“Pragmatic Pragmatic and Actionable and Actionable”
Excellence in Program, Project and Portfolio Execution Management: Lessons Learned and Critical Success Factors from W ld Cl World Class Case Study Companies C S d C i
PMI ‐ NY Chapter March 23, 2011 Dr. Gad J. Selig, PMP, COP Associate Dean, Business Development and Outreach Graduate Studies and Research Division University of Bridgeport Managing Partner, GPS Group, Inc. Cell: (203) 521‐9664 Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved. 1 E‐mail:
[email protected]
Background & Objectives As a leader in program, project and portfolio management consulting firm, GPS Group, Inc. completed a recent study that reviewed select leading edge companies that have successfully implemented & sustained Program, Program Project and Portfolio Investment Management practices. Th t d ’ bj ti The study’s objectives were to: t Identify current & emerging practices for effectively institutionalizing & sustaining program, project and portfolio management processes and disciplines across dynamic, leading edge, technology oriented or technology dependent organizations. Identify critical success factors and lessons learned and their implications.
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
2
Meet the Presenter Meet the Presenter Dr. Gad J. Selig, PMP, COP Associate Dean, Business Development and Outreach adua e S ud es a d esea c so Graduate Studies and Research Division University of Bridgeport & Managing Partner, GPS Group, Inc., E‐mail:
[email protected] or
[email protected]
• 30+ years of diversified domestic/international executive, management and consulting experience with Fortune 500 and smaller organizations in general management, marketing, planning, operations, program and project management, product ll i ti i l t k ti l i ti d j t t d t development outsourcing, IT management, strategy and governance. • Select clients include: ATMI, Air Products and Chemicals, Bank General of Luxembourg, Bristol‐Myers Squibb, Cigna, Columbia University Graduate School of Business, Cendant, Computer Associates, ESPN, GE Aircraft Engines, GSA’s Federal Technology Services Fuji Film IAOP Johnson and Johnson JPMorgan Chase KeySpan Energy (National Grid), McCreight Services, Fuji Film, IAOP, Johnson and Johnson, JPMorgan Chase, KeySpan Energy (National Grid) McCreight and Co., Purdue and Co Purdue Pharma, TNT Expense Management, Starwood Hotels and Resorts and others. • Dr. Selig worked for the Marketing Corporation of America, Verizon, Continental Group, Standard Kollsman Industries, CBS and AT&T in executive, management and professional positions. • Currently, Dr. Selig is the Managing Partner of GPS Group, Inc. a marketing and technology consulting and management development firm. He is also the Associate Dean, Business Development and Outreach at the University of Bridgeport. • Award winning author of five books and over 70 articles in journals, conference proceedings and/or presentations . He is a dynamic and popular speaker at y p p p domestic and internatonal industry and corporate conferences. His best selling book is called, y p g , “Implementing IT Governance ‐ A Practical Guide to Global Best Practices in IT Management.” He recently completed co‐ authoring a book entitled, “ Implementing Strategic Sourcing: A Managers Guide to World Class Best Practices,” published by Van Haren Publishing. • Dr. Selig has been a Board member of Telco Research, BIS Group, LTD. and AGS, Inc. • Earned degrees from City, Columbia and Pace Universities in Economics, Engineering and Business. • He holds a Top Secret Clearance with the Federal Government. Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
3
Companies Profiled
We conducted secondary research and analyzed information on the following companies & organizations which was supplemented by the lessons learned from case studies which appeared in Dr. Selig’s books.
