indirect or consequential loss or damage, or any loss or damages whatsoever arising from use or loss of use of, data or profits arising out of or in connection with the use of the documents or materials. Links to other websites contained in these documents are for information only and Cambridgeshire County Council accepts no responsibility or liability for access to, or the material on, any such website.

CONTACTDebbie Bondi

Head of Business Development Cambridgeshire County CouncilShire Hall Cambridge CB3 0AP

e-Mail: [email protected]


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INTRODUCTION

Welcome to the Project Portfolio Management (PPfM) Framework developed through the Office of the Deputy Prime Minister’s eInnovations programme by Cambridgeshire County Council and partners to help Local Authorities improve the management of change by selecting and running the optimum set of projects and programmes. It has been developed in response to the demand from Local Authorities for support and guidance with developing a range of capabilities required for managing, delivering and sustaining successful business change.

With the emphasis on demonstrating value for money and the introduction of the Annual Efficiency Statement and the Comprehensive Performance Assessment (CPA) scoring on “Use of Resources”, Authorities are now looking to develop and improve existing capabilities as a foundation for establishing structured and robust methods of investment decision making so its resources are directed at the changes that will contribute most effectively to its strategy and objectives.

All too frequently, projects can be approved on the basis of who shouts loudest or who has got the money in their budget. However, the budget may have been set under different conditions from those that now prevail, and the money could be better spent from both the citizen and Authority standpoint.

An additional level of complexity is that, once approved, changes in the internal and external environment can invalidate projects or programmes and senior managers need consistent information on which to judge the impact of such changes.

This framework provides a structure for establishing PPfM within a Local Authority setting, so the appropriate capabilities and infrastructure are established that will support an effective investment decision-making process and project delivery function. This will ensure:

The right projects and programmes are selected to achieve the strategic outcomes and priorities set by the Authority.

Unnecessary activities are terminated or never started at all. Resources are deployed where the organisation needs them most. Programmes and projects are monitored against key outcomes Ongoing successful delivery of programmes and projects

Project Portfolio Management tools in the market place are mature, and it would be very easy (tempting!) to purchase one of these without due regard to the functionality required. The temptation to invest early in purpose-built or off-the-shelf tools to support a PPfM function could prove expensive and unnecessary if they don’t provide the functions and features required, or are too functionally rich for an Authority’s immediate and longer term needs. Automated tools are a useful aid for capturing and analysing data before translating into management information. However, our experience is that many Authorities don’t yet create or collect the source data on which to base this information. One of the key principles of this framework is to enable Authorities to develop a more rounded PPfM function and adapt a range of ‘manual’ processes or exploit features in existing tools before undertaking a major investment in automated tools.


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Through dedicated funding this framework encapsulates a range of experiential learning from the Local Authority sector and uses existing practical guidance and material to support a Project Portfolio Management function. It synthesises approaches and methodologies in the Public Sector to come up with a practical generic framework that could easily be applied in a Local Authority setting. The project studied the processes and conditions necessary to set up and grow a successful PPfM function in an incremental way that would maximise any future investment in tools and infrastructure. We have found this process of experiential learning an effective method by which to develop the PPfM function.

A Project Portfolio Management function helps to ensure that the citizen gets the maximum value from each pound spent on projects and programmes, which the Meta Group estimates can reduce spending by up to 30 percent.

If you can’t respond yes to 3 key questions, this Project Portfolio Management framework is for you.

Are we doing the right projects right? Are we investing in the right areas? Do we have enough of the right types of resource?


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SECTION 1 - ABOUT THE FRAMEWORK

What is Project Portfolio Management?

A Working Definition

In the context of a Local Authority delivering key services and improvements, Project Portfolio Management (PPfM) is viewed as a corporate, strategic level process for coordinating successful delivery across a Local Authority’s entire set of programmes or projects. It provides a structured method of decision-making that enables an Authority to select and run the optimal set of Programmes and Projects. In particular it considers alignment with Public Sector Agreement (PSA) and CPA targets and other corporate policies/objectives and overall achievability based on the Local Authority’s capacity and capability to deliver.

What is the PPfM Framework?

The Project Portfolio Management (PPfM) framework has been developed by Cambridgeshire County Council and partners to help other Local Authorities improve the management of change by selecting and running the optimum set of projects and programmes to support their strategic priorities. It is the response to the demand from Local Authorities for support with developing the skills, capabilities and knowledge required for managing and delivering successful business change projects

The framework provides guidance based on experiential learning and existing practice and identifies the building blocks on which to start developing a PPfM function within a Local Authority. It is designed to complement and build on existing guidance provided by Central Government already in the public domain and should be read as a framework for an approach and not a prescriptive implementation path or standard.

Why a Framework?

Unlike Project and Programme Management, there isn’t a de facto standard for PPfM, and in practice the maturity of PPfM is relatively low within many Local Authorities. Much of the material that can be purchased or is in the public domain does not have a Local Authority focus and can be both difficult to absorb, too advanced or lacks relevance for the present levels of project, programme and change management maturity within Local Authorities.

There is only so much change an organisation can manage efficiently at once, so this framework suggests a staged and phased approach to develop the PPfM function. There is no magic wand or


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1 in 3 firms have no project selection criteria

1 in 3 firms do not explicitly align projects with strategysource Gartner © 2004

big bang approach, and it is intended the approach will be towards incremental improvements in developing the capabilities.

How will the Framework help?

This framework is designed to be as generic as possible, although the look and feel of the PPfM function is likely to vary from Authority to Authority depending on individual preferences and tailoring.

It has been established to help Local Authorities develop their own portfolio management function through a method of:

Promoting the benefits of PPfM within their Authority

Developing an understanding of the barriers to establishing a PPfM function

Identifying the processes and capabilities required to be effective at different levels of

maturity

Understanding of the organisational structure and governance arrangements that support a

PPfM function

Having access to tools and guidance that will support the development of the required

capabilities, infrastructure and processes

Reflecting, reviewing and planning based on experiential learning.

The framework comprises 5 sections – here is a brief synopsis of each section


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Sections

1 About the framework

This section defines what Project Portfolio Management is and puts the framework and its components into context

2PPfM overview

This section provides summary guidance, an overview of the Project Portfolio Management function and a definition of 7 core Portfolio Management processes. The content of this guidance has been developed from a blend of practical learning and research and is aimed at helping departments understand the principles and value of Project Portfolio Management and how to get started.

3Maturity Assessment Model

The model sets out the transitional states of PPfM maturity. It provides a framework for an Authority to assess and plan how it will develop its own PPfM function through improving the Authority’s level of capability in key practices. The overall framework provides links to a range of useful guidance or tools that will help in developing a more detailed understanding of the basic and underlying capability

4 PPfM Experience in Cambridgeshire County Council

This section provides a vignette of PPfM implementation in Cambridgeshire County Council and using the outputs of Cambridgeshire’s experiential learning assessment, the lessons learned in developing each capability are described.

The experiential learning assessment was completed using a set of questions on which to reflect, review and plan the Authority’s progress against key PPfM practices it is developing. This tool was developed by Cambridgeshire, and can be used or modified by any Authority that wishes to use experiential learning as an approach.

5Tools

This section provides some useful tools in the form of guidance or techniques to help develop the necessary capabilities and infrastructure of the PPfM function. Some of these tools have been developed by Cambridgeshire, others are freely available using the OGC Successful Delivery Toolkit or via other web sites where you may need to register first. These tools are signposted using links or are embedded in this document


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High Level PPfM Framework

This framework comprises 3 elements that form part of the broader PPfM function.

1. Strategic PPfM Process2. Supporting Capabilities3. Building Blocks (PPfM infrastructure)

It acknowledges in principle that PPfM is a strategic decision making process, but it is reliant on a level of capability underneath to enable good information and practice to flow, without which the strategic level processes are likely to lead to poor decisions.

This framework doesn’t attempt to prescribe a specific sequence in which these elements are implemented as the level of capabilities may vary according to personal preference or current levels of maturity and the individual nature of the organisation

The following table describes the elements in more detail.

PPfM Elements

These are the strategic (corporate) level processes of the PPfM function. PPfM in its narrow definition is the process of strategic decision making for selecting and maintaining an optimum level of project and programmes. This framework defines what these are, and what capabilities need to be developed, but is sensitive to the broader needs and requirement for good management information to enable strategic decision making to take place. This framework has been established around a number of capabilities that need to be developed in order good practices and information can be created.

Capabilities are a set of behavioural characteristics observed or expected at various levels of performance. This framework has identified 6 supporting capabilities being central to a successful Project Portfolio Management. Each management function must operate and interact together through a blend and mixture of these capabilities. Capabilities in this framework comprise human and non-human characteristics and become the collective ability through which a function performs successfully.

Building blocks are the individual components that underpin each capability. Therefore to be come ‘capable’ needs more than just skills, knowledge and understanding. Ability is created through a supporting infrastructure that combines 6 components.

The following table is an illustrative High Level Framework that describes the components of these 3 elements in more detail


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Building BlocksInfrastructure

Core Capabilities

Strategic Level PPfM Processes

ILLUSTRATIVE HIGH LEVEL PPfM FRAMEWORK


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Corporate Planning

Definition

This process establishes the Corporate Plan, which sets out the organisations priorities and details how they will be achieved. Corporate objectives and priorities will embody the vision and values of the organisation.

This process establishes the Corporate Plan, which sets out the organisations priorities and details how they will be achieved. Corporate objectives and priorities will embody the vision and values of the organisation.

Definition bridges potential gaps between strategy planning and project delivery. This is achieved by articulating the strategic requirements for change into logical groups of project that clearly map project and programme outputs to the strategic and performance outcomes desired by the organisation.

Definition bridges potential gaps between strategy planning and project delivery. This is achieved by articulating the strategic requirements for change into logical groups of project that clearly map project and programme outputs to the strategic and performance outcomes desired by the organisation.

Selection Monitor Track & Corrective Actions

During the Project selection process key information relating to each project is collected and analysed before a process of prioritisation based on predetermined selection criteria begins. Project approvals will confirm decisions based on sound judgement and a rationalised approach to selecting each project portfolio.

During the Project selection process key information relating to each project is collected and analysed before a process of prioritisation based on predetermined selection criteria begins. Project approvals will confirm decisions based on sound judgement and a rationalised approach to selecting each project portfolio.

This process provides a helicopter view of the organisation’s delivery and investment commitment and is designed to maintain the optimum portfolio of projects. This process will monitor and review all programmes and projects upto the point they produce the outcomes or capability they were designed to deliver.

This process provides a helicopter view of the organisation’s delivery and investment commitment and is designed to maintain the optimum portfolio of projects. This process will monitor and review all programmes and projects upto the point they produce the outcomes or capability they were designed to deliver.

High LevelStrategic

Level Processes

Portfolio management continues to track the realisation of benefits beyond the life of the project or programme. Portfolio management identifies and recommends any necessary intervention strategies or measures in response to an unexpected shortfall in the desired level of programme or project benefit.

Portfolio management continues to track the realisation of benefits beyond the life of the project or programme. Portfolio management identifies and recommends any necessary intervention strategies or measures in response to an unexpected shortfall in the desired level of programme or project benefit.

