IC1-Team Edited
Transcript of IC1-Team Edited
IC1 – PLANNING FOR SUCCESS CASE STUDY 1
IC1 – Planning for Success
Team 1
Project Masters
UMUC – ITEC640
IC1 – PLANNING FOR SUCCESS 2
Table of Contents
Question 1:.......................................................................................................................................3
Project Portfolio Management/View Advantages.................................................................4
Challenges of Project Portfolio Management........................................................................5
Question 2:.......................................................................................................................................5
Question 3:.......................................................................................................................................7
Question 4:.......................................................................................................................................8
References......................................................................................................................................10
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Question 1: How is managing IT projects from a project portfolio view different from a single-
project view? What are the advantages? What are some of the challenges?
A portfolio is a collection of projects “grouped together to facilitate effective
management of that work to meet strategic business objectives” (Project Management Institute,
Inc., 2008, p. 8). According to De Reyck and Lockett (2005), project portfolio management
(PPM) focuses on doing the right IT project while project management focuses on doing a single
IT project right. In order to determine if a project should be undertaken, it should be evaluated
against several criteria. Marchewka suggests the evaluations should be done from a financial,
customer, internal business and an innovation and learning perspective (Marchewka, 2009, p.
61).
Applicable to every type and size of company, project portfolio management is all about
getting the biggest bang for the buck, states Haynes, (2010). It also prevents companies from
allocating money on ill-conceived projects or diverting funds from highly deserving ones.
The scope of project portfolio management is far-reaching. According to Marchewka
(2009), often discussed in terms of the IT organization, it is ideally practiced at every level of an
enterprise. Although individual projects are conceived, championed and executed at the
department or organization level, higher level oversight and objectivity is needed to make the
hard decisions that cut across the entire portfolio. The project portfolio at each level allows
executives to prioritize competing projects, select those that offer the highest potential payback,
and provide ongoing management to ensure that projects remain aligned with larger business
goals.
Managing IT projects from a portfolio perspective is called Project Portfolio
Management (PPM) and require more organization resources than Project Management (PM)
which is more closely associated with the managing of a single project. Levine (2005) on page
496 defines PM as the application of knowledge, skills, tools, and techniques to project activities
to meet project requirements. Similarly PPM is the art and science of applying a set of
knowledge, skills, tools, and techniques but to a collection of projects in order to meet or exceed
the needs of an organization.
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PM requires the participation of several core components of the firm. Furthermore, it
requires the integration of several systems within the organization. PPM is accomplished in two
phases; prioritization and selection of projects and an effective managing of projects within the
portfolio (Levine, 2005, p23).
Levin and Rad (2006) make it clear that projects are recognized as major components of
almost every organization’s work. Managing organizations by projects is no longer the
exception, but rather, the norm. Many organizations view successful projects as a competitive
advantage and establish full-scale portfolio management systems to assist in ensuring project
success. With an increased recognition of the project management profession, the focus of
organizational attention is no longer on only one or two large, complex projects. Instead, the
organizational attention is focused on the management of the collective set of all projects (Levin
& Rad, 2006, p7).
The objective of a well-constructed PPM system is to ensure that with limited resources
and available time, the organization selects the projects that facilitate its success. A prioritized
list of projects can ensure that organizational objectives and portfolio priorities are in concert
(Levin& Rad, 2006, p7).
Project Portfolio Management/View Advantages
PPM helps with the definition and cohesion of all IT project goals and objectives to better
ensure that resources are leveraged to maximize the return on investment, the internal rate of
return, net present value, or economic value added to the bottom line.
Many companies concentrate their management efforts on executing individual projects,
but fail to give the same attention to the project portfolio itself. The result is sub-optimal
performance and returns for the portfolio as a whole. Project portfolio management attempts to
rectify this situation by ensuring; project diversity, balanced risk, resource allocation, problem
corrections, adjusting business goal alignment, support and oversight.
