Project and Portfolio Management

Today’s tough economic environment is bringing new challenges. And an absolute focus on performance. Investment decisions should be made with a complete understanding of the impact to cash flow, profitability, velocity, growth, and customer intimacy in your IT organization. Project and Portfolio Management addresses these concerns by adopting a combination of processes based on COBIT 4.1 and VAL IT management frameworks using the right tools to ask and answer the right questions. 

In portfolio management we really want to know:

• Are we doing the right things?
• Are we realizing the benefits?

The answers will help guide us to approve the right mix of work to optimize contributions to strategic objectives while providing value, at affordable cost with an acceptable level of risk. And, focus our attention to the projects generating the most significant improvements in the five (and only five) essentials in business that matter: cash flow, profitability, velocity, growth, and customer intimacy.

We use project management when we really want to know:

• Are we doing them the right way?
• Are we getting them done well?

How effective and disciplined are my delivery and project management processes? Are we finding ways to continually boost the productivity of our project management teams? Does our organization have the capability to evaluate our initiatives in a systematic and objective manner?

Asking the right questions here is critical to success.  Poor project and portfolio management practices can prevent even the best organization from performing in an optimal manner. Most of the real problems begin with execution in project management where the work is planned and managed. Since this is where most of the project activity originates and is recorded, it is a critical to measuring progress to plan and evaluating performance accurately. Without an effective and disciplined project management function unplanned work begins to overtake planned activity (see my prior post on Demand Management). Because intent is not communicated clearly to stakeholders and resources committed, a significant amount of risk can be introduced into every initiative undertaken. The results are inevitable and lead to:

• Incomplete project definition leading to ongoing project extensions
• Unclear work assignments, goals, objectives, and deliverables.
• Non-value added essential work and unplanned activity ratios rise as more and more meetings and status reporting is required to communicate intent and progress.
• Scope creep or frequently changing delivery targets
• Budget overruns occur to meet the unplanned activity not accounted for
• Missed deadlines on scheduled deliverables or slippage in cycle delivery occurs
• Unusable new product or feature is created – expensive, costly rework is required
• Failure to deliver on some elements of the project scope – focus is lost
• Customer confidence and value is destroyed faster than it can be created

Now that we have met the enemy, what can be done?  I plan to address some straight forward ways to improve fundamental blocking and tackling in project management practices in the coming weeks. Effective Portfolio management is built on this foundation, without getting this right you will only be left guessing at best when it comes time to make the right call.

A breath of fresh air…

Terrific read about what Paul Johnson (CIO) is doing over at BB&T in this economy. Well run organization, it is truly refreshing to see this kind of thought and insight when others are running for cover and mindlessly adopting awful financial re-engineering techniques (slash and burn) to destroy value faster than can be created (or retained for that matter). See the entire article at CIO and let me know what you think about his approach.

Demand Management

First up in this corner office series is the subject of demand management. Or lack of it. Demand management defined means we are meeting customer needs consistently, meeting expectations on a regular basis. It doesn’t mean we drop everything to address an urgent priority in our partners mind every time we are asked. Maybe if is both urgent and important. Maybe. But consider that high performance organizations usually spend less than 10% of their time on urgent and unplanned work.  This has been proven to be the single characteristic (metric) that can be used to indicate extremely high levels of operational excellence, compliance, security, and good working relationships with business partners. High performance organizations:

Build and complete new projects for the business
The ideal organization is completing projects on time, with reliable quality, and delivering needed capabilities to the business. These projects are planned work, and anything that detracts from completing it is unplanned work. If developers spend more than 10% of their time on emergency break/fix issues escalated from operations, project commitments suffer, almost guaranteeing late projects.

Operate existing services and use assets effectively, efficiently, and securely
Services are performing as advertised and promised, with a reliable level of quality; customers are satisfied; controls exist so that management detects variance early and can repair it in a planned and orderly manner; and controls exist to foster a culture of compliance, helping management achieve business goals and satisfy auditors.

You have got to get this right. 

Here is a quick way to understand where you are and what kind of actions you can take to begin managing this key discipline to lead a high performance organization.

First, get a handle on the true capacity constraints you are managing to. Calculate the entire man-hours resource pool required and available and then multiply this amount by 80%. This is an effective planned capacity. Group the work characteristics so that Maintenance and Production Support is clearly identified and separated from development and project related activity. Leaving 10%-12% means professional staff can be developed, trained, and use a manageable amount of free time to actually research tools and methods to offset the times when a true emergency occurs and then can be expected to work at 100% or above levels.  The other 8% – 10% should be reserved for unplanned, unforeseen activity.  Develop a true plan of record to uncover any gaps from what is planned and the capacity constraints you have identified. Use this plan to prioritize with the business so that the important and urgent work still gets done and shortfalls (expectations) can be managed.  This will be required anyway to demonstrate need if additional headcount is needed.

