ODC Portfolio Management Ensuring Sustainabiliy in the Face of Growth Surge- A Case Study
Veerendra K Rai, Vijayasaradhi B., Subramanian K., Umamaheswari S. Tata Consultancy Services 54 B, Hadapsar Industrial Estate Pune-411013, India
[email protected]
Abstract— This paper reports benefits of Systems Thinking on a case study on project portfolio management in an Offshore Development Centre (ODC). This ODC had grown exponentially in the last few years and existing operating models were not scaling up to this growth. A set of consultants (authors of this paper) from the organization of Service Provider were commissioned to conduct an internal study to address this problem. Consultants used Systems Thinking approach to develop portfolio management framework for the ODC. Development of the framework, its deployment and results thereof are being reported in this paper. Keywords- project portfolio management (PPM); systems thinking; offshire development center; 4D methodology
I.
INTRODUCTION
The case study reported here is about project portfolio management (PPM) at an ODC embodying a Client-Service Provider relationship. It focuses on day to day management of portfolio. With projects such as full staff augmentation, partial staff augmentation and delivery projects this portfolio fits within the framework defined in [1]. This ODC was started a few years back and has experienced significant growth in the last two years. It has over thousand associates and delivery spreads across a number of global delivery centers. Increasing size and exponential growth had come to pose a number of challenges to the ODC. At the time of study the ODC was struggling to meet two basic expectations of the client - delivery excellence and value addition. It had problems meeting these requirements since growth burst. Analysis disclosed that these problems emerged as a result of failings in handling issues around people, process, customer engagement and operations. People related problems centered on very high attrition rate, unique skill requirements, confusion around roles and career development. Quality assurance processes such as audit; project health check and Project Management Review (PMR) were not effective. The issue regarding customer engagement mostly pertained to the fact that client preferred staff augmentation projects over fixedprice projects and control of project affairs leaned towards the client as majority of projects were staff augmentation projects. Service Provider, on the other hand, preferred fixed-price projects wherein it could have maximum control. Besides, there were some operational issues. Prominent among them
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was managers spending majority of their time on operational work and were left with little or no time to accomplish value addition as expected by the client. Proper classification and prioritization of projects within the portfolio was lacking. Resource allocation, thus, was inadequate within the portfolio. Managers were not getting decision-worthy information across the portfolio. Furthermore, there was an ecosystem misalignment in the ODC due to disparate client and Service Provider ecosystems. Client ecosystem was characterized by belief in Resource Centric Engagement Models while service providers’ ecosystem was distinguished by belief in Value Based Engagement Models. This resulted into two incongruent ecosystems that ODC had difficulty coping with. Service Provider organization also expected this ODC to add value to it in terms of business development, marketing and sales support. II.
ENGAGEMENT APPROACH AND METHODOLOGY
Consultants deployed 4D methodology consisting of four stages as given in [2]. Discover wherein discussions were held with concerned stakeholders; diagnose wherein key emergent themes were identified; design wherein an ODC portfolio management framework was developed and recommendations were made on each area of the framework. It was eventually followed by deployment phase wherein implementation program plan was developed. The implementation program was split into three phases called ‘Waves’, which were implement constructs to be carried out in a staged manner. A detailed description of 4D methodology appears in figure 1. Experience from delivery excellence initiatives taken earlier were also pooled in while developing this framework to benefit from earlier learning. A. Cybernetics of 4D Approach As given in figure 2 the 4D approach has twin loopslogical loop and the learning loop. The essence of the logic loop lies in identifying the identity and purpose of the client system, the problem boundary, system diagnosis (barriers to be overcome) and design of interventions (actions to overcome the barriers) [2].The flow of the learning loop is the other way round- examining whether the interventions throw up new barriers and whether these lead to the need for redefining the purpose / identity and objectives.
