Donna FitzgeraldMy blog entry All Project Portfolio Management Prioritization is Subjective has generated some interesting comments. There was one underlying thread in the discussion that I thought needed to be brought to the top. Steve Romero (with CA) was concerned that my challenge to the “objectiveness” (where objective is defined as fact based) of most portfolio analytics would lead people to believe they didn’t really need to invest in project management. Since I view portfolio management as a very separate discipline from that of project management I was having trouble connecting the dots and then I realized that Steve really was on to something. It is possible to do portfolio management and NOT do organizational imposed project management, but the circumstances under which this approach works successfully makes it easier for most companies to simply implement organizational project management.
So here’s a true story:
A long time ago, in a glittering Valley of Silicon, I worked for a company where our project management practices were at early level one but our portfolio management practices were at level four. Business cases got written and scrutinized with a microscope by people actually qualified to do the scrutiny. And the portfolio was reviewed and prioritized during an annual three day meeting which included the founders and every GM and Controller in the company. Once the annual portfolio was approved, the projects got kicked off and it was completely up to the project manager and the sponsor how the project got managed, just so long as the results came in when they were expected to come in.
This approach was successful in this company for one reason and one reason only. The company culture was date driven in the extreme (anything worth doing is worth doing quickly) and demanded results (which meant it was highly disciplined). The company was also filled with people who happily said “how high?” to a request to jump and “yes, ma’am!” to a request to take a distant hill. Essentially while a manager assigned a project might have skipped a lot of the more formulaic project management practices he or she managed the project and lead the team knowing full well their career was on the line it they either didn’t succeed or didn’t acknowledge failure early.
What was the secret this company used to beat the results of some level three companies? The answer is that it turns out there is such a thing as a project culture (a topic I presented on at last year’s symposium). It also turns out that the company I described above and a few other companies I know about have these cultures and as such can extend the period of time they can stay at level one with regard to project management. For everyone else, Steve’s right. It’s a whole heck of a lot easier to just implement formal project management as soon as possible.
Category: PMO Tags: Project Culture, Project Management, Project Portfolio Management
3 responses so far ↓
1 Eric Deraspe June 12, 2009 at 12:40 pm
I totally agree that PMO is different than PPM, but they complement each other very well.
In the true story mentioned here, the missing pieces of Portfolio Management would be Financial Management, Portfolio Health Management, Value Management, and ongoing communication. Without these pieces, I wouldn’t consider the organization at a level 4 maturity even if they already do a great job at Demand Management. I can see that, in a project-oriented culture, some of these elements can be taking care of informally. Without a solid PMO in place, I would be concerned about the consistency and accuracy of information being fed to the Portfolio to ensure proper finance management, project monitoring, and communication takes place.
That said, an organization can start with the PPM function first to adress the very important process of Demand Management. A consistant PM methodology (often governed by the PMO), would have to be built soon after to capture the appropriate amount of information that the portfolio needs to make critical adjustments during the year.
For more on this, see my blog at http://www.chiefportfolioofficer.com
Great topic!
Thanks,
Eric Deraspe
http://www.amplioconsultants.com
2 Donna Fitzgerald June 12, 2009 at 1:23 pm
(“oh” she says, “a straight man”)
I can see from you comments that I completely forget to mention I was the finance person in my story. I also forget to mention that I’ve always been the queen of feretting out information by walking or phoning around and hence knew where every single dime was and how it was being spent and how much more they were going to need. It also seems that I forget to mention that I was a dual report to the CIO and the CFO and went over my perceptions of what was happing in detail on a weekly/monthly basis and that I always had an indepth 180 rolling forecast?
So I agree with you completely on 95% of what you said. Where I disagree is your assumption that the PMO is the only place that can provide oversight. A portfolio office is more than capable of providing all the oversight you mentioned and in fact may be better positioned than a classic multipurpose PMO
Unfortunately part of my story was to point out that I’ve seen very few PMOs who could compete with the level of detailed financial management that I or in later years my staff could provide. There are two reasons for this. The first is generally one of training and temperment and the second (in defense of the PMO) is that most PMOs are so busy they can’t possibly do what they aren’t staffed to do.
Like everything in life you get what you pay for. So I’m not knocking PMOs. Lttle to no staff and a broad charter means something is going to have to get prioritized lower than something else and in my experience its generally financial management (which we point out in our maturity model) but strangely enough that might be ok as long as somebody picks up the slack, In my example it was finance.
Thanks for the great comment. I really appreciated it.
3 Steve Romero, IT Governance Evangelist June 12, 2009 at 9:33 pm
Another provocative post evoking yet more insightful delving into the complex world of what I insist is Investment Governance. My insistence is based on the notion that PPM and Project Management are required to help ensure we are aligned with the business, delivering value, managing risk, resources and performance – the principles of IT Governance.
The one thing I think resonates most from these discussions are the numerous ways you can skin this investment governance cat. Donna notes a MAJOR factor in the options that are chosen – culture. There are even more.
Consider that Governance is the processes and relationships that lead to reasoned decision-making. The trick for any Enterprise is to strike the correct balance between these two dimensions. This is not easy given the constant change to the variables that affect this balance:
- Industry and business sector
- Enterprise Goals and Objectives
- Process capability / maturity
- Resource capacity / capability
- Resource demand (planned and unplanned)
- etc.
Given the moving targets I listed above, the two dimensions of investment governance [investment decision-making (ensuring we are doing the right things via PPM) and investment delivery (ensuring we do things right via Project Management)] will vary greatly from one circumstance to the next.
Some organizations need to focus on and mature one dimension more than the other – and you can bet that will inevitably change. The key is to understand the ultimate objectives of investment management:
- Knowing where you want to go
- Choosing and prioritizing the right investments that will get you there
- Connecting plans to delivery to enable and foster execution
- Monitoring, fixing and killing investments to ensure you are always moving the right direction
- Assessing the value of investments (in progress) and realizing the value of investments (post-implementation)
- Constantly measuring and improving the effectiveness of this cycle
The what, where, when and who of getting this done will vary greatly. The manifestation of PPM processes, Portfolio, Programs, Projects, PMOs, Steering Committees, PMs, PM Processes and Methodology, Systems, and Tools will vary greatly – dependent on a head-swimming number of variables driven by every-changing circumstances.
I have my beliefs and preferences as to how to go about this. My own bias aside, what matters more than my approach are my goals and objectives and my ability to realize them. How you slice it and dice it should be driven by one simple question – is it working?
In some cases it will be a PMO providing oversight and in some cases it will be a Steering Committee. In some cases PMs will execute according to prescribed rigorous methods and in other cases they will be left to “do the voodoo that they do.”
I don’t think the answer is easy. I agree with Donna that it need not necessarily be one thing or the other, and I care little about what we call it. 50% of our projects continue to fail. We need to do something and that “something” will differ from one organization to the next.
So even though it is an incredibly complex business problem and there is no one easy answer, I am heartened there are Donna Fitzgeralds and Eric Derapes in the world. It is your conviction and conversation that will inspire success. Please keep it up.
Steve Romero, IT Governance Evangelist
http://community.ca.com/blogs/theitgovernanceevangelist/