We interviewed and profiled the following six (6) companies: Company: CISCO ‐ Largest Internet Equipment Manufacturer IBM ‐ Major Professional Services & Computer Manufacturer LUCENT/ ALCATEL ‐ Leading Telecom Equipment & Services Company AT&T ‐ Leading Telecommunications Services Company PHARMAC ‐ Rapid Growth Pharmaceutical Company TELECOM ‐ Major Telecom Equipment Company
• • • • • • • • • • • • • • •
ATMI AXA/E i bl AXA/Equitable Avon Bristol Myers Squibb CA Cigna ESPN Federal Government Department of Housing & Urban Development GSA – Federal Technology Services Johnson & Johnson JP Morgan Chase JP Morgan Chase Microsoft Purdue Pharma Starwood Hotels & Resorts Unilever
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
4
Selection Criteria – Primary Organizations Interviewed
• • • •
High growth Aggressive market capitalization goals gg p g Rapid technology refresh Superior to Excellent Program/Project/Portfolio Management reputation
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
5
Overview of Company Case Study Profiles In presenting the case study profiles, we focused on a number of major areas to identify trends, learning's, and key implications. The case study format covers the following: 1. Company Overview * Corporate Summary * Products and Services * Products and Services * Program Management Philosophy 2. Key PM Attributes * Drivers * Drivers * Objectives * Key Initiatives * Level of Maturity 3. Program Management Organization * Organization & Staff * Responsibilities * Metrics * Metrics
4. Program Management Process * Process & Tools * Key Applications * Key Applications * Motivations & Incentives * Sustaining Features 5. Program Management Issues 5 Program Management Issues * Issues * Risks * Obstacles 6. Critical Success Factors & Lessons Learned * Critical Success Factors * Lessons Learned * Lessons Learned * Key Implications
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
6
Key Drivers for PM Most of the companies analyzed have similar drivers. Most of companies analyzed have similar drivers.
AT&T
Cisco
IBM
Lucent/ Alcatel
Pharma
Telecom
Improve customer satisfaction/service
X
X
X
X
X
X
Reduce costs and improve i investment t t portfolio tf li management effectiveness, prioritization & alignment
X
X
X
X
X
X
New product development and complex p solution delivery
X
X
X
X
X
X
Quality improvements
X
X
X
X
X
X
Improve business process efficiencies & organizational maturity
X
X
X
X
X
Better risk assessment and mitigation
X
X
X
X
X
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
7
How Much Program/Project/Portfolio Planning & Governance Is Required? Depends on:
Degree of visibility & strategic value
$ value (one time and recurring costs)
Complexity, scope and size
Duration
Number of interfaces & integration requirements
Degree off risk k
Speed of required implementation
Senior management and PM’s management style, philosophy and level of organizational level of PM maturity targeted
Number of organizations, departments, locations and resources involved
Executive management &/or customer requirements
Degree of in in-sourcing sourcing versus outsourcing; domestic versus international
Regulatory and compliance requirements
A flexible, consistent and scalable PM process (fast track versus full risk mitigation) which addresses A flexible consistent and scalable PM process (fast track versus full risk mitigation) which addresses requirements, scope, risk, issues, change and deliverables on an iterative basis is essential for success. Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
8
Key Issues ‐ PM AT&T
Difficult Diffi lt to t implement i l t without executive team sponsorship & visibility
X
Cisco
X
IBM
X
Lucent/ Alcatel
Pharma
Telecom
X
X
X
X
X
X
X
X
X
Value proposition not evident or marketed effectively Single PM process not flexible enough to meet the unique needs of all programs & projects
X
Coordination of uniform process across organization
X
Cumbersome and labor intensive process and tools (ti (time-consuming) i )
X
X
X
X
X
X
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
X
9
Major Obstacles Identified
AT&T
Cisco
IBM
Lucent/ Pharma Alcatel
Resistance to PM due to time investment
X
Lack of PM value proposition awareness
X
Limited Li it d supportt from f the top, but this improving
/
/
X
Insufficient dedicated qualified PM advocacy resources or Center of Excellence
X
/
X
X /
Telecom
X
X
X
X
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
/
10
Actions to Overcome PM Obstacles/Issues Obstacles
Actions
Resistance to PM due to time investment
Create flexible flexible, scalable PM process with minimum and maximum requirements (e.g. “fast track” vs. “full risk mitigation”)
Lack of PM value proposition iti awareness
• Quantify PM benefits (time savings, quality improvements, costt reductions, d ti customer t satisfaction, ti f ti innovation, i ti etc.) t ) • Create PM advocacy groups that share information and document PM value lessons learned
Limited support from the top
Customer satisfaction was a key measure in 4 out of 6 cases cases. Using key metrics for corporate leadership (often tied to their individual and group bonuses) demonstrates value and garners greater interest/attention/commitment.