Project portfolio management cannot eliminate performance problems, states (Charvat
2003), but it can help address them early on before they worsen. Swiftly recognizing, escalating
and responding to execution issues keeps projects on track and avoids compromising dependent
or downstream projects. Project portfolio management provides continuous management
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oversight, regular communication and coordination, and constant course correction to minimize
project drift, re-direct projects when business objectives change and maintain alignment.
By elevating the prioritization and oversight responsibilities to the executive level,
project portfolio management ensures that projects receive the backing they need to succeed.
Executives have the authority and business knowledge to ensure alignment between projects and
business strategies; to fine tune the timing and order of projects to exploit synergies, avoid re-
works and eliminate redundancies; to optimally assign resources; to direct funds to the most
valuable initiatives; and to help resolve critical performance issues.
Additional advantages of portfolio management is that by adopting a systematic process the
organization will know more about its capacity and limitation to carry out any proposed project.
Levine (2005) details six steps that are common in project portfolio initiatives which
demonstrate great advantage to organizations and is instrumental in successful project
completion, jumps in productivity, quality and revenue.
1. Analyze the overall project environment. Before moving to remedy the situation an
organization need to take a long, hard look at the status quo. Interviews and other assessment
tools reveal the nature of the gap between current approach to management and a systematic
portfolio approach. Most important is the knowledge of the current process for project initiation,
implementation, measurement of results, and closeout or termination.
2. Develop project portfolio objectives. The senior management team need to undertake
the definition of specific, strategically linked objectives for building the project portfolio. The
outcome of this process is the full commitment of senior executives to clear and commonly held
objectives to guide difficult decision making.
3. Analyze resource capacity. An understanding of organizational project capacity is an
essential precursor of balanced decision making about resources such as project development
time vs. man hours available, facilities, and technologies.
4. Gather and organize data on current and anticipated projects. Whatever the project
management methods used in various parts to the organization project data need to be collected
and reported in a consistent format for evaluation.
5. Evaluate the project portfolio. Based on the objectives developed and the project data
collected, senior mangers evaluate each project for inclusion in the portfolio going forward.
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When there is expert facilitation individual members of the team will assess their personal risk
tolerance, understand their contribution to the decision process and build commitment to the
portfolio plan.
6. Implement a complexity reduction system. Install a simple and sustainable
management system to control project proliferation permanently. Continuous portfolio
management ensures that every project plays a part in helping the organization achieve its
business objective (Levine, 2005 p477-479).
Challenges of Project Portfolio Management
The following are results when organizations don't practice project portfolio
management; overlapping projects, redundant projects, projects that are not aligned with
business strategies, an unbalanced project portfolio, too heavily weighted toward aggressive or
conservative projects. Projects do not occur in isolation, and seldom execute perfectly according
to plan. Many issues affect their performance and the quality and usefulness of their deliverables,
including; misalignment of projects and their business objectives, delayed projects, dependency
conflicts, execution difficulties, overlapping and redundant projects, resource conflicts, and
unrealized business value.
Strategic and tactical execution issues challenge every project, wasting resources and
opportunities, diverting management attention and hindering corporate plans. Economic
conditions may force budget cuts, key personnel may leave, specifications may change and
technologies may fail to perform as advertised. Overlapping projects are responsible for
inefficiencies and waste budget dollars, time and resources. These projects undermine each
other’s progress and potential benefits. People are often assigned to several projects at the same
time. Those with special expertise or scarce skills may be in high demand, causing bottlenecks.
Ultimately, every project generates deliverables that the company uses to derive business value.
When those deliverables are late or incomplete, the business loses opportunities; whether to earn
revenues, acquire customers, or perhaps fix a problem.
