Project Portfolio Management: A View from the Management Trenches

By EPMC, Inc.

Written by ten successful project portfolio managers from companies including AAA, Boeing, Franklin Templeton, Johnson & Johnson, Safeway, and the UK Government, this easy-to-follow guide takes you through the project portfolio management process. It's based on what actually works, giving you a clear road map and the tools needed to determine the optimal mix and sequencing of projects in order to meet your organization's goals. The book begins by explaining basic PPM principles and why PPM is more critical than ever for business success. This introduction is followed by a story, tracking the experiences of a manager new to PPM as he discovers the issues that all of us face in trying to get traction with our PPM initiatives. In answering the questions our story raises, the book then details each step of the PPM process, using cases and examples drawn from the authors' first hand experience to help you address such key questions as:

• Which projects should our organization invest in?

• How can we optimize our organization's capacity?

• How well are we executing the PPM process?

• Can our organization absorb all the changes that our PPM plan requires?

• Are we achieving all the expected benefits?

The authors are all members of the Enterprise Portfolio Management Council, a group of senior portfolio management executives dedicated to helping organizations develop their own portfolio management capabilities. Now you can benefit from their collective wisdom and experience, and duplicate their successful results within your own organization.

• Language: English
• Publisher: Wiley
• Release date: Nov 16, 2011
• ISBN: 9781118276396

Book preview

Why We Created the Enterprise Portfolio Management Council

From the earliest days of the Enterprise Portfolio Management Council (EPMC), our goal was to provide pragmatic responses to the pervasive question in our profession: If project portfolio management is so self-evident, why is there such limited traction; and, more importantly, what do you do about it? We wanted to ensure that our perspective would have universal appeal. Our approaches to exploring the old issue of balancing growth with change in the face of limited resources should be read not only by portfolio, program, or project managers, but also by CEOs, CFOs, and other C-Level executives who care about this issue and about the real people and real dollars involved in their business’ success.

In March, 2005, long before we had the idea for a book, a small group of likeminded project/portfolio practitioners met in San Francisco to form what has become the EPMC. Our belief was that there was a major disconnect between those who were making decisions on which projects to fund and those who were tasked with executing those projects.

We envisioned an organization that was free from consultants and vendors, where non-competing practitioners could share ideas, intellectual capital, software information, processes, problems, challenges, solutions, and future plans. It was from this vision that the EPMC was formed. As the founders of the EPMC, we suspected that there was an opportunity to accelerate the development, sophistication, and pragmatic application of enterprise portfolio management (EPM) methods resulting in greater business value for organizations through EPM. To that end, we proposed making the EPMC a not-for-profit organization.

The EPMC was chartered soon after our first meeting. The EPMC then took on the tasks of developing, deploying, and generating awareness of Enterprise Portfolio Management and the advancement of the tools, techniques, processes, and implementation methods that support it. The EPMC grew to include experienced EPM practitioners representing major corporations and organizations across all industries, along with a smaller number of industry analysts and academics.

The format of the EPMC is that of peers representing a wide range of non-competitive industries and organizations, enabling the group to facilitate a more rapid expansion of the EPM body of knowledge and experience. One of the goals was to create a forum and a defined mechanism where member organizations could exchange best practices, assets, and processes. We believed that within this range of organizations, developed assets, or Intellectual Property (IP), might be shared and exchanged without needing to make significant vendor software purchases.

A secondary goal of the Council was to grow industry awareness and understanding of the EPM method; including what it is, how it is implemented, tools and processes that support the method, and the challenges and advantages of a structured EPM approach. By educating other companies on the EPM approach, we helped bring new practitioners, new ideas, and new tools into the market and, over time, improved the quality of EPM deployment and corporate performance of our members’ organizations.

The EPMC has continued to grow and support a wide range of activities, including: the creation of standards, certification; the dissemination of information on the EPM method and implementation; the creation of working groups around specific EPM topics; and the creation of an accepted, industry-wide EPM maturity model. Our reach is now global and has grown to include practitioners from adjunct fields.

It has been a long journey. When we started bringing these principles to light, the country was experiencing record profits on Wall Street and was in the midst of one of the longest growth periods in history. What a difference a couple of years make. While the principles outlined in the book apply to any economic period, they are especially critical in the radically changed business environment today.

