Success Factors of Project Portfolio Management · Project Portfolio Management Project Portfolio Management is a pivotal concept to manage complex project landscapes .. Research

Success Factors of Project Portfolio Management

Expert Workshop at ESG UQUAM

Montreal, 6th of May 2010

Prof. Dr. Hans Georg Gemünden

TU Berlin - Technische Universität Berlin

TIM - Chair of Technology and Innovation Management

Research Areas at TIMChair for Technology and Innovation Management

Technology & Innovation Management

Innovation Service Entrepre-neurship

Project Management Technology

What are success factors for managing complex landscapes of projects?

What are the instruments of a strategic, future-oriented technology management?

InnovationManagement

How can companies manage innovation in order to achieve long-term innovation success?

Service Innovation

How can innovative services be stimulated, implemented and supported?

neurship

What are the driving forces of successful start-ups in high tech industries?

Management TechnologyManagement

2

Source: TIM TU Berlin 2009

The Project Management Research Group @ TIM

Prof. Dr. Hans Georg GemündenHead of Chair

Prof. Dr. Eric SchottLecturer Strategic Project Management (lecture and seminar)

Dr. Alexander KockSuccess of highly innovative projects and project portfolios

Sascha MeskendahlStrategic planning and prioritization of project portfolios

Daniel JonasRoles & responsilibilities in MPM and project portfolio controlling

Barbara UngerInfluence of cultural factorsiMPM internationalization of MPM study

Wilderich HeisingMPM forecasting & opportunity management

Juliane TellerRisk management on project portfolio level

3

Agenda

Goals and Design of iMPM Study XX

Success Criteria: Measurement of Project Portfolio Performance XX

Quality of Project Portfolio Management Process 19

Aggregated Measures of Single Project Success 19

Portfolio Level Measures (Timing, Fit, Synergies, Balance, Timing) 19

Business Success Measures (Value Creation) 19

Goals and Design of iMPM Study 5

Success Criteria: Measurement of Project Portfolio Performance 18

4

Success Factors: Definition and Impact on Performance XX

Business Success Measures (Value Creation) 19

Strategy 30

Actors (Roles) 42

Processes (Tactical and Operative Level) 55

Conclusions & Outlook on iMPM study 2010 & MPM 2011 69

Success Factors: Definition and Impact on Performance 29

Benefits and Costs of Project Portfolio Management 64

Content

Goals and Design of iMPM Study

5

Goals and Design of iMPM Study

Definition of Multi-Project Management

Project Portfolio-Management

Program-Management

Project-Management

Multi-Project Management

6

Management

FunctionalManagement

Source: TU Berlin

Multi-Project Management is defined as a ...

„holistic management of project landscapes - applying an aligned

management system comprising organizational actors, strategies, structures,

processes, methods (including IT), and cultures (including incentives) – to

reach defined performance criteria of relevant stakeholders.“

iMPM Diamond – A Research Program onSuccess Factors of Project Portfolio Management

Co

nte

xto

fP

PM

Co

nte

xto

fP

PM

STRATEGYSTRATEGY

ACTORSACTORS

STRUCTURESTRUCTURE

PROCESSPROCESS

Inte

rna

l Co

nte

xt

MATURITY LEVEL OF SINGLE PROJECT-MANAGEMENT

7Source: TU Berlin iMPM-team

Exte

rna

lCo

nte

xt

CULTURECULTURE

ACTORSACTORS

METHOD /METHOD /ITIT

PERFORMANCEPERFORMANCECRITERIACRITERIA

Research Questions of iMPM Study

there are very few quantitative

empirical studies on

Project Portfolio Management

Project Portfolio Management

is a pivotal concept to manage

complex project landscapes ..

Research Gap

but …

Our scholarly research addresses the following Research Questions:

(1) Which practices are used in PPM and how do they develop over time?

(2) Which factors influence the usage and quality of practices?

(3) Which factors influence execution and business success of PPM?

(4) How do the success factors interact with each other and with context variables?

(5) Which elements should be used in a maturity level model of PPM?

8Source: TU Berlin

The Berlin MPM Studies have a Long TraditionSince 2003 Initiation of Research on Multi-Project Management at TU Berlin

Since 2005 First Benchmarking Study on Multi-Project Management in Germany

Since 2009 iMPM: Internationalization of MPM Benchmarking Study

Each two years a new iMPM is planned !

Initiation of Multi-Project Management as field of

5th Benchmarking Study2011/2012

2003 2004 2006

Interview Study

1st & 2nd Benchmarking Study2005 / 2006

3rd Benchmarking Study2007/2008

2007

4th Benchmarking Study/ iMPM2009/2010

Management as field of research at TU Berlin

2005

MPM-Benchmarking-Studies:With more than 1200 participants from different industries

2008 2009 2010 2011

9Source: TU Berlin

Research Program of the Berlin MPM Benchmarking Studies

First & Second Study2005/2006

• MPM-Success

• MPM-Processes, MPM Tools and IT Support

Third Study2007

• MPM-Success

• MPM-Processes, MPM Tools and IT Support

• Actors in MPM (initial measurement)

10Source: TU Berlin IMPM-Team

Fourth Study & iMPM2009-2010

• MPM-Success & Business Success

• Strategy and Portfolio Structuring

• Decision Culture and Portfolio Steering

• Actors in MPM (elaborated measurement)

Fifth Study2011-2012

• MPM-Success & Business Succes

• MPM Processes and Actors in MPM (short Version)

• Opportunity Management and MPM

• Risk Management and MPM

Design with two Informants Secures Independency of Performance and Success Measurement

Decision MakerDecision Maker

Overview of strategic goals and attainment of performance goals

Decision Makers typically are:

• Management Board

• CEO

CoordinatorCoordinator

Overview of implemented practices and levels of maturity

Coordinators typically are:

