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Formalize Project Portfolio Management for Small Enterprise Make big gains in small steps. Info-Tech Research Group, Inc. is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and relevant advice with Info-Tech's products and services combine actionable insight with ready-to-use tools ready-to-use tools and templates that cover theand full relevant spectrumadvice of IT concerns. and templates that cover the full spectrum©of IT concerns.© 1997Research - 2015 Info-Tech Research Group 1997-2015 Info-Tech Group Inc. Info-Tech Research Group 1 Our understanding of the problem This Research is Is Designed For: This Research Will Help You: People who run or work in IT departments with Formalize a PPM practice that makes sense 10 or less people and who need to action a PPM solution immediately, without drawn out deliberations or formal approval from senior executives. for a group of your size. Configure a lightweight multi-user PPM tool to help you track and monitor the portfolio. IT departments of 10 or less people who are look for a lightweight PPM tool to help facilitate their nascent PPM process. This Research Will Also Assist: Assist: This Research Will Help You: Them: Executive stakeholders in companies with Gain control of the project portfolio while small IT departments. recognizing that the small IT department still has to keep the lights on and support the end users. Info-Tech Research Group 2 Executive Summary – PPM for Small Enterprise Situation Info-Tech Insight • You need to increase manageability and value of IT projects. • As a small enterprise IT leader, you need PPM tools and processes 1. Adopt PPM processes that match your organization’s maturity. Unless IT has the resources and discipline to implement a rigorous PPM framework, the best approach to portfolio management is through a light-weight set of processes that align with your current capabilities. suitable for teams in fast-paced, rapidly changing, interruption-driven environments. Complication • Almost all PPM tools and processes are aimed at mid-to-large-sized • enterprises, not small enterprises. While you would like to get more strategic at PPM, you feel as though you lack the time, budget, and staff that this would require. Indeed, your team is constantly in firefighter mode, and imposing additional administrative overhead onto them is not an option at this time. 2. Emphasize interaction over documentation. The job of a PPM tool is to facilitate and support conversations and decisions. Organizations fail at PPM when updating and maintaining data in the tool becomes the end in itself. Resolution • Take a “crawl-walk-run” approach to developing PPM capabilities. ◦ ◦ ◦ First, establish portfolio visibility to increase awareness of work in progress and enable more effective project decisions. Second, track and manage resource capacity to right-size project intake. Third, optimize project throughput to increase efficiency and value delivered by IT projects. • Use Info-Tech’s spreadsheet-based PPM templates to quickly implement an easily usable and affordable PPM solution. Info-Tech Research Group 3 Get the right projects done at the right times with PPM Project Portfolio Management (PPM) is a set of processes that helps the organization: • Prioritize the most valuable urgent projects. • Allocate the right resources at the right times. • Help decision makers stay informed and make decisions around project in flight. • Ensure that projects are completed in a way that maximizes benefits in relation to costs. 42 out of 45 PPM is the third least effective IT process (out of 45) among InfoTech’s small enterprise members.* IT teams with fewer than ten members face unique challenges around portfolio management. • Priorities are informally, subjectively defined. • Urgent incidents and requests constantly take resources away from projects, causing the team to go from one emergency to the next. • The organization has few or no full-time project managers to plan and manage large initiatives. • A lot of project work is outsourced, making the organization dependent on external providers to get things done on time, in scope, and within budget. This blueprint provides a set of practical, tactical tools and guidelines for establishing highvalue, low-effort PPM capabilities. *Info-Tech Research Group PPM Current State Scorecard, 2015; N=44 Info-Tech Research Group 4 Portfolio management needs a strategy or operating plan A PPM strategy is essentially a series of responses to questions elicited at each phase of a project. These questions must be answered at the portfolio level. Your answers to these questions will help constitute your PPM strategy or operating plan. Who can request a project? How? Who decides what to fund? How will they decide? Intake Who reports on project status? When? How? Execution Who assigns the resourcing? Who feeds them the data? How do we make sure it’s valid? How do we handle contingencies when projects are late or availability changes? Who declares that a project is done? Who validates it? Who is this reported to? Closure Are we tracking the projected benefits from the original business case? How? This blueprint will help you define the answers to these questions with a right-sized PPM strategy. Info-Tech Research Group 5 Portfolio management is not project management For small organizations especially, portfolio management requires a set of tools and processes that are distinct from those of project management. Project portfolio management is not simply about managing a lot of projects. While project management (PM) and portfolio management (PPM) originate from a similar set of challenges, and are driven by the same guiding principle – i.e. the successful execution of projects – they are separate disciplines with distinct goals and processes. Equating the two and mistaking portfolio management for “project management on a larger scale,” is a common symptom that contributes to the failure of PMOs. Doing things right vs. doing the right things. Where project management practices seek to deliver projects on time, on budget, and in scope, PPM is a set of processes that can help ensure organizations are working on the right projects. “Right” in this context can depend on a number of factors, including resource capacity, strategic goals, and stakeholder needs. In order to succeed, PPM processes require a clearly articulated set of goals, as well as widespread adoption throughout the organization. There is nothing so useless as doing efficiently that which should not be done at all. – Peter Drucker (quoted in Lessing) Project management is about doing things right. Portfolio management is about doing the right things. This blueprint will help small IT departments with the latter. Info-Tech Research Group 6 Unique challenges of small organizations require unique approaches to PPM While portfolio management is about doing the right things, “right” can be particularly hard for small IT shops to determine. In fact, in most cases, small IT shops simply get told by senior management that a project needs to get done, and regardless of capacity or the feasibility of the concept, it is up to IT to “figure it out.” Any effective PPM solution needs to take into consideration the unique challenges small