IInsufficient ffi i t dedicated qualified PM resources
• Continuous C ti training t i i off relevant l t constituencies tit i • Reward and recognition of certification • Career path options – professionalize PM • Funding of Centers of Excellence
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
11
Typical PM Organization Structure & Roles A growing number of organizations are setting up a federated PM structure composed of both central and local PMOs, depending on size, geographic span, budget, number of programs/projects and other factors:
VP
VP
Vice President Head, European CoE
Head, Asia/Pacific PM CoE
Head, Head Global Services Organization PM Center of Excellence (CoE)
‐Professional Development (training, mentoring, career paths, certification)
SBUs
VP
‐Community Community (value awareness, communications, PR) (value awareness, communications, PR) ‐Methods and Tools (processes, software tools, templates) ‐Project controls (governance, vital signs, metrics, reporting, escalation) ‐Deployment/operational support (PM help desk, troubled/complex project resources) ‐Intellectual Capital (corporate memory, lessons learned, PM knowledge mgt.)
Head, Latin/S. America PM CoE
SBUs
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
SBUs
VP
Head, Rest of World PM CoE 12
Organizational Structure & Roles • Mix of centralized and decentralized PM advocacy groups who coordinate processes, tools, templates, training, best practice learnings, certification, and continuous PM process improvements and continuous PM process improvements • Resources rotate through field projects (staff/line PM jobs) • Execution responsibility only on troubled/critical projects • Head of PM CoE Head of PM CoE reports into Vice President level or higher reports into Vice President level or higher • Roles vary from doing to consulting to a mix of both ‐ PM policy, process and tools PM policy process and tools ‐ Managing projects ‐ Administrating project budgets, resources, governance and reporting governance and reporting ‐ Training and education coordination
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
13
Key PM Metrics Used Key Metrics
AT&T
Cisco
IBM
Lucent/ Alcatel
Pharma
Telecom
Status of critical path items
X
X
X
X
X
X
Milestone hit ratio
X
X
X
X
X
X
No. of open issues
X
X
X
X
X
X
No. of planned vs. completed deliverables (ratio)
X
X
X
X
X
X
Budget vs. actual cost
X
X
X
X
X
X
Budget vs. actual time
X
X
X
X
X
X
Cost/performance index
X
S h d l / Schedule/performance f index i d
X
Earned Value* C t Customer satisfaction ti f ti
X
X
X
X
*Mostly used in federal government projects Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
X 14
PM Metrics The Realities of Program or Project Metrics and Key Performance Indictors (KPIs): The Realities of Program or Project Metrics and Key Performance Indictors (KPIs):
• Must Must be easily captured or calculated as normal output of a transaction‐based be easily captured or calculated as normal output of a transaction‐based system, such as: – Accounting system – Time reporting Time reporting – Purchasing/accounts payable/allocation system – Project management tracking system • Should link to initial business drivers for implementing PM • Most organizations will not support multiple Most organizations will not support multiple unsynchronized PM reporting systems unsynchronized PM reporting systems
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
15
Key PM Processes/Applications
• All now have formal PM phases and approval processes (gates) with varying levels of detail and deliverables ranging from Demand Management (Portfolio Investment Management), g ), Planning, g, Monitoring, g, Risk Management g and Control ((Governance). ) • Flexible and scalable processes (Fast track vs. Full risk mitigation projects) are adapted to project type (e.g. Simple vs. Complex Solution Initiatives, Degree of Risk, Low vs. vs High Investment, Investment Visibility, Visibility etc.). etc ) • Most use or are converting to web‐based PM tools. • PM documentation example for multiple internal and external constituents – Lucent/Alcatel. • The next big challenge is consistent Portfolio Investment Management (Go/ No Go Criteria Selection, Funding & Prioritization) and Governance (e.g. Accountability, Traceability, Auditability and Follow‐up action).
