Strategic deployment of Program Management best-practice model in financial institutions.

Author Name: Kaushik Pramanik, PMP, MSP, PGDOL(Oxford), DOL(LSE), Mtech (IIT), B.M.E Introduction:

Structured and industry standard best-practice Program Management framework is very much essential to smooth execution of company strategy and objectives, achieve the result and gain the increased customer satisfaction globally.

Financial institutions like Banks, Insurance companies, Financial data providers, Stock exchanges execute many multi-million dollars cross-functional and cross-divisional transformation programs spanning across different geographic regions and divisions.

This article is focused on industry-standard practices and briefly describes how to deploy such a framework in the global financial institutions.

Programme Management may be defined as the co-ordinated organisation, direction and implementation of a portfolio of projects and activities that together achieve outcomes and realise benefits that are of strategic importance.

Effective and efficient Program Management is the key success factor to any financial institutions to transform the company’s vision and various inter-related strategic objectives spanning across different sectors like core business, IT, operation, HR, finance; etc.

There are number of Program Management framework exists within the industry; as example, PMI (Project Management Institute) based SPM (Standard for Program Management) framework, TSO (The Stationary Office, UK Government) based MSP (Managing Successful Programs) framework, University of Oxford Program Management framework, George Washington University Program Management framework, Big 4 consultancy firm’s Program Management framework etc.

However, very few companies around the world follow the best-practice framework provided by major institutes and universities even though there is a high level of benefit for using the industry-standard program management framework. This article will provide a very brief overview of PMI based SPM approach and TSO (The Stationary Office, UK Government) based MSP approach and how to deploy any of these models through-out a global company through strategic execution.

Brief Overview of PMI based Standard for Program Management (SPM) approach:

Program delivers benefits to organizations by developing new capabilities or enhancing current capabilities. Programs are initiated for achieving organizational goals and strategic objectives that are so large scale that they cannot be achieved by single project. Diagrammatic view of Standard for Program Management framework is given below.

Source: THE STANDARD FOR THE PROGRAM MANAGEMENT, Second Edition, PMI, Chapter 1, 2 & 3

PMI based Standard for Program Management framework mainly consists of following key areas.

Program Governance and Stakeholder Management: This area spans all the program life cycle phases. Program governance overseas the progress of the program and the delivery of the coordinated benefits from its components.

Programs are often too complex to be managed by a single individual, which is why appropriate implementation of program governance is the critical factor for a program to succeed. Program governance helps in managing risks, stakeholders’ benefits, resources, and quality across the program life cycle. Furthermore, program governance ensures decision-making and delivery

management activities are focused on achieving program goals in a consistent manner, addressing appropriate risks, and fulfilling stakeholder requirements.

Program governance also provides an appropriate organizational structure, the policies and procedures necessary to support program delivery through formal program reviews. This is facilitated by the regular and phase-gate-based monitoring of deliverables, performance, risks, and issues by the program board.

Program stakeholder management identifies how the program will affect stakeholders (e.g., the organizations’ culture, the local population, country-specific culture, resistance or barriers to change, bureaucracy, etc.) and then develops a communication strategy to engage the affected stakeholders, manage their expectations and manage acceptance of the objectives of the program.

Program stakeholder management is the very important factor to establish the program governance and program organizational structure, which is monitored and reviewed through-out the program life cycle.

Program Life Cycle: Typical program life cycle consists of five phases (Pre-Program Preparations, Program Initiation, Program Set-up, Delivery of Program Benefits, and Program Closure ) as mentioned in the above picture. End of each phase works as an entry point to the next phase.

During the various stages of program life cycle, program manager understands the strategic benefits of the program, develop the plan to initiate the program, define the program objectives and their alignment with the organizations’ goals and vision, develop the high-level business case demonstrating an understanding of the needs, business benefits, feasibility and justification of the program, establish the program governance mechanism, risk management protocols, and program schedule. The program life cycle complies with the needs of corporate governance and also ensures that the expected benefits are realized in a predictable and coordinated manner.

Program Benefits Management: Program delivers benefits to the organization. Benefits realization planning is part of program management which consists of interdependencies between benefits, alignment with the strategic goals of the organization, benefit of delivery scheduling, metrics and measurement, responsibility for delivery of the final and intermediate benefits within the program, and benefit realization.