Challenges arise when projects increase, become more complex, and must compete in an
environment with constrained resources. Project Management Organizations (PMOs) have arisen
within many commercial and government organizations to serve as project and portfolio process
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owners, financial stewards, and centers of expertise. Specifically the following challenges are
often commonly recognized; increasing numbers of potential projects in which to invest,
difficulty aligning projects and portfolios with organizational objectives, difficulty achieving
consensus among competing stakeholders regarding project priorities, inadequate measurements
methodologies to determine project benefits, costs, and risks, overemphasis on project execution
without due diligence on portfolio selection and alignment, and more complex and challenging
project constraints, including budgets, personnel, risk, time, and compliance (Levine, 2005,
p158-159).
Question 2: With a tightening of budgets for IT projects, what was the significance of
Agere involving the business units in making decisions about work prioritization and
resource allocation?
According to Mescall (2010), the CFO holds the purse strings to all departments and it is
his or her job to make sure those any and all projects, is supporting the overall company goals
and business strategies. Therefore, the enlisting of the business unit is critical to overall PPM
goal of maximizing resources to achieve companywide goals and business strategies.
The solution for Agere was to apply its hard earned lessons and methodologies to every
IT project in the portfolio. As a result, IT can now better meet the needs of the business units –
while operating under a drastically reduced budget. Project time frames and cost estimates are
predictable and accurate, and the portfolio of IT projects supports Agere’s key business goals.
Agere formed a program management office (PMO) to develop standards, identify cross-project
constraints, provide consistent project management support for key initiatives, and measure the
success of the portfolio. Today, the PMO can provide commit dates for all projects based on
projections of resource consumption and capacity. Agere passed through seven stages on the
road to program management success:
Step 1: Block and tackle
Step 2: Move beyond the basics
Step 3: Repeat and extend
Step 4: Involve the business units
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Step 5: Integrate with financial management
Step 6: Decentralize project management
Step 7: Simplify project management
Levin and Rad (2006) coincide with the Agere Systems involvement of the business unit
in making decisions about work prioritization and resource allocation with a tightening of
budgets for IT projects. Implementation of a PPM process requires a dedicated commitment from
upper management since the implementation can be a major culture change. To support this kind
of decision making and oversight, projects and programs must follow a consistent data collection
and reporting process. A centralized view of the enterprise’s projects shows their
interrelationships and priorities. The result is a PPM system that is fully strategic and mission-
driven. This formalized relationship means that the projects in the portfolio will be managed in
an informed rather than ad hoc manner and will provide the foundation for transferring data and
establishing a process for logical and methodical decisions (Levin & Rad, 2006, p8).
Question 3: Chris Morris believes that Agere will view project management the way IT sees
it: as a core competency. Do you believe project management should be a core competency
for most organizations?
For many organizations the capacity to effectively and efficiently manage projects from
conception to completion should be considered a core competency, states Youker, 2006. This
means the entire project life cycle not just the implementation phase. Thus project management
includes selecting the right projects as well as good implementation. Some people call this
Strategic Project Management or just Strategic Management. What does all this mean for the
Chief Executive (CEO) who thinks that Project Management should be a Core Competency in
his organization?
First, the top management team needs to know and understand project management. The
organizational structure and culture needs to be amenable to PM. Some methodology for cross
functional communication and cooperation needs to be in place. Then the various management
systems for selecting projects and managing the project life cycle and project implementation
need to be developed and implemented. The total reward and punishment systems of the
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organization need to support the implemented project management system. Next the
management systems need to be documented and all of the necessary people trained. Finally, the
CEO needs to be totally committed and involved over time to be sure that Project Management
in fact does become a true “Core Competency” in the organization.
The overall performance of the organization is directly tied to the the organization in
managing the entire suite of projects. In turn, project management performance is partly tied to
having best practices in managing projects and partly tied to strategic planning in selection of
those projects (Levin & Rad, 2006, p10-11). Thus PM and specifically PPM must become a core
competency for organizations that hold progress, growth and change as a means to achieve
business advantage and therefore business success.
Question 4:
Should all projects be planned using a project management software tool?
