Published on March 3, 2014
PROJECT PORTFOLIO MANAGEMENT at IT Services Hungary Ltd Budapest, 26 February 2014 László Balogh – Head of SPM CoE
THE COMPANY – public – 3/3/2014 2
OWNERSHIP HISTORY – public – 3/3/2014 3
HEADCOUNT DEVELOPMENT & EDUCATION In 2012 IT Services Hungary became the largest ICT employer in Hungary. Based on Aon Hewitt & AIESEC Hungary "Employer Brand Survey 2012" our company is the most famous & the third most attractive IT employer in Hungary! 79% 65% 44% – public – 3/3/2014 4
THREE MAJOR LOCATIONS Understand where your business is vulnerable Rehearse Your Plan Cultural Change Define your Business Continuity Startegy Develop your Business Continuity Plan Debrecen and Budapest are fully equipped Business contingency solutions. Operation started at 1st of June 2012 at Pécs, as third location – public – 3/3/2014 5
OUR CUSTOMERS – public – 3/3/2014 6
PPM IMPLEMENTATION - BACKGROUND – public – 3/3/2014 7
WHY does need a SSC for project portfolio management? The company increased by 300-500 FTE every year from 2007 – capacity, quality and efficiency had to be developed continuously. These activities were managed in projects from the beginning. Main categories of projects Infrastructure (office, IT) Organizational development Quality improvement Projects were controlled and decisions were made on top management level. After awhile it was not enough. The change in the management team brought changes in management style and expectations Resource conflicts between projects
WHAT? „Implement project portfolio management framework to achieve ITSH strategic goals, by defining the roles, processes and toolset needed and redefining existing processes (e.g. project management).” HOW? 1. Collect and analyze the expectations and define the requirements 2. High level planning of the solution 3. Involve third party to develop and implement the project portfolio management solution – issue a tender. 4. Implementation 5. Fine tuning 6. Lessons Learnt and planning further development
PREPARATION – public – 3/3/2014 10
HIGH LEVEL EXPECTATIONS Demand for Project Portfolio Management on ITSH level – two level in the project portfolio (ITSH/Company level and Service Line level) Management decision about the elements of the project portfolio Management control on the progress of the projects Ensure the transparency of the projects - Transparent and objective view about the real project cost and benefit Result oriented approach during the execution Business (performing Service Lines) and PMO has distinct needs, interests, expectations to PM’s involvement in project execution Enhance project resource allocation efficiency, project priority influences resource allocation
THE ORGANIZATIONAL CONTEXT OF PORTFOLIO MANAGEMENT* Strategy Managament Office Portfolio Management Project Management Office * PMI - The Standard for Portfolio Management
PROJECT PORTFOLIO MANAGEMENT BUILDING BLOCKS „Doing the right things” Project Evaluation and Selection • Standardized project initiation • Project evaluation based on the strategic goals • Selection of the project ideas (go/no go decision by Project Board) „Doing the things right” Project Steering and Controlling • Standardized project management process especially monitoring, controlling and reporting • Central project repository as the central source of the basic project management data „Exploit what we did” Post Project Control • Analyze project real benefit compered to the plans • Lessons & Learnt
ITSH PROJECT PORTFOLIO STRUCTURE Company Level /ITSH Project Portfolio ITSH strategy related projects Global/TS rollout projects Major local customer projects SL initiated projects with high impact on ITSH/other SLs • Major deal transitions • • • • • SL strategy related projects • SL transitions • SL operational projects SL Level Project Portfolio
THE SOLUTION – public – 3/3/2014 15
PROCESS HIERARCHY AND STEERING LOGIC Executive Board (EB) Verification of the PP Top level control on the PP Vision Mission ITSH Strategy Project Portfolio Board (PPB) PP reporting to EB – creating PP (incl. priorization + IN/OUT decisions) Portolio Change control Project Portfolio Manager (+ team) PP reporting to PPB – recommendation for PP Monitoring & controlling Portfolio Change management Head of PMO/SLs/Project steering Project Portfolio Management Demand management Project management Project Demand Management Project /Program Management –public– 3/3/2014
HIGH LEVEL PROCESS Allocate PMO PM Submit initiation Prioritize projects, Create PP Portfolio Selection Project proposal Demand mgmt. Project charter PP system Project Initiation Verify the PP Re - prioritization Re - allocation Portfolio Forecasting, Monitor & Control Follow-up actions Portfolio Follow-up Quality mgmt. tool Project and PP report Planning Recording closures Quality mgmt. Project Closure Execution Change Control –public– 3/3/2014 17