At the end of the program, the benefits delivered should always be compared against those promised in the initial business case to ensure that the program actually delivered the full benefits for which it was created.

Program Management Process Groups: Program management process groups are a set of interrelated actions, and activities performed to achieve a pre-specified outcome. Program management processes are primarily integrative in that they coordinate the outputs of various projects to derive the desired program outcomes.

A shown in the above picture, there are five processes ( Initiation, Planning, Executing, Monitoring & Controlling and Closing) in program management. Processes receive inputs from processes that logically precede them and send outputs to successor processes. A guiding rule for applying program management processes is to ensure that the program manager effectively delegates authority, autonomy and responsibility for day-to-day management of the projects to the designated project managers.

Brief Overview of TSO based Managing Successful Programs (MSP) approach:

TSO (The Stationary Office, UK Government) based MSP approach is basically based on a two-layer framework. As shown below in the diagram, the outer layer concentrates on various program principals like empowerment, leading the change, envisioning, adding value, focusing on benefits, alignment with corporate strategy, capability development and learning experience. These principals are very important to execute a global transformation program in the organization and mostly linked with leadership skills associated with Program Management.

Sources: 1. MSP framework and concepts, published by The Stationary Office (TSO), UK Government2. http://www.managing-successful-programmes.com/ 3. Managing Successful Programmes Manual - 4th Edition4. Swiss Program Management Conference, 2012

The second layer core consists of program management activities like program vision development, organization, stakeholder management, business case development, blue print design, planning & control, program risk management, quality management, program delivery, benefit realization management, etc.

Present Scenario:

Many global financial institutes do not follow any industry-standard program management framework rather than follow their own customized framework and guidelines to execute the program. Sometimes the in-house framework is not consistent enough.

The usage of inconsistent approach results various downside risks like increased financial risk (e.g.; budget overrun), reduced customer satisfaction, low quality ends deliverables, slippage on schedule, usage of different program terminology, processes and tools, below the standard management and KPI reporting, and lacking of controlled governance mechanism.

The main reason behind this is that Sr. Management of the organization doesn’t value best practice, or they are not aware of the latest industry standard. Many program managers are not properly trained to execute a complex cross-divisional and cross-functional program in the large organization and very few people in the company are aware of strategic implications of program management and portfolio management.

To overcome this problem, it is very much essential to form a central program management control department which will be responsible for rolling-out the best-practice framework across divisions and regions through effective communication, collaboration and hands-on training to program managers. Deployment Model:

Deployment of Program Management best practice framework in the global organization across divisions and regions is a herculean task. To achieve the goal, several strategic measures have to be taken into consideration.

As shown in the below figure, three work streams have to be formed. The Communication and Communities Work stream is responsible for creating the awareness about program management, communicating guidelines & policies about the best-practice framework and establishing the program management community across the organization.

Source: Own idea

Training, Tools & Techniques, and Support work stream is responsible for development and execution of a framework related to training, tools & techniques, and user support of “Program Management – Best Practice” to increase the quality and efficiency of numerous program management environments in the global organization.

Finally, Cross – functional collaboration work stream will be responsible for collaboration and coordination between above two work streams across organizational divisions and regions, corporate training department, external parties to facilitate smooth deployment of “Program Management – Best Practice” framework in the company.

Furthermore, a strong governance model must be in place to integrate three work streams mentioned above. The main responsibilities of the governance model are setting-up the strategic direction, disciplined execution, prioritize and communicate, establishment of accountability, definition of reward & recognition and various investment decisions. A sample governance model for deployment is given below.

Source: Own idea

Conclusion:

All major financial institutions are continuously lacking of standard program management practice. In today’s volatile economic and global environment, it is very important to streamline program management practice across the organization which will help to achieve company’s vision, goals and strategic objectives in a systematic manner. The industry standard best-practice methodology provides a sustainable framework that is clear, complete, relevant and generally recognized as good practices on most programs, most of the time.

References:

1. The Standard For Program Management, Second Edition by PMI (Project Management Institute)

2. http://www.managing-successful-programmes.com/ 3. Managing Successful Programmes Manual - 4th Edition4. Swiss Program Management Conference, 2012