CoreCapabilities

Benefits Managem

ent

Risk Managem

ent

StrategicManagem

ent

Capacity &

Capability

Management

Project & Program

me Managem

ent

OrganisationInfrastructure

Building Blocks Methodology Tools Governance Processes

Investment &

Performance

Management

Competency

SECTION 2 –PPfM OVERVIEW

At the end of this section you will be able to: Understand and explain how PPfM could benefit your Authority Identify the barriers and challenges and how to mitigate these. Explain the prerequisites for success Understand the benefits of PPfM Understand the key practices that need to be established for a projects portfolio management

function Understand the underpinning capabilities and infrastructure required for different levels of

maturity. Understand the inter relationships between the different management functions Recognise and understand the characteristics and behaviours associated within the function Understand and improve an Authority’s position of the components of a PPfM function. Plan the implementation of a PPfM functions in a more structured way

1.1 Getting Started

Change requires the desire and motivation to do it and the greater this is the more likely you will succeed. This alone will not guarantee success when implementing PPfM in your Authority, although with an understanding of the benefits, challenges, and how these can be managed, an Authority can better prepare for the journey ahead. Using this framework any Authority will be able to establish a plan for developing PPfM. It does not provide an implementation route map, but an overall approach that will help to deliver noticeable benefits.

1.2 What are the benefits and drivers of PPfM?

Many Authorities are in the process of developing, or have already established project management as a method for managing and delivering change. Whereas the methods, standards and benefits of project management are more widely understood, the value of PPfM is less well known and viewed by some with certain cynicism as just another distraction, more bureaucracy that will consume more time across an already overstretched workforce.

Although Project Management is now becoming a well-established practice across many Authorities to an acceptable standard, it doesn’t necessarily mean we are investing in the right projects. The investment in developing excellent project management capabilities could be devalued as a result of approving projects that don’t deliver real value or are not aligned with the real priorities of the Authority.

The project focus to deliver on time, budget and to quality although valid, may do little to improve the overall performance of the Authority and in the areas it wants to improve most. PPfM is about weighing up the relative merits and value of its projects, with consideration of the risks, benefits and resource constraints. It provides an approach for selecting and


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In short ‘we might be investing our time and energy in managing and delivering the wrong projects well’.

sustaining the most advantageous projects by improving the organisation’s decision-making process through access to better information, and having the means and capability to support this.

The case for PPfM is about ensuring any investment decisions will be made with the necessary and appropriate attention given to the short and long-term value the change will deliver.

It is understandable that senior managers will ask the question ‘ what will PPfM do for us’ or ‘what will we get out of it’. The immediate benefits are summarised:

1. Increase visibility of the Authority’s demands – risks, issues, resourcing, budgeting2. Create an understanding of the capability requirements to meet resource and financial

demands3. Maximise use of scarce resources4. Matching projects needs with right skills5. Improve financial control with a clear understanding of costs and strategic value of the

projects6. Better management information on which to make more informed investment decisions7. Establish a common understanding and targets energy and money on the key priorities 8. Creates visibility of the deliverables and outcomes expected, and a vision of what success will

look like.

This isn’t an exhaustive list, but these are the benefits often cited or associated with Project Portfolio Management.

Whilst this framework does not attempt to provide a generic cost benefit analysis for PPfM, the following sub sections clearly identify the areas where any Authority could benefit from PPfM practices.

Rather than expand on the generic PPfM benefits above that apply equally to both public and private organisations, the following expands on 3 key drivers for improving efficiency that are relevant and specific to any Authority delivering public services.

The Gershon and CPA efficiency drives for realising cashable and non-cashable gains can be achieved through better management of an Authority’s financial and human resources and strategic risks. These are explicit principles of PPfM and core components of the capabilities within the framework.

Sections to explain the relationship between a PPfM approach and the following three drivers:

1. Linkage with CPA2. Avoiding common causes of project failure as defined by the National Audit Office3. Addressing common inefficiencies


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Linkage with CPA

The philosophy of portfolio management supports the CPA process in a number of ways.

The following areas have been discussed with the Audit Commission as part of this project:.

Corporate Assessment The principles of portfolio management support the Corporate Assessment in a number of ways particularly with respect to Prioritisation (Theme 2) and Capacity (Theme 3).Each area is considered in more detail in the table below, based on the Key Lines of Enquiry (KLOE) documents, which can be found at http://www.audit-commission.gov.uk/kloe/index.asp

Corporate Governance The philosophy behind portfolio management appears to support Corporate Governance since it concerns the husbandry and governance of resources in a clear and transparent manner.

In particular, several KLOEs (Key Lines of Enquiry) are relevant to portfolio management which are described in the table below

Use of Resources The philosophy behind portfolio management appears to support Use of Resources since it is about optimising the way in which resources are utilised with respect to projects and programmes, in support of corporate objectives.

In particular, under Financial Management, Key Line of Enquiry 2.1 states “The council’s medium-term financial strategy, budgets and capital programme are soundly based and designed to deliver its strategic priorities”. Portfolio management supports this by ensuring that proposed projects and programmes are aligned to strategic priorities before approval is given and by helping to ensure that business planning is integrated with financial planning.


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http://www.audit-commission.gov.uk/kloe/index.asp

KLOE Nr. Corporate Assessment KLOE Relevance to PPfM2.2 Is there a robust strategy to deliver the

priorities?This KLOE requires that “resources allocated within and between partner organisations are managed, reviewed and revised in line with priorities”. Portfolio management provides a framework to do this.

3.2 Is capacity used effectively and developed to deliver ambitions and priorities?

This KLOE requires that “the council ensures that projects are properly resourced…”. Portfolio management provides resource management at a strategic level to ensure that the resources of the organisation are used to optimal effect in support of strategic priorities and are not over/under utilised.

3.3 Does the council, with its partners, have the capacity it needs to achieve change and deliver its priorities?

By promoting a more strategic approach to developments, portfolio management provides a framework for looking forward to understand what resources will be required to deliver current and future priorities.

KLOE Nr. Corporate Governance KLOE Relevance to PPfM1.2 Does the council have coherent

programmes of change based on local needs and opportunities?

It is assumed that local needs are reflected in corporate priorities and that programmes are then developed which deliver to the corporate priorities i.e.

Local Needs Corporate Priorities Programmes

Portfolio management provides a demonstration of the link between corporate priorities and programmes. However, it should be recognised that portfolio management will not ensure that corporate priorities properly reflect local needs and opportunities

1.3 Is the council’s vision translated into organisational aims and objectives?

A pre-requisite for portfolio management is having corporate priorities which are understandable and which are based on the vision. Instituting portfolio management provides a pressure to ensure that the vision is translated into meaningful priorities and objectives. In particular, portfolio management appears to support 1.3.3 which refers


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KLOE Nr. Corporate Governance KLOE Relevance to PPfMto the quality of decision-making.

2.2 Are the council’s policy and decision-making processes working effectively to ensure clear accountability and good governance?

Portfolio management supports good decision-making and is part of good governance.

2.3 Are the council’s corporate and service-planning processes comprehensive and consistent?

Portfolio management supports a “cascade of corporate priorities” (2.3.2). One of the components of inadequate performance under 2.3.2 is a “mismatch of plans and priorities”. Portfolio management helps to guard against this.

2.5 Does the council have a comprehensive and well-managed strategy for cross-departmental working?

Portfolio management operates at the strategic level, irrespective of organisational boundaries. In this way, it helps to promote cross-departmental working.

3.3 Does the council plan resources over the medium and long term?

Portfolio management promotes strategic planning by considering how resources can best be utilised in support of corporate priorities.

3.6 Does the council ensure projects are properly resourced and vigorously managed

Portfolio management considers resourcing of projects ie. Are they achievable and is there sufficient resource?

Portfolio management will however not ensure that projects are vigorously managed.


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Mitigating risk of project failure

The OGC and NAO have agreed a list of Common Causes of Project Failure. PPfM provides a complete framework, which develops a range of competencies, processes, and methods that mitigate these risks.

8 Common causes of project failure

Relevance to PPfM

1 LACK OF CLEAR LINKS BETWEEN THE PROJECT AND THE ORGANISATION'S KEY STRATEGIC PRIORITIES.

Investment decisions are based on agreed selection criteria and alignment with organisational priorities.

2

Lack of clear senior management ownership and leadership.

Multi-layer governance arrangements ensure that governance is appropriate to the level of investment or strategic importance of the project and programme It ensures all project and programmes have an appropriate level of ownership and leadership

3

Lack of effective engagement with stakeholders.

PPfM uses an iterative process for reviewing project and portfolio alignment, resourcing requirement, business risks, performance, benefits and corrective actions that sustains stakeholder engagement throughout and beyond the project lifecycle

4

Lack of skills and proven approach to project management and risk management.

The broad nature of the PPfM framework includes Project and Risk Management as two of its core capabilities. Developing best practices and competencies in these disciplines is a component of PPfM

5

Too little attention to breaking development and implementation in to manageable steps.

Decisions on scheduling and sequencing projects are made at the Portfolio level and not project level which minimises resource conflicts, reduce risks and delivers outcomes in line with organisation needs. Stage planning and stage reviews form an essential part of PPfM within the Project & Programme management capabilities

6

Evaluation of proposals driven by initial price rather than long-term value for money (especially securing delivery of business benefits).

Investment decisions consider project alignment with strategic outcomes rather than just the individual project benefits. Investment proposals assess affordability, achievability, risks and benefits. Evaluation compares the relative value of each project in relation to corporate outcomes and considers whole life costs and returns.

7

Lack of understanding of, and contact with the supply industry at senior levels in the organisation.

The portfolio approach of initiating projects provides a better focus on strategic outcomes and partnerships than standalone projects. Decision making at the portfolio strategic level will help to improve sourcing decisions and avoid isolated piecemeal decisions

8

Lack of effective project team integration between clients, the supplier team and the supply chain.

Effective PPfM is founded on standardising and implementing methods of good practice and developing repeatable processes together with the necessary capabilities to ensure effective partnership working


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http://www.ogc.gov.uk/sdtoolkit/reference/ogc_library/bestpracticebriefings/causesprojfailure.pdf

Addressing common inefficiencies

The following table provides a few probing questions that may help you address areas of inefficiency within your authority’s project and change delivery. Where you cannot respond positively or with certainty, about a specific area, the column opposite indicates the PPfM capability that needs to be developed to address this.

Areas of project & change delivery PPfM capability to be developedAre all your projects and programmes aligned with the corporate strategic objectives?

Investment & Performance management

Strategic managementDo you focus more on individual project outputs rather than Strategic outcomes Benefits managementAre projects properly costed and are lifetime costs identified as part of the decision making process

Benefits management Investment & Performance

managementIs there something better you can do with your time and resources?

Capacity & capability management

Do you know what the impact will be on your organisation when introducing new projects? Risk managementAre you able to redirect resources efficiently to accelerate more important projects?


Are you able to fund the most important projects and identify/ re-allocate excess budget to high priority projects?

Investment & performance management

Do you know which projects are under performing? Investment & performance management

Are you able to effectively manage organisational capacity and resource?


Can you clearly predict the rate of return of programs/ project?

Benefits realisation

Is there sufficient capacity in the necessary competencies to delivery all projects without compromising operational service levels?


Is there a clear, consistent and defined process for initiating and stopping projects and programmes?

Investment & performance management.

Project & Programme management

PPfM has many facets and to move from a project-oriented to a portfolio approach involves developing and maintaining multi-layer relationships across the Authority to sustain and perform the PPfM function.

Although there will be a number of challenges to manage and overcome, gaining senior level support and buy-in for a Portfolio Management functional is required from the outset.


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What are the Organisational Barriers for PPfM?

Consultations with a range of Authorities during the development of this framework have identified a number of common barriers and challenges that are seen as potential obstructions to establishing effective PPfM. The Lessons Learned section in this Framework also provides information on some of the specific barriers and challenges faced in Cambridgeshire.

The high dependency between managing these barriers and achieving effective strategic level project portfolio decision-making is one of the key reasons for developing a much broader and deeper PPfM framework that extends beyond the strategic level PPfM processes.