HIGH LEVEL ROADMAP The continuous improvement of level 1-3 and the development of level 4 are both suggested simultaneously. All department are on the same maturity level Enterprise Portfolio Level 6 Cross Portfolio Level 5 Defined benefits Level 4 Level 3 Level 2 Level 1 Project Alignment Structured Processes Initial Process All department are on the same maturity level Cross portfolio awareness, optimized resource management Promised benefits are monitored Project selection aligned with strategy, portfolio is documented on company level. Well defined and detailed processes Enhancing maturity and processes All projects are captured, cost are planned and controlled, Standards for project management on company level In depth expansion Supportive tools and practices Decisions are made on project-level. Poor transparency on company level. – public– 3/3/2014 18
Evaluation – public – 3/3/2014 19
Common positive feedbacks First steps of efficient project portfolio management, the development needs to be continued Project categorization is transparent and effective Operating central project portfolio Demand management – Project cannot start without approval, management knows the projects on a high level • Process of project portfolio is transparent and effective • Role of the PPB – a dedicated unit was established, who deals with the project portfolio • Reasonable achievement according to the current project maturity • • • • –public– 3/3/2014 20
Common suggestions, areas to be improved • More specific project prioritization – the current method and prioritization process is not effective, needs to be improved • Templates for project proposals – Based on the prioritization and the available information the project proposals should be submitted in a standardized way • Critical resources – What are the critical resources in case of projects, what are the limits? • Sending the project proposals and pre-prioritization several days in advance to the meeting –public– 3/3/2014 21
Other feedbacks • Project portfolio trainings – efficiency can be improved by shaping project portfolio attitude of the stakeholders • Limited capacities of PMO, PPM and business owners • Roles and responsibilities – PMO and PPM roles are different, it is not effective that one person holds these positions • Benefit calculation and business case – differences in the expected complexity of the project proposals • Project funding – after approval it should be clear who finances the given project and in what rate • Maximization of the number of projects – How many projects can run simultaneously? –public– 3/3/2014 22
Related topics under discussion • Project portfolio for external and transition projects • SL poject portfolios • Standardized project evaluation • Project and portfolio management awareness development
Actual hot topic - Project prioritization – public – 3/3/2014 24
High level methodology, dimensions Business priorities • • • • • Benefits Costs Benefit Opportunity cost TSI expectation Human resource needs • • • • Duration PM-FTE needs Total FTE needs FTE limits Management priorities • Strategy and goals • Business • Resources –public– 3/3/2014 25
Business priorities Based on the quantifiable estimation of the business owner Question Weight Value 1 2 3 Payback period of the project 40% Never/over 3 years 1-3 years In 1 year Estimated project cost 20% High medium low Benefit of the project 20% no/low moderate high How should the rejection affect the company/service line? 20% no/low moderate high Based on the qualifiable estimation of the business owner Is the project a TSI expectation? (Yes/No/Don’t know) – If yes, the project automatically gets 3 in the last parameters –public– 3/3/2014 26
Qualifiable business priorities Question Weight Value 1 2 3 Payback period of the project 2 never 1-3 years In 1 year Estimated project cost 1 20M+ HUF 5-20M HUF 0-5M HUF Benefit of the project 2 or or or How should the rejection affect the company/service line? 2 or or or The qualifiable estimation of the business owner - value + written explanation: • Benefit of the project If the project will be delivered successfully the expected business benefit is low, moderate or high? (e.g. revenue, efficiency, reputation, future business, etc.) • How should the rejection affects the company/service line? In the case the project will be rejected or failed the expected (negative) effect on the business is low, moderate or high? Business priority: the weighted average of the value of each project = ∑value x weight –public– 3/3/2014 27
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