• Portfolio-Managers

• Multi-Project Managers • CEO

• Divisional Directors

• Head of PM

• CIO

• CTO

• Director of IT-Strategy

• Director of Strategic Management Accounting

• Multi-Project Managers

• Program-Managers

• Director of PMO

• Head of Department

• Project-Controller

• Quality Managers

• Head of PM

• HR Director

Source: TU Berlin 11

Questionnaires made for two Informants Structure and Scope of Benchmarking Questionnaires

Thematic BlocksThematic Blocks

1. Importance of Multi-Project Management

2. Strategic Orientation

3. General Information on Company

4. Characteristics of Project Landscape

CoordinatorCoordinatorDecision MakerDecision Maker

10 Items

25 Items

9 Items

16 Items

12

5. Roles and Responsibilities

6. Structuring of Project Portfolio

7. Control of Project Portfolios

8. Success Assessment

9. Innovation Culture Assessment

73 Items

78 Items

57 Items

31 Items

9 Items

∑ 100 Items ∑ 284 Items

15 Items

7 Items

28 Items1

1. Enquiry made to increase comparability for future internationalization of MPM Study Source: TU Berlin

Coordinator assesses control of project portfolio –Decision Maker assesses success of project portfolio

13 Items 13 Items

3013

High Interest in Study in all IndustriesStructure of Participants of 4th MPM & iMPM Benchmarking Study

Participants of previous studiesParticipants of previous studies Participants 2009/2010 by industry1Participants 2009/2010 by industry1

441

Particpating

Portfolios

44 9 %

11 %

12 %

21 %

21 %

Electric/Electronics 9 %

Services 12 %

IT/Telco 13 %

Banking/Insurances 18 %

Automotive/Engineering 24 %

85

Planned

143 154

2009/201020072005

13

1. Based on 262 evaluated companies; 2. . Finland: 85, Switzerland: 44, Germany/Austria: 164, other: 8 Source: TU Berlin 4th MPM Study and iMPM Study 2010

Participation reflects high practical relevance of project portfolio management

441 44 9 %

5%

5%

2 %

3 %

4 %

Others 10 %

Science

Consumer Goods

Healthcare

Pharma/Chemicals 5 %

Electric/Electronics 9 %

172

2010/2011

Share of portfolios

Projects and Multi-Project Management with continuously Growing Importance

Projects will play an even greater role for us in future.

Projects will play an even greater role for us in future.

Multi-Project Management will become even more important for us in the future.Multi-Project Management will become

even more important for us in the future.

Share of portfolios

12%15%

1%1%1%

7

34%

6

37%

54321

Fully Agree

16% 16%

1%2%

1%

14

72

32%

61

31%

543

Fully disagree

Fully Agree

Remark: Estimation of decision makerSource: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

Fully disagree

Focus of 4th MPM Study and iMPM Study on R&D and IT Project Portfolios

Focus of considered project portfolios1

Focus of considered project portfolios1

29%

R&D

Number of projects in considered portfoliosNumber of projects in considered portfolios

17 %

25 %

28 %

Ø 143

15

1. Assignment to a category with focus > 60%; 2. No project focus > 60%; 3. Investment, organization and other project portfoliosSource: TU Berlin 4th MPM Study and iMPM Study 2010 (N=301; D, CH, FIN)

18%

32%

22%IT

Mixed2

Other3

Number Portfolios: 276

Number Projects: 40.000

Whole year budget: € 39,3 billion

20 %

9 %

17 %

5 %

17 % 32 %

5%

5 %

10 %

17 %15 %

Number of Projects in Portfolio

≥ 500< 500< 250< 100≤ 20 < 50

Significant Differences in Size of Total Budget of considered Portfolio Types

Ø Total budget by portfoliotype1Ø Total budget by portfoliotype1 Planned budget by portfolio type2Planned budget by portfolio type2

150

200

250

Total budget [Mio. €]

-6%

60%

80%

100%

Share of total budget

16

1. What was/is the total budget of the project landscape? 2. Which proportion of the total project budget is usually already planned for ongoing projects? Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) All Mixed PortfoliosIT-PortfoliosR&D-Portfolios

64 56

185164

0

50

100218

185

Budget 2008

211

Budget 2009

174

56%61%

0%

20%

40%

MixedAll ITR&D

62%68%

Analysis of MPM Performance and Success FactorsStructure of Benchmarking

MPM Performance

MPM

Quality

Project Portfolio

MPM Success Factors

Strategic Level

Operational Level

17

1. MPI = Multi-Project Management Performance IndexSource: TU Berlin

The assessment and evaluation of the MPM performance is

based on the 20% top- and low-performers

Project Portfolio

Success

Business

Success

MPI1RolesLevel

TacticalLevel

Content

Success Criteria: Measurement of Project Portfolio Performance

18

Success Criteria: Measurement of Project Portfolio Performance

MPI as Central Success Measurement for Assess-ment of Multi-Project Management Performance

PPM Execution Quality

Termination quality

Cooperation quality

Information quality

Allocation quality

Timing

Coordinator

Decison Maker

Assessed by:

MPM Performance

Multi-Project Management Performance Index1

(MPI)Project Portfolio Success

Business Success2

Use of Synergies

Strategy Fit

Portfolio Balance

∅ Single-Project Success

Economic Success

Future Orientation

1. Assessment on a scale of von 1 to 7 2. Business success as additional MPI factor included after 3rd studySource: TU Berlin 19

Measurement Concept of PPM Execution Quality

Terminationquality

MPM Performance

Informationquality

Cooperationquality

Allocationquality

PPMActors

Source: TU Berlin 20

Top-Performers

(top 20%)

Number Participants

MPI as the Central Benchmark MetricComparison MPM Performance Top- and Low-Performers

Low-Performers

(lower 20%)