The PPfM maturity model in this framework incorporates illustrative behaviours and characteristics that guide the direction towards mature and better practices to help overcome these barriers. They also smooth the transition from a project centric to a portfolio management approach that minimise the impact these obstacles can have on progress.

The following provides an overview of the areas of challenge and the capabilities that need to be developed to address these.

Area of Challenge PPfM Capability area Diversity of services could create tensions in prioritisation Prioritisation is made more complex by the breadth of

activity As well as improvements, prioritisation needs to assess

the “givens” i.e. This won’t affect…We must do….We won’t give up

Not all priorities are relevant to all services There is a danger that Local Authorities can attempt to do

everything rather than prioritising activities which can lead to future problems.

Unwillingness of business managers to see their “pet” projects shifted in priority

Some LA’s may not be willing to share or disclose ‘not so important’ priorities making it harder to identify the breadth of activity.


Corporate strategy is at a very high level and does not support the investment decision-making process. May need ‘Golden threads’ to link corporate strategy with priorities and services.

Strategic Management

Senior Management teams need to make investment decisions (new and continuing ones), which may require capabilities that are scarce.

Senior Management must have the capability to create a sense of urgency “this is our real priority”

Innovation may be missed or suppressed if the whole focus is on top down change

Senior Management needs to identify the most important areas for services to prioritise.


Capacity and capability management

Accountabilities and responsibilities may not be understood at Senior Management Level and Members.



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Area of Challenge PPfM Capability area Many organisations have experienced difficulties in

moving away from line to matrix management arrangements.

The HR implications of the framework e.g matrix management brought on by project and programme management and juggling priorities between day jobs and project work

Members are set to scrutinise and not intervene. Lack of engagement can be a barrier.

Difficulty in allocating skilled resources due to structural, geographical and HR issues.

Maturity of organisation is key Making and then actioning difficult decisions affecting the

portfolio as a whole when resources are in short supply and timescales are tight

Hard to justify closing a project. Justification of “sunk” costs on stopped projects can be too political.

Defining how decisions are made. What are the gaps e.g missing or weaknesses in for instance Benefits Realisation?

Risk management


When looking at the cost benefits for PPfM consider the cost of not doing it.

Defining what the pre-requisites or critical success factors are for PPfM

Benefits management

A significant number of organisations do not have enough resources in place to make their project portfolios achievable.

Capacity & capability Management

Resistance from programme and project teams to adopt a common approach to reporting progress and business case construction

Agreeing criteria for identifying programmes and projects within the organisation and distinguishing them from `business as usual` and/or operational services

Project & Programme Management

What are the prerequisites of PPfM?

PPfM is not dependant on the use of any specific methodologies, but the extent to which the strategic level process of PPfM matures is dependant on how well an Authority develops and matures the supporting capabilities and infrastructure.

Each level of maturity therefore has its own set prerequisites, and that higher level of maturity will only be achieved if lower maturity behaviours and characteristics are achieved. You can view each maturity level as pre-conditions for the next level.

However, in order to begin implementing PPfM practices the following preconditions are seen as supportive and highly influential to the successful implementation at any level. Against these pre-conditions are notes of Cambridgeshire’s own experiential learning


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Pre Conditions Experiential LearningTop management commitment to, and understanding of, the value of Project Portfolio Management

Use the benefits section in the framework as a communication aid to increase awareness and buy-in for a PPfM function

Willingness for the organisation to (potentially) implement new processes to support and enable effective Portfolio Management.

Cascade communication more widely. Involve and engage with all relevant stakeholders. Be careful not to abandon existing good practice. Look to use this to complement new processes and methods and be willing to compromise to gain support for the changes.

The cultural aspects of the organisation’s acceptance to embrace change is being addressed

Business as usual and project activity impact every aspect of the organisation’s workload and therefore implementing a PPfM function will need to be managed sensitively. Look to align the implementation of PPfM to other aspects of organisation wide changes and culture change programmes so that it is shown to support the wider drive for efficiency rather than a ‘policing’ activity or function.

Adequate resources, including people, funding and tools are provided to establish and perform the activities within the PPfM function.

When the value of PPfM is understood, commitment to providing a range of resources must be agreed as part of establishing a dedicated corporate PPfM function, and team to oversee the implementation of PPfM into a business as usual activity and practice.

The principles of Project Management are widely understood and practiced to a consistent standard.

The process for selecting, prioritising and maintaining the right projects is dependant on good, timely and consistent information. Adopting a standard approach for collecting and presenting information relating to project achievability, affordability, outcomes and strategic alignment need to be integrated into the Authority’s own project and programme management standards.

Where is PPfM positioned?

PPfM is both a support function and decision making process which requires people to carry out necessary activities. However, it also draws on other inputs, outputs and activities across other functions and it’s this bringing together that becomes the object of the PPfM framework that positions PPfM as an organisational practice and way of working.

PPfM, as it has already been mentioned, extends beyond those core strategic PPfM processes for selecting, prioritising and maintaining a portfolio of strategic projects. This framework defines the inputs to these core processes as the underpinning capabilities and infrastructure that also span other management functions and processes

The multidimensional view of the PPfM framework is illustrated by a number of overarching high-level processes that interact across 4 management functions

Corporate Strategic Management Portfolio Management


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Programme / Project Management Service (operational) Management

The diagram illustrates how the strategic PPfM processes of the Portfolio Management function cuts across the other management functions and 3 delivery stages of implementing change (pre-delivery, delivery, and post delivery)

These high level processes are relatively generic, and from this perspective the process may not look much different from one Authority to another. However, sub level processes are more likely to reflect local preferences and are not generic enough for this framework


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The experiential learning from the PPfM project has shown that even in the early stages of establishing a project portfolio management approach, these processes become recognisable and start to take shape and operate at low maturity levels using a mixture of formal and informal formal methods, techniques and tools.

PPfM is a practice that affects the organisation on many levels. The traditional view that PPfM is a series of corporate level processes for aligning organisational objectives and projects to produce identified business outcomes, is limiting from a Local Authority perspective. A more rounded PPfM approach incorporates a range of capabilities, processes and methods operating effectively at all levels.

The Corporate level defines the strategic direction and priorities of the Authority The Portfolio level ensures that projects and programs are aligned with the Authority’s

strategic priorities, have the capacity and capability to meet the strategic objectives without compromising operational service levels and ensure programmes & projects are meeting or exceeding planned contribution to the overall objectives

The Project & Programme level focuses on defining and delivering benefits and managing the Authority’s resources and risks.

The Operational level provides innovation and the transformation of strategic plans into realisable and measurable service improvements and efficiency gains.

The following illustrates the functional levels and where portfolio management is positioned in relation to other functions.


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The Portfolio Management Level within Cambridgeshire combines tasks and activities performed by 3 Business Development Boards, each with the responsibility for making investment decisions on projects and programmes in their respective areas, and the Corporate Project Office who provide appropriate and accurate information on proposals and project/ programme progress. More details on how this model is applied in Cambridgeshire is found in the Case study

What are the Portfolio Management processes?

At the heart of Project Portfolio Management (PPfM) function there is a defined set of processes for collating and analysing a range of business information, and assessing the relative value of each change programme or project in meeting corporate strategy and business outcomes.

The value measure used for prioritising projects and programmes will typically include The costs that will be incurred. Expected benefits The alignment of those benefits with corporate strategy and performance measures The level of risk inherent to achieving the benefits and outcomes.

In assessing the priorities, the process will assimilate information about the capacity and capability of the organisation to determine what is achievable within these constraints.

The important step towards realising that goal is to develop a method for providing a relative measure of each project and implementing some repeatable processes for prioritising and initiating projects and programmes, which may start for example by an evaluation of the strategic fit between projects, programmes and organisational goals or desired outcomes.

The end product of the Portfolio Management level process is to establish the Authority’s optimum portfolio of programmes and projects that will deliver business benefits appropriate to the needs and priorities of the Authority.

This objective, unbiased decision-making process is not achieved at a programme or project level and it ensures funding, resources and benefits are targeted at the priorities of the Authority, rather than individual services.

The process model in this framework reflects the approach Cambridgeshire County Council is implementing and although reference to programme management is made, it does not suggest this function is a pre-requisite for PPfM. The core outputs from programme management processes could similarly relate to those from projects, such as project briefs, project definitions and project business cases, which provide the necessary information on which to make investment and selection decisions.

The 7 Portfolio Management processes defined below are:

1 2 3 4 5 6 7

Collect Information

Analysis Assess &

Prioritise

Authorise Monitor & Review

Agree Corrective

Action

Track Benefits


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The evaluation technique used to determine value is likely to be a fairly simple logic (gut feel almost) when first implementing PPfM, which can be refined into something less rudimentary as the PPfM function matures.

Corporate Level PPfM process – page 1


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Once the project portfolio has been assessed and prioritised, the authorise process will confirm decisions based on sound judgement and a rationalised approach to selecting the optimised portfolio. This process is not just about giving the green light to projects, as it may decide to halt, de-scope or cancel projects in favour of improved proposals, new initiatives or changes in organisational strategy and priorities. Authorisation is the investment decision-making process for committing, distributing and managing the project portfolio funds and resources.

From the strategic and business planning process new programmes and project are defined and compete for a place in the portfolio. This top down process will require a number of approval gates to commit resources and/or funding in order to define the programme and constituent projects. This early definition stage work will produce sufficient information in an outline benefit and business case to facilitate the portfolio management decision-making process.

The authorisation process and its governance arrangements will also include and consider projects and programmes proposals created outside the top down planning cycle, through innovation or policy directives. When an organisation first establishes portfolio management, an inventory of projects currently in progress will also come under review as new programmes and projects compete for funding and resourcing within the portfolio. The review may conclude that existing projects are not strategically aligned or provide limited value in comparison to other programmes and projects. This is where the authorising process may decide to halt, de-scope or cancel projects and redistribute budget and resources into more value-added programmes and projects. Authorisation is an iterative process supported by the output from the analysis and assessment processes, and is the process by which formal approval to initiate a programme or project is given. The scope and the proposed investment is formally authorised to enable the governance arrangements to be implemented and the management of the programme to begin.

4- Authorise Project

Information analysis produces and presents findings on the unapproved, approved and in-flight projects to support the decision makers in deciding which projects provide the most balanced and blended portfolio. Using the information collated earlier, the analysis process provides assurance that the right projects are selected and that the organisation chooses a portfolio that is achievable: It will aim to answer the following questions.

Are we doing the right programmes and projects, and at the right time? Are there sufficient resources with the right capabilities? Is there sufficient time? Is there sufficient budget? Are the benefits linked to the desired business outcomes?

