Communicating Effectively With Stakeholders: What Does IT Portfolio Management Success Look Like?

Success is relative.  Just yesterday I was working with an organization where the CEO said, “If I could just get a manageable list of the current active projects and their current status that would be the first step to success.” As you can see, this CEO’s idea of success is incremental.  That’s the key.

I’ve witnessed successful and, unfortunately, unsuccessful attempts at implementing IT Portfolio governance models.  Typically most of these failures are:

  • a result of a narrow vision of the end state;
  • implementing a PMO with the exclusive mission of projects and methods. This is a situations where the focus is less on delivery and more on creating the Project Lifecycle Management (PLM) deliverables regardless of the size/duration of the proposed project, i.e., “The Process Police.”
  • And finally, the “Big Bang” approach to implementing technology in an attempt to buy a process out of the box.

Success is more of an organizational change management effort than simply installing a tool. Or, as I like to say “Build it, they will come.”  Unfortunately what really happens is just the opposite: Build it and they will RUN.

This notion of a change management approach is important because success is more about identifying the “change plateaus” and building a strategy to execute those plateaus instead of just implementing a tool that everyone resists 6 weeks after you go-live.  You have to walk before you run.

Key to that is having an understanding of the pain the organization is experiencing. Like the example of the CEO above, his pain was around portfolio transparency.  That was his first change plateau.

So what’s the next plateau?  That’s not always clear. That’s why it is imperative to have access to senior management, because macro-environmental influences can most definitely change any leader’s course of action.

IT Portfolio Management or Governance can be viewed in three categories.

  • Asset Management – this isn’t necessarily the way we currently view assets like servers, PC’s, etc. although they can be part of the asset pool.  For IT, I look at assets more broadly, focused on business outcomes.  It really about applications and how applications influence processes to achieve positive business outcomes.
  • Project Management – we execute projects to create, renew, and divest assets.
  • Resource Management – self-explanatory – we need people (in the right place at the right time) to operate the process/ tools and execute the projects.

The big challenge is to not let the governance of these three categories be developed and operated in silos.

Oh, and by the way, this doesn’t come in a box.  You just can’t buy software and expect the software to immediately solve everything.

So what are the change plateaus for each of these categories?  Every organization is different and each stakeholder will bring a different lens upon that pain.  But here are some ideas:

Like the CEO above, it could simply be an inventory for all three categories and the status of that inventory.

Identifying and implementing standard operating practices and service agreements for your assets, for IT ITIL (Information Technology Library) is a great place to start.

Project Management and Resource Management has really evolved in understanding to Project Portfolio Management (PPM). With PPM we are dealing with:

  • Timeliness – having the right number and the right balance of projects, completed on time without gridlock.
  • High Value – projects that reflects business strategy and are aligned with business objectives
  • Quality – projects are executed with predictable outcomes
  • Right People – having the right person at the right time to execute projects

Success is in understanding your pain points and which ones to take on first for immediate success, recognizing they all can’t be tackled overnight. Success is getting early and quick victories like the CEO example sought. Then build on to those early successes by identify the change plateaus and executing a roadmap with incremental capability and success.

Remember, IT Portfolio Management is transitional NOT transformational!


What Does The CEO Want From The PMO?

Project Management Offices, and those with an enterprise flavor (or e-PMOs), tend to think they’re all about project portfolio management and project execution and performance. But these topics can sometimes be lost on a CEO as they don’t innately sound like they relate to the company’s vision, strategy, or performance. Thus, when cost-cutting time comes, the PMO looks like one more piece of G&A bureaucracy ripe for the chopping block.

What does a CEO really look for? To a CEO, the company is driving toward a vision – hopefully a compelling vision to the marketplace; a good example is Google’s “Organizing the World’s Information.” That vision translates into strategies to implement and further the vision. Those strategies require changes to be made in the corporation to either implement the strategy or to course-correct. The CEO is more than willing to invest in these changes to help drive the company forward.

Projects, of course, are the main vehicles used to implement change. They aren’t just isolated business cases proposed as pet projects by department heads – they should actually be creating the changes required to drive the company into the future. So, what PMO directors really want to show the CEO is how the PMO helps orchestrate and execute these changes.

First, the PMO needs to ensure that all changes connect to strategic goals and investment priorities. Each change should carry an investment classification – Run, Grow, Transform is a popular model. I like Strategic, Improvement, and Run. It provides a quick justification for the change – we need this change to keep the business running, make it more efficient, or to further corporate strategy. For strategic projects it is important they align with the stated corporate strategies. If not, is it really furthering the vision of the company?

Key PMO Value: Making sure the right changes (projects) are selected

On the orchestration side, the PMO’s involvement with portfolio planning is critical. There are two basic modes: the Annual Operating Plan (AOP) and the funneled intake process. Often, both are employed. The AOP usually emanates from the executive team as a set of strategies and initiatives with proposed funding amounts attached. The PMO’s job is to make sure these initiatives get fleshed out, planned, funded, and finally executed. They are an invaluable resource to the CEO in making sure business plans become reality.

The intake model is more typical and involved, sorting through numerous requests for changes and deciding which to pursue. Here again the PMO is valuable as the facilitator of the process, providing objective information on the alignment and relative value of each request to enable steering committees or executives to make sound business-focused investment decisions.

Either way, if the CEO sees the PMO as effectively aiding the planning of organizational changes they will be in good stead.

Best Practices for Success: Effective Reporting, Performance Metrics

When reporting on execution progress, don’t just group a project list under investment classes or strategies. Do you really think the CEO has time to wade through all that data? There are better ways of reporting progress more suited to the executive suite.

First – they are interested in how much has been invested and the returns from those investments. To highlight the investment side, pie charts dividing the budgets by investment class, strategy, and business unit work really well. Returns are trickier as not all changes result in direct dollars to the bottom line. Some are measured in market share, customer satisfaction, or other non-financial metrics. The key is creating a benefits scoring model that rationalizes the various stats into benefit units. Then report the expected benefit points out per portfolio and follow up – if you can! – with the actual results post-change.

Next up on the CEO’s list – how are the investments faring? Now we’re talking standard project performance metrics, but grouped up to the portfolio level. Budget pie charts of project health (Red, Yellow, Green) work well for a high level view. If they want more info on critical projects the single-page or 4-square status report serves the purpose.

One question frequently asked by the C-Suite is when will these changes hit the organization? The best tool I’ve seen  is the project landing map. This usually has a Gantt bar for the life of the project and milestone markers for only the go-live events. It’s a graphical timeline of change impacts across the enterprise.

If you want to put this all together in a nice neat package for corporate execs the portfolio deck does the trick. I’ve seen this used at Fortune 500 and even Fortune 100 companies at the CEO level to great effect. This is a published (often pdf) document that  starts high level but has more detail in the body for reference if needed. A common format would be:

-          Investment Pie Charts

-          Project Landing Map

-          Portfolio list (not project list) showing budget, actual, variance totals along with average health and average schedule variance.

-          Program list (largest and/or most important programs/projects only) grouped by strategic portfolio with standard health, financial, and schedule status indicators

-          4-square project status reports for all projects listed above

So to give the CEO what they want, think like a CEO instead of a project or portfolio manager. When you’re running a company, you want to know you’ve made the right investments in strategic change and that those investments are paying off.