Often times the biggest challenge associated with complex organizational transformation is figuring out how and in what sequence to take down the proverbial elephant – What are the steps? On which leg should I start chewing first? Charting a course for your company’s journey into the realm of Project Portfolio Management (PPM) is no different. It would be far too easy (not to mention foolhardy) to suggest some sort of “one size fits all” approach. Every organization is structured somewhat differently. Corporate paces and cultures are as numerous as company logos, and each’s capacity and readiness to embrace change is uniquely their own. Being blind or insensitive to that fact would likely doom any well-intended transformation effort from its very onset.
The challenge can be somewhat simplified by at least agreeing on the basic LEGO® blocks with which one must establish the foundation for any viable enterprise PPM function. While there is no universal consensus on what those blocks might be, let me take a swing at outlining a few that I believe make up the core components of that stable underpinning.
Building Block #1 – Standardized Ideation/Intake Process
Employees, business partners and our customers seldom lack the ability to generate an inexhaustible supply of ideas regarding how to improve their lives through automation. The challenge is defining and adopting a standardized and efficient way of hearing, cataloging and processing that continuous inbound stream of creative thought. It goes without saying that we, as IT service providers, must ensure we don’t inadvertently squelch the invaluable ideation assets flowing from our brightest and most creative colleagues by not instituting an intuitive “proposal” (IT project request) intake process. The intake process is made up of several smaller building blocks, including:
- Business Case (Benefit) Definition – Focus this on the business need, be that revenue enhancement, cost reduction, risk avoidance, regulatory compliance, or other drivers. Avoid technology “solutioning” at this phase of the conversation. It’s far too early, and only serves to distract from more important aspects of effectively profiling the overall value that fuels the initiative’s consideration by key decision makers. Where possible, quantify the benefit for use in one of the subsequent stages of the PPM process – Value Proposition Development.
- Cost Estimation – During the Ideation phase of the “vision-casting” exercise, the Cost portion of the equation is inevitably and wildly “squishy”. Relax…there’s no way to change that dynamic at this point in the formation process. The numbers will “mature” (get more accurate) at the appropriate time, assuming the initiative earns its place in the downstream prioritization/analysis areas of the pipeline. Relevant costs under consideration at this point fall into three major capital expense buckets – Labor, Hardware/Infrastructure, Software – and one operating expense bucket – the ongoing Operating Cost portion of the Proposal’s TCO. A preliminary breakdown of the initial Labor estimates into resource categories (e.g. Project Manager, Business Analyst, Architect – Data/Application, Developer, Quality Assurance, etc.) will assist in refining your initial estimates as well as supporting the downstream “Resource Balancing” step in the PPM process. NOTE: Estimates for the above resource categories are best determined by something functionally equivalent to an enterprise application architecture team.
- Value Proposition Development – At the risk of oversimplify things, let’s focus on the key building blocks that ultimately define Value. Value = Benefit – Cost. We should, at this point, at least have a quantifiable sense of the Benefits (see above) and Costs (see above), the key ingredients in measuring the positive or negative incremental Value associated with a Proposal.
Building Block #2: Standardized Prioritization
With a well-developed Intake Process and ever-evolving set of Proposal Business Cases in hand, our next challenge is to get a priority-driven perspective of the stack. This is an ongoing process that takes place in two cyclical/recurring stages:
- Portfolio-Specific Prioritization (e.g. Sales Portfolio, Finance Portfolio, etc.) – This is a rank-ordered set of portfolio-specific business cases assembled on a continuous basis by portfolio-specific sponsors/decision-makers. As new Proposals and associated Business Cases emerge within each portfolio, they are inserted into the appropriate position within the rank-ordered, portfolio-specific stack.