Note – the more information that is collected and analysed the more likely you will need automated tool to do the job. This process comprises the following sub processes

2.1 Balancing 2.2 Strategic Alignment 2.3 Benefit 2.4 Capability

Each programme and proposed project that may contribute to the overall change agenda needs to be examined and evaluated to enable informed decisions to be made. Before this can happen a process of information gathering and analysis needs to be completed. The information collected will be used to support portfolio selection, planning and performance tracking. There is no single definitive list of information that is collected for each project, and the type of information each organisation collects may vary to suit individual requirements, but it will generally fall into these broad areas:

Benefit/ Value Cost Achievability

o Capacity. Skills etc Complexity Project Profile

This process will also develop and maintain a register of resources that match the core skills sets required by the organisation for delivering programmes and projects. This register will contain details of the resource pool, which a project manager can search to identify appropriate resources for their projects. It also provides the basis for further analysis when looking at the organisation’s ability to match supply with demand, and where potential resource conflicts exist

2- Analyse

With the analysis complete, assessing the portfolio provides the opportunity to evaluate the relative strength and fit of the projects within the portfolio, to re-evaluate or realign proposals and then prioritise the change programme, based on the organisations ability to deliver, whilst at the same time, maintaining the overall balance and ensuring not all eggs are in one basket. The assessment will help answer questions such as: What alignment issues are there and can these be corrected? Is there sufficient resources, and of the right quality to meet demand and how can we overcome any

constraints? Do we have the right mix and balance of projects to achieve our objectives? Are there any significant risks and complexities that are unacceptable? Are new projects required to reduce or manage these risks? What is the best sequence of projects to reduce risk, deliver returns and benefit and optimise the

use of resource pool.As project and programme management cannot answer these questions, portfolio management provides this unique view in support of the organisation wide change agenda. The objective of this process is not to simply identify all the projects that will deliver the most benefit and demonstrate the strongest strategic fit. The objective of this process is to prioritise and find the right balance that is achievable and delivers the desired value. The outputs of the analysis are used in the assessment to explore issues and options for fine tuning and optimising the portfolio. The portfolio can be structured by rankings, ratings, weightings and measures to aid the decision making process, and place all the relevant information into context. At the mature stage of Portfolio Management, tools can be used to complete scenario tests and “what if” analysis. However, rudimentary, but effective methods, tools and techniques can be used in the early stages to help an organisation establish and embed the principles of portfolio management within its decision-making process. In summary, evaluation needs to weigh up the benefits to be achieved in relation to the costs in delivering them, their alignment with the corporate policy and objectives and the level of risk the programme or project will carry.

1- Collect Information

Click here for summary of the sub processes

3- Assess & Prioritise process



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. This process provides a helicopter view of the organisation’s delivery and investment commitment and is designed to maintain the optimum portfolio of projects. This process will monitor and review all programmes and projects up to the point they produce the outcomes or capability they were designed to deliver. Once a project has delivered its outcome, it is likely to remain within the portfolio, but as part of the continued tracking process for the realisation of the overall programme benefit, which may be profiled over many months or years. The tracking of the overall benefit and return on the investment is a separate portfolio management process as this will span a period beyond the life of a project and perhaps programme.

All programmes and projects should be scrutinised and challenged at appropriate stages or gates. The monitoring and review process should be completed as an iterative process to ensure that any variances and gaps that appear in project schedules, funding estimates, capacity and resource utilisation, outcomes and benefits are reviewed. Where variances or gaps are reported or evidenced, this will trigger portfolio management to provide analysis and assess the impact on the portfolio and replan if necessary for investment decision makers to make stop, start or hold decisions if necessary. Adhoc reviews will be initiated where circumstances change that may have an impact or influence on the balance or viability of the portfolio. Whilst changes in strategy will cause a review of the existing portfolio, good practice suggests portfolio management should also initiate a review of corporate strategy as a means of providing corporate level assurance the existing vision and strategic direction is in line with current thinking.

Once authorisation has been given to initiate a programme or project through the portfolio management process, any changes to the original costs, benefits, timescales, sequencing and resourcing will need to be updated in the business case. The revised business case will be the reviewed through this process and validated against the authorised business case to ensure no unacceptable variances have occurred.

Periodic reviews will consider progress against: Key output and milestones Risks Budgets Resource utilisation and capacity plans Changes in dependencies across project or programmes Expected benefits Project outputs post implementation

Adhoc reviews will be prompted by changes in

5- Monitor & Review

Corrective action is the process through which portfolio management identifies or recommends any necessary intervention strategies or measures in response to an unexpected shortfall in the desired level of programme or project benefit. This could result in re-scoping a programme or initiating a new project that will cause the portfolio to be re-evaluated in light of the proposed changes. Alternatively, corrective action may be a matter of reviewing the business as usual process, or the way in which a new system is being managed, and the actions may be relatively minor.

6- Agree Corrective Action

Whether a project is a constituent part of a programme or just a standalone project, it should remain part of the overall portfolio beyond the original implementation period and for the duration of the investment period until all the benefits or outcomes of the project or programme have been delivered and realised. The investment period may be a number of years and will almost certainly extend beyond the life of a project and in some cases a programme. For this reason the tracking of benefits should be seen as a portfolio management function that can be transferred from project and programme management to another management group for the continuity of benefits measurement and tracking. This process will provide information to investment or senior management teams on the performance and success of the original investment. Smart use of categories will enable these investments and benefits to be filtered out into one or more portfolio’s depending on how the organisation wishes to view its performance. The use of dashboards provides an effective means of presenting and reporting benefits, which will be tracked against the measures and performance indicators established and agreed in the Programme and Project Benefits Realisation Plan and Business Case.

7 - Track Benefits



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Programme management tends to provide static and one-dimensional view of the respective programmes it manages, and as a consequence, performance tracking and reporting of the organisation’s portfolio is often constrained by this narrow focus. A portfolio management perspective extends this view across organisational boundaries and programmes and establishes a process through which projects can be categorised to provide multi-dimensional views of the overall portfolio. For instance, the organisation may decide it requires a good balance of projects within the portfolio that deliver short-term efficiency savings. As these projects may cut across multiple programmes and business areas a consolidated view of progress and status may not be available without investing significant time and effort in consolidating the information, which could be out of date by the time it is produced. Applying a category for e.g. ‘short term efficiency saving’ to any project delivering this type of benefit will facilitate a real-time consolidated ‘portfolio view’ of all those projects sharing this category irrespective of which programme or business area it resides in. Further analysis can determine how much investment is tied up in these projects, what the overall return or net efficiency saving is and the level of risk that is spread across the efficiency portfolio. This is just one dimension of how the portfolio can be viewed and tracked allowing proactive management of the portfolio.

Categories need to be thought through carefully before collecting data. This will enable projects to be blended into various portfolios depending on how the organisation decides to diversify its portfolio and how it apportions and manages both investment and risk across the change programme. This way, changes that may impact a portfolio can be tracked, and appropriate corrective action taken if necessary to maintain or correct the balance.

Categories can also be used to manage the portfolio in different ways. For instance, programmes and projects that are not transformational, but are policy or asset maintenance driven are more focused on delivering an outcome rather than a benefit to be realised over an extended period time. Programmes such as these may require a portfolio view, but the approach to managing and tracking the benefits will be different.

Cautionary note - It may be tempting to define a large number of categories but it would be advisable to restrict them to those that describe how the organisation wishes to manage or view its portfolio. Keep it simple and relevant to the organisational priorities. Paralysis by analysis should be avoided; too much information will detract from what is important. Ask - What information do we want? Why do we want it? How do we want to view it?

2.1 Balancing

For successful change to occur it is essential that an organisation identifies and selects those projects and programmes that will contribute most in helping achieve its overall aims. To do this, it will be necessary to integrate the cyclical business planning process into the overall change management function of the business, so that co-ordinated change programmes are established that embody corporate values and are aligned with corporate priorities, objectives and business plans. The outputs from business planning provide targeted improvements that programme and project management then translate into a vision for change. These are shaped into individual or multiple programmes and projects that define the outputs and outcomes needed, and demonstrate how they support the business priorities/ objectives. The strategic alignment process will determine the relative strength each project/ programme has against the organisational priorities/objectives and the targeted improvements set in the business plans.

2.2 Strategic Alignment

An organisation in its early stages of implementing Project, Programme and Portfolio Management (PPfM) is unlikely to use complex financial models for measuring project and programme value and expected benefits. The purpose of this process is to provide a relative measure so that one projects benefit can be compared to another. This does not have to be a complex process, so long as it achieves a level of consistency, accuracy and provides some measure of comparative value. Value metrics for each programme will be collected as part of the information gathering process. The value metrics could be financial, where this is difficult to quantify in monetary terms for ‘soft’ benefits such as ‘Improved Customer Service,’ a scoring model applied consistently will provide a fair means to evaluate the relative strength of one project against another. In the case of both financial and non-financial comparisons, the whole life investment costs will need to be taken into account for a true evaluation of the benefit to cost ratio.

Capability in this context is defined as having sufficient capacity in the right skills, budget, and time to deliver the project within the constraints of complexity and risk that are inherent to the programme or project. This process aims to answer whether sufficient resources exist, and how they are allocated.

Capacity - This process takes the information collected earlier to provide a gap analysis between the resources that are available within the organisations resource pool and those that required from the resource pool to deliver the projects. Capacity should also include other resources such as building facilities and hardware that are often shared. Deficiencies and conflicts can be resolved by either rescheduling projects, procuring additional resources or changing scope but any of these may invalidate the business case, so these will need to be re-examined.

Time - When projects are planned at the project and programme level, conflicts are not always identified and the projects are not always sequenced to maximise the realisation of benefits. With the information collected earlier, portfolio analysis will determine whether existing programme and project schedules are in the most logical sequence, and whether rescheduling projects can maximise value and resolve any current or potential resource conflicts.

Budget - This process provides a picture of the total cost of each programme based on actual or best estimate project costs contained in programme business case. The purpose of this analysis is to ensure the organisation has sufficient funding for its optimal portfolio. Committed or spent funds should be identified in the information collection process where programmes or projects are already in progress. This will be a factor during the analysis and assessment process later when decisions are formed on which projects will be selected for the portfolio. Project cost information also enables portfolio management to evaluate the cost benefit analysis of each project.

Complexity / Risks - Based on the information collected earlier, this process will provide analysis on the size of complexity and risk for the projects across the portfolio. Whilst benefit is part of the value equation, risk is also a factor and may be the key differentiator between two programmes or projects that are of equal or similar benefit. The organisational capability to deliver a project and maintain a business as usual operation need to be understood before the selection process can begin.

2.4 Capability

2.3 Benefits

SECTION 3 – MATURITY ASSESSMENT MODEL

Introduction

We have found the practice of PPfM to be in its early stages across a range of Local Authorities and those within or known to the project reference group are still performing in the early maturity stages of this framework. It is envisaged this framework and maturity model will develop as experience increases.

The maturity model complements the processes defined and described earlier, and provides a generic framework for any Authority to plan, develop and establish a PPfM function.

The Maturity Assessment Model is a hybrid of our own experiential learning and other maturity models. It combines practical experiences in project, programme & portfolio management within a Local Authority setting, and advice and guidance from government and academic research that is available in the public domain.

It is expected that this model will be refined and amended as PPfM practice evolves, establishes and embeds itself as a familiar organisational practice.

The model does not prescribe a set sequence for developing each component of a PPfM function. Instead it aims to defined general levels by which an organisation can measure and evaluate its current level of capability along the maturity continuum. This will enable any Local Authority to set goals and milestones for improvement and close gaps between where they perceive themselves to be, and where they aim to get. Full maturity is a future aspiration of many Authorities. In time as the level of maturity across Local Authorities develops, the higher levels may be lowered and new high levels identified as more is learned about the subject.

With the assumption that many Authorities require only a basic level of understanding in these early stages, a key principle of this framework is to provide simple and easy to use guidance. The reference group consulted in developing this framework suggested the value of such a model would not come from a plethora of Case Studies and theory, but guidance on some of the transitional issues, supporting tools and illustrative behaviours or characteristics expected at each level of maturity.

Authorities who find themselves operating in early maturity levels may still produce good results and well-run projects. An advantage of establishing more mature levels is that it promotes consistency with an assurance that the right projects are delivering the right results again and again and producing more predictable outcomes across a diverse organisation. Embedding the corporate level PPfM processes, the supporting capabilities and infrastructure provides a framework for Authorities to achieve their priority objectives and deliver repeatable results through repeatable processes and practices, and negates the common risks that causes business change to fail.


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What is the maturity assessment model?

The maturity assessment model evolves around the transitional states of 6 core capabilities.

