Project Portfolio Management

Articles related to Project Portfolio Management – doing the right projects

What’s blocking your benefits realization?

PMI just released the Benefits Realization Management practice guide this month which provides comprehensive but still easily consumable coverage of a benefits management framework covering principles, practices and roles. There is no doubt that benefits management is a critical competency for any company whether they are for profit or not-for-profit but it is also not well  implemented in many organizations.

Overly optimistic business cases might be one reason for this as I’d covered in an earlier article, but there are other potential causes including:

  • An unwillingness to hold sponsors accountable for expected benefits. While punitive measures may create a culture of fear and drive otherwise effective sponsors away but there still needs to be some way of ensuring that sufficient due diligence has gone into identifying benefits. Independent verification of benefits analysis is one way to reduce inflated expected outcomes without scaring off potential sponsors.
  • A lack of objective definition of the benefits expected to be realized when executing a given investment. Even for initiatives with a financial benefits motive, it may be difficult to demonstrate causality between the outputs of the project and expected financial outcomes as there will usually be more multiple projects with the same types of measures (e.g. increase revenue, reduce costs).
  • Limited monitoring of expected benefits over the life of an investment. Projected benefits like scope, schedule and cost baselines represent what is expected at the point in time when they were defined so ongoing forecasting is crucial. Without this, delivery might be successful within approved scope, schedule and cost constraints, but the project’s ROI is never realized. Sometimes there is no owner identified for tracking benefits during the life of the project while other times an owner has been anointed but is ineffective in that role or is unwilling to declare that the project won’t deliver expected benefits proactively.
  • Benefits realization timelines are excessively long. The more time which passes between the end of a project and when expected benefits should materialize, the more fragile those benefits will be due to the impacts of internal and external changes.
  • Poor project delivery. While the outcomes of a given project may not change, if the costs or timeline for realizing those increase significantly due to delivery issues, the project’s ROI will be worse than expected.

For leaders looking to improve benefit realization from their project investments, doing some root cause analysis to identify why projects aren’t generating expected benefits can help them to focus their improvement efforts.

Mohamed El-Erian – “Investors have to ask themselves two questions. How much can we grow our investments? And, can we afford our mistakes?”

 

 

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Categories: Project Management, Project Portfolio Management | Tags: , , , | 1 Comment

Impacts of traditional project funding models on agile delivery

In one of my previous articles I’d written about the need for change across multiple areas of an organization when undertaking an agile transformation. A key enterprise partner is the Finance department and the organization’s model for project funding will have significant influence over successful agile delivery.

Traditional project funding models are anchored to periodic (annual, semi-annual or quarterly) portfolio re-planning exercises which ingest updated forecasts for active investments and funding requests for new ones. The funding approach for an investment might be one time lump sum, split into two pieces (e.g. seed and remaining), or progressive through the use of funding tranches.

The challenge with all of these funding approaches is that they are based on an estimated cost of a project rather than the funding we wish to allocate to a product, capability or service.

So what challenges arise from a project-centric funding model?

It can result in higher risk, premature financial commitments.

Even in those cases where a funding tranche approach is used, the expectation is that the estimate for the current funding request will be at a high level of confidence. Now nothing prevents project teams from requesting a minimal amount of funding (e.g. one sprint’s worth), but in most cases, project funding approval processes are not lean enough to encourage such behavior. Given this, teams choose to make a funding commitment tied to a major milestone such as a release which might span multiple sprints worth of work. The danger in this is that unless we have a long lived team with predictable velocity working on a well understood product, the level of confidence in the work to be done and how complex that work is will drop the further out we go resulting in a team being at risk of a cost overrun.

Now you might say that agile delivery approaches can work when we fix cost and time and let scope or requirements be the variable. This is true, but how do we know how much to budget up-front to be confident in meeting business needs?

It can also encourage sloppy product management.

When product owners receive funding for a single project and don’t have any guarantees that they will receive funding for follow-on work, it is tempting to throw everything and the kitchen sink into the project backlog and to procrastinate on making tough prioritization decisions. With product-centric funding, the product owner can effectively prioritize the product backlog with confidence that there is available funding for incremental evolution of the product’s capabilities.

Moving from a project-based to a product-based funding model is a challenging people, process & technology change, but will be a powerful accelerator for your agile transformation.

 

 

 

Categories: Agile, Project Portfolio Management | Tags: , , | 1 Comment

Does your PMO hinder or help your agile transformation?

An agile project management office might sound to some like an oxymoron, right?

This might be a reasonable assertion as many PMOs were first formed to provide oversight over a portfolio of projects and enforcing standards sounds like the antithesis to agility. But many successful PMOs have evolved beyond governance and control to helping their company reach higher levels of organizational project management maturity, and increasing agility should be complementary and not contradictory to this pursuit.

There are many ways in which PMOs can hamper progress towards greater agility including:

  • Enforcing standards over principles
  • Continuing to apply traditional funding models and prerequisites to agile investments
  • Obsessing over vanity metrics such as velocity or time to market rather than business value delivered or shipped features utilized
  • Evangelizing agile from the ivory tower instead of actively engaging with and supporting teams
  • Failing to inspect and adapt

So what can a PMO do to actively support an agile transformation?

  • Collecting chronic impediments from agile teams, curating and prioritizing them, and championing their elimination by the appropriate senior leaders
  • Having the courage to say “NO!” when a given context is not suitable for using an adaptive approach
  • Advocating for funding to incent early adopters to try new delivery approaches
  • Encouraging staff who possess the right expertise, behaviors and attitude to train and take on Agile Lead/Scrum Master or Product Owner roles with coaching support
  • Examining their own operational processes and leaning them out as much as possible
  • Shifting portfolio reporting from being a manual, onerous process to the automated consumption of information radiators
  • Migrating from an artifact-centric delivery approach to an information-centric model
  • Transforming heavy, gate-based governance to a metrics-driven, exception-based process
  • Working actively with functional managers, procurement, HR and other key stakeholders to change their project engagement models to be more support of adaptive approaches
  • Helping portfolio governance committees to make their investment selection, evaluation and prioritization processes more agile

An agile transformation provides the leadership of a PMO with a good opportunity to review their charter and service catalog – are these still relevant, and if not, what can be changed to ensure that the PMO is not identified as common impediment by agile teams!

 

 

 

 

 

 

Categories: Agile, Facilitating Organization Change, Project Management, Project Portfolio Management | Tags: , , , , | 2 Comments

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