We wrote this book to share our passion for the EPM philosophy and process with you, the reader. We offer our thanks to all of the current members and their respective organizations who made this book a reality. As we embarked on this daunting task, there were some of us who weren’t sure we could pull it off. But with the same passion and structure we have for our EPM roles, we used laser focus, outcome orientation, and perseverance to write the volume you are about to read.

We hope you will take a moment to review each contributor’s brief biography in order to get an overview of the broad appeal our principles have had in companies and organizations around the world.

We wish you all continued success and growth in your own Portfolio Management journey.

—San Retna and Mark Stabler

Why We Wrote the Book

As the Enterprise Portfolio Management Council members continued to learn more about project portfolio management (PPM) from each other over the years since its inception, we discovered a distinct shortage of practical books written to aid those of us practicing the art of PPM. Most of the volumes available on the topic of PPM spoke from an academic point of view, or from some proprietary source selling processes, methodologies, consulting services, and even software programs. Realizing that we were seeing distinct patterns of workable processes amongst ourselves, and encountering similar issues, we began to ask ourselves how we could best help others in our situation. We concluded that we could not be alone in this PPM journey. We bounced around a number of ideas, but the idea of writing a practical book excited the EPMC membership. We came to the conclusion that we could put our ideas into a format that could reach far more people, likely going through some of the same trials and tribulations as each of us in dealing with PPM. We decided to write a book about what we have learned in a clear and practical style that could communicate to many others some of the sound practices we have found to work, and to help avoid some of the difficulties we have learned about the hard way.

The next step, of course, was to ask for volunteers to actually determine what to specifically write about and then to actually complete a manuscript. In the end, ten of us decided it was something we indeed were willing to put the effort in to so a book could come to life. Starting with a blank sheet of paper is daunting for any writer. We decided to form subteams to do some legwork and prepare an outline for consideration. The task worked best using a technique called, among other things, a concept map. We converted the map into an outline with suggested topics. Next, of course, came the question of who would write which chapters. Again, volunteering worked to make the assignments. So, off we went…and soon had in hand several chapters in draft form. But, guess what, the styles were all different. Some of us wrote in an academic style, others wrote in a conversational style, and still others wrote in a narrative, or story, style. Now, which one should we choose? Good question!!

At this point we brought in an experienced editor for guidance and assistance. The group could not decide exactly which style to pursue, so the editor packaged up some samples from the three different styles and pulsed the publishing community. As it turned out, the package was quickly picked up by John Wiley & Sons, who sent it out to some independent assessors for review and comment. The result of the reviews told us that a conversational style and a narrative, or story, style were the most popular. We toyed with the idea of doing two books, but decided instead to write one book incorporating both styles!

The book starts with a brief introduction to the major concepts of PPM in a conversational style. The next six chapters explore the world of PPM through a story from the perspective of the central character, a relatively new portfolio manager. Through the course of his travails, the manager discovers some new concepts about PPM. The next five chapters of the book go back to a conversational style to expand on the points brought out about PPM in the story. The final chapter of the book catches up with our now wiser portfolio manager as he looks back over the past year and ponders what lies ahead.

We all enjoyed writing this book together and hope you gain a better understanding of PPM and pick up some helpful tips and guidance to use as you travel on your own PPM journey!

—The EPMC 10

Michael Gosnear

Stephen Jenner

Mike Mee

Michael M. Menke

Diane D. Miller

San Retna

Mark Stabler

Michael J. Stratton

Sarma Tekumalla

Mark Wybraniec

About the Authors

Michael Gosnear, MGM Mirage. Mike has over twenty-five years of information technology and operations experience, which includes government defense contracting, healthcare, and gaming industries. Over the past six years he has focused on portfolio management opportunities in healthcare and gaming, including developing governance, tools, and process methodologies across IT.

Stephen Jenner, UK Government. Steve has extensive experience of investment and benefits management in the public sector. The approach he developed to manage the criminal justice system IT portfolio was recognized internationally, in reports to the OECD and European Commission, and in a case study by Gartner. Steve is a professionally qualified management accountant with an MBA, and Masters of Studies from Cambridge University. He is also the author of Realising Benefits from Government ICT Investments: A Fool’s Errand?

Michael Mee, Franklin Templeton Investments. Mike joined Franklin Templeton in 2004 as director of Franklin Templeton Technology Administration. In February 2005 he was promoted to vice president of Operations and Technology Administration. Mike facilitates the internal executive committee of the Operations and Technology Council (TOC). The role of the TOC is to approve, prioritize, and track technology projects within Franklin. Additionally, Mike is responsible for the continuing evaluation and improvement of the project portfolio management processes at Franklin Templeton.