Ø MPI-Score1

MPM Performance

25

11

1619

27

40

29

2421

13

4132

21

1 765432

MPI-Score

5,5

3,6

LowAll

4,6

Top

1. Scale 1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) Low-PerformersTop-Performers All

Good PPM Creates Value!These KPI‘s were not included in measuring MPI

40

50

Time overrun[%]

Average Percentageof Time OverrunsAverage Percentageof Time Overruns

40

50

Budget overrun [%]

Average Percentageof Budget DeviationAverage Percentageof Budget Deviation

80

100

Share of economicallysuccessful projects in portfolio[%]

Share of Projects withEconomic SuccessShare of Projects withEconomic Success

MPM Result

22Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

37 %

15 %

0

10

20

30

Top Alle Low

24 % 25 %

11 %

0

10

20

30

LowAlle

16 %

Top

51 %

82 %

0

20

40

60

Alle Low

69 %

Top

Low-PerformersTop-Performers All

One MPI-Scale Point equals ca. 11 % Time overrun, 7% Budget overrun and 15% Success Probability

Performance along the Dimensions of PPM Execution Quality

5,9

5,0

3,9

Allocation4,3

Information quality

4,9

Score1

Score1


MPM Performance

23

5,2

4,8

3,5

3,7

3,2

Terminationquality

4,1

Cooperationquality

4,4

Allocationquality

4,3

5,2

3,5

LowAll

4,5

Top

Low-PerformersTop-Performers All1. Assessment on a scale of von 1 to 7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

Performance along the Dimensions of Project Portfolio Success

5,2

5,9

3,3

4,0

Strategy fit 5,1

Timing 4,2

Score1

Project Portfolio Success

Score1

MPM Performance

24

5,4

5,6

5,9

4,0

4,0

3,8

3,8

Ø Single-projectsuccess

4,9

Portfolio balance 4,8

Use of synergies 4,6

1. Assessment on a scale of von 1 to 7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

5,7

3,8

LowAll

4,8

Top


Comparison of Economic Success and Future Orientation

5,6Economic

4,5

Score1

Business Success

Score1

MPM Performance

25

5,5

3,3

3,8

Economicsuccess

4,5

4,7Future

orientation

3,6

4,7

5,6

Top All Low

Low-PerformersTop-Performers All1. Assessment on a scale of von 1 to 7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

The Average MPI is 4.6Comparison MPI Factors with Benchmarks

Score1

5,2

3,4

4,5

5,7

4,8

Score1

Score1

Multi-project Management

Performance Index (MPI)

MPM Performance


Project Portfolio

26

5,5

3,6

LowAll

4,6

Top

3,8

4,8

5,6

3,6

Business Success2 4,7

All

Score1

1. Scale 1-7 2. . Business success as additional MPI factor included after 3rd studySource: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

No differences in MPI between portfolio types and industries

Project Portfolio Success

Top-Performers Low-Performers

No significant differences of PPM Performance in Different Types of Project Portfolio

4

5

6

7

Ø MPI-Score

∅∅∅∅ 5,5

∅∅∅∅ 4,6

MPM Performance

1. Assignment to a category with focus > 60% 2. No project focus > 60% 3. Investment, organisation and other project portfoliosSource: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) 27Top-Performers All Number of companies

5,5 5,6 5,4 5,6

3,6 3,6 3,44,0

1

2

3

4

Other Foci

4,8

No dominant focus

4,5

IT

4,7

R&D1

4,6

∅∅∅∅ 3,6

63 51 73 30

Low-Performers

Industry Analysis shows no Differences in MPM Performance either

4

5

6

7

Ø MPI-Score

∅∅∅∅ 4,6

MPM Performance

28

1. In case of sufficient number of comparable companiesSource: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

1

2

3

Other

4,7

Consumer Goods

4,7

Research

5,0

Pharma-ceutical/ Chemical

4,9

Healthcare

4,5

Services

4,5

IT/Telco

4,6

Electrics/ Electronics

4,8

Banks/ Insurances

4,4

Automotive/ Mechanical Engineering

4,6

Number of companiesAll

Evaluation of Top-/Low-Performers by industry1 shows no significant differences either

46 45 25 23 20 10 10 5 7 26

Content

Success Factor: Definiton and Impact on Performance

29

Success Factor: Definiton and Impact on Performance

Deficits in Strategic Management of Project Landscapes

Previous MPM Studies of the TU Berlin identify the following problems:

• Missing transparency in Top-Management decisions and strategies**

• Implementation problems with the enforcement of priorities **

• Only 12% of firms execute the right number of projects ***

• Only 19% of firms abolish inefficient projects consequently ***

• Only 23% of forms allocate resources according to their strategy ***

30

Central topic of MPM Study 2009: Strategy and MPM

(1)Which demands exist regarding strategy?

(2)How can MPM contribute to better implementation of strategy?

.** MPM Study TU Berlin 2004, *** MPM Study TU Berlin 2007

Success Factors related to Strategy

Strategic Level

OperationalLevel

Str

ateg

icP

lan

nin

g Decentralization

Co

rpo

rate

Str

ateg

y

Clarity

Sustainability

Analysis

Roles

Level

TacticalLevel

Str

ateg

icP

lan

nin

g

Coordination

Pro

ject

P

rio

riti

zati

on

Formalization

Participation

System

Efforts

31Source: TU Berlin

Top-Performers with a Clear and Well Communicated Corporate Strategy

5,9

6,2

4,9

5,5

5,5

Fully disagree Fully agree

Strategy ClarityWe have a written mission,

long-term goals and strategies for implementation.

Goals and strategies are communicated.

Score1

Strategic Level – Corporate Strategy

32

5,8

4,9

4,4

5,2

5,5

6,0

4,7

LowAll

5,4

Top

communicated.