Diagnose
Discover
Deploy
Design
ACTIVITIES
• Discussions with leadership team • Identification of key themes of challenges and • Information collection from managers implications
and project leaders
• The semi-structured interviews done around: – Nature of the Portfolio – Success Parameters – CSI of the projects – Challenges faced – Wish List – % Time spent in delivery and operations
• Validation of the draft • •
framework with the ODC head Identification of variables for construction of Cybernetic Influence Diagram Identification and analysis of various streams of the portfolio management framework
• Refined the ODC Portfolio • •
•
Management Framework Recommendations on each area of the framework Development of an implementation roadmap with three waves to implement the framework across the portfolio Defined a governance structure for implementation
• Discussion and fine-tuning of findings and implementation approach with the managers • Preparation of overall program plan for the three waves • Commencement of Wave 1 • Refinement of approach based on results in Wave 1 • Execution of Waves 2 and 3 • Reporting of results
RESULTS
• Holistic View of the Client-Service •
Provider Relationship Key Challenges and Elements of Solution
• Variables for the CID • First Draft of the Portfolio Management Framework
• ODC Portfolio Management • Implementation of Framework
• Implementation Approach
Improvement initiatives • Improvements achieved and tracked
TEAM -------------------------------------------------------------Team of 4 Consultants----------------------------------------------------------------------------------------------------------------------------------Timelines---------------------------------------------------------------------10 days
10 days
Ongoing
10 days
Figure 1. The 4D approach
Discovery
Promotes
Leads to
Design & Deployment
Diagnosis
Leads to
Discovery
Informs
Informs
Design & Deployment
Diagnosis
Creates need for further
Figure 2. Logical and learning loops in 4D methodology
III.
DISCOVERY: THE CHALLENGES
As mentioned in introduction problems in the ODC emerged as a result of failings in handling issues around people, process, customer engagement and operations. List of issues across these dimensions has been given in figure 3. Besides, there was significant disparity between client and Service Provider’s respective environments. While service provider focused on processes and strived for metric based governance, client environment was more people oriented with ad hoc processes. Service Provider organization tended to cultivate generalists and had a hierarchical structure while client groomed specialists and technically savvy personnel. Service Provider organization preferred deliverable based engagement models and client preferred resource centric engagement models. Service Provider’s organization focused on improving profitability through off shore leverage and better senior / junior ratio
(more juniors), client expected team members working on its projects retained in current roles longer. Service Provider’s organization expected its project leaders to take higher responsibilities, which might result in these project leaders moving out of this ODC. Disparity between the respective environments was quite pronounced, being diagonally opposite in certain cases. Client expectations for delivery excellence and providing innovative solution had to be fulfilled within this divergence. IV.
DIAGNOSIS: SYSTEMIC VIEW OF THE PROBLEM
A comprehensive causal map was developed to understand cause-effect relationships and identify feedback loops in the problem domain as discussed in [3]. Issues and implications identified from the causal map are given in figure 4, which is a summarized view of the causal model. Figure 5 and 6 show the disablers and restrainers in the PPM environment and feedback loops respectively. The feedback loops have also been selected from the same causal map.
Process
People
• QA processes such as PMR, Health Check and Audits perceived as non value adding • Inexperienced auditors • Auditors do not understand production support • Service Provider Organization’s quality processes not suitable for production support • PMO Portal does not have up to date data • No SLAs for internal Service Provider organization’s support groups • Inability to make meaningful decisions based on data as it is either incorrect or outdated • Use of Service Provider Organization’s tools • Client’s network • Ad-hoc report requirements from Service Provider organization • Manual compilation of quality metrics
• High Attrition Levels • Unique skill set requirements • Low competency levels of Project Leaders (PLs) • PLs training ineffective • Managers being promoted without sufficient preparation • Staffing 24/7 production support roles • Lack of role clarity with different expectations from client and service provider • Associates not keen to take up managerial roles • Training time for resources working on shifts • Feeling among associates of being cutoff from the rest of Service Provider organization
Internal
Client Concerns • Customer preference for staff augmentation engagements with very less ownership to Service Provider • All managers are billable resources with responsibilities to provide technical guidance • Long lead time for selection and on-boarding of resources • High expectations on skill and experience requirements • Line managers of client do not believe in Service Providers quality assurance processes • Multiple global teams and interfaces for projects • Ad-hoc working style, changing priorities with very less planning • CSI is largely based on most recent recall • Expectations on value adds from Service Provider
• Managers having to spend 50-80% of their time in staffing, operations and fire-fighting work • Less time and energy for value adds • No strong second tier of management • Providing support for proposals • Managers’ profile is essentially techno-functional • Interfaces between verticals and horizontals • Lack of bench strength and increasing staffing challenges • Launching of multiple initiatives • Leveraging larger Service Provider’s organization
Figure 3. The issues involved
Quality of Deliverables
Depleting Capabilities of the teams
Attrition
Value Adds To client Sustained Business
Increasing demand
Project Portfolio Management Effectiveness
Synergy at ODC/Portfolio level
Customer Satisfaction
Insufficient Supply
Workload on Managers
Suboptimal processes and systems
Disparate Standards and approaches
Operations work
Service Provider’s specific Expectations
Governance of respective Portfolios / groups
Responsibilities from the client’s billable roles
Implications
Issues
Figure 4. Issues and implications
Disablers are the factors that either deplete PPM capability or come in the way of building it
• Client-Service Provider environment mismatch • Confusion around control & responsibilities • Divergent standards by portfolios
Depleted Project Portfolio Management Capability
Disablers • • • • • •
Restrainers are the factors that disallow manifestation and application of PPM capability whatever of it there may be.
