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Project Manager : Project Manager Dec Jan 2012
www.aipm.com.au Project Manager 15 14 Project Manager THOUGHT LEADERS Stephen Jenner FAPM, is co-author and chief examiner of the OGC’s Management of Portfolios. He is also author of several books in the field. Gareth Byatt is an experienced practitioner of project, program and portfolio management currently working out of Sydney, Australia. He co-authors articles on various subjects within the professional community. By Stephen Jenner and Gareth Byatt Project Portfolio Management (PPM) is a hot topic. Last year saw the publication of the Office of Government Commerce ’s Management of Portfolios (MoP). This year the Foundation and Practitioner MoP exams have been launched. The MoP guidance highlights a strong theoretical case for a discipline (or more cor rectly, the coordination of several disciplines including investment management, project and program management, and benefits management) that seeks to ensure organisations: • do the ‘right’ projects and programs (the portfolio definition cycle in MoP); and • do projects ‘r ight’ in terms of effectively managing dependencies, risks and constraints to optimise delivery and benefits realisation (the portfolio delivery cycle in MoP). It has been argued that success depends on adopting approaches that are: evidence-based, value-led, fast and frugal, and active. Here we provide some examples of these factors in practice. 2Value-led: Decisions about which projects to fund should be driven by a clear understanding of their strategic contribution, complexity and level of r isk – and hence the likelihood that the benefits will be realised. It is also important to ensure an appropriate balance of investment within the portfolio across various strategic objectives. But how can we assess strategic contribution reliably when many organisations’ strategic objectives are not defined in sufficient detail? The answer is to use ‘driver-based’ models to make the implicit value chain underpinning strategic objectives explicit. For example, MoP notes that researchers at Harvard University have developed the ‘service profit chain’ that links employee satisfaction with customer satisfaction, customer loyalty and the bottom line. Sears have modelled this relationship mathematically – an 8-unit increase in employee attitude is expected to drive a 1.3 -unit increase in customer ‘impression’ and this, in turn, drives a 0.5 per cent increase in revenue growth. The message: turn intangible value into tangible value. 1Evidence-based: Apply the lessons of what works from the experiences of others – tailoring them if necessary to your organisation and situational context. Research sponsored by the Chartered Institute of Management Accountants (CIMA) has identified six core portfolio management practices: • strategic alignment of projects; • visibility of projects; • allocating scarce resources; • prioritisation and categorisation of projects; • balancing risk across projects; and • de-escalation of projects. Significantly, greater benefits appear to result where these practices are adopted together in a coordinated and systematic way. Professor Bob Cooper, expert in product innovation, agrees. He argues that exceptional performance is no accident; rather, “it is the result of a disciplined, systematic approach based on best practices.” An evidence-based approach also means performance is tracked via robust post- implementation reviews and collecting a ‘reference class’ of data to inform forecasting on other projects. Coming of age Research into project portfolio management maturity reveals its success factors in practice. Project Portfolio ManageMent
Project Manager Oct Nov 2011
Project Manager Feb March 2012