Capability Area

Benefit Management

Benefits Management aims to make sure that desired business change or policy outcomes have been clearly defined, are measurable, and provide a compelling case for investment. This ultimately helps to ensure that the change or policy outcomes are actually achieved. Any change project or programme requires a constant focus on the intended benefits (measurable improvements) if it is to deliver value and remain aligned with business goals. Delivering value begins with defining the expected high-level outcomes before a programme is approved and continues through the identification, profiling, tracking and embedding of benefits.

Risk Management

Risk management at the project level focuses on keeping unwanted outcomes that would adversely affect the project outputs to the minimum. Programmes risks are generally associated with broader funding, organisational and cultural issues. Risk management at the programme level is primarily concerned with the overall direction of the programme and the management of interdependencies between the related projects. Risk Management at the portfolio level provides a aggregated level of risk that evaluates the impact re-prioritisation decisions or significant changes to projects and programmes may have on achieving strategic outcomes


This activity embodies the strategic level PPfM decision processes for selecting, prioritising and maintaining the optimum level of projects. It determines the appropriate governance arrangements for each investment request. It ensures alignment between each investment request and the performance framework of the organisation and monitors performance of the change programmes to ensure the collective benefits will meet the strategic objectives.

Strategic management

Strategic management is the Authority’s methodology of setting and maintaining its strategic direction, aligning strategies, performance and business results. It is also the decision-making process for responding to changing circumstances and the challenges of the organisation.


Capacity & Capability management in this framework is the business activity that manages the quality, efficiency and effectiveness of the resources, and ensures there are sufficient resources of the right quality to meet the needs of the Authority’s change agenda without compromising standards of operational service. It brings together people, processes, organisation and technologies to support the objectives of the organisation. Resources generally relate to people in this framework but equally an Authority requires effective capacity management practices for buildings, finance and IT equipment. Capability refers to the ability to perform through the use of the Authority’s skills, knowledge, understanding, and physical tools

Project & programme management

Project management is the function through which change is planned, monitored, controlled and delivered. Programme management is the method through which the Authority defines a vision of change and co-ordinates a portfolio of related projects and activities to achieve identified outcomes and business benefits

It provides a framework for an Authority to assess and plan developing the capabilities it needs to establish its own PPfM function.


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There are two maturity models against which you can both assess your own Authority’s position and track its progress

A quick assessment will help establish an overall maturity level for each capability, which may indicate which area you want to analyse a bit further.

A detailed assessment will help develop a better profile of the characteristics and capabilities that need to be developed

It is unlikely any Authority will develop to a mature state without a sustained development. You might find that in some areas you are in the later stages and in other areas, early stages. The purpose is to provide an assessment of where you are and where you need to get to, to help plan your journey and progress.

Benefits of the maturity assessment model

For any Authority wishing to develop and improve their processes, capabilities and infrastructure for PPfM, this model provides.

A framework to provide the basic and essential ingredients for establishing PPfM within a Local Authority.

An understanding of the key practices that need to be fully embedded and developed within the organisation to achieve continuous improvement in PPfM.

Simple but effective guidance for establishing PPfM process improvements and developing an understanding of the capabilities required for establishing and running an optimum set of projects.

A tool to assess, evaluate and improve the maturity of the authority’s PPfM capabilities and processes.

A method for identifying and planning priority development needs and establishing measures and milestones for target improvements.

A foundation for integrating and/ or building a set of appropriate tools to support each process in PPfM.

A mechanism to help identify risks and issues that need to managed as part of establishing the PPfM function.

A tool to support the corporate competency and organisational development framework.


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The tool is not intended as a

Benchmarking tool for comparing and contrasting the PPfM functions of different Authorities

Measure of success or failure in an individual PPfM function

Highly comprehensive & scientific model for project portfolio management

A competency framework. However, it should help an Authority identify the knowledge, understanding, practical and thinking skills that are required to develop capacity and capability.

Provide a definition of each component


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The maturity model is simple to use and each capability is illustrated this way

Example 1 2 3 4 5

Immature Maturing Matured

Characteristics

Describes the characteristics when operating at the basic level

Describes the characteristics and behaviours during the developmental stages of the PPfM function. This model breaks the ‘Maturing’ stage into 3 interim stages as some characteristics may develop faster or more slowly than others.”

Describes the characteristics when the PPfM function has matured


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Quick Maturity Assessment

Core Capability Maturity Transitional State

1 2 3 4 5

Benefits Management

Projects generally describe some business benefit, but there is no formal or standardised benefit management practice, and ownership of benefits.

There is a standard approach across the Authority for developing business cases and defining business benefits, but no formal benefit tracking and management process. Ownership of benefits is best described as sporadic

The Authority has established a consistent approach for benefit realisation planning and measurement. However, these are mainly focused on the output of individual projects rather than aggregated and measured programme benefits. Programme sponsors are signed up to owning benefits

The benefits realisation and management process is well established across all change programmes and both project outputs and programme benefits are actively managed and owned, and the Authority is developing some linkage between outcomes and the corporate performance framework.

The whole benefit management process is embedded across all the Authority’s change programmes and the benefit measurement of individual programmes and projects are clearly aligned to the corporate performance framework and priority outcomes.

Risk Management

There is an adhoc and inconsistent approach to managing risks. Risk are often identified, but effective management of the risks is inconsistent across the Authority

Generally projects are managing risks well, but decision-making is project focused and considers the impact on individual project outcomes without the wider impact

Project and Programme risks are well managed and consistent. Inter dependencies across projects are better defined and enable project decisions to considering a larger impact.

Programme risk registers used as an everyday working tool to ensure decisions taken consider the impact on the prospective value of individual programmes

Stage gates used to proactively assess and manage investment risk and make decisions on impact on the wider Authority portfolio. Diversifies exposure to risk by selecting diverse technologies and programmes


All or nothing approach to funding. Approved funding is devolved to budget centres and is spent with little or no accountability outside the budget owner

Project budget devolved to project as one pot and managed by project board in controlled stages but generally project will continue to progress and deliver regardless of its continuing performance.

The Authority has developed investment management processes and practices for programme level governance although decisions to halt project and programme progression based on future performance are unlikely.

The Authority has established documented policies; procedures and governance for project programme investments and developed investment board structure to oversee programme investments

The organisation has effective and robust governance for managing change. Investment boards manage investment on a pay as you go basis subject to successful programme stage gate reviews and agreed performance measures.


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LOW HIGH

Quick Maturity Assessment cont

Core CapabilityMaturity Transitional State

1 2 3 4 5

Strategic ManagementThere is no recognisable process for defining and translating the Authority’s strategic objectives and policies into defined change projects.

There is some attempt to align projects with corporate objectives but this work ‘bottom up’

Some projects can evidence how they support the Authority’s strategic outcomes or service plans, but this is best described as inconsistent and informal.

Large change projects and programmes are generally well defined and demonstrate alignment with strategic outcomes/ objectives and the Authorities change agenda

Strategic projects are easily identified.

The Authority as a whole has a defined and managed process for translating policy and key corporate priorities into well defined change programmes and projects

Community and Corporate strategy plans are fully integrated into the strategic planning process for defining the Authority’s change programmes and project, with clear alignment to the strategic outcomes with sequential schedules for all programmes/ projects

Capacity & CapabilityManagement

Individual project identify and source own resources using internal external mix. Authority generally has a high risk of overcommiting key resources.

Resources are identified and allocated at programme level to better manage potential risks of over committing resources.

The Authority has developed a resource pool, which can be used by project managers to identify staff with the appropriate skill sets, or the skills required for specific roles to fulfil the needs of the project.

Real-time utilisation of the Authority’s resource pool is monitored to plan, manage and meet its resourcing needs across the Authority.

The Authority has established effective capacity and capability strategies and processes for obtaining, allocating and adjusting resource levels in line with medium and long terms investment plans.

Project & Programme ManagementManagement

There is no consistent approach to managing change projects, the Authority uses various tried and tested methods

A consistent approach for project management is developing within the organisation based on internal and external good practice

The organisation has embedded a corporate standard for project management, which all change projects use consistently.

Programme Management is being used in parts of the organisation to define change programmes and the constituent projects that will deliver the change

A standard programme management approach is embedded across the organisation, through which change programmes are defined and managed to deliver the Authority’s vision for change.


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LOW HIGH

Detailed Maturity AssessmentBenefits Management

1 2 3 4 5


Illustrative Characteristics at each Transitional stageThere is no formal process or consistent approach for creating the justification for each project.

It is likely be difficult to evaluate the financial or strategic reasoning for most projects

Benefits are described in a very inconsistent manner.

Benefits are generally described too high level or subjective to be tracked and measured

Benefits tend to be subjective rather than objective.

No ownership/ accountability of benefits realisation or business cases

There is generally no clear view of what success will look like for each project, or is only supported by anecdotal evidence

Success is considered or described in terms of the project outputs such as ‘implementation of a new system’

The Authority has developed a standard approach to creating business cases. Practice is improving

Business cases generally contain some evaluation of possible options for achieving the business outcomes.

Most projects provide a Business Case founded on some financial reasoning

May be some qualitative/ anecdotal evidence of what success or failure will look like

Benefits are written as more qualitative than quantitative statements, with difficulty in establishing measures for tracking their realisation

High profile projects have accountability and responsibility for business case development.

The Authority has developed a standard approach to creating business cases that is being widely used across the Authority

Business Case provides a range of costed options for meeting the business need and demonstrates sound financial reasoning.

The Business Case describes the benefits as business outcomes rather than project outputs e.g a new system that will enable the public to make internet payments’

Benefits becoming smarter quantitative and objective

Hard benefits are described in financial terms, soft benefits are not quantified in financial or non-financial terms.

Benefits demonstrate strategic alignment

All business cases have a senior sponsor

Measurements agreed with key stakeholders

All projects are supported by a business case that is appropriate to the level of investment request.

All Business Case are assessed for the potential cost, financial viability, risk, and operational impact

Programme level business cases provide a summation of the project business case and benefits.

Benefits are defined/ categorise in a standardised way, to enable comparative analysis & improved reporting

The Authority has established an approach for quantifying soft benefits in a consistent way

Benefits are written as measurable outcomes e.g reduce rework by 10% and realisable saving of £50,000

Unrealistic benefits are challenged and resolved.

There are clear linkages between project/ programme benefits and strategic outcomes.

Benefits of programmes and projects are regularly tracked

All business cases identify whole life costs, risks and timescales. Measured against the expect benefits.

The Business Case describes the value of the investment to the Authority.

Benefits are defined in a consistent way, and relate to specific and measurable business outcomes business.

The Authority has a process for managing benefits realisation during and beyond the life of a project, are monitoring and tracking and results against projected performance.

Benefits Management is a joint activity between project and operational management

Benefits realisation is firmly established as the responsibility of a Senior Manager or Board

Benefits measurements and realisation is integrated into Performance Management framework of the Authority

The business case is maintained and reviewed regularly to ensure it remain s aligned with anticipated outcomes, costs and schedules


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Detailed Maturity AssessmentRisk Management

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Illustrative Characteristics at each Transitional stageThere is an adhoc and inconsistent approach to managing projects risks.

Project risk management is inconsistent with corporate risk management

Risk are often identified, but there is no proactive management of the risks across the Authority

In the main project risks are identified and assessed H/M/L based on an individuals assessment of the likely probability

Risks are generally managed in a reactive way

Project risks captured in disparate spreadsheets and difficult to assimilate

Assess Risk Management process and implement corporate standard. Involve corporate risk management

Generally projects are managing risks well, but decision-making is project focused and considers the impact on individual project outcomes without the wider impact

Projects generally follow the corporate risk model.