Our long-term competitive strategy is

clear and understandable.

Low-PerformersTop-Performers All1. Scale 1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

Top-Performers with a LongtermSustainable Corporate Strategy

5,7

5,4

4,1

4,4

5,0

Strategy Sustainability

Our corprate strategy is very long-term oriented

compared to our industrial sector.

Our present corporate strategy has a long

Score1



33

4,0

3,6

3,3

3,7

4,4

5,0

3,7

LowAll

4,4

Top

strategy has a long tradition.

Our corporate strategy is rarely subject to changes.


Top-Performers with a Systematic Strategic Analysis

5,8

5,2

3,9

4,5

5,0

StrategySystematic Analysis

We analyze our environment systematically in order to ensure future competitive

advantage.

We continously test the adoption of new technologies for our

Score1



34

5,1

3,7

3,2

4,1

4,5

5,3

3,6

LowAll

4,5

Top

of new technologies for our unit.

Through the analysis of our project portfolio we receive

valuable impulse for our strategy.



Strategic Level

OperationalLevel

Str

ateg

icP

lan

nin

g Decentralization

Co

rpo

rate

Str

ateg

y

Clarity

Sustainability

Analysis

Roles

Level

TacticalLevel

Str

ateg

icP

lan

nin

g

Coordination

Pro

ject

P

rio

riti

zati

on

Formalization

Participation

System

Efforts

35Source: TU Berlin

Top-Performers with higher Decentralization of Strategic Planning

5,4

5,0

5,2

4,8

5,5Strategic planning is conducted centrally at the head quarters.

Strategic planning is conducted decentralized within our

Score1


DecentralizationofStrategy Planning

Strategic Level – Strategic Planning

36

5,4

4,0

4,1

4,7

4,8

4,33,6

LowAll

4,0

Top

decentralized within our divisions.

We try to delegate authority as much as possible to those who

are responsible for the execution.

1. Scale1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) Low-PerformersTop-Performers All

Top-Performers with Better Integration of Strategic Planning and Project Portfolio Planning

5,6

5,7

4,1

4,6

4,9

Integration of Strategy and Portfolio Structuring

Portfolio planning and strategic planning are closely

linked with each other in our

We put down the general guidelines for the portfolio via

our strategic planning.Score1


Strategic Level – Strategic Planning

37

6,0

5,3

3,6

4,2

3,6

4,5

5,0

5,7

3,9

LowAll

4,8

Top

linked with each other in our company.

The goals of our project portfolio are derived from our

unit‘s goals.

Our strategic planning is harmonized with the product-/

technology cycles of our industry.

Low-PerformersTop-Performers All1. Scale1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)


Strategic Level

OperationalLevel

Str

ateg

icP

lan

nin

g Decentralization

Co

rpo

rate

Str

ateg

y

Clarity

Sustainability

Analysis

Roles

Level

TacticalLevel

Str

ateg

icP

lan

nin

g

Coordination

Pro

ject

P

rio

riti

zati

on

Formalization

Participation

System

Efforts

38Source: TU Berlin

Top-Performers with higher Formalization of Project Prioritization

5,0

5,3

3,3

4,5

4,4

Formalization of Project Prioritization

For the prioritization definedprocesses and rules exist.

We use a standardizedprocedure for the prioritization

of projects.

Score1


Strategic Level – Project Prioritization

39

4,5

4,7

3,5

3,3

3,4

4,0

4,04,9

3,4

LowAlle

4,2

Top

processes and rules exist.

Projects are summarized into categories and compared

before the prioritization process.

Also ongoing projects are reprioritized alongside new

projects in each cycle of prioritization.


Top-Performers with high Involvement of all Functional Areas during Prioritization Process

Participation of Project Prioritization

5,1

3,9

4,9

4,6

4,4

All functional areas concerned (e.g. marketing, controlling) are

adequately represented during the prioritization process.

Different points of views of the funtional areas are considered

Score1



40

4,8

3,8

LowAll

4,3

Top

4,4

4,1

3,4

3,9

4,6considered during the

prioritization process.

All functional areas involved share equal power during the

prioritization process.


Top-Performers with Systematic Use of Project Evaluation Criteria

4,8

4,4

3,2

3,3

4,0

4,2

Systematic Project Prioritization

The evaluation criteria are adapted occasionally to new

requirements.

The evaluation criteria for the prioritization of projects are defined and well known.

Score1



41

5,8

5,8

4,9

4,7

5,1

3,8

4,5

5,6

5,3

5,2

4,0

LowAll

4,7

Top

We use strategic criteria for project evaluation.

We use financial criteria for project evaluation.

We use risk criteria for project evaluation.


Success Factors related to Roles

Strategic Level

OperationalLevel

42

Level

Roles

TacticalLevel

Level

Source: TU Berlin

Score1

5,7

4,65,2

Top-Performers perform all MPM Tasks More Intensively

Roles

Tasks along the four Phases of the Project Portfolio Management Process

43

Strategic Planning

Definition of long term target portfolio

Generation of project ideas

Collection and consolidation of project ideas

Evaluation of projects

Selection of projects

1. Scale 1-7Question: To which extent is this task performed in your company?Source: TU Berlin

Portfolio Structuring

Low-PerformerTop-Performer All

Score1

5,7

4,65,2

5,7

4,65,1

Roles



44

Strategic Planning








Cross-project resource allocation planning

Individual allocation of employees to projects

Release of project resources

Conflict management in case of resource conflicts

Resource Management


Score1

5,7

4,65,2

5,7

4,65,1 5,3

3,84,6

Roles



45

Strategic Planning












Resource Management

Controlling of project portfolio

Monitoring of the strategic alignment of the portfolio

Development of corrective actions in case of deviations

Cross-functional coordination of projects

Identification of synergies between projects

Identification of short-, middle-, long-term portfolio opportunities

Portfolio Control


Score1

5,7

4,65,2

5,7

4,65,1 5,3

3,84,6 4,6

3,14,0

Roles



46

Strategic Planning












Resource Management

Controlling of project portfolio

Monitoring of the strategic alignment of the portfolio

Development of corrective actions in case of deviations

Cross-functional coordination of projects

Identification of synergies between projects

Identification of short-, middle-, long-term portfolio opportunities

Portfolio Control

Evaluation of project results

Maintenance and reuse of knowledge after project closure

Ex-post control of projects

Portfolio Sustainability


Project Management Offices Receive Increasing Acceptance

Is there a central point of contact for the project management?1

Is there a central point of contact for the project management?1

Number of Employees in a Project Management Office (PMO)

