Thursday, April 11, 2019

Weighted Scoring Model in Portfolio Management

Project portfolio management presents a complex set of challenges: Primarily multiple projects need to be configured and managed in a way to enhance the long-term strategic value of the portfolio while considering multiple criteria and interdependencies.
Value maximization has been stated as one of the key goals in project portfolio management. The starting point for value measurement is often through the firm's objective of long-term profit, return on investment, likelihood of success, or some other strategic goal.
While the definition of project value is not universally agreed upon, the traditional measure of value is the return on investment in financial terms. Financial measures are attractive due to the ease of generation and comparison of data; however, it is well recognized that financial benefits are only a part of project value. According to the critical project management view, a notable shift is underway from project management success measures (the ‘iron triangle’ of cost, time, and scope) to project success (project outcomes and benefits realization). 
Nevertheless, let's see how to perform portfolio intake using the weighted scoring model.
There are several steps to this model.

1st - Identify the evaluation criteria
The criteria are dependent on the organization and the portfolio itself. You need to involve your team and stakeholders in the development of the criteria.
The criteria normally includes: Net present value, Strategic value, Risk, Compliance with regulations, or Resource capabilities.

2nd - Define a scoring system for the evaluation criteria.
1 to 5 is usually good enough.
You also need to define what each score means.
e.g., 
5 may equal - Exceeds all evaluation requirements.
4 may equal - Exceeds some of the evaluation requirements and meets all other requirements.
3 may equal - meets all evaluation requirements.
2 may equal - Does not meet all evaluation requirements.
Minimum change can be adaptable.
And 1 may mean - Significant noncompliance to evaluation requirements.

3rd - Assign a relative weight to each evaluation criteria.
The sum of the weights needs to equal 100%.

4th - Calculate the weighted score for each proposal
by calculating the weighted score for each criteria and summing them up.

5th - Take the total cost of the proposal
and divide by the weighted score.
The proposal with the lowest value is selected.

Even as this helps decide the projects that can be prioritized and picked up, more research is happening in this direction to make portfolio project management criteria and decision making model more effective and reliable.

Tuesday, March 26, 2019

Aligning a portfolio with Org Strategy


Lets look into the relevance of the portfolio alignment with the Organisational Strategy.

For that, let us first understand what is organizational strategy, and then look at how portfolios align with that strategy.

Organizational Strategy:
Michael Porter says that strategy is about competitive position and about differentiating yourself in the eyes of the customer, and about adding value through a mix of activities different from those
used by competitors.
In short, he believes that organizations need to have a unique or different offering than their competitors in order to gain competitive advantage.
This comes down to selecting the products and services to offer, the markets in which to offer them, and the way in which those products or services are offered through the capabilities in the organization.

So, Organizational strategy could be broadly categorized into: 

Cost leadership - the objective is to offer products and services at a lower price than competitors. 

Quality - the objective is to offer the highest quality product or service in the marketplace.
This can be achieved through implementing quality throughout all activities.

Flexibility - the objective is to have the highest flexibility in products and services offered, allowing customers the highest level of customization.

Organizations looking to keep a competitive advantage have realized that creating a strategic plan is not enough. The execution of that plan is where the value is created. And that is exactly where portfolio management comes in.
So, Projects and programs must be considered as investments and therefore, must be chosen with a clearly defined process and monitored closely for strategic relevance.

Portfolio management: ensures that projects and programs promote organizational strategies and goals. It accomplishes that by avoiding the common trap of trying to execute every project that sounds like a great idea in an environment of limited resources.
It requires disciplined decisions driven by agreed upon priorities. It is an approach for investing in a categorized collection of projects and programs that support the business strategic goals and objectives.
Now, some projects within the portfolio will have high risk and high return, while some will have low risk with a modest return.
Portfolio management allows the organization to not only monitor the results of individual projects and programs, but also gives insight into the how they contribute to the strategic goals. Thereby helping the top management into taking decisions on the right projects and portfolios to execute and stop or keep on hold the projects or portfolios that do not align with the strategic objective of the organization.

