We normally defineproject failurein terms of time,
money and specification. A typical end-of-project report will state
that the project was late, cost too much or failed to meet the
users' requirements. TheNational Audit Officereports on
public sector projects that fail to meet these
criteria.
In organisational change projects, however, this misses the key
issue: how did the project improve the organisation's performance?
In other words, what were the benefits?
Many organisations pay lip service to benefits. Before we
initiate our projects, we normally ask if the project is
"worthwhile" or if it "stacks up". Someone will often try to
justify the project. Projects are often approved because of the
persuasiveness and authority of the individuals pushing the
idea.
But nearly all forms of project, justification leads to benefit
duplication.
Most planned projects will claim to deliver cost savings,
generate additional income or create non-financial benefits. On
closer examination, it is common to find that many projects were
justified on the expectation of eliminating exactly the same costs
and generating the same additional profits as other projects.
The holistic approach
Project portfolio management (PPM) is a top-down approach
designed to solve these problems. PPM proposes that only a holistic
view of the project workload will answer the vital question: what
is the best possible portfolio of projects that will most improve
the organisation?
The PPM selection and approval process hinges on a programme
board that is responsible for examining and approving all change
projects within an organisation or at least a part of the
organisation. The inputs to the programme board are:
- The organisational strategy
- The current picture of the live projects
- The current overall resource availability to work on
projects
The outputs of the programme board's regular meetings are
approved projects.
PPM is a very much a top-down approach. It values doing the
right projects over doing projects right. It concentrates on
outcomes, not outputs. PPM delivers the organisation's strategy
through a carefully selected, optimal portfolio of projects. It
often means starting fewer projects but finishing more. It puts the
focus on delivering improvements measured through benefits.
Discovery projects
To support the most informed decision-making, each new idea is
often subjected to a discovery project.
Discovery projects are designed to analyse each new suggestion
in a cold, analytically and independent manner. A relatively small
budget will support a discovery project ending in a report
providing a detailed and independent evaluation of the
proposal.
A discovery project will report the expected outcomes of the
proposed project described in terms of expected income, savings,
return on investment plus strategic alignment through its expected
impact on
key performance indicators. These will be signed off by the
line management.
The inputs to the proposed project will include the investment,
resource demands and risk estimates. In addition to a clearer
picture of the new idea, the discovery project process weakens the
political and emotional pressure frequently applied by the
project's originator.
PPM is gathering strength and support. The US-based
Project Management Institute published
their Project Portfolio Management standard in 2006. The UK-based
Association for Project Management
recently published their Introduction to Programme Management
emphasising the benefits of PPM. Microsoft launched Project
Portfolio Server in 2007, and a range of other tools have since
emerged.
I have yet to hear anyone argue that PPM is not perfectly
logical. When explained to someone outside of the IT fraternity the
usual question is: how else could you possibly select your
projects?
In many organisations, PPM is low-hanging fruit. Its cost is low
and its rewards can be great.
The PPM project selection cycle:
- Approval to Proceed
- PPM
- Selection and Approval Process
- Discovery projects
- Suggestions
- Live Projects
- Progress
- Updates
Geoff Reiss is a Fellow of the Association for Project
Management and President of the Programme Management SIG. He was
recently voted a "top 10 influencer in project management" He has
four successful books to his name and is both freelance and
independent.