Restrainers
Exit of senior PLs Under-experienced PLs Ineffective PLs training Ineffective audit & PMR Lack of process maturity Unavailability of niche skills
Ineffective PPM
Figure 5. Disablers and restrainers Resource crunch
+
+ Synergy at ODC level
-
Work backlog
+
Schedule pressure
Lateral communication across portfolio
-
Disparate standards
+ SLA compliance
+
+ Service quality
Error proneness
+ Net throughput
+ Process maturity
-
Figure 6. Selected feedback loops
-
+
Rework
Process orientation mismatch
+
A. Elucidating the Figures Figure 4 and 5 are self explanatory. Figure 6 consists of 2 positive feedback loops selected from the causal diagramone describing the dynamics of synergy at ODC level and the other describing the dynamics of schedule pressure [4] and work backlog. The former loop arises as a result of different standards followed by projects in the portfolio adversely affecting the lateral communication across projects. This in turn led to low synergy in the ODC. The latter loop triggered primarily by work backlog due to resource crunch (unavailability of niche skills and attrition) led to schedule pressure, rework and low productivity, and failure in SLA compliance. V.
•
Program structure: Implementation of the proposed ODC portfolio management framework itself turned out to be a program of considerable complexity and size with a number of projects to execute and a set of stakeholders to deal with. A viable program structure based on Viable System Model (VSM) [5] was made a part of implementation roadmap. It consists of a set of roles and corresponding responsibilities and structural relationships.
•
ODC portfolio management framework. Issues and recommendations reported above were expanded to result into a comprehensive project portfolio management framework with a matrix of verticals and horizontals as given in figure 7.
DESIGN AND DEPLOYMENT
A. Design All aspects of Project Portfolio Management discussed in [1] were taken into account while developing the PPM framework. The following design propositions were made and implemented to enhance the portfolio management capability of the ODC. •
managers (SMs) / Application managers (AMs) and project leaders (PLs); the three main classes of managers in the ODC are to be assisted by executive assistants, subject matter experts (SMEs) and business analysts (BAs) respectively. This helps reduce operational workload on managers so that they could devote time on value addition work as expected by the client.
Project classification and segmentation: A project classification and segmentation schema was implemented for effective portfolio analysis and prioritization and to view the distribution pattern of projects in the portfolio at given point of time. A portfolio level view of projects at risk and their distribution across the defined criteria is an added advantage of having a proper project classification and segmentation implement.
•
Choosing the right strategy: One of the critical functions in PPM is strategy selection given the criticality of the projects and type for effective monitoring and control of the projects in portfolio. All projects in the portfolio could not be given the same priority and attention. Strategy deployment in this case study was architected in the form of IF and THEN rules. For instance, IF the project is of Type X (managed services, managed communication, staff augmentation) AND critically is Y (high, medium, low) THEN the strategy is (Active monitoring & control, Stay engaged, Keep informed).
•
Category based governance: ODC head could not pay attention to projects of all categories nor does it help projects as he / she could not take outstanding issues to logical closure all on his / her own. This entails a distribution of attention schema for project governance so that projects get governance attention at a level they deserve.
•
Creating bandwidth for managers: One of the problems identified in the discover phase reported earlier was limited bandwidth available to managers to do any value addition work. Cognitive burden of dealing with operational issues was a general refrain for managers and had emerged as a consensus issue during the study. Portfolio managers (PMs), service
B. Deployment Deployment of ODC portfolio framework was implemented in 4 waves (phases). Wave 0 was about conducting AS-IS analysis of the key areas of the framework and devising the key performance indicators. Roadmap for waves 1, 2, and 3 is also given in figure 7. •
Framework implementation roadmap. As part of this case study an implementation roadmap was designed. Figure 7 shows the color coding for all three waves for identification. As can be seen from its structure, waves are not linear, straight forward implements. While horizontals, as noted above, will have perennial and simultaneous implementation, verticals are to be implemented in phases. For instance, Wave 1 in addition to all horizontals will also include knowledge capture, knowledge store, orientation on challenges and expectations, competency assessment, competency planning, issue and risk management processes, stakeholder management, and understanding of client’s problems & challenges.