Wednesday, March 20, 2019

Shades of Colors: Lord Ganesha Symbol

Shades of Colors: Lord Ganesha Symbol: In Om resides all! Here, I have tried to represent Lord Ganesha, the lord of all good beginnings in the symbol of Om. For Lord Ganesha ...

Tuesday, March 19, 2019

Defining, Aligning, Authorizing and Controlling a Portfolio


In this session, we will look into the important concepts around the Project Portfolio Management process.

The key flows around portfolio management are Defining, Aligning, Authorizing and Controlling a portfolio.

Defining:
This function is focused on planning and identifying the corporate organizational strategy needed to deliver that strategy over a period of time. This includes creating key artifacts, such as the strategic plan, the charter, the road-map of the portfolio, as well as the risk and communication plans.
In general, we plan what we're going to do about keeping everything aligned with strategy, how we will assess the performance, how we'll communicate with stakeholders and how to manage risks at the strategic level.
.
Aligning
Aligning activities are conducted once the portfolio has been defined. They are concerned with creating a method for aligning the mix of portfolio components to the organization's strategy. They work in tandem with the defining activities. 
If or when the corporate strategy changes, we assess the portfolio to ensure that all components are aligned to the revised strategy.

Authorizing and controlling 
This is the area that emphasizes authorization of new efforts and oversight of in-flight work within the portfolio.
The responsibility here is to make decisions to approve the work efforts, track status and progress of components within the portfolio that are under progress.
For example, say, there is an organizational change which modifies the organization's charter and mission. The strategy will change. Therefore, the governance function would have to approve any new components or cancel any existing efforts that don't align with the new strategy. Accordingly the activities would be aligned as well as the new effort would be authorized and controlled in line with the revised strategy.

Monday, February 18, 2019

The Case for Portfolio Management

As mentioned in my earlier post, "Project portfolio management — or simply portfolio management — is defined as the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations.”

So who really needs portfolio management?
A start up company or one who is responsible for investment and work to be accomplished within an organization needs a project portfolio management.

Effective portfolio management aligns corporate investments and resources with the overall strategic objectives.

The net effect of a good PPM model is that business units can make a stronger contribution to the overall business strategy and bottom line.

With portfolio management, we would expect the following benefits.
  • Increased IT performance through discipline and mature PPM practices.
  • Avoidance of additional IT spend on efforts that do not align with the business strategy.
  • Earlier identification and corrective action for troubled IT projects and programs, and 
  • Improved communication and risk management effectiveness for IT and the business.
For portfolio management to succeed, recognizing the need and obtaining buy-in from the sponsor is important and critical.

Management organizations like PMO are an effective way to organize and manage an enterprise portfolio and enable others responsible for management and delivery of IT products and services to operate in an effective manner.

Portfolio management also encompasses governance and resource allocation, ensuring compliance with standards, alignment with strategy, and ensuring optimal resource usage.

For effective portfolio management, clear and effective communication channels are critical to be established between all stakeholders in the portfolio.

Monday, February 26, 2018

Scrum or Kanban? It depends on the type of project

The Agile framework has 2 significant or Key methodologies in today's software project environment. Both are equally efficient and produce results. However, if the right methodology is used after accessing the project you are handling, that is when you get the right results. Also, over a period of time, as the organization project management model changes, one can switch from one methodology to other.
But, how do we decide if we should use Kanban or Srum? For this, let us understand what these two are. There are some similarities and some differences as well between the two.
Scrum follows Agile methodology to carry out complex projects. It focuses on team collaboration and creation of  a framework such that the team is completely committed to create innovative solutions for all challenges. There are small set of rules which need to be followed to the letter and punctuations.
Kanban is another similar yet slightly different framework that is used to implement Agile methodology. Kanban breaks down tasks into manageable chunks and uses a Kanban Board to visualize those tasks as they progress through the workflow.
Both Scrum and Kanban strive to increase quality along with productivity and bring efficiency in the organisation.
Now, coming to the key fundamental differences:
Role:
Scrum depends on atleast 3 prescribed roles: Product Owner, Scrum Master and Team members.
Kanban has no set of roles prescribed. Practically a project manager for supervising the work is sufficient.
Schedule:
Scrum plays heavy emphasis on schedule. Each sprint is time bound. Whatever does not fit in a sprint moves to next sprint.
Kanban has no time boxes or iterations. However the focus is on getting a set of work done or completed as planned based on the capacity and timelines.
Tools:
Scrum has columns / sections that are labelled to reflect the periods in workflow beginning with Sprint backlog, work required for the definition of done and the actual work completed. So, stories added to the sprint based on the past sprint velocity should appear in the completed section or column of the sprint.
Kanban board has columns to show workflow states. They are published with maximum number of work that can be completed in a time frame based on estimates with no time boxes. So, sprint length can vary and need not be constantly time boxed.