Mitigating actions are described but no specific risk / contingency plans for high risks.

Evidence of consistent analysis of risks in terms of impact on project schedule, cost and quality of deliverable to determine the probability, impact and proximity (timing) of the identified risks

Proactive management of risks is patchy

Risks prioritised and managed depending on severity and impact

Project risks logs are more accessible, enabling others to self help and consider risks outside immediate project

Develop a framework for responding to significant risks

Project and Programme risks are captured in a corporate or programme risk register that enables risks to be aggregated into a single portfolio or programme risk profile

Inter dependencies across projects and programmes are established informing decision makers of the wider implications of decision.

All projects follow the corporate risk model consistently

Proactive management is more common place

Risk assessments are carried out before each project stage.

The effort in managing a risk is appropriate to its significance and priority

Effective contingency plans are developed for critical show stopping risks

Each significant risk is proactively managed by an assigned risk owners and reviewed regularly

Project and Programme risk registers used as an everyday working tool to ensure decisions taken consider the impact on the prospective value of individual project programmes.

Risk Assessments involve people with a range of knowledge including business/ technical experts

Risk criteria are established to evaluate achievability of identified business outcomes.

Risk owners with appropriate responsibility are assigned to each risk with documented risk plans proportional to the significance of risk.

Regular risk reviews occur.

The Authority is able to view the level of exposure to risk types across its projects and programmes.

Stage gates used to proactively assess and manage investment risk and make decisions on impact on the wider Authority portfolio.

The Authority diversifies exposure to risk by selecting a range of technologies and programmes.

The Authority proactively manages the aggregated risk of its strategic projects on achieving its strategic objectives and focuses on critical show stoppers

The strategic projects / programmes undertakes quantitative (financial) analysis of both the threat itself and the likely cost of mitigating measures in order to inform subsequent decisions.

Risk criteria are fully embedded into project prioritisation process

Risk Management is operating and effective at all levels (Strategic, Programme, Project and Operational)

The Authority is able to view its risk exposure across the overall project portfolio and strategic objectives


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Detailed Maturity AssessmentInvestment & Performance management

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Illustrative Characteristics at each Transitional stage

No disciplined processes or controls of project budgets and spending.

The Authority does not have an overview of how many projects it has in progress

Projects are not seen as an investment providing measurable improvement

No investment boards or management groups oversee and control project spending.

Inadequate processes to resolve troubled projects.

All or nothing approach to funding projects. Budgets are devolved to project and spent regardless of project performance

Project and investments requests are factored into general budget rounds, and not as competing investment requests based on defined selection criteria.

Some project approvals may be perceived on who ‘shouts’ loudest.

Investment management awareness is increasing across the Authority

There may be some evidence of individual directorates or offices establishing a structure to oversee and co-ordinate its main projects.

The Authority has started to outline a framework and process for improving investment decision-making, project selection and accountabilities determined.

An inventory of all projects and programmes exists and provides a corporate view of all current commitments

The Authority still has an adhoc approach to which project are funded and which aren’t projects

Initial investment decisions are largely made in isolation to the bigger picture, but Projects/ Programme Boards consider alignment pf the project with the Authority’s strategic priorities

Individual directorates or offices have established a senior level structure with responsibility for approving all new projects.

Documented policies, procedures and governance for investment projects not yet fully embedded.

Authority has established a selection criterion that determines the relative fit between the project and the Authority’s strategic objectives.

Business cases are integral to the investment decision.

Project selection is mainly influenced by magnitude of benefit and strategic fit.

There is evidence of projects not aligned to the mission, strategies, and corporate goals being rejected.

A measure of the relative importance or strategic fit of each project proposal must be established before approval is given.

Management structures and governance are established to oversee strategic projects and provide decision-making on approving project selection, priorities, resource allocation and performance monitoring.

Investment management boards have start, stop and hold decision-making responsibilities for its strategic projects.

Authority has established and practices more robust project selection criteria considering risk, benefits, achievability, affordability, alignment factors

Projects or Programmes are structured by a combination of rankings, ratings using weightings and measures to place all relevant information into context to inform and improve the decision making process.

Authority has a process for reviewing and assessing projects and programmes to compare actual results with expectations

Financial control and investment management of the Authority’s projects have shifted from a project centric process to a corporate centric process.

Investment boards manage investment on a pay as you go basis subject to successful programme or project stage gate reviews and continued performance.

The Authority’s performance management framework is fully integrated with the investment management process.

Investment decisions take into account the Authority’s entire portfolio of projects and programmes.

Investment decisions consider the collective benefits of project and programmes not individual projects.

Investment decisions take a balanced perspective of risk, benefit, alignment and achievability

The Authority has a formal review process to ensure corrective actions are taken where actual results are not in line with expected performance.


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Detailed Maturity AssessmentInvestment & Performance management (continued)

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It is difficult to establish how most investment requests contribute to the strategic objectives

It is difficult to establish the rationale for which projects are funded or approved.

Investment requests are supported by a proposal or service improvement initiative but not evaluated on cost benefit analysis.

Investment decisions are not corporately made.

In many areas business cases are appraised independently of each other, and real priorities are not established.

Project budget devolved to project at initiation and managed by project board in controlled stages but generally project will continue to progress and deliver regardless of its continuing performance.

Initial governance arrangements are established

Time recording introduced as a mechanism for collecting information

The Authority has established and agreed criteria for assessing progress and alignment of projects and programmes

Investment proposals are approved subject to a sound business justification that demonstrates delivery of benefits and alignment with corporate objectives.

The Authority has started to develop its investment management processes and practices at programme level although decisions to halt/stop projects and programme progression based on future performance are unlikely.

Governance arrangements for projects and programmes are developing

A mechanism for determining the appropriate governance arrangements is developing

Investment proposals are approved subject to a sound business justification that demonstrates measurable cost benefits and alignment with corporate objectives.

Business Cases are mandatory for all investment proposals

All Business Case are appraised for the potential cost, financial viability, risk, and operational impact

Projects and Programmes are categorised to provide logical groupings of projects and multi-dimensional views giving better management information that improves decision-making to achieve a better balance of projects

The Authority has a repeatable and consistent process/ method by which all strategic project and programme requests are authorised.

The Authority has established documented policies, procedures and governance for project and programme investments and has developed an investment board structure to oversee programme investments

The organisation has effective and robust governance for managing change.

A process exists for Project and Programmes to provide Interim performance results.

Authority is proactive in conducting strategic reviews to ensure its projects and programmes remain consistent and up to date with strategy.

Real-time management information of project and programme performance is available to ensure proactive management of the Authority’s total investment

Investment decisions are based on well-defined and robust selection criteria which measure and assess the comparative value of programmes and projects for whole life costs, risk, achievability and strategic alignment.

The investment boards have established a process to monitor changes to risks and to assess intended benefits and outcomes to ensure they are still on course.

Roll out and develop co-ordinated projects and programmes linked to local/ regional/ NEED TO CHECK THIS PHRASE


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Detailed Maturity AssessmentStrategic Management

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The Authority does not have a structured framework or process for defining and implementing change within the organisation

The Authority does not have a process for defining and managing its projects in accordance with its strategic direction and outcomes.

Project are not defined and planned proactively to support corporate objectives

The process of translating policy, corporate and service objectives into defined programmes are best described as informal

The Authority has established a strategic management team responsible and accountable for the Authority’s strategic direction

The Authority has established some key service priorities, but overall the wider strategic outcomes and objectives of the Authority are unclear and not communicated.

The link between the corporate priorities and service priorities is unclear

Priorities are externally focused and do not articulate the internal priorities for the health, sustainability and efficiency of the Authority.

Projects are implemented more as a result of bottom up planning than top down

There is a clear business strategy and vision for the future

The Authority has defined strategic themes and the areas of business activity in which it needs to engage to meet the challenges posed by threats, opportunities and weaknesses.

Awareness of the Authority’s strategies and priorities is improving

The Authority identifies and defines candidate projects and programmes that will deliver its strategic goals and outcomes

The Authority’s priorities for external and internal priorities are better defined

The Authority has developed well-founded strategies from careful analysis of the business and its citizens and considers new and changing directions

The strategic themes are divided into defined programmes and projects capable of delivering the strategy.

The Authority considers the wider implications of strategic decisions across the organisation and its partners

Strategies and the internal and external priorities are well articulated with high awareness.

The Authority has identified the golden threads through which departmental and service plans are aligned with the priorities of the council and its partner agencies.

IT performance, succession planning and IT strategy are integrated into the overall strategic planning process to ensure these are mutually supportive and aligned.

Strategic management is a continuous activity in which senior managers engage to ensure projects and programs are aligned

Strategic management is embedded as a dynamic process that aligns the Authority’s strategy, performance and business results

The strategic governance framework includes collaborative strategic partnerships

Golden Threads ensure that departmental and service plans are aligned with the priorities of the council and its partner agencies, and that all employees have a clear understanding of how they are contributing to the councils' success and key objectives.


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Detailed Maturity AssessmentCapacity & Capability Management

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The Authority is unable identify its resources with the appropriate skills for successful project delivery.

The Authority isn’t able to gauge or assess if it can fulfil current or planned project commitments with the resources it has.

The Authority cannot gauge the level of resources and skills it requires to fulfil current and future project commitments

Resource conflicts are commonplace when managing projects and programmes

Projects and programmes are not managed or delivered consistently with the skills appropriate for the type of projects

There are no standardised and repeatable process for defining, initiating, prioritising, selecting and managing projects

The Authority does not prescribe or mandate the use of specific tools or techniques to support the project delivery and management process

There is some awareness of good project skills but no inventory of the people and skills within the Authority

Resource decisions are mainly made at project level with no assessment on the impact on other projects or business as usual activity.

The Authority is starting to develop and improve project management practice

The role of project board and project sponsor is practiced in some areas.

Training and development tends to be more universal than specific in creating the skills, competencies and standards required for good consistent practice in selecting, prioritising and running projects

The Authority starts to develop a profile of the key resources and skills required to manage and deliver its change projects

Best practise is actively identified within the organisation

Projects are generally good at identifying resource needs and allocation decisions are generally approved outside of each project and consider the potential impact on other projects or programmes

Project Boards and Project Sponsors have clearly defined roles and responsibilities that are understood and practised.

The Authority has developed a database of key project resources and is able to identify current utilisation.

Skills assessments are completed to identify overall capacity and capability within the Authority.

The Authority has established a method for measuring proficiency levels of project resources and evaluating the criticality of its projects

Projects are being managed with the degree of skill and competence appropriate for each type of project

The Authority is starting to set up formal internal groups to share best practise

The Authority has established a resource pool which identifies the people with the appropriate skills and experience for managing a range of projects

Resources conflicts are smoothed out and managed before being approved and allocated to projects.

Stage Plans are prepared consistently across all projects which identify the level and number of resources required

Performance and availability of resources is assessed against organisational needs

Refresh polices and sequential planning maintains a constant level of capacity and capability

Skills assessments are translated into organisation development plans

Skills within the resource pool are matched according to the proficiency required for each level of project

Lessons learned and formal networks are established to improve capability

The Authority is able to identify resource utilisation of its resource pool to plan and profile utilisation to manage projects more effectively and deliver benefits more timely.

All resources decision and resource allocations are made giving regard to the impact on other projects programmes and benefit delivery and the Authority’s ability to maintain its operational service standards.

The impact of strategic planning and its implementation on future capacity demands and capability requirements is understood and managed.

The Authority has effective demand management strategies in place, and can influence the balance between demand and availability through reprioritisation, sequential and cross project and programme planning.

The Authority can demonstrate optimum usage of its resources.