•
Rationale behind staged model. Problems facing the ODC are comprehensive in nature and could not be attributed to just one factor alone. For instance, merely implementing competency management vertical alone would not really help the ODC. Secondly, staged model has the benefit of StopÆAssessÆ Proceed cycle at the end of every wave. ODC will assess the achievements at the end of each wave; redo it if expected results have not been realized and proceed further only when a given wave is complete.
Knowledge Management
People Management
Competency Management
Delivery Management
Value Add Management
Marketing & Sales Support
Knowledge Dissemination
People Excellence
Competency Optimization
Delivery Excellence
Business Value Creation
Opportunity Creation
Knowledge Categorization
Mentoring, Coaching and Grooming
Competency Development
Quantitative Management of Quality
Improvements on systems & processes
Creation of new offerings
Knowledge Store
Succession Planning
Competency Planning
Stakeholder Management
Definition and set up of Infrastructure
Creation of Marketing & Sales Collateral
Knowledge Capture
Orientation on challenges and expectations
Competency Assessment
Issue and Risk Management Processes
Understanding of client’s Problems & Challenges
Documentation of Business Value of Projects
Information Management Project Segmentation and Prioritization Operations Management Wave 1
Wave 2
Wave 3
Figure 7. ODC portfolio management framework and roadmap
•
It might also happen that portfolio management framework itself would need a revision or redesign. VI.
IMPROVEMENTS OBSERVED
A. General Improvements Activities and targets are no longer top driven. They are now decided within the portfolios and driven by the portfolio managers. All other initiatives in the relationship are aligned and synergized with the portfolio management framework making only one initiative across relationship bringing to an end to disparate set of initiatives carried out across projects with little lateral communication leading to lack of synergy at ODC level. The framework succeeded in establishing mechanism for measuring performance across key areas. Trend analysis of the Key Performance Indicators (KPIs) helped keeping rigor on the initiatives implementations. Portfolio management framework and its implementation have been recognized as best practice by the organization and is being implemented across different relationships in the organization. B. Improvements Across Key Areas Knowledge sessions are conducted at defined intervals and there is marked increase in creation of project, portfolio & organization level knowledge assets. There is greater participation of associates in knowledge sharing sessions and greater Onsite-Offshore knowledge transfer as this ODC is spread across geographies. Competency gaps have been identified in each project and role based & career oriented trainings made available in the ODC. Relationship level training calendars are released on monthly basis and there is more focus on grooming experienced Subject Matter Expert (SMEs) in the ODC. Mentoring for new associates, regular proactive associate engagement program & team building activities are conducted at regular basis. Client Satisfaction Survey (CSS) action items & customer complaints are taken to
closure. More associates are participating in idea generation and there are established processes for taking ideas to closure. There is better alignment of associates for generating customer centric ideas. Marketing blitz is created to showcase the portfolio capabilities and there is established process for crossselling from other accounts. Best stories & best practices are highlighted to client. VII. CONCLUSION AND BENEFITS OF TAKING SYSTEMS THINKING APPROACH Systems thinking based methodology helped discover and diagnose the issues ODC was ailing with and develop the appropriate solution framework. Its major contribution was connecting the different pieces of the problem so that it could help devise a comprehensive solution to the problem ODC was facing. Piecemeal solutions could not have worked. This approach was quite useful in identifying causal relationships between the issues and reinforcing and balancing feedback loops in the problem domain. Viable System Model framework helped in creating viable program structure, strategy development and in the design of overall program governance scheme. Portfolio management framework has taken root and better results are awaited as the framework matures overtime. REFERENCES [1]
[2] [3] [4] [5]
H. Tikkanen, J. Kujala, and K Artto, “The marketing strategy of a project-based firm: The Four Portfolios Framework”, 36 (2007) 194– 205, (2007) P. N. Murthy, “Systems Practice in Consulting”, in Systemic Practice and Action Research, Volume 7, No. 4, pp. 419-438, 1994. J. Sterman, “Business Dynamics: Systems Thinking and Modeling for a Complex World”, New York: Irwin/McGRaw-Hill, 2000 R. L. Glass, “Anarchy and the Effects of Schedule Pressure”, IEEE Software, vol. 21, no. 5, pp. 111-112, 2004 R. Espejo and R. Harnden, The Viable Systems Model - Interpretations and Applications of Stafford Beer’s VSM, Wiley, Chichester (1989).
