Making Benefits Happen:

Portfolio Leadership in Benefits Delivery

Stephen Parrett, on behalf of the APM Portfolio Management

(PfM) SIG

(SIG committee member)

APM Benefits Management SIG

National Conference May 2012

1

Agenda

Introducing the APM Portfolio Management (PfM) SIG

Positioning Portfolio Management for Benefits Delivery

PfM in Action 1 – 2012 SIG Survey....... results so far (PfM Principles & Challenges)

PfM in Action 2 – Some Personal Perspectives

Summary

Q&A

2

PfM SIG – some committee faces

We share a passion……..

"To develop and promote the professional discipline of Portfolio Management for

the public benefit.“

…..Promoting, Influencing, Communicating, and Sharing best practice……

Matt

Rawson

BG-Group

(Chair)

Achilleas

Mavrellis

Defra

(Secretary)

Adrian

Pyne

Pyne Consulting Ltd

Christine

Rigby

AstraZeneca

Stephen

Parrett

Right Change Consulting

Nigel

Bell

HP

Martin

Samphire

3pmxl Ltd

Chris

Beach

Transport for London

Dr Peter

Parkes

Peak Performance

David

Dunning

CPS

3

Assurance

Governance Programme

Management

Benefits

Management PMO

PfM

PfM SIG - interfaces with other SIGs

4

PfM SIG – Join the Debate.... Come and join us to find out more!

– Link to PfM SIG area on APM website

Become one of our Bloggers online...

Do you have some interesting PfM learning, tools, techniques or

a case study to share through a written article or presentation?

Please do complete the survey at

www.surveymonkey.com/s/LB93F9C

PfM SIG event in September…more on this soon…

PfM topics will keep flowing during 2012..................

5

Projects

Programmes

Portfolio

Specific

business

benefits

Outputs

Achieve Strategic

Objectives

Portfolio Management ensures

“right projects and optimises

investment in change”

Positioning PfM – BM Context

6

Positioning PfM – What is it?

Making the right investment choices and effectively optimising scarce resources

(money – technology – infrastructure - people)

APM

The prioritisation,

selection and

management of an

organisation’s

projects and

programmes in line

with its strategic

objectives and

business priorities,

taking into account

its capacity to

deliver them.

OGC

PfM is a

coordinated

collection of

strategic

processes and

decisions that

together enable a

more effective

balance of

organisational

change and BAU

National Audit

Office

Prioritisation of all

an organisation’s

projects and

programmes in

line with business

objectives and

matched to its

capacity to deliver

them.

Cranfield &

Open University

Managing a

diverse range of

projects and

programmes to

achieve the

maximum

organisational

value within

resource and

funding

constraints.

7

Positioning PfM – Some SIG Perspectives

‘Portfolio Management ensures the ‘right’ projects & programmes

are selected and managed for success….’ Portfolio Management SIG 2011

‘All Projects

Succeed’ APM Vision 2012

Supports timely

decision making

and re-orientation of

in-flight projects &

programmes so that

strategic benefits

are optimised

Ensures early

identification of Projects

& Programmes that

don’t add value/benefit

so they are not started /

stopped

Identification of

Projects & Programme

that are strategically

aligned. Those not

strategically aligned

are not started or

cancelled as early as

possible

Ensures visibility of all

projects & programmes

and their

interdependence and

enables tracking and

focus to ensure success.

Provides better

engagement with staff

Supports effective and

optimised allocation of

resources to better enable

the highest priority ‘right’

projects and programmes

to succeed

Ensures management

of risk at the collective

level increasing

success of the ‘right’

projects & programmes

and a link to business

risk management

Provides robust

governance of change

across the whole landscape

of change / projects

8

Positioning PfM – Integrated Cycles

Benefits Mgmt Maximise Portfolio

performance

Financial Mgmt Alignment with financial

business cycles

Risk Mgmt Mitigation …& opportunity…

Stakeholder

Engagement Maintaining

support for delivery

Resource

Mgmt

Management

Control Templates,

Assurance

Understand Strategic fit

Plan Portfolio strategy

& delivery…

The baseline…

Balance E.g. Overall risk,

return, coverage etc

Prioritise Ranking criteria

Categorise For easier

decision making

Organisational

Energy &

Willingness

Definition Delivery

Input

Results:

Influencing

Strategy

Output

Benefits:

delivering

Strategic

Objectives Performance

(Verify – Clarify –

Check – Respond) Diagram based on the Portfolio

Management cycles in OGC

Management of Portfolios (MoP™)

Governance Clarity for decision

making

9

Business Drivers

Portfolio Plan

BAU Work

Vision

Current State

Programmes and

Projects

Strategy Mission

Consensus?

Poorly

understood

Priorities

agreed? Poor

control

processes

Resources

Not Integrated

Not what

expected

Positioning PfM - where can it go wrong?