Second, evaluate your Plan of Record (it does exist right?) and make sure you share this often within the organization to guide planning efforts or help resolve prioritization issues.  Conflicting demands are addressed on a reactive basis so try to mitigate confusion and ambiguity introduced through shifting priorities, assignments, and resource allocations that can create a significant amount of unplanned activity. Make sure Create/Build and Operate/Maintain missions are clear and unambiguous among the professional staff tasked with providing both roles concurrently. Ruthlessly pursue this clarity of mission. Not doing so will introduce a significant amount of rework and waste. Watch carefully for symptoms and extraordinary amounts of non-value added essential activity (e.g. meeting after meeting with all-hands for example) to overcome the poor communication a good plan of record will overcome.

Third, ensure adequate resources have been identified and allocated to the scheduled tasks at the right time. Sounds simple, but in many cases I have witnessed first hand the same resources committed two and three times over which is a direct result of poor coordination and communications. Use the Project Management Office (PMO – you have one right?) to examine project plans to make sure they are not populated with UNAMED RESOURCES or roles without an association to an actual resource. TBD is not good enough here. If uncovered in your work plans, this will only lead to further ambiguity and confusion over committed resources. And there will be hell to pay when it comes time to deliver real work.

Fourth, make sure there is evidence of resource pooling or sharing concepts in use. If not, there may be a lack of skill and experience with program management in general or some fundamental misunderstanding of basic IT management concepts. A good place to start is in production support activities.  If there is one resource allocated and no back up or cross-training occurring you are in trouble. Get your resume up to date and hope for the best.

Last, and most important – have your PMO regularly report to you the ratio of unplanned to planned activity. If they can’t do this, ask why. There may be a skills or competency issue. There may be a capacity or set of processes that are broken. This may be your best shot at managing demand, judging capacity, and understanding how well your organization is managing to objectives. This is an essential make or break early-warning metric to quickly realize when your organization’s ability to respond to and overcome demand management challenges needs attention.

There is much more to this subject, intend to explore some real world examples in the coming weeks. I welcome your thoughts and comments on this important management challenge.

Best of Intentions

Welcome to the corner office. Will try to keep this as entertaining as possible and encourage all to contribute and share their personal and professional experiences here. This eclectic collection of posts will in many ways reflect the wide variety of issues will all encounter in our daily professional lives.

Will try to restrict claims and assertions made in this blog to reflect generally accepted, time proven best practice principals that have demonstrated value.  I believe no operating model you are managing is complete without addressing the subject areas identified here as a whole. Taken together, the effect of one on the other is cumulative; improving one without the other will result in a less than optimal solution.

Understanding this we can still prioritize which deficiency to attack first and use this to guide our efforts to take corrective action. The order which makes most sense is to begin with leadership and management (“we have met the enemy and he is us”), then the professional practice, and finally address the skills and competency issues. In other words when you asked to improve an ineffective IT organization I recommend you attack the solution in this order:

- Demand Management
- Organization
- Project Management
- Knowledge of the Business
- Professional Skill and Competency
- ITIL and the Operating Model

Posts collected here are not indictments of the current operating models or leadership fads. Believe me, over my career just when I think I have seen all, the unexpected happens. The good, the bad, and the really ugly. Many hardworking and well meaning professionals have contributed to this understanding of what works and what doesn’t. Topics found in this blog represent a sincere desire to share the years of experience we have collected in corporate IT management, commercial software development, and executive management to solve similar challenges for others.

Thank you for your interest, hope this will meet your expectations and you will become a regular reader and contributor.

Method for an Integrated Knowledge Environment (Mike 2.0)

One of the more interesting sites I have kept an eye on is the open source Method for an Integrated Knowledge Environment better known as Mike 2.0 (http://mike2.openmethodology.org/wiki/MIKE2.0_Methodology). Initially created by a team from BearingPoint, the project started as the development of an approach for Enterprise Information Management in early 2005. Much of the content of the MIKE2.0 Methodology was made available to the Open Source community in late December 2006. The contributor base includes a number of individuals, from BearingPoint and from external community. The Data Governance and Management Consortium (DGMC) is being formulated to take ownership of MIKE2.0 and to lead the extension of many aspects of the methodology.

Sean McClowry is the overall lead for the MIKE2.0 Methodology. Sean wrote much of the Overall Implementation Guide, and was the core contributor on a number of MIKE2.0 Solution Offerings as well as the overall collaborative framework that hosts the MIKE2.0 Methodology. Andreas Rindler is the architect of the collaborative framework that hosts MIKE2.0 and primarily focuses on development of content related to Enterprise Content Management, Enterprise 2.0 and the Open Methodology Framework.

There is a wealth of material to explore on this site, you can spend days wading through the details and templates provided. As an example, I encourage you to see the Data Migration solutions offering  and I think you will agree this is a terrific exposition on a subject area there is just not a lot written about. Of course there is much more to be done, but this represents an invaluable resource for all of us in this profession. Thank you Sean and Andreas for making this readily available to all of us, very much appreciate all the hard work you have put into this.