Number of Employees in a Project Management Office (PMO)

Share of portfolios [%]Share of portfolios

90 %

80 %

70 %

34 %28 %

52 %

100 %

Nein∅∅∅∅ Top: 7,4

∅∅∅∅ Low: 5,4

Roles

47

10%15%

25% 25%21%

4%

≤ 2≤ 1 ≤ 5≤ 3 ≤ 4 >10≤ 10

1. Comparison with 2nd and 3rd MPM-Benchmarking StudySource: TU Berlin

Number Employees

Yes AllNo

60 %

50 %

70 %

40 %

30 %

20 %

10 %

2007

66 %

0 %

2005

48 %

72 %

2009

Ja

Top Management and MPM Coordinator with High Share of MPM Tasks

Relative allocation of tasks along the hierarchical levelsRelative allocation of tasks along the hierarchical levels

Share of tasks

34%80%

100%

Absolute mentioning of task fulfillment along the hierarchical levels1

Absolute mentioning of task fulfillment along the hierarchical levels1

1.938

1.102

Ø 1.495

Division Head

Board ofManagement/CEO

Roles

1. Please indicate, who is mostly responsible for the following tasks in your unitRemark: Evaluation of task matrix along the project portfolio management process (multiple answers possible)Source: TU Berlin 4th MPM Study & iMPM Study 2010 (N=301; D, CH, FIN) 48

60%

40%

20%

0%11%

33%

22%

MPM Coordination Project ManagementLine ManagementTop-Management

Number of mentions

1.938

PMO 990

MPM Coordinator 1.653

Project Leader 1.315

Department Head 1.970

Division Head

Large Shifts in Task Responsibility over the PPM Process Stages

39 %

18 %24 %

15 %

100%

Share of Tasks

80%

60%

24 %

24 %45 %

Roles

1. Please indicate who is mainly responsible for the following tasks.Comment: Assessment of task matrix along project portfolio management process (multiple answers possible)Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) 49

40%

20%

0%Portfolio Sustainability

38 %

22 %

Portfolio Control

20 %

32 %

Resource Management

24 %

13 %

45 %


12 %

18 %

31 %

Top-Management

Project Management

MPM Coordination

Division/Line

Top-Performers with Strong Top-Management Support in PPM

4,8

5,0

3,4

4,2

4,0

Our Top-Management adheres to the defined rules of MPM.

Our Top-Management invests a lot of time in steering the

project portfolio.

Top-Management Support

Score1


Roles

50

5,5

4,4

3,7

4,3

3,1

3,7

4,9

to the defined rules of MPM.

Our Top-Management deliverstimely decisions when

problem situations arise.

There are sufficient resourcesavailable for the management

of the project portfolio.

1. Scale 1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

4,9

3,6

LowAlle

4,2

Top


Top-Performers with Clear Assignment of Roles in PPM

5,6

5,0

4,2

4,2

4,9

Roles Clarity

Each task in the context of MPM is exclusively carried out by the

person responsible.

The tasks of the stakeholders in MPM are clearly and formally

differentiated.

Score1


Roles

51

5,1

4,7

3,6

3,7

3,5

4,1

4,4

5,1

3,7

LowAll

4,4

Top

person responsible.

The role of the multi-project coordinator is clearly defined.

Clear objectives exist for the role of the line management within

the MPM.

Low-PerformersTop-Performers All1. Scale 1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

Combined Influence of Roles & Strategy

Strategic Level

OperationalLevel

Roles

Level

TacticalLevel

52Source: TU Berlin

Impact of Senior Management on Strategy and Portfolio Performance - Framework

Integration of Strategy &

Clarity ofStrategy

H4.1: +

H2.1: +

H4.2: +

H4.3: +

H2.2: +

53

Senior Management Involvement

PortfolioPerformance

H1a): +H1b): ∩∩∩∩

PPM-ProcessH4.1: +

Sustainability of Strategy

H4.4: +

H3.1: + H3.2: +

53

Impact of Senior Management on Strategy and Portfolio Performance Results

Integration of Strategy &

Clarity ofStrategy

+ 0.49 + 0.40

n.s.

R**2 = 0.50

R**2 = 0.34

54

Senior Management Involvement

PortfolioPerformance

n.s.

Strategy & PPM-Process

+ 0.40 + 0.57

Sustainability of Strategy

+ 0.19

+ 0.30 + 0.43

R**2 = 0.52

R**2 = 0.09

54

Success Factors related to Tactic

Strategic Level

OperationalLevel

55

Roles

Level

TacticalLevel

Source: TU Berlin

Top-Performers Validate Portfolios more Frequently

Frequency of Portfolio ValidationFrequency of Portfolio Validation

Share Portfolios [%]

How Often do you Validate your Entire Project Portfolio?How Often do you Validate your Entire Project Portfolio?

