Download 7- Design and Implementation

Designing and Implementing the Portfolio Management
Process: Some thoughts and Tips Before You Charge In
Designing and implementing a portfolio management process (PMP) will require the help and
input of many people in organization and take several years.
The design and implementing a PMP is much like rolling out a new product. The difference is your
customer is internal. There is a four-stage method for the design and implementation of a PMP.
Stage 1: Defining the requirements.
It entails defining the requirements for an effective OMO in your business. Understanding the
problem is the first step to a solution. The purpose if the definitional step is twofold:
1. To define that needs fixing.
2. To map out the "specs" and requirements for the PMP - what the process must be and do, how
it must function and what its requirements should be.
1. Assemble a Task force : The task is beyond the capabilities of one or two people. A portfolio
task force is recommended.
2. Define and seek concurrence on the mandate
3. Hold a kickoff session: Create awareness of the need for improvement; identify the problems
in project selection and prioritization that the business faces; generate organizational buy-in.
4. Do a literature review: Conduct a thorough literature review to find out what others have said
and done.
5. Benchmark other firms: Seek professional help; turn to the literature.
6. Conduct an internal audit of current practices: Review existing PM process and define the
problems.
7. Define system requirements and develop goals for PM process: what your new process must
be and must do.
8. Gain insights into Key portfolio metrics: what intend to measure and track for each
development project.
9. Develop detailed work plan
10. Seek concurrence from sponsors and selected users
Stage 2: Designing the portfolio management process - key action items
Now it's time to begin designing the process in earnest.
1. Map out system design - how PMP will work: Design PMP module by module. Begin with an
overview or skeleton process.
2. Decide on Approach 1 or Approach 2 - A fundamental question: The gates dominate or the
portfolio review dominates.
3. Map out process for deciding resource allocations and strategic buckets:
Step 1: Start with current portfolio breakdown.
Step 2: Move to a top-down or strategic allocation process.
Step 3: Do a first-cut allocation of resources - modified delphi.
Step 4: Move to the bottom-up - look at the major projects from each business area.
Step 5: Review lists of desired projects across the business areas and roll-up.
Step 6: Display what the portfolio would look like on the basis of this tentative ranked list.
4. Develop, overhaul, or refine the new product process: The right side of the gating process.
5. Design the portfolio reviews: The left side of the gating process.
6. Define key portfolio metrics:
7. Build several rounds into the design process - make it an iterative process: recommend that
task force set aside blocks of time and meet in two-day sessions, roughly two to three weeks
apart.
8. Engage top management as part of the design effort: top management involvement is critical
throughout the entire design phase.
9. Undertake some activities off-line: there is much work to be done, and not all can be
accomplished in the two-day meetings. Organize to undertake some work off-line.
10. Define data collection and IT needs: Portfolio management is almost impossible to install
without some type of software. At minimum a database to keep vital portfolio information on all
projects is needed. It's better to use standard software and modify as needed or, buy portfolio
software.
Stage 3: Trial Installation and Adjustments
1. Select and install portfolio software
2. Collect initial data on projects: Input to the software
3. Review portfolio of projects
4. Conduct trail runs of your portfolio reviews, gates, and IT system: Approach 1 - periodic chech,
invite senior gatekeeping group. Approach 2 - more critical review. Recall Chapter 10.
5. Test the macro allocation process (strategic buckets): outlined in Chapter 9.
6.Final review and revisions of PMP: take a hard, critical look at what you and your task force
have designed and make the needed changes.
7. Develop implementation plan
8. Present tested PMP and implementation plan to executive sponsors
Stage 4: Implementation and improvement
1. Install a portfolio process manager
2. Secure senior management Buy-In: the PMP is doomed to failure unless senior management
buy in and commit totally to it. Some ways to ensure senior management buy-in:
- Involve senior management in the design of the process.
- Run some pilots.
- Provide a gatekeeper training session, where senior people can not only learn about the
PMP but can be briefed on expected behaviors and their rules of the game as well.
3. Develop user-friendly documentation: Often use 3 pieces or booklets with different levels of
detail - brochure, guide, and manual.
4. Undertake internal marketing: Have an "announcement event" to roll out the PMP. Use
in-company communications.
5. Provide training on the PMP
6. Bring existing projects into the PMP
7. Get the gates working right: Hold gate reviews soon.
8. Start running the portfolio reviews and the macro allocation process
9. Continually review and improve your PMP