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
16
Lucent/Alcatel PM Documentation – (Illustrative Example) Documentation has been developed for multiple constituents – Documentation has been developed for multiple constituents – Executives, PM Executives PM practitioners, employees and customers:
Executive roles/responsibilities
EXECUTIVE MGMT.
PM Executive Guide PM resource guide, quick reference, checklist
Defines PM processes/tools in Defines PM processes/tools in depth – risk, change, requirements, etc.
Educate customers (int/ext) on benefits of PM
PM CoE
Program Management Handbook
PM Process &Tools Handbook PM Sales Brochure
PM Sales Brochure
Project Control Handbook
Metrics, reporting and governance
PM Prof. Development Guide
EMPLOYEES
PM Handbook User’s Guide
Career path, training, certification, job descriptions User roles/responsibilities User roles/responsibilities
CUSTOMERS
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
17
Key Strategies for Sustaining PM Companies use a variety of strategies that address the issue of sustainability of a robust and effective PM environment. AT&T
Cisco
IBM
Lucent/ Alcatel
Pharma
Telecom
Formal periodic project reviews
X
X
X
X
X
X
Growing leadership commitment & sponsorship
X
X
X
X
/
X
Recognition & rewards for outstanding performance (e.g. (e g website posting]; PR and marketing
X
X
X
X
/
X
X
X
X
/
X
X
/
X
X
X
/
/
X
X
/
X
X
Consistent, repeatable, but scalable and flexible process & metrics PM Health Checks/Audits Make PM a priority –Part of Performance Objectives and Reward Structure Executive ecut e involvement o e e t in PM assess assessment e t& governance Best practice benchmarking
/
X X
/
External PM competency assessment Incorporate PM objectives into annual performance reviews (MBOs)
/
X / X
X
X
X
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
/ 18
AXA Equitable Case Study – Portfolio Investment Management, Business/ IT Alignment and PMO Handoff (Illustrative Example) Background: In 1999, AXA USA decided to increase its investment in IT significantly. AXA USA employed 10,000 people with about 500 in the IT organization and is a division of French based AXA Fi Financial Services. i lS i Issue: How to choose among a large number of investment initiatives based on a sound, objective and consistent portfolio investment selection process and methodology? Solution: • Established business/IT Portfolio Investment and Governance Executive Committee consisting of CEO and direct reports: • Determined IT spend levels for corporate and business units. • Reviewed and approved major IT projects with investment of $500,000 and higher. • Developed a Project Portfolio Investment Review Process Developed a Project Portfolio Investment Review Process consisting of two filters: consisting of two filters: • Filter 1 ‐ Business and IT Strategy Alignment • Filter 2 – IT Project Business Case • PMO handoff ‐ Handoff for development and implementation Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
19
AXA Equitable Case Study – Portfolio Investment Management, Business/ IT Alignment and PMO Handoff (Illustrative Example) Solution (Cont’d.): Filter 1 – Business and IT Strategy Alignment: 1 Identify and weigh key business strategy objectives (i.e. illustrative examples): 1. Identify and weigh key business strategy objectives (i e illustrative examples): •
Increase revenue by 25%.
•
Reduce expense base by 30%.
•
Improve customer satisfaction by 15%.