There’s really no way to answer the question on what fits in which type of environment. Both Scrum and Kanban are powerful, proven process tools that can vastly improve your project management. The best option is to become familiar with both of them and experiment with various aspects of both in your production environment. Creating a hybrid of both is perfectly acceptable if that works best for you.

Sunday, November 5, 2017

Portfolio Management

On request from many, I am posting this article to cover the fundamentals on portfolio management.

So what is portfolio management?
There are many definitions available in different books and on the net. But, I would like to go with the standard one provided in PMI.
"Project portfolio management — or simply portfolio management — is defined as the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations.”

These projects or programs can be related technologically, financially, or entirely unrelated to help achieve the common business goals and strategies. 

A key result of PPM is to decide which which projects to fund in an optimal manner. Project Portfolio Optimization (PPO) is the effort to make the best decisions possible under these conditions.

Enterprise Project Portfolio Management:
Enterprise Project Portfolio Management (EPPM) is the practice of taking a top-down approach to managing all project-intensive work and resources across the enterprise.

IT portfolio management is specific to the IT industry. It is the application of systematic management to the investments, projects and activities of enterprise information technology (IT) departments. Examples of IT portfolios would be planned initiatives, projects, and ongoing IT services (such as application support). 

IT portfolio management contains three major portfolios or areas:
Application portfolio
Infrastructure portfolio
Project portfolio

Information Technology portfolio management as a systematic discipline is more applicable to larger IT organizations. In smaller organizations its concerns might be generalized into IT planning and governance as a whole.

In my forthcoming blogs, we will deal with each of these in more detail.

Sunday, September 24, 2017

Actionables from Successful PMO's

In my previous article, I mentioned about what successful PMO's do at the strategic level.
To sum it up, they are strategically aligned, a vital part of the planning team, embrace core competencies, and show consistency in the project execution and yet flexible in their approach to managing change.

So, the PMO have following key areas to focus on:
Having a clear strategic vision
Staying consistent in delivery practices
Flexibility to align to the changing business goals
Playing an active role in overall ownership

The road to achieve success for the organisational success is to have visibility at the top level. The PMO would have a say in critical business decisions and work closely with CxO's and VP's.
So, a right approach is what helps in ensuring that this happens. And to achieve this, the key ingredient is to work on the fundamentals and ensure that the basic things are as a matter of fact working.
1) Keep it simple: Simplicity removes the room for different interpretations and gets everyone on the same page, especially when one is working in a global environment across culturally different teams. So, the PMO's focus on using standard metrics and processes. This sounds simple but the real challenge lies in internalizing it and implementing it across the organisation and making it work.

2) Focus: The PMO's ensure that  the processes and metrics defined are aligned to the strategic goals of the organisation. This ensures all stakeholders across all teams believe and rely on the processes and metrics.

3) Action, Action and Action: This is the main result and outcome, else all the strategy, planning and concepts are futile. All processes and KPIs are in-vain if they do not result in actions. As an example, increase in revenue is directly proportional to the operational excellence. And successful PMO's aspire to track KPI's that help relate to this.

4) Measuring PMO value: This is subjective and depends a lot on the maturity of the organisation and the PMO model itself. But if implemented correctly, can help in measuring the return on investment (ROI) of the PMO team itself.

The KPI's that the PMO can focus on is shown schematically in the diagram below:




Sunday, September 17, 2017

What successful PMO's do?


