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A leading executives wife came up with an idea over the weekend Clear is so much prettier than cola color Dry Beer (as opposed to wet?) The guy who had the last good idea has another one If you make it they will buy The presentation of the idea was very convincing
The Boss is so sold on the idea that we can save costs of proving its validity
Shipping
exotic pets
Contact Information
Carolyn Reid, CSR Consulting Email: csreid1@cox.net Cell: 602-882-5292 Paper:http://www.bettermanagement.com/ Library/Library.aspx?LibraryID=9326
Discussion
The
Tools
The Issue
Corporate leaders increasingly face a confusing, complex, and uncertain environment. Globalization and technology constantly change the market and industry structures that have historically defined the nature of competition. The pace of change is accelerating!
According to Analysts, most companies spend close to 40% of their capital budgets on investments that do not align with their corporate strategies.
Government Issues
Clinger-Cohen Act
Calls
for the implementation of a portfolio investment process for IT in Federal agencies of Management and Budget (OMB) to identify governments most glaring problems
Government Performance and Results Act (GPRA) Capital Planning and Investment Control (CPIC)
The Solution
Portfolio Management is a disciplined and structured process of selecting and governing the projects, programs and work that best meet the goals and objectives of the organization, based upon established criteria.
It enables organizations to categorize, evaluate, prioritize, purchase, and manage assets, projects and resources so they are aligned with current and future business strategy and goals to achieve an acceptable balance of risk and reward.
Optimize
capacity
Maximum Return Maintain competitive position Properly allocate resources Link between projects and business strategy Achieve Focus Achieve Balance Better communicate priorities vertically and horizontally Weed out bad projects Creates Flexibility to respond
Established team to develop Program/ Portfolio Management Standard for PMBOK 2005 Team discussion and research determined that Program and Portfolio Management processes are different, requires 2 standards
Provide
standards that define processes recognized as good practices to manage programs and portfolios Provide standards that can be widely recognized and consistently applied
Core Competency
S TRATEGY
Strategic Objectives
PROJECTS
Educate Organization
Portfolio
Collect
What
projects are already in work? What are the new investment requests? What is the financial and resource capacity of the organization? What are the logical portfolios?
Tie:
Business
Portfolios
Usually reflect separate budgets Examples:
Departments Mergers
and Acquisitions Special Project Budgets Regulatory projects Business Strategy/ Goals
Define:
Investment
Business Case information requirements Selection, Ranking and Prioritization criteria Review and approval process Go/ No Go and kill criteria Portfolio Review schedule
Control:
Are
the projects on track? What is the status of the projects with regard to risk? Has a change in the business environment caused a change in corporate strategy?
Strategic Fit/ Business Need Benefit/ cost analysis Risk/ Benefit comparison Categorize: Maintain, Grow or Transform the Business Regulatory, Issue resolution Payback Cost Savings
Viability of an Investment
Time to positive cash flow Personnel Requirements Funding Requirements Technical Feasibility
Investment Fit
Initiative Alignment with core capabilities Alignment with other company initiatives Fit with organizational structure Fit with company culture values Competitive Rationale Commercial Attractiveness
Risk Types
Schedule Risk Organizational Risk Technological Risk Risk of Not Doing the Project Project Support Costs
Benefit areas
Financial Return Cross-Functional Impacts Improving Internal Culture Improving External Customer Services Efficiency Improvements Increased Market Share
Alignment and importance Competitive advantage Market Attractiveness Leverage Core Competency Technical Feasibility Financial Reward
Balanced Scorecard
Financial
Maximize Profit by x % ROI, ROE, EVA, Revenue Revenue up x% over previous year Cost Cutting (by target amount) or improved technology initiatives Increase Market Share Customer Satisfaction Improve customer satisfaction ratings by 20% Initiatives derived from Customer Feedback
Customer
Balanced Scorecard
Portfolio Management
ProSight Stakeholder Collaboration
Corporate Focus Busines s Unit/ Program Focus Team/ Project Focus
Forms
Document Management
Workbook
Slide Provided by ProSight
Displays at least four dimensions for correlation View a complete Portfolio at a glance View distribution across defined strategic buckets Set goals for each strategic bucket and show gaps Drill down to a different View Create what if analysis through Versions
Scorecard Contents
View the status of Items or Portfolios across multiple Categories View the status of a Category across multiple Items or Portfolios View the status of a Category over time (trend view) Drill down to another View Assign / highlight actions Update data
6.
Idea Screen Preliminary Investigation Build Business Case Development Testing and Validation Full Production and Market Launch
Optimal Plan
What we actually do
Balancing Act
Balance your Portfolio of investments (Portfolio Theory) Long Term versus Short Term Benefit versus Risk Cost versus Risk Business Specific Sustains/ Improves/ Revolutionizes the Business
On Schedule? In Budget?
Frequency of Reviews Reports required at review Integration of Project Management information and Strategic planning information Investment Review Process
Strategic Achievement New Project Business Case Summaries Approvals and Prioritizations Summary
First:
Strategies
Established PfM Education Portfolios Budgeted/ Projects grouped Define business case requirements
Next:
Selection/
On going Activity:
Review current business environment: Business Strategy changes? Business
The Tools
Resources
Software analysis:
www.Gantthead.com www.Metagroup.com www.gartner.com
Business Cases
databases Duplication of effort Re-packaging information for different levels of the organization Manual data entry that could be automated
Goal
is paperless process
Are we Investing in the right projects? Do we have the capacity to execute? Can the Organization absorb the changes? Are we realizing the expected benefits?
Enterprise operational capacity assessment and decision making tool Master Program Schedule used as basis for What if Analysis Managed operational capacity risks via resource availability, system impacts, schedule levers Minimized resource gaps/ constraints Optimized and improved operational delivery
Summary
Sr. Management commitment and consensus Clear, communicated strategic objectives Institutionalized investment management process
Close alignment between portfolio management activities and the business plan Strong link between business objectives and investment selection
Governance framework aligned with enterprise decisionmaking Well thought out, controlled project selection criteria
Well defined decision making process Go/ No go decision criteria clear and controlled
Credible Financial metrics and tools Quality Business Cases Well defined and controlled selection and prioritization criteria Strong link between business objectives and investment selection Consistent risk and performance measurement Effective balance of investments
The Purpose: Creating a successful, flexible and adaptable Organization doing the right things and keeping up with the changing market.