Fully effective process for obtaining, allocating and adjusting resource levels are in place.


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Detailed Maturity AssessmentProject & Programme Management

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There is little or no consistency in the Authority’s approach to project management and the success factors of one project are difficult to replicate.

No particular project management standard is applied within the organisation.

It isn’t uncommon for projects not to have any senior business ownership or direction

The are no governance arrangements or policies for initiating, selecting, running and closing projects and programmes

Project management expertise is not matched to the demands of the project.

Projects plans are created in isolation, and in some cases there are no formal documented plans

A corporate approach for project management is developing within the Authority based on internal and external good practice

Policies and governance arrangements are being established for co-ordinating projects and programmes.

Project Boards are established to oversee the implementation of significant change projects

Although plans are relatively high level, plans generally define stages and the key decision points.

All projects articulate their objectives

Project resources are identified during Initiation as standard practice

All projects have a project plan but these may vary in quality and detail

The Authority has established a common framework and standard for managing its projects

Programme Management is being used in parts of the organisation for defining and shaping change programmes and identifying the constituent projects that will deliver the change

The Authority has established a governance framework for the initiation all projects and programmes

No project is initiated or approved without Senior Sponsor ownership for the business case, providing direction to the project, and the realisation of projected benefits.

Plans are developed in sufficient detail with clear timeline plans, milestones and work packages defined

The Authority has fully embedded a corporate standard for project management, which all change projects use consistently.

The principles and practices of programme management are now being used to some extent in delivering strategic change.

Programme plans integrate and synchronise the timetable for projects with the benefit realisation plan.

The Authority has effective governance for managing projects that span internal and external boundaries

Governance arrangements apply to all project activity across the Authority

Programme Management is established to translate strategic aims into co-ordinated projects that will bring into effect the necessary business change

The Authority is continually developing and improving the standard of project management through a process of establishing best practise, internal/ external networks, and lessons learned

A standard programme management approach is embedded across the organisation, through which all strategic change programmes are defined and managed to deliver the Authority’s vision for change.

Projects are controlled and managed through the development and approval of costed stage plans.

Individual project plans reflect decision made at the programme level on the sequencing of the projects designed to deliver and maximise benefit, capacity and achievability.

Governance for all projects/ and programmes is appropriate to the level of investment and scope.


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Detailed Maturity AssessmentProject & Programme Management (continued)

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Poor estimating techniques are used for planning and costing.

Cost and schedule estimates are best described as guesswork.

There are few verification and validation activities.

Project reporting is sporadic and non standard

The quality expectations of the stakeholders are not defined

Estimation is based on personal judgement but with some experience

There is some evidence of good quality assurance in practice or being developed.

Some form of regular project reporting is demonstrated but there is a general weakness in consistent measurement of progress and of reporting progress against plan.

Quality expectations of stakeholders is gauged, and generally well defined especially for significant projects

Critical friends provide some informal verification and validation activities of quality assurance

Detailed plans are approved before each new stage is started.

Project plans provide the level of detail that is pertinent to the type of project being plannedThere is an agreed process for managing change within projects

All significant projects have quality plans and stakeholders observe and monitor quality of deliverables

Estimation is based on sound analysis of risk, scope, quality and costing.

Project reporting provides a measure of actual performance versus planned.

Quality management is embedded into the Authority’s project management approach to ensure the outputs mirror the expected quality

Programme monitoring and reporting tends to focus more on the progress of its constituent projects, not benefits delivery as a measure of the programmes performance

Programme monitoring and reporting focuses on project performance and checks the impact of any variances on the benefits realisation profile.

Verifications and validation is assured through internal and external programme and project reviews.


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SECTION 4 – PPfM Experience in Cambridgeshire County Council

Background

After Cambridgeshire County Council set out its vision and priorities for 2004-5, it underwent a major reshaping programme to meet these challenges. In line with the Council’s vision and priorities, a new organisation was put in place from April 2005 tightly focused on service delivery and meeting its customers’ needs.

One of the drivers for organisational change was the Improving Business Support initiative set up during 2004 with the purpose of bringing a consistent and structured approach to the numerous projects undertaken at any one time across the Council.

Under this initiative a Corporate Project Office (CPO) was established in April 2004 to bring consistency in project management and delivery, and ensure that scarce resources were allocated effectively and efficiently across the portfolio of projects and the Authority had the capacity to deliver.

The CPO established itself as a Centre of Expertise for project & programme management that: offered expert support and guidance in delivering projects on time and to budget made best-practice project management skills available to all. offered the chance to share knowledge and learning with other project managers across

the Council. created new opportunities for personal and professional development through training.

The CPO is now established as a corporate service that is available and accessible to all Cambridgeshire County Council (CCC) programmes and projects, providing skills in programme and project management, establishing robust programme and project governance, quality assurance, monitoring and control, mentoring and support services.

The Challenges

There are a number of issues and challenges the Authority and the CPO are facing


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Response to Challenges

Since April 2004, the CPO has established itself as a corporate service and helped develop and embed an infrastructure and many of the core capabilities required for a PPfM approach. There is now. Here are some of the highlights

Key Milestones in establishing PPfM in Cambridgeshire Ref material PPfM Component

The Corporate Project Office established as an Authority wide service and Centre of excellence for project, programme and portfolio management. The OGC provides a good model for this.

(Source OGC Successful delivery Toolkit)

Organisation

Developed a basic methodology for programme and project management, underpinned by MSP and PRINCE2, and a clear strategy and plan for training staff.

Methodology

Implemented a pilot to embed the methodology across all identified business support programmes and projects. Refined and enhanced into an organisational standard based on best practice.

Competency

Built programme and project capability across the organisation through promoting best practice, project management network, training, mentoring

Programme & Project

ManagementEstablished a governance structure of three Business Development Area boards and thirteen programmes with responsibility for prioritising significant programmes and projects within the portfolio, approving funds and resources, initiating, stopping and closing projects / programmes. These are supported by the CPO who provide advice, guidance and information on project and programme status

(Source material CCC)

Organisation

Full roll out of standard programme and project methodology and process across 3 Business development areas.


Process

Developed and embedded project/ programme Governance across three Business Development Area Boards. Governance arrangements define:

How accountability is assigned How decisions are made How projects & programmes are identified, defined, prioritised,

approved, funded, resourced, managed and closed

(Source material CCC Draft Governance)

Governance

Investment & Performance Management

Established the Business Case as the corporate vehicle for gaining management commitment and approval of all project and programme investment requests. The CPO provides project management support in the development of the Business Cases through 1-1 mentoring.

Benefits Management

Developed a Typology tool to identify the appropriate level of governance for projects

(Source material CCC)Tools

Established a mandate for developing the sustainable capacity and capabilities that Cambridgeshire County Council requires for the successful delivery of business developments.


Capacity and Capability

Management


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Summary

It is still early days but there is evidence of more rational decision-making as a result of developing some PPfM tools and techniques. More accessible, timely and accurate information is also improving the quality of decision-making. It is still early days, but the following are evidence that progress is being made.

Projects stopped before they started Projects rescoped or redirected Comprehensive Performance Assessment feedback Anecdotal evidence from staff

Objective measurement is not always easy and the limits to developing decision-making criteria need to be established. The end goal for PPfM governance needs to be a balance between structure and culture so human factors remain part of the decision-making processes


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Experiential learning assessment tool

The experiential learning assessment was completed using a set of questions on which to reflect, review and plan the Authority’s progress against developing key PPfM practices. This tool was developed by Cambridgeshire, and can be used or modified by any Authority that wishes to use experiential learning as an approach.


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Reflect Back (6-24mnths) Actions Taken Review Actions Forward Plans

Capability Area

IN REPONSE CONSIDERReflecting back consider the issues that were identified and problems the Authority needed to address, but also identify any examples ‘good practice’

IN REPONSE CONSIDERWhat actions have been implemented (based on the Authority’s strengths and weaknesses)

IN REPONSE CONSIDERHave the actions made any positive or negative impact.What level of improvement is visible in this specific capability area

IN REPONSE CONSIDERWhat further strategies and plans are the Authority implementing or considering to become more effective in this area.

Project ManagementHow would the standard of project management be best described in the Authority?

What methods or approach have been implemented to improve project management standards and capabilities?

What benefits are being seen from these actions?

What further developments and strategies have been identified to improve all aspects of project management?

Programme Management(If applicable)

How would the standard of programme management be best described in the Authority?

What methods or approach have been implemented to improve programme management standards and capabilities?

What benefits are being seen from these actions?

What further developments and strategies have been identified to improve all aspects of programme management?

Project Scheduling

What was the method or approach for scheduling and sequencing projects deliverables and benefits and how were cross project dependencies recognised and managed.

What improvements has the Authority taken to better manage cross project dependencies, risks, benefits delivery, resource conflicts, financial management through co-ordinated project plans /schedules.

Does the Authority have overall visibility of its project and programme commitments?

How might the Authority change its approach for scheduling and sequencing projects to deliver further improvement and visibility

Resource Planning – (Capacity and Capability)

What would be the best way to describe the Authority’s approach and method of managing, developing and utilising its resources across its span of project activity.

What has the Authority done to improve the way it utilises, manages and develops its key resources to match supply and demand?

Describe to what extent improved resource planning has improved project delivery and the Authority’s capacity and capability to deliver strategic projects.

What strategy and plans has the Authority developed to further improve resource utilisation and the capacity and capabilities required for selecting and running multiple change projects.


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Capability Area





Project Reporting

How effective was project or programme information in enabling clear direction, informed decision-making and monitoring of projects(Consider, risk, progress, schedule, cost, benefits, visibility, accuracy, reliability).

What measures were taken to improve the collection, capture, presentation, analysis of information to ensure management boards were more effective in direction and decision making

To what extent has the quality of information improved the direction, decision making and monitoring of projects?

What further improvement could be made, and what priorities lie next?

Decision Making

What issues or gaps have been identified in the overall decision-making process spanning project or programme selection, delivery, benefits relations and lifecycle reporting?

What approach has the Authority used to improve its decision making process and how?

Which gaps have been closed and how? What improvements have been made?What still needs to be done to improve its decision-making.Is the process responsive and flexible?

How does the Authority intend to further improve its overall decision-making process?How will the Authority close remaining gaps?

Project Selection & Prioritisation

By what process did the organisation assess, evaluate and communicate project priorities?

How does the organisation assess, evaluate and communicate priorities?

What evidence suggests present selection methods are prioritising projects more effectively? And is there a better awareness of the Authority’s priorities?

How does the Authority plan to improve the effectiveness of selecting the most advantageous projects or programmes in the future?

Project Selection & Prioritisation

How was the relative importance of one project or programme compared to another?

What methods, if any, have been implemented to improve project selection criteria?

Has an agreed set of criteria been established that uses a combination of - strategic fit, risk, affordability, benefit, achievability as a relative measure of project weighting or value?

How does the Authority plan to improve the effectiveness of selecting the most advantageous projects or programmes in the future?


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Capability Area





Strategic Fit How would you describe the process for aligning projects with corporate strategy, objectives and priorities

What initiatives / actions have been introduced to improved the strategic fit of the Authority’s projects and programmes

Is it the case that all change projects are now strategically aligned? What further challenges does the Authority face in aligning priorities with project delivery

How can the translation between high level business plans and project outputs be developed to improve investment decision-making? What approach does the Authority plan to use for assessing alignment of its projects and programmes with corporate plans, strategy, priorities etc.

Risk Management What risk management framework existed to identify, assess, manage and report project level and cross project dependencies

How has the Authority improved its process for managing risk including the business wide perspective?

Are responsibilities for managing and reporting risk explicit? What is the current level of risk management?Are risks assessed beyond the project level?