6

7

Validations [per year]

Tactical level

56Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

2%

> 6

9%

0

30%

≤ 6≤ 5

7%

≤ 4≤ 2

5% 3%

≤ 3≤ 1

23%26%

Validation [per year]

5,0

2,8

0

1

2

3

4

5

Top LowAll

3,6


Top-Performers Respond Quickerto Changing Requirements

5,3

5,3

3,5

4,5

4,5Portfolio AdjustmentWe adapt our project portfolio

quickly to changed customer needs.

We adapt our project portfolio quickly to changed competitive

conditions.

Score1


Tactical level

57

4,9

5,1

3,4

3,3

3,4

4,2

4,3

5,2

3,4

LowAll

4,4

Top

conditions.

We adapt our project portfolio quickly to changed

technologies.

We adapt our portfolio quickly to changed economic conditions.


Top-Performers Communicate Portfolio Decisions Clearer, Quicker, and Broader

Communication of Decisions

4,5

5,6

3,4

4,2

The communication of important portfolio decisions to affected

employees takes place in a planned and uniform way. Score1


Tactical level

58

5,2

3,8

LowAll

4,6

Top

5,6

5,5

3,8

5,0

4,7

4,3

Important portfolio decisions are communicated immediately after

they are made.

Important portfolio decisions are communicated immediately to all affected employees regardless

of hierarchy.


Top-Performers Control Project Portfolios Tighter and more Responsively

4,3

4,3

3,2

3,6

4,0

Project Portfolio Controlling

We examine plan vs. actual project performance analytically

We frequently examine the targets for our portfolio.

Score1


Tactical level

59

4,7

4,6

3,4

3,6

3,9

4,2

4,34,5

3,5

All

4,0

Top Low

project performance analytically for our portfolio.

We systematically examine the individual projects in detail for

our portfolio.

If deviations from the portfolio plan occur, we invest a lot of time in preparing countermeasures in

detail.


Top-Performers with Portfolio Decisions of Higher Quality

5,4

5,7

3,9

3,9

4,8

4,6Quality of Portfolio Decisions2

Portfolio decisions are implemented consistently.

Once portfolio decisions are

Portfolio decisions are usually transparent and

comprehensive.

Score1


Tactical level

60

5,0

2,3

2,5

3,6

3,6

4,0

3,3

2,7

4,5

5,5

4,0

LowAll

4,8

Top

Once portfolio decisions are made, they are binding and

change only rarely.

Portfolio decisions are frequently made by one

person alone.3

Portfolio decisions are made by referring to gut-

feeling rather than by assessing the facts.3

1. Scale 1-7 2. Inverse elements recalculated for score calculation 3. Inverse questionnaire elementSource: TU Berlin Low-PerformerTop-Performer All

Roles

Identification of MPM Success Factors on Operational Level

StrategicLevel

OperationalLevel

MPM Success Factors

61

Roles

TacticalLevel

Source: TU Berlin

Top-Performers have also Higher Standards in Single-Project Management

Single-Project Management Standard

Score1

6,8

6,6

6,3

5,0

5,9

6,5Every project has a defined

project manager.

Every project has a definedproject budget.

Operational LevelMPM Success Factors


62

5,8

4,8

Top LowAlle

5,4

1. Scale 1-7Source: TU Berlin

6,3

5,9

3,3

5,0

4,9

2,8

3,3

5,5

5,6

All our project manager are certified according to a

common standard.

We follow a standardized procedural model for the

project management.

Every project has a defined project steering committee


Top-Performers have also Better Project Planning in Single-Project Management

Project Planning in Single-Project Management2

6,0

2,5

5,1

5,5A detailed project

plan is provided for each project.

Score1

Operational LevelMPM Success Factors


63

5,5

4,5

Low

5,0

Top All

2,5

3,0

3,8

4,0

3,3

3,1The actual goals of a projectare often vague at the start of

the project.3

The composition of the project team is often vague at the start

of the project.3

1. Scale 1-7 2 . Inverse elements recalculated for score calculation 3. Inverse questionnaire elementSource: TU Berlin Low-PerformerTop-Performer All

Content

Benefits and Costs of Project Portfolio Management

64

Benefits and Costs of Project Portfolio Management

Good PPM Creates Value!These KPI‘s were not included in measuring MPI

40

50

Time overrun[%]

Average Percentageof Time OverrunsAverage Percentageof Time Overruns

40

50

Budget overrun [%]

Average Percentageof Budget DeviationAverage Percentageof Budget Deviation

80

100

Share of economicallysuccessful projects in portfolio[%]

Share of Projects withEconomic SuccessShare of Projects withEconomic Success

MPM Result

65

37 %

15 %

0

10

20

30

Top Alle Low

24 %

1. Fragestellung: Wie hoch ist die durchschnittliche Terminüberschreitung in Prozent?Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

25 %

11 %

0

10

20

30

LowAlle

16 %

Top

51 %

82 %

0

20

40

60

Alle Low

69 %

Top


One MPI-Scale Point equals ca. 11 % Time overrun, 7% Budget overrun and 15% Success Probability

Top-Performers put more Effort in Preparation and Realization of Portfolio Meetings...

6,94,6

Low

6,1

Top All

How frequently does your management meetfor portfolio meetings?

Per year

9,9 8,8

LowAll

10,7

Top

How many persons participate in a typical portfolio meeting on average?

Persons

MPM Result

66

4,43,5

Top All

3,9

Low

How long does a portfolio meeting usually last?

Hours

9,65,7

8,4

Top All Low

How long does it usually take to prepare a portfolio meeting?

Man days

Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) Low-PerformersTop-Performers All

Top-Performers put more Effort in Preparation and Realization of Portfolio Meetings...

6,94,6

Low

6,1

Top All

How frequently does your management meetfor portfolio meetings?

Per year

9,9 8,8

LowAll

10,7

Top

How many persons participate in a typical portfolio meeting on average?

Persons

MPM Result

Man days

Effort

67

4,43,5

Top All

3,9

Low

How long does a portfolio meeting usually last?