•
Reduce time to market for new products by 20%
2. Key Key business objectives business objectives were plotted on an X were plotted on an X‐YY chart against corresponding IT projects ranked chart against corresponding IT projects ranked by five levels of potential impact – 1) Extreme 2) Strong 3) Moderate 4) Low 5) None. 3. All IT projects ranked as 1) Extreme 2) Strategy and 3) Moderate were listed on a “Strategic Alignment Initiatives Master List”, which represented preliminary approval for further consideration & provided input for Filter 2. 4. A “Pool of Money” was allocated for IT projects in two classes: •
Business as usual (Mandatory projects to keep the lights on) Business as usual (Mandatory projects to keep the lights on)
•
Discretionary projects 20
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
AXA Equitable Case Study – Portfolio Investment Management, Business/ IT Alignment and PMO Handoff (Illustrative Example) Solution (Cont’d.): Filter 2 – IT Project Business Case: 1 A 1. A business case b i was developed for each project on the “Strategic Alignment Initiatives d l df h j t th “St t i Ali t I iti ti Master List” using a consistent set of evaluation criteria (e.g. ROI, Risk, Strategic fit, Competitive Advantage, Payback, Legal, Environmentally Sound, etc.) 2 A 2. A “Priority List” “Priority List” of approved IT Projects was developed using a combination of factors ( of approved IT Projects was developed using a combination of factors ( from Filters 1 and 2). 3. The “Pool of Money” was allocated to the Priority Project List until the funds were fully allocated (the remaining unfunded projects were postponed recycled or cancelled.) allocated (the remaining unfunded projects were postponed, recycled or cancelled ) PMO Handoff: All funded projects were handed off to the PMO for development and/or implementation.
21 Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
Case Study ‐ Global Consumer Goods Organization IT Mission & Key IT Mission & Key Management Principles (Illustrative Example)
22 Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
Critical Success Factors • Executive leadership and commitment • Formal governance process with metrics and executive reviews • A multi‐level PM advocacy organization (e.g. Federated Model) A multi‐level PM advocacy organization (e g Federated Model) • “PM Health Checks” conducted by corporate group at request of field for positive improvement • Recognition Recognition that PM processes require flexibility/scalability to accommodate that PM processes require flexibility/scalability to accommodate “fast track” and “full risk mitigation” projects • Rewards and recognition throughout the organization for outstanding work • PM PM education and training, provided to PMs and other constituent education and training, provided to PMs and other constituent communities (e.g. users, executives, technical, product development) • Encourage and reward PM certification and career ladders p g p g • Uniform progress reporting and metrics • Keep the process simple and automate as much of it as possible • Major programs/projects should have their own empowered PM Steering Group (represented by all impacted constituents) p( p y p )
Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
23
Lessons Learned • Let the business and project dictate the level of PM process detail required; however, establish a p j p q ; , minimum set of PM process requirements • Make PM an integral part of the Corporate and IT Governance policy and process • Provide and mandate PM education and training for all levels of the organization • Use flexible and scalable PM planning and control processes for project baseline and performance management – Know where you are going – Know when you have gotten there • Best Practice companies realized: – Improved quality, reduced error rates, reduced rework and related costs – Early detection of “problem” or “drifting” projects – Improved risk management and mitigation – Increased Customer Satisfaction – Sped up Time to Market and Delivery • Continuously compare to best practices and modify practices accordingly g/ / q p p • Continuous marketing/communications/PR to focus on the quantitative value proposition and benefits of PM Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
24
Develop a Personal Action Plan & Next Steps Based on the lessons learned, the critical success factors identified and your own experience: • Identify your and your organizations’ strengths and limitations • List and prioritize the gaps in the processes, skills, techniques and tools you and your organization wants and needs to develop and/or update • Define your and your organizations’ action plan for next steps: ¾ Create awareness and commitment to action d ¾ Develop a plan with milestones and metrics ¾ Use, as appropriate, inside/outside subject matter experts to fill the gaps and your organizational change and transformation and your organizational change and transformation ¾ Institute continuous learning and education – Improve your skills, competencies and knowledge of the relevant standards, processes, tools, techniques etc techniques, etc. ¾ Institute continuous process improvement based on current and emerging best practices ¾ Just do it
GOOD LUCK! Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
25
Thank You!
Dr. Gad J. Selig, PMP, COP Managing Partner, GPS Group, Inc. & Associate Dean, Business Development and Outreach Graduate Studies and Research Division University of Bridgeport Cell: (203) 521-9664 E-mail:
[email protected] Excellence in PPPM Best Practice Execution–1/14/11 © GPS Group, Inc. 2011 ‐ 2012. All rights reserved.
26