What are the priorities to further improve the process by which the Authority manages the impact of risks across its projects and programmes?

Tools Which tools and techniques did the Authority use during its investment decision making process spanning project or programme selection, management and reporting.

How has the Authority improved its decision making process to improve the methods by which it selects, runs and reports project programme and manages risk, benefits, resources and strategic fit

Is there any evidence of improved decision making through the use of tools or techniques?

How does the Authority feel it will further develop and improve in the following areas:

Using tools etc: Visibility of investments, Aligning investments to

priorities Benefits realisation Managing risks Comparing relative values

of projects Establishing business cases Resource planning Selecting and deselecting

projects.


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Capability Area





Communciations & Stakeholder Management(internal, suppliers, partners, etc)

How would you describe the effectiveness of stakeholder management both internal and external?

Describe any deficiencies in the process for managing stakeholders and any actions that have been implemented to make this function more efficient

Is stakeholder analysis used effectively?Are stakeholders engaged sufficiently to overcome resistanceDo business cases take account of the views of internal and external stakeholders?

What are the main issues that still need be resolved to ensure effective stakeholder engagement?How will the Authority overcome these?

Benefits Management How were project / programme benefits described, defined, measured and tracked. To what extent were measures linked to business outcomes?

What were the weaknesses in this process and have any improvement measures been implemented especially to improve alignment of benefits to the performance management framework within the Authority?

Is benefit management and the realisation process a higher profile function now? How has the process matured?Is there a more robust mechanism for considering the relative measure and alignment of benefit in the selection process?

How will this process and capability mature?

Financial & Investment Management

How effective were the governance arrangements for approving and managing investment requests?

Describe any changes in these arrangements to make overall project and investment governance more effective?

How has the investment decision-making process matured? Are decision points built into governance framework?What evidence exists of better or more informed financial decision-making?Are there any key problems or issues still to be resolved?

How would the Authority like to change its governance arrangements to become better at managing the delivery of benefit and managing its project investments and why?


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Capability Area





Business Cases To what extent did project / programme business cases support the decision making process for deciding which projects were selected?

What has the Authority done to establish business cases at the heart of the investment decision making process and ensuring projects continue to remain viable?

How are business cases used in the decision making process?Are business cases actively managed?Do they provide the level of justification to support decision making?

How will the Authority develop its mechanism to ensure investment decisions are driven by business cases and that projects remain viable?

Organisation What was the organisational structure for getting projects approved, and managing the decision making process throughout delivery and benefits realisation?

How has this structure had to change and adapt to enable improvements in the governance arrangements for selecting and running more effective projects and programmes?

Is this structure working effectively?Has decision making improved? Is decision making being made at the appropriate levels?

How will the structure need to change to overcome any outstanding issues or meet further improvements in selecting and maintaining a diverse range of projects?


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LESSONS LEARNED FROM CAMBRIDGESHIRE

Benefits Management Risk Management

Establish a process for benefit definition in the early stages and factor this in to timescales

Build in scrutiny and challenge of the benefits into the project approval process Challenge the thinking that this is just another level of bureaucracy Avoid the temptation to develop a cottage industry of benefit measures and

measurement systems. Instead, focus on something simple that will signal progress towards the actual outcomes that have been identified. In the early stages this may be anecdotal or qualitative evidence based assessment.

Unless the Authority already has a comprehensive performance management framework that is aligned to the strategic objectives, establish as early as possible a universal understanding and agreement of what the Authority’s priorities are with each Office/ Directorate. These priorities should encompass external as well as internal priorities

The time and effort spent on establishing benefits should be not be wasted by failing to build in a mechanism for monitoring and tracking their realisation.

Establishing ownership of the benefits is one part of the requirement; responsibilities for monitoring and tracking the benefits need to be agreed as early as possible. This may sit within Performance Management or a Corporate Project Office for instance.

People don’t always see the importance of a business case, and sometimes view it as a means to an end to get a project approved. Establish a standardised approach for the Business Case as a means for justifying the investment and as a tool for regular reviews of the continuing viability of the project.

Whilst we often think about supporting people writing business cases we need to recognise that it is a very skilled task and the most influential document a project will produce. Good project management doesn’t guarantee a good business case. Developing capabilities in project management should include developing business case skills. In addition, a centralised support service for writing business cases could be considered.Develop a benefits framework that is flexible and appropriate to each level of investment request, ranging from the high-risk strategic business case for delivering major change to the low risk project that delivers smaller incremental improvement.

Move away from managing and reporting project risks in isolation Running project and programme risk management alongside

strategic risk management helps to gain senior management and Member visibility and scrutiny

Portfolio Management encourages clarity about corporate priorities in all four quadrants of the balanced scorecard: this means that risks can be understood and managed against those priorities. For effective risk management, it helps to be clear about what the organisation is setting out to achieve and why it matters.

Use risk management to assess the significance of an undertaking: this helps to ensure that the kind of effort in the business case is appropriate to the risk and significance of the project itself


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Investment & Performance Management Investment & Strategic Management

Project selection and prioritising can be achieved at a basic level using elementary analysis to measure the strategic fit of each project. There are still limitations with this approach because it isn’t very analytical, and tends to rely more on “gut instinct” than one might expect. In particular, some of the barriers to achievability aren’t made very explicit. The analysis of whether the organisation has enough skill and resource to do a particular project is less factual and more anecdotal, but the basic principles of PPfM can be applied to good effect without any complex or formal quantitative analysis. This approach does require a broad understanding of what the strategic priorities are to provide the appropriate challenge.

It is important to establish an investment management structure to provide the challenge, leadership and decision-making. This will help to combat any weak investment management practice that might have lingered in an environment of devolved budgets, strong management boundaries and the misconception that once approved, the budget belongs to the budget holder to do with as they wish.

Effective governance and an investment management process can provide scrutiny of each project proposal regardless of the funding status. This wider scrutiny can evaluate and approve each project proposal based on the strength of business case and not simply the existence of a budget

The CPA provides useful leverage to overcome some of the cultural barriers, as Authorities need to demonstrate that human and financial resources are targeted at priorities. The transparency required to achieve this cannot be evidenced without some form of management structure that can either directly or indirectly influence how budget or resource is utilised.

Although in the early stages of maturity, the model and governance used by Cambridgeshire has been effective in a number of ways: the three Business Development Boards have had a strong influence, using service budgets to support better strategic objectives. Each Board is responsible for specific strategic programmes and is headed by a Deputy Chief Executive who can form a clearer picture of how money and resources are being directed in pursuit of strategic objectives

Investment Boards can effectively control budgets without necessarily becoming budget centres themselves by using sound governance.

Moving from 1 year to 3-year business planning cycles has helped the practice of investment management. This has developed a more strategic focus, and the transparency of how a budget is directed to projects and programmes is made clearer.

Don’t assume that because the priorities are defined, they are understood in depth across the organisation

There are many public-facing documents that convey value statements and priorities concerned with securing the health and sustainability of individual citizens and communities. Rather less tends to be focused on securing the health and sustainability of the organisation itself

Project Portfolio Management requires a holistic view where strategic management defines and articulates the Authority’s priorities for securing the health and sustainability of its citizens, communities and organisation.

Without considering the internal focus it is difficult to evaluate the value and strategic importance of those projects and programmes that provide sustainability of the Authority.

Using a balanced scorecard approach, which includes dimensions such as Citizen, Finance, Learning & Growth and Internal Business Process can be considered. Using such a method illustrates more effectively the strategic relevance of each priority, and provides a tool to assess the strategic fit of each project and programme in the portfolio.

Priorities need to be articulated in a meaningful way. High-level statements are difficult for people to translate into a form so they understand what it means and what is expected of them. This helps the Authority to tie more closely the process of strategic planning, business planning and personal objectives to better visualise how successful outcomes can be achieved

Strategic planning is fundamental to the maturing process of project portfolio management. Incentives for high innovation and economise of scale are less likely where the driver for change is bottom up and where budgets are managed within silos.

Engaging early with the Authority’s Performance and Policy team helps to map out cross cutting themes and priorities between internal and partnership strategic priorities. There is a complex process concerning how externally funded or shared priorities fit within the overall governance that needs to be addressed.


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Capacity & capability Management Project & Programme Management

Capacity management works effectively as an informal process in the early stages of maturity

With greater visibility across larger cross-functional groups on programme and business development boards, resource dependencies get picked up.

Anecdotal evidence supports the improvement in capacity management: employee say it feels better, and although they may still be asked to do too many things at once, there are now fewer things being asked of them, and it has become slightly more reasonable. They also report that with more formal governance structures, they have an escalation path if work is unachievable.

The early stages of maturity in Capability management has thrown up issues about what the scarce resources are

To develop further capacity for project sponsorship, the open leadership behaviours required for effective sponsorship need to be encouraged and supported.

With the advent of 3-year business planning and looking at longer-term change programmes, the capabilities and skills needed have become clearer. How resources are used is also key to CPA. Project and programme management skills and awareness have developed well in the early stages, but in hindsight more attention might have been given earlier to sponsorship skills.

It has been much more difficult in a large Authority to gain clarity about scarce resource groups although it is easier to identify the capabilities and skills that will need to be developed. To try and get the model right the initial focus will be on a very few scarce resource groups, the ones that will be a barrier to development. In doing this tricky issues start to emerge about whether it would be better to source skills externally. This starts to stray into areas about working with the private sector, outsourcing and so on. These are quite complex and sophisticated issues that will take some time to resolve.

Identify and integrate existing good practice into a project management standard Standardise your practice and methodology across the Authority as far as possible to

breakdown the language barriers. Developing a corporate project office as a centre of excellence for project and programme

management has removed any preconceived ideas or legacy influence Avoid being overly bureaucratic. A one-size heavy weight method isn’t appropriate for all

projects. Devise a suitable approach for low/ medium/ high risk projects Cambridgeshire have developed a typology of different types or categories of projects to tailor

approaches. Consult internal and external experts to develop better estimates Project management can be seen purely a discipline around a particular profession like

construction, rather than a way of managing change. Setting up and establishing internal forums and networks for Project Management within Cambridgeshire, has helped to break down some of the functional boundaries and change perceptions by getting people to think more broadly about project management

Look at exploiting any existing tools to start some quantitative time recording measures that can support planning and project estimating.

Develop better estimation techniques as a foundation to more informed decision-making and planning.

Try to analyse and understand the culture within the Authority and the receptiveness to change and avoid being too rigid on the process at the expense of delivery.

Work towards making more detailed estimates of the effort required to produce/deliver the individual components or perform the lowest level tasks.

Using programme management early as a container for a group of projects provides senior management a higher-level picture and starts to focus them on the more strategic issues rather than getting bogged down by the detail of individual projects.

Programme management has been a successful vehicle for getting senior managers to think more openly and publicly about how to deliver strategic objectives. However it is necessary to be considerate of differences between the different styles of programme and the need to be flexible with any methodology.

Without a broader approach to strategic management and planning, it may be difficult to extend programme management beyond a container for projects and be able to define programmes that more clearly support strategic objectives.

Programme sponsorship is as necessary as project sponsorship.


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Acknowledgements

We would like to thank the following organisations for their input and contributions to the development of this Framework

London Borough of Greenwich Shepway District Council Newcastle City Council Surrey County Council Manchester City Council London Borough of Lambeth (eCapacity Building Programme) The Audit Commission The Office of the Deputy Prime Minister (ODPM) St Edmundsbury Borough Council The Improvement and Development Agency (IDeA) The Office of Government Commerce (OGC)


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Documents

PPfM-01-V1-Apr06 - Project Portfolio Management - Framework