- Enterprise Prioritization – Getting the above Portfolio-Specific Prioritization in place is seldom the challenge for most companies. The level of understanding of each Proposal and its perceived relative value within the individual Portfolio is generally well understood, thus easier to rank-order. Achieving a well-reasoned, rank-ordered consolidation at an enterprise level is a far bigger challenge – one that must be approached with intentionality and a focus on the broader interests/goals of the enterprise. These efforts are frequently hamstrung by personalities, politics and territorialism. Often, organizations ultimately acquiesce to the loudest and/or most influential “Alpha dog” in the pack, or even worse, simply agree to divide the enterprise IT budget into fixed portfolio-specific (departmental) appropriations once a year, inevitably ignoring intra-year priority fluctuations.
Let’s put our enterprise hats on for a moment, and entertain the idea of establishing a small, but highly empowered, set of senior enterprise leaders whose mandate is to always keep the larger strategic goals and success of the company, not just themselves, in the forefront of their minds. This broader-billed cap drives every decision they make regarding the dispatch of the monies and human capital of the firm toward a common, not conflicting, goal…the success of the company. “A rising tide lifts all boats.” With well summarized and visualized information at the fingertips of such an unbiased panel of decision-makers, a well-reasoned view of the enterprise’s project priorities is well within their reach.
Building Block #3: Effective Capacity Management (Human Capital)
In keeping with the adage, “If you can’t measure it, you can’t manage it.”, IT organizations in pursuit of more mature PPM practices must become disciplined in maintaining a glass-pipeline view of their current Resources’ skills and capacity utilization (available/committed). Given the highly dynamic nature of any IT workforce, lightweight and intuitive processes must be put in place to continuously measure the ebbs and flows of available Resource Capacity within each Resource Category (e.g. Project Manager, Business Analyst, Application Architect, Data Architect, Developer, Quality Assurance, etc.). At the risk of stating the obvious, this success of this endeavor is highly dependent upon an organization’s commitment and rigor in the following areas:
- Resource Skill/Role Profiling – Associate standardized Roles and Skills with each IT Resource – contractor/employee (metadata tagging in a PPM tool-based context).
- Time-based Demand Forecasting by Proposal and Project – A “sufficiently accurate”, ongoing re-estimation of each Proposal’s/Project’s Resource demands will largely determine the usability of the resulting Resource Availability projections/estimates.
Building Block #4: Resource Balancing and Project Delivery Sequencing
The three primary Building Blocks outlined above – Standardized Ideation/Intake Process, Standardized Prioritization and Effective Capacity Management – serve as the primary inputs for the next chapter of our LEGOLAND® PPM construction project… Resource Balancing and Project Delivery Sequencing. Let’s start with some basic concepts first.
- Resource Balancing – We already have a rank-ordered view of the enterprise’s priorities as a starting point for planning conversations. However, due to real-world resource constraints, the prioritized sequence does not necessarily equate to the eventual chronological sequence in which the enterprise portfolio will be delivered, thus the need for an efficient and effective Resource Balancing process.
- Project Delivery Sequencing – The timing of critical resources’ availability often forces resequencing within the previous enterprise priority sequence. The timeline for onboarding and/or augmentation of capacity in areas where shortfalls exist often mandates deferral of high priority initiatives while lower priority projects requiring more readily available Resource Categories move to the front of the line in order to optimize total IT service delivery velocity.
Comprehensive, continuous forecasting/reforecasting of Proposal and active Project Resource demands, balanced against “sufficiently accurate” skillset/role Capacity projections, serves as an effective planning workbench from which to build an optimized Resource Deployment and Project Sequencing Plan. All of the downstream Release Planning and Delivery Management functions depend on the effectiveness and integrity of these upstream Building Blocks.
As noted in the introductory comments, the methods outlined in this blog post describe the ideal scenario. Separate and apart from the science is the artistic aspect of the challenge – structuring an effective Organizational Change Management strategy that aligns the PPM initiative’s velocity of incremental organizational change with the enterprise’s level of maturity and readiness to embrace it.
If you’re entertaining the idea of embarking on, or perhaps resurrecting, such a journey, click here to have ISI contact you.
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