Hours

9,65,7

8,4

Top All Low

How long does it usually take to prepare a portfolio meeting?

Man days

Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH)

105,1

43,1

LowAll

83,5

Top


But: It is NOT just more Effort –but a Superior Decision-Making Culture

2,2

3,6

3,1

4,0

2,8Efficiency ofPortfolio Meetings2

Frequently no decisions are taken on resources in portfolio meeting.3

The people responsible forcommitting key project resourcesare frequently not represented in

the portfolio meeting.3Score based on inverse scales


MPM Result

68

1,7

2,8

4,5

2,7

3,5

2,9

2,1

5,4

4,5

LowAll

5,1

Top

on resources in portfolio meeting.3

Our portfolio meeting exists only for the sake of having one.3

Unscheduled ad hoc portfolio meetings take place frequently.3

1. Scale 1-7 2. Inverse elements converted for score calculation 3. Inverses questionnaire elementSource: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) Low-PerformersTop-Performers All

Content

Conclusions & Outlook on iMPM study 2010 & MPM Study 2011

69

Conclusions & Outlook on iMPM study 2010 & MPM Study 2011

Top Performers have a Better Strategy Process,Integrate PPM Better and Prioritize Better.

Their strategy is communicated in a clearer and better way. Their strategy is based on a more thorough analysis and pursued more sustainably.

More autonomy is given to the units, all units have

CorporateStrategy

Strategic

Conclusion (1)

What we can learn from Top-Performers...What we can learn from Top-Performers...

More autonomy is given to the units, all units have equal saying in the coordination of strategic planning.

The prioritization is carried out within a well structured, formalized process in which the units are involved closely.

The greater effort for these process is more than paid back by much better results – also in times of crisis.

70

Strategic Planning

Project Prioritization


Cost/Benefit

Top-Performers have a better Distribution of Tasks and control with much more Intensity

Top management investments more time,

delivers committed decisions, when they are needed,

and also complies more strictly to the rules of the PPM.

Senior Management

Behaviour

Conclusion (2)

What we can learn from Top-Performers...What we can learn from Top-Performers...

Roles are more clearly defined, stakeholders are

more specialized and professionalized.

Line executives are more integrated, already in earlier

phases. The PPM Coordinator has more influence.

Project portfolios are examined more frequently,

adjustments to changes takes place faster, measures are

better communicated and pursued more intensively.

71

Cooperation of Actors

Projekt Portfolio

Controlling


Participate in the iMPM Study 2010!Ta

rget

Gro

up

Big and medium-size, public and private organisations, that face the challenge ofmanaging complex project portfolios. These portfolios characteristically consist of at least 20

projects, that need to be handled simultaneously. Respondents are typically project portfoliocoordinators such as multi-project managers, portfolio managers, program managers and

responsible persons of project management offices (PMOs), as well as project portfoliodecision-makers like CEOs, Division Heads or Heads of Business Unit.

Participants

72

Ben

efit

s fo

r P

arti

cip

ants

Your benefits of participating in the iMPM study 2010

�Participate free of charge in the biggest cross-cultural MPM study

� Questionnaires are available in French, English and Spanish language

�Receive an individual report on your project portfolio management performance

�Receive benchmarking to a pool of international (i.e. German, Austrian, Swiss, Finnish, Canadian, US-American) top and low performing companies

�Learn about best-practices, global trends and developments in Multi-Project Management

Participate in the iMPM study 2010!

You receive two questionnaires, which need to be filled in by different persons:�The Decision-Maker questionnaire is 3 pages long and requires 10 to 15 minutes for

completion. Target group is the Top Management of the evaluated enterprise, that makes decisions on project selection, prioritization and termination.

� The Coordinator questionnaire is 10 pages long and requires about 60 minutes for completion. Target group are persons, that manage the project portfolio and thus have a sound knowledge of the project landscape.

Your Contribution...

73

sound knowledge of the project landscape.

�Sign up for study now with Monique Aubry at [email protected]

�Receive questionnaires to be filled in asap

�Return questionnaires by 31st of May 2010

�Receive report by 31st of August 2010

Next Steps to take...

iMPM Study: Research Rationale and Focus

Traditionally, the project management researchers at the Chair of Technology and Innovation (TIM) ofthe Berlin Institute of Technology (TU Berlin) have been researching success factors in single projectmanagement. In 2003, while building on this former research, a new question was put forward: “How dofirms manage project portfolios?”

Project portfolios are rather long-term endeavours within the landscapes of projects and thus in strongcontrast to single projects, that are temporary ventures. As such the management of project portfoliosbecomes a permanent organizational issue, and also success factors are distinct from single projectmanagement.

In 2005 and 2007 surveys have been conducted in German-speaking countries. Since the beginning of

Res

earc

h R

atio

nal

e

In 2005 and 2007 surveys have been conducted in German-speaking countries. Since the beginning of2010 data collection has started in selected countries around the globe.

74

Fo

cus

In the iMPM study we ask: “How are project portfolios managed reflecting on their contexts?” Whileconsidering aspects of problem-context like different characteristics (i.e. innovativeness andinterdependency) and types of project portfolios (i.e. R & D portfolios, IT portfolios, Organizational changeportfolios, mixed portfolios) specifically system-context dimensions like different types of firms, industriesand countries, as well as management styles are examined.