Managing a project that will require the contributions of multiple individuals or teams using a
multi tiered development plan over a fixed area of time, project manager should consider using
project management software to help organize the elements of a project into milestone goals and
organize the efforts of the development team in an efficient manner. Examples of such projects
include software application development, game development, execution of an advertising
campaign, web site design and development and nearly any kind of project at varying levels of
complexity can be documented and conditions forecasted to allow for more organized leadership
and properly focused team members assigned to specific tasks to fulfill the overall goals of the
project.
Project management software should help in all phases of the project, including
brainstorming and flow-charting tools to assist in workflow and design management.
Brainstorming management utilities can help organize and coalesce abstract design ideas into a
fully developed product and workflow management tools can help make the production,
marketing and evolution of this product as efficient and organized as possible.
No matter how big the project is project manager should map out the milestones, team
member core competencies and assign tasks using project management software such as Visio
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from Microsoft. Certain tools such as Microsoft Outlook, which provides very basic project
management tools as well as commercially available brainstorming and project mapping
software solutions that can help streamline development cycles and organize the information
structure of company’s management teams.
Projects planned using a PM software tool can have problems if the software does not aid
the stakeholders in project management and error checking. According to Norton (2008) there
are five problems that may arise when using a PM software tool. Problems surface when there is
too much emphasis on maintaining the plan rather than managing the project. Maintaining the
detail estimates against actuals of a plan can be a full-time task which leaves little time for issue-
management. Problems can be generated by the mythical man-month. The unrealistic assuming
that if a task takes ten days then ten people applied to the task can do it in a day. Problems occur
with poor estimates. The accuracy of estimates is vital to the identification of the critical path
and the key milestones of the project. Problems stem from uncertain skill levels.
Problems happen when work breakdown is not analyzed properly. Some plans fail
because the work broken down into tasks does not match with how people work resulting in
recording discrete units of work as time against the plan to represent an accomplished part of the
plan instead of monitoring what people are actually doing (Norton, 2008, p261-262).
When a project manager is sufficiently skilled to overcome the problems detailed earlier
then the benefits of using a PM software tool are advantageous. Most software tools have several
functions. A budget and cost control function can compare actual and budgeted costs for
individual resources or activities or for the whole project. The calendar function can be used for
reporting purposes and to define working periods. The graphics function displays tasks in a Gantt
chart. The multiple projects handling function can store many projects very easily. The activities
planning function maintain detailed tasks lists and create critical path analyses. The scheduling
diagrams function builds charts and diagrams based on the task and resource list and all their
associated information. The resource planning function ensures the project has the correct level
of manpower, equipment and material at the right place at the right time and in the right
quantities. The resource histograms function provides the project manager with a visual display
showing the usage and availability of resources over the project’s life. The reporting function
delivers the facility to generate standard reports such as progress to date budget reports,
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allocation of resources reports, WBS and financial reports (Norton, 2008, p260-261). From these
PM software tool functions we gain accuracy, ease of use, ability to handle complexity, what if
analysis, and timesheet recording, projects should be planned using a project management
software tool.
Several factors need to be determined before implementing a project management tool on
the project. One of the key elements to consider is the complexity of the project. For a short
project with limited stakeholder involvement, a small budget, clearly defined objectives and
mature approach may be managed with a task list. Also, a maintenance or operation kind of
project may also better be accomplished with a checklist.
It is important to keep in mind that utilizing a project management software tool does not
mean implementing project management best practice. It takes process, people and tools to
successful approach a project. Both Microsoft Project and Primavera are powerful tools which
can do many good, and harm on a project. It is very important to have the proper process in
place with the trained personnel to maximize the benefit that the tools can bring to a project.
References
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Lenfle, S., Loch, C., (Nov. 2010), Lost Roots: How Project Management Came To Emphasize
Control Over Flexibility And Novelty, California Management Review, 53(1), pgs.32-55.
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