Introduction:
Implementing a structured portfolio investment lifecycle allows decision makers to evaluate proposed investments to ensure resources are expended on initiatives that represent value. This can also assist in limiting the number of misaligned or ‘pet’ projects that are funded without sufficient justification.
Problem:
A well-established manufacturing company experienced serious difficulties delivering multiple and concurrent ICT projects that presented a resource and expenditure burn on activities for many informal and unknown initiatives.
The newly commenced Chief Information Officer (CIO) recognised that they had been operating without established portfolio planning procedures, often initiating projects in an ad-hoc and reactive manner based on an immediate business need. Little evidence showed due consideration as to whether there would be sufficient funding or resources to successfully deliver projects through to completion.
The senior management team representing business areas had no visibility of new ideas for improvement, work planned, or in progress, which hampered their ability to make informed choices to optimise delivery of change priorities. Also, with no central data repository to capture project pipeline information, or essential details such as demand vs actual information for funding and resources, they were ill-equipped to maximise business benefits within budget constraints.
Objective:
myP3’s first objective was to triage and evaluate all of the in-progress ICT projects and potential initiatives that may enter a formal portfolio for the current year. This would allow the newly established Portfolio Board to make an evidence-based assessment of business priorities and define an achievable delivery portfolio.
Another objective, in parallel to the business’s growth in awareness of annual portfolio planning, was to embed an end-to-end Portfolio Investment Lifecycle, and provide key stakeholders the knowledge transfer they needed to both value it and maintain it.
Overview:
myP3 kicked-off engagements with stakeholders across the business to identify all formal and informal (known and unknown) ICT projects underway and those ideas considered as potential projects.
The business had over one hundred (100) identified ‘active’ projects. myP3 observed that many could be considered as operational tasks, business-as-usual (BAU) work packages, or be consolidated into larger initiatives. This enabled us to consolidate and reduce the list by approximately 75% through use of standard definitions of Work Types.
Confirmed project initiatives were then formally defined with a common dataset of relevant information to enable like-for-like comparisons and assessments. These were each documented in an Initiative Proposal. The identified BAU and operational activities were designated to ICT teams with line management responsibility for these non-projects.
myP3 then developed the Portfolio Definition practices and tools to inform the initial ICT Portfolio of Work based on the MoP® (Management of Portfolios) approach. This was piloted to assess initiatives for strategy contribution, delivery risk and complexity, capacity requirements and benefits until the profiling was considered ready.
The culmination of our investigations informed facilitation of the client’s newly formed Portfolio Board and their first portfolio prioritisation meeting comprised of senior managers across the business. The key objective of the meeting was to allocate relative priorities to all existing and proposed initiatives, refining as needed to constraints and dependencies, and to create an achievable delivery portfolio. A secondary objective was to demonstrate to senior business managers that the process and outputs provided clarity, fairness through justification, and thus achieve buy-in to the structured and decision-enabling approach.
With the priorities, dependencies and high-level sequencing of projects now understood, myP3 developed the first draft Portfolio Master Plan. This was supplemented with a first draft Portfolio Performance Report in dashboard-style format. With growing interest as further planned projects were initiated, myP3 provided coaching and guidance to the Portfolio Board on interpretation of presented Reports through the lens of portfolio management decision-making. After a few minor iterations, the information was understood, fully adopted and approved Projects formally progressed.
Naturally, as ideas emerged for new initiatives over the year, the triage activity was repeated mid-annual cycle with decision-support information and advisory from the now functioning ICT Portfolio Investment Office. myP3 attended the Portfolio Board meetings on a regular basis to provide support and to suggest ways to continue to balance the portfolio, while optimising their delivery investment to meet strategic business priorities.
Outcome:
Increased trust and confidence in the ability of the new CIO and ICT Leadership team to deliver change within the organisation.
The Client’s strategic objectives gained a formal channel of entry for itemised and prioritised tactical delivery.
Buy-in from senior business managers who recognised the importance of initiative assessments and the balanced management of the annual Portfolio as a whole.
A culture of scrutiny on haphazard change improvements, and if necessary, their appropriate delivery pathways.
Funding, along with business and ICT resources, were planned and directed to delivery of approved work resulting in contained and understood rogue change activities.
Clarity on the planned Portfolio and out-years’ costs, improving the accuracy of annual CAPEX and OPEX budgets.