Business Strategy

Changes

Effective PfM leadership (at all levels) will ensure governance

works to overcome barriers and to protect portfolio benefits 10

Business

Performance

Benefits

Positioning PfM – The Benefits of PfM

More “right” programmes / projects

Removal of redundant, duplicate, poorly performing projects

More effective implementation of programmes / projects –

consistent approaches and improved dependency management

Better resource utilisation and collaborative working

Holistic risk management

Enhanced transparency, accountability and governance

Improved engagement and communication between senior

management and staff

Greater benefits realised

Reference: MoP™ Office of Government Commerce, 2011 11

PfM Survey – Principles(*) Considered

Proactive and visible senior management commitment

Consistent and effective governance alignment

Alignment of the Portfolio with strategic objectives

Co-ordination through a Portfolio Office

Energised change culture and associated behaviours

(*) Principles from: MoP™ - Office of Government Commerce, 2011

PfM Survey asked how each of these were perceived in

organisations in terms of their Importance and Effectiveness

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PfM Survey – Principles Rated

Principle Importance Effectiveness

Proactive and visible senior management

commitment

59% 44%

Consistent and effective governance

alignment

46% 28%

Alignment of the Portfolio with strategic

objectives

63% 39%

Co-ordination through a Portfolio Office

28% 22%

Energised change culture and associated

behaviours

29% 19%

(% of survey participants rating the Importance/Effectiveness as “High”, being a rating of 5 or 6)

13

PfM Survey – Challenges Faced

1. Gaining Board buy-in to a single agreed view of business objectives

2. Developing an initial portfolio

3. Getting portfolio management started

4. Securing and sustaining business unit management commitment

5. Prioritising and balancing the portfolio

6. Dealing with tensions between Portfolio and BAU/Operational objectives

7. Securing and developing people with the right portfolio skills/capabilities

8. Putting in place the right tools & techniques to support PfM

9. Delivering overall portfolio benefits

10. Setting up, and gaining compliance with, portfolio management processes

11. Achieving the goals set for a portfolio management function

12. Applying lessons learnt from regular reviews of PfM performance

14

PfM Survey – Challenges being met?

Challenge

Rated High Interest

Gaining Board buy-in to a single agreed

view of business objectives

35% --

Developing an initial portfolio 37% 9%

Getting portfolio management started 35% 30%

Securing and sustaining business unit

management commitment

22% 30%

Prioritising and balancing the portfolio 21% 43%

Delivering overall portfolio benefits 18% 40%

A long way to go in many areas, but significant interest in more

debate/learning about how to improve performance 15

Some Personal Perspectives - 1

Introducing sustainable PfM is a “long game”.....

But, it can be started quickly with:

– The right leadership & direction

– The right people & processes

– The right focus (on achieving the overall benefits expected)

However, maintaining momentum requires:

– Persistence – selling & telling (structured PfM/BM framework)

– Pragmatism – integrating with other processes

– Participation – getting all stakeholders to recognise WIFM/Org

If possible, demonstrate with an “exemplar” model

– Willing and important business unit

– Showing how all stakeholders can benefit 16

Some Personal Perspectives - 2

Embedding PfM can be tough.....

But, good leadership from the top will help to:

– Clarify business objectives, vision etc

– Secure cross-business commitment to process & information

– Ensure PfM adequately resourced

While focusing on strategic objectives will:

– Highlight projects that do not “fit” (getting portfolio balance right)

– Identify where synergies might exist (less risk – more benefits)

– Sharpen portfolio reporting – impact on Benefits Delivery

Establish what will work for your organisation

– PfM is more than just a set of processes

– It must deliver ongoing improvement in investment performance

17

Some Personal Perspectives – 3

Some PfM operating issues encountered:

– Poorly defined funding limits & budget allocations

– Inconsistent Business Cases (ramping of benefits)

– Business Units “doing their own thing” – avoiding governance

– Incomplete information poor portfolio analysis

– Projects masquerading as something else (“When is a project not

a project? When I say so!”)

– Mis-allocated resources (ignoring prioritisation decisions)

– PfM not taken seriously – patchy Portfolio Office coverage

– Question: “So who owns these benefits?”

– Answer: “Not me, or us - it was them; they have moved

on......somewhere”

18

The Black Death, PM and PfM

The Black Death has a parallel with project management….the signs of something going

wrong were well known and yet the same medicine was applied – Project March 2012

Heavy investment in change delivery

framework, tools and skills

Success rate for projects not improved

Need new “medicine”

Could that be more focus on Portfolio

Management?

Successful Portfolio Management

leading to better Benefits Delivery?

19

Summary

Effective PfM is about delivering Strategic Objectives

This requires:

– Executive ownership of the Portfolio

– Integrated governance and decision-making

– Commitment to underpinning processes

Getting PfM right should result in:

– Clear links between strategy, plans and the change portfolio

– Optimisation of all change resources

– Better overall Benefits Delivery

Portfolio Management needs to become an integrated and rolling

process, adapting to changes in the organisational environment

Questions.........? 20