Project Program and Portfolio Management in easy steps

John Carroll

• Publisher: In Easy Steps Limited
• Year: 2014
• Print ISBN: 9781840786262
• eBook ISBN: 9781840786699
• Topic: Business
• Subtopic: Project Management
• Index: Business

Project Program and Portfolio Management (P3M) represents project management taken to the enterprise level. Increasingly it is being recognized as critical to the success of projects in large organizations, such as governments and multinational corporations. Conversely, it is also being recognized that failure to implement it in an organization will often result in a string of poor performing and failed projects. While P3M should therefore be considered critical for large organizations, it can also play a significant part in improving the success and financial payback of projects in any size of business.Whether you will be commissioning, running, involved in the delivery of, or are just interested in the possibilities that program and portfolio management can bring, Project Program and Portfolio Management in easy steps will give you a good understanding of the subject. It will show you how to implement program and/or portfolio management in easy steps and how to get the greatest benefit from using one or both in your organization.

1

Introduction

This chapter introduces Project Program and Portfolio Management and explains how they can help to ensure successful projects.

Overview

Leviathans and Vanities

A Cautionary Tale

How P3M Can Help

How the Book is Organized

Summary

Overview

Project Program and Portfolio Management (P3M) represents project management taken to the enterprise level. It is increasingly being seen as critical for large organizations (such as governments and multinational corporations) but it can also play a significant part in improving the success rate and financial payback from projects in any size or type of organization. But before we get into the details, let us start with a basic definition of each term:

Implementing project program and portfolio management (P3M) can bring significant benefits to any organization, whether large or small.

Project

A project can be described as a temporary organization that will focus on the creation of a set of business deliverables (as defined by the project scope), within an agreed time span (usually of a year or less), cost budget and quality parameters. A project will be justified by its business case and will deliver some form of new product, service, system or business process.

Projects are generally well-defined although they can also be complicated. Their focus is to provide changes that are needed in the business now.

Program

A project program (usually just referred to as a program) again refers to a temporary organization but this one will coordinate, direct and oversee the implementation of a series of related projects and supporting activities to deliver outcomes and benefits in line with the organization’s strategic objectives. Programs are the link between the business strategy and the individual projects that will implement the solutions required to deliver it.

Programs are generally complex and will deliver multiple products and services aligned to the business strategy. They will usually span several years and therefore the scope, time and cost are likely to change during the life of a program.

Portfolio

A portfolio refers to the total set of programs, stand alone projects and other change initiatives undertaken by an organization. It is aligned to the organization’s budgetary and decision making processes and is the link between the corporate and business strategy and the programs and projects that will deliver it.

Portfolios have strategic corporate deliverables and are on-going. They are reviewed and revised regularly and changed as needed. The following diagram illustrates the relationship between corporate and business strategy, portfolios, programs and projects:

Corporate strategy is implemented through the business strategy and the portfolio is aligned with the business strategy. The business strategy is then implemented through the programs and projects that make up the portfolio. Portfolio management ensures that all projects and programs stay aligned with the business strategy and deliver business benefits. Program management also ensures that projects deliver business benefits.

This book explains how to implement effective project program and portfolio management (P3M) in any organization and in easy steps.

Who This Book is For

There are many books on project management but far fewer on program and portfolio management. The few books that have been published tend to be theoretical or technical, rather than hands on guides. This book is for people who will be commissioning, running or involved in the delivery of project programs or portfolios and who need to get up to speed quickly on P3M.

Leviathans and Vanities

The reason we need P3M stems from the fact that the majority of organizations have a poor record when it comes to delivering business change projects. According to most surveys, around 25% of projects are total failures and have to be abandoned, while around another 50% are seriously late, way over budget or fail to deliver the full business requirements. But there are two specific types of projects that most often seem to result in failure or significant wasted effort: Leviathans and vanities.

Leviathans

Leviathans were enormous, mythical all-consuming sea monsters which sounds awfully like some of the recent high-profile failed or struggling projects reported in the media:

•British Broadcasting Corporation: Digital Media Initiative, to improve efficiency and allow better management, but underestimation of the complexity, poor governance, organizational immaturity and continual changes resulted in the contract being abandoned in 2013, at a cost of £100m.

•State of California: 21st Century Project (MyCalPAYS) payroll and benefits system development. After eight months of operational failures the system was eventually scrapped, at a cost of around $254m.

•BSkyB: Customer Relations Management system, where the supplier failed to resource the project properly and was seriously late. When the project was finally scrapped, little had been accomplished but the cost was £318m.

•UK Government Regional Fire Control Centre project, which was flawed from the outset and scrapped as the IT systems could not be delivered. The cost was £469m at the time of cancellation but the costs are still on-going.

•US Department of Defense: Expeditionary Combat Support System (ECSS), an integrated supply chain and logistics system (at one time the largest project in the world), finally scrapped as they couldn’t get it to work at a cost of $1b.

•Airbus SAS: A380 commercial aircraft development project, delayed by nearly two years due to design faults caused by the use of different computer aided design (CAD) software in different parts of the organization at a cost of $6b.

The problem with these Leviathan projects is they become like out of control giant tankers, almost impossible to stop until they hit a rock and flounder. Many more projects end up like this than get reported in the media; they get hushed up by the embarrassed organizations responsible for them.

So what can we learn from them? Effective Project Management in easy steps (a companion volume to this book) defines 20 laws of project management. The most pertinent of these is this:

“A two year project will take three years;
a three year project will never finish.”

The basic problem is that the world will change, often quite dramatically, over a two to three year period. As a result of this, the business requirements are also likely to change in line with it. With the passage of time, what the project initially set out to achieve will no longer be what the business now requires.

There is a direct correlation between the size of a project and its risk of failure.

Changing the project’s requirements (scope) on the fly will seriously impact on the project’s time, cost and quality. This will add to the risk of it falling further and further behind until, eventually, it gets abandoned. The larger the project is, the greater the risk of failure.

Vanities

The second type of problem projects are vanity projects, promoted by proud men (usually senior executives) with whom no-one likes to disagree. These typically have poorly defined objectives and no sound business justification. They may eventually get completed but they produce little or no real benefit to the business despite using precious resources. Even worse, they prevent those resources being used for projects of more value to the business.

It might be thought that hosting the Olympics or Football World Cup can tick both of these boxes!

The problem is that without proper project, program and portfolio management processes in place each individual project is considered in isolation. It doesn’t matter if the project is necessary or not, as long as the person sponsoring it can make a convincing case for it. In fact it might not even need corporate approval if the sponsor has su...

Table of contents

• Cover
• Title
• Copyright
• Contents
• 1 Introduction
• 2 Project Management
• 3 Program Management
• 4 Portfolio Management
• 5 Organizational Maturity
• 6 Implementing Program Management
• 7 Managing a Program
• 8 Implementing Portfolio Management
• 9 Managing a Portfolio
• 10 Gateway Reviews
• 11 Action Plan
• Back Cover