In today' rapidly changing business environment, Project Management Offices (PMO's) struggle to provide adequate support for the shifting priorities and faster delivery cycles. The basic reason for a PMO's failure in an organisation has been that they have remained stuck to solely reporting and prioritization function focused on tactical project management. However, the need of the hour is to enable leaders to develop and implement strategies that drive better business outcomes.

These are the so called next-gen high performing strategic PMO's empowering their executives to act with greater agility and achieve better business outcomes. Such PMO's have been more successful compared to their counterparts doing the run of the mill PMO activities.
Based on Forrester research, there are four key findings about successful PMO's:

1) They are members of the executive management: If PMO wants to be part of strategic results, they require strategic positioning. Such champions are strategically positioned and work closely with the CxO's.

2) They are vital part of the strategic decision makers: For successful PMO's, portfolio management is key. They apply the learning from portfolio management to help shape strategy by providing feedback to the executives regarding performance, resource utilization and even customer feedback.

3) They embrace core competencies: Successful PMO's invest on sharpening their axes on project management learning, so as to be excellent in their core competency.

4) They use consistency across industry and regions: Successful PMO's are sensitive to culture. They apply their learning and soft skills to ensure that the processes and objectives are consistent across the organisation, across departments , be it customer facing or product development. They help drive the organization towards excellence.

Sunday, May 14, 2017

Vital signs that tells you that Scope Management needs attention in your organization

Almost all projects would have a scope defined base. Those projects that don’t have a proper scope management in place would definitely be at a peril. Though most of the managers realize the importance of scope management in the first place, they almost fail to execute it properly. Either the processes are in place, but not effective enough, or there is not enough maturity for taking scope seriously. Such organizations would normally give a fair bit of reasoning such as we are always on our toes and our project environment is far dynamic, or our resources are working day night to ensure that the customer is satisfied by providing last minute patches/hot fixes and last minute requirements.
If one looks deep into the situation, one of the reasons is the pure lack of scope management, which causes a cascading affect on unrealistic planning, poor quality of product, lots of over work and thereby causing low morale of employees.
Though there could be so many reasons/ signs, here are a few vital ones that will indicate that scope management needs attention. It could mean that the project manager would need to carefully examine and  bring in positive changes in the scope management related processes:

The team has trouble getting the project off the ground.
This is the first sign that shows that the scope mgmt related process is either not working or is not in place at all. Team members would be looking at previously executed similar projects and assuming that they would work on the project accordingly. Everyone would be thinking that he is doing his job well without looking at the big picture.
1
Number of False starts .
This is another vital sign where the project team would plan out the requirements to be done and then after a few days or weeks realize that the requirements/ scope were somewhat different than what the customer wanted in the first place. Here we go again, reworking on the scope. And after a few weeks when the team has already started progressing on  the requirements, they realize that the stakeholder had another idea. This sign also indicates that not only was the scoping not done properly, but there was also a lack of proper processes to manage the changes in scope though an integrated change control environment.
2
Unpredictable sponsor and stakeholders.
This could hit the project and the project team throughout the project life cycle. In the beginning, when the scope keeps changing every often, in between during execution and control when stakeholder would find defects as well as changes in the fundamental design and concept of the product itself; and during the end when last minute major and critical changes would creep in and shift the project completion date further to the right.

Lots of changes amounting to rework.
This is in continuation of the previous point, and it goes a step ahead when the team has no idea what will hit them next. They would have lots of unplanned work on weekends and the work would look like perennially continuing, affecting the morale of the team members and the employees of the organization as a whole.

If any of these vital signs are observed in your project, it is indicative of the scope management process that would need fixing immediately. Next, the project manager should follow the other areas of project management that got impacted as a result of the scope related problems such as time/ quality/ Resources etc.

It is important to set-up and follow the scope management processes i.e.,
1)       Collecting Requirements
2)       Defining the scope
3)       Creating and base lining the WBS – re-base lining whenever there is relevant/ agreed scope changes with clear impact on time and cost.
4)       Controlling the scope through integrated change control.
5)       Verifying that the scope delivered is in sync with what the customer initially asked for.