iMPM Participants and Academic Partners

3M ESPE AG, ABB Schweiz AG, ADC Konzern, Amt für Hochbauten, ATLAS Elektronik, Austrian Airlines, AXA Winterthur, AZO, Basler & Hofmann, BaslerVersicherungen, Basler Vision Technologies, Bauerfeind, Bayer Animal Health GmbH, Bayer Schering Pharma, Beiersdorf Shared Services GmbH,Bombardier Transportation, Bosch Siemens Hausgeräte GmbH, Bundesamt für Landestopografie swisstopo, CADFEM (Suisse) AG, Citibank PrivatkundenAG & Co. KGaA, Claas KGaA, Clientvela GmbH, Continental Automotive Switzerland AG, ContiTech Techno Chemie GmbH, CSS Versicherungen, DaimlerAG, DAK, DB Projektbau GmbH, Delta Lloyd Deutschland AG, Deutsche Bank AG, Deutsche Lufthansa, Deutsche Telekom Technische Service, DFSDeutsche Flugsicherung GmbH, DLR, Dornier Consulting GmbH, Dr. Acél & Partner AG, E.ON IS GmbH, EPI-USE Africa (Pty) Ltd., Festo, Flughafen ZürichAG, Förde Sparkasse, Gallus Ferd. Rüesch AG, Generali Deutschland Holding AG, Gothaer Versicherung, Graubündner Kantonalbank, HamburgerSparkasse, Harting Electronics Gmbh & CO KG, Helsana-Versicherungen AG, Henkel AG & Co. KGaA, Hilti Befestigungstechnik AG, ICS, IE EngineeringGroup AG, Immobilien-Bewirtschaftung der Stadt Zürich, INPRO, Inselspital Universitätsspital Bern, IPI GmbH, Komax AG, Landert Motoren AG, LeicaGeosystems AG, Lufthansa Technik AG, MAN Nutzfahrzeuge, Manor AG, MATEC SERVICE GmbH, MBDA / LFK-Lenkflugkörpersysteme GmbH, MotorolaGmbH, Münchener Verein Versicherungsgruppe, NetCologne, Neue Aargauer Bank, Novartis, NÜRNBERGER Versicherungsgruppe, OMICRON electronicsGmbH, Otto Bock HealthCare GmbH, Parexel Intl., PLDS Germany GmbH, Postbank Systems AG, Primondo GmbH, proventis GmbH, Putzmeister SolidPumps GmbH, Raiffeisen Informatik GmbH, Raiffeisen Schweiz, rlc AG (Holding), Robert Bosch GmbH, ROSEN Group, RWE Innogy, RWE Power AG,Salzgitter Mannesmann Forschung GmbH, Sartorius AG, SBB Cargo AG, SBB Personenverkehr, Schreiner Group GmbH & Co. KG, Schweizer Electronic,

Sel

ecti

on

of

Par

tici

pan

ts

Senatsverwaltung für Inneres und Sport, SIEMENS AG, Siemens Enterprise Communications GmbH & Co. KG, St. Galler Kantonalbank, StädtischesKlinikum München GmbH, Sulzer Mixpac AG, SV Sparkassenversicherung, Symrise, Telefonica 02 Germany GmbH, THALES Electron Devices GmbH,Thomas Magnete, ThyssenKrupp Elevator AG, ThyssenKrupp Steel AG, T-Mobile Deutschland GmbH, UK Hamburg, UK Münster, Valora AG, VDI/VDE-innovation+Technik GmbH, VHV Holding AG, Volkswagen AG, VR LEASING AG, Wincor Nixdorf International GmbH, WITTENSTEIN AG, Wolff & MüllerGmbH & Co. KG, Zimmer GmbH, to be continued* …

75

Sel

ecti

on

of

Par

tici

pan

tsA

cad

emic

Par

tner

s

* Annotation: There are only participants listed, that agreed to be reference for the 4th MPM wave/2009. Source: TU Berlin

Aalto University School of Science and Technology Stevens Institute of TechnologyProject Business research group Project Management Research GroupBIT Research Centre USAFinland

Université du Québec à Montréal Zurich University of Applied Sciences Chaire de Gestion de Projet School of Management and Law Canada Switzerland

MPM Opportunity ManagementMPM Opportunity Management

5th Berlin MPM Benchmarking Study with two new Foci

MPM Risk ManagementMPM Risk Management

Organization of the "Fuzzy Front Ends“ of project portfolios

Structuring of ideas management and the Deal Flows of project proposals

Identification of search fields for strategic initiatives and ideas campaigns

Autonomy and entrepreneurial liberties of the project

Risk Management on project portfolio level

Analysis of risk management methods and their organisational embedding

Analysis of maturity levels of risk management systems in MPM

Communication and processing of „bad news“, learning from mistakes Autonomy and entrepreneurial liberties of the project

manager

Identification of critical success factors of opportunity management systems in MPM

from mistakes

Identification of critical success factors of risk management systems in MPM

Wilderich HeisingForesight and Opportunity Management

[email protected]+49 (0)30 314 28337

Juliane TellerRisk Management

[email protected]+49 (0)30 314 78812

The 5th MPM Study starts in January 2011.Be part of it!

76

Top-Performers use systematic Methods to generate “good” Project Ideas

4,6

5,1

3,8

4,7

4,2

Identification of strategic gaps(e.g. gap analysis

Analysis of mega-trends(society, politics, technology,

biosphere)

We generate sufficiently „good“ and/or „right“ project ideas.

How strongly does your unit use the following methods to increase the quality of fresh ideas and to generate sufficiently "good“ project ideas?

Score1

77

4,4

4,7

4,7

4,0

3,7

3,8

3,74,1

4,4

4,3

4,7

Very rarely Very strongly

5,4

4,0

LowAll

4,8

Top

(e.g. gap analysis

Definition of strategic search fields

Continuous technology scouting

Utilization of lead users (trend-prominent users/customers)

1. Scale 1-7Source: TU Berlin 4th MPM Study, April 2010 (N=217; D, CH) Low-PerformerTop-Performer All

Thank you for your Attention !!!

Questions?

78

Documents

Success Factors of Project Portfolio Management · Project Portfolio Management Project Portfolio Management is a pivotal concept to manage complex project landscapes .. Research