enterprises face around project and portfolio management. “It’s a perpetual problem. IT department sizes are small. There aren’t enough hours in the day to accomplish everything, and it feels like the problem is getting worse.” – Joe Stangarone, “7 Ways Small IT Departments Can Accomplish Big Things” Operational demand often trumps project work It is hard to plan and establish project discipline when, from one week to the next, there is little predictability regarding how much time staff will be able to devote to projects. Limited visibility With too many projects on the go, and requests constantly being added to the queue, it can be tough to establish a reliable picture of all the work in progress. Staff don’t have the luxury to focus on one thing at a time Staff at all levels of IT are commonly required to play multiple roles within the department on any given day. Time hasn’t been allocated to staff to manage projects The appetites of senior management far outpace their propensity to invest in project management time. Info-Tech Research Group 7 PPM solutions aren’t working for small organizations Unfortunately, most PPM tools are created with large, enterprise clients in mind. This leaves the largest portion of the market – small organizations – with overly complicated PPM tools, and advice that is mismatched to the everyday challenges they face. Indeed, low adoption shows that commercial PPM tools are difficult and costly to implement. Info-Tech Insight 67% Of Info-Tech clients use a home-grown PPM tool Only 16% use a commercial PPM tool 17% Don’t have a PPM solution 16% You need to establish PPM discipline before you can succeed with a commercial tool. A simple spreadsheet-based tool can make things easier while you build the processes you need to support a more sophisticated solution. Fortunately, an effective PPM strategy doesn’t require expensive tools, sophisticated infrastructure, or adherence to complex frameworks. What’s needed for effective PPM is simply a strategic approach to executing projects, driven by well-defined processes that are clearly communicated and enforced throughout the organization. Info-Tech Research Group 8 There is a strong correlation between PPM best practices and project success Info-Tech has identified correlations between certain responses (across 58 in-scope PMOs) in an effort to predict the common scenario for success managing a project portfolio. Productive project work 0.6 0.5 Our study showed strong correlations between “Clarity of Business Goals” (0.47) and strategic “skillsassignment” matching (0.45) to fostering of more productive project work and reducing portfolio waste. 0.4 0.3 0.2 0.1 0 Productivity of Project Teams Correlation Customer clarity of business goals Project resourcing is optmized with the best skills-assignment matches Info-Tech Research Group PPM Current State Scorecard, 2015; N=58 More governance isn’t the solution to project success. Our diagnostic results show that portfolio-level functions around reporting, resource management, and organizational strategy are the best practices to cultivate to ensure project success. This blueprint will help small organizations with all three. Info-Tech Research Group 9 Info-Tech’s approach to PPM combines leading schools of thought with practical, tactical insider research Governance frameworks such as COBIT and ITIL: Project Management Frameworks such as PMBOK and Prince2 Why they’re essential: They offer essential advice on the alignment of IT strategy and business strategy. Why they’re essential: They offer crucial advice on the role of the PMO as an intermediary between the project and executive levels. Where they fall short for small organizations: • They start from the assumption that IT and the businessside exist on an even plane. In truth, small IT shops are there to “serve” the needs of the business and do not usually play a role in agenda setting. Where they fall short for small organizations: • They present a view-from-above portrait of PPM that doesn’t ring true for most small IT shops, which struggle to attain visibility not “from above,” but from the trenches. • Further, these frameworks assume that organizations will have and spend the necessary time to follow them. • Further, these frameworks assume that organizations will have and spend the necessary time to follow them. Why our approach fits the small IT department better: Our approach equips small IT departments with the processes to manage stakeholder relations and interject their voices when the business side is setting priorities. Why our approach fits the small IT department better: Our approach takes into account the realities that our SE members are facing and offers a simplified, less processheavy path towards portfolio visibility. “ITIL calls for a very structured team approach, and it wouldn't work for us in our small shop… We'd just be adding a layer of complexity on the shoulders of those already tasked with keeping the lights on.” – Steven Porter, CIO, Touchstone Behavioral Health (quoted in Caretta) Info-Tech Insight Unless IT has the resources and discipline to implement a rigorous PPM framework, the more viable approach is to implement a set of lightweight processes and tools that match your department’s resource capacity and capabilities. You can introduce more rigor as your capability level matures. Info-Tech Research Group 10 Take a “crawl, walk, run” approach to building PPM capability This blueprint will help you define and implement a PPM operating plan suited for your capability level. A Establish Portfolio Visibility B Manage Resource Capacity C Optimize Project Throughput Implementing this will allow you to: Implementing this will allow you to: Implementing this will allow you to: Report and manage the status of projects in flight. Prioritize and schedule projects with the most appropriate resources assigned. Enable more projects to get done on time, on budget, and in scope. PPM benefit achieved: PPM benefit achieved: The PMO and decision makers will be in a better position to determine what projects are adding value to the organization and which ones are not. Improve efficiency and effectiveness across the portfolio to reduce the waste caused by cancelled, delayed, and zombie projects. PPM benefit achieved: Improve stakeholder satisfaction and increase the organizational capital of your nascent PMO. Taking on too much at once is a recipe for PPM failure. Info-Tech’s tiered approach allows small IT departments to introduce achievable increments of change over time, helping to ensure that foundations are strong before trying to implement more sophisticated processes. Info-Tech Research Group 11 Info-Tech Research Group Helps IT Professionals To: Quickly get up to speed with new technologies Manage business expectations Justify IT spending and prove the value of IT Train IT staff and effectively manage an IT department Make the right technology purchasing decisions – fast Deliver critical IT projects, on time and within budget Sign up for free trial membership to get practical solutions for your IT challenges “Info-Tech helps me to be proactive instead of reactive – a cardinal rule in a stable and leading edge IT environment. • - ARCS Commercial Mortgage Co., LP Toll Free: 1-888-670-8889 www.infotech.com Info-Tech Research Group 12