Michael M. Menke, Value Creation Associates. Michael is the President of Value Creation Associates, a management consulting firm focused on the front end of the value chain: generating, evaluating and selecting the highest value opportunities for business and government. Formerly he was Fellow of Knowledge Management at Decision Strategies Inc., a strategy and decision consultancy. Prior to that he was Chief Portfolio Advocate at Hewlett-Packard. He has been helping senior leaders improve their strategies, decisions and portfolios since 1972 and helped introduce portfolio management as a best practice into the global pharmaceutical and oil & gas industries. He has taught executives about portfolio management and good decision making all over the world. He has a BA in physics from Princeton, an M.Sc. from Cambridge and a Ph.D. in physics from Stanford University.

Diane D. Miller, PMP, Independent Consultant (Former IT PMO Lead for Coca-Cola Enterprises, Inc.). Diane is a senior management professional with experience leading organizations through developing, implementing, and sustaining strong portfolio management practices. Her pragmatic approach to portfolio management is credited with saving millions of dollars through improved investment decisions and project delivery. Diane has earned the designation of PMP from the Project Management Institute and a BS in Management Information Systems from Syracuse University.

San Retna, Safeway. San is the vice president of IT Effectiveness and Optimization for Safeway, Inc. He has spent over twenty years in building great depth on pragmatically deploying and operating project, program, and portfolio management capabilities. Prior roles included managing principal at TransformAction and Chief Portfolio Officer at AAA of California, Utah, and Nevada. He also spent over ten years at Accenture, specializing in large-scale program management ($25M+). Clients included Bell Atlantic, Elis, JP Morgan, Merrill Lynch, Philip Morris, and Washington Mutual. His experience covers more than countries across four continents. This includes ten years in the United States, four years in the UK, and at least two years in France, Nigeria, and Switzerland. As a thought leader, he has been profiled in numerous publications including CFO magazine, CIO magazine, Computerworld, and PM Network. Case studies of successes have also been published by Gartner, Corporate Executive Board, META, and the Project Management Institute.

Mark Stabler, AAA for Utah, Nevada, and Northern California. Mark has nearly twenty years of program and project management experience garnered in leading corporations such as AAA, NCR, and AT&T. He has core expertise in developing and implementing processes across diverse business functions; project budgeting, tracking, and resource management; and project team management. He has helped create and deploy sophisticated Enterprise Portfolio Management infrastructures, enabling companies to consistently deliver value and realize return on internal investments. He speaks regularly at industry conferences, and is a founding member of the Enterprise Portfolio Management Council and serves on its board. He has published several white papers and articles.

Michael J. Stratton, The Boeing Company. Mike is a senior project manager at the Boeing Company in Washington State. His thirty-year career at Boeing includes working on nearly all of the commercial jetliners in a variety of positions including manufacturing engineering, make/buy, communications, and training. He holds PMP #611, a BA from Washington State University, an MBA from City University, and is pursuing his PhD focusing on project management at Capella University.

Sarma Tekumalla, Grange Insurance. Sarma has over twenty years experience in technology and project management. He managed local and global teams for start-up technology to large financial firms. He executed technology, process reengineering, and M&A projects to building an enterprise PMO from ground up. He is a Project Management Professional (PMP) and has his MBA from Fisher School of Business at Ohio State University.

Mark Wybraniec, Johnson & Johnson. Mark is a senior IT Executive with expertise in PMO and IT transformation. Mark has over eighteen years of experience as a senior IT executive in the strategic planning, analysis, and design of a variety of business information systems, across a broad range of technology platforms. He has substantial depth in successfully deploying and operating project, program, and portfolio management capabilities. Mark has a focus on how to best leverage the Program Management Organization function to drive greater value from project investments.

About the EPMC

OVERVIEW

The Enterprise Portfolio Management Council (EPMC) is a nonprofit organization whose goal is to support and accelerate the development of Enterprise Portfolio Management processes, tools, and techniques for the betterment of shareholder value. Portfolio management, though still in its early stages of maturity, can help corporations gain a competitive advantage by improving efficiencies, lowering costs, and increasing the return on internal investments. With hundreds of billions of dollars spent each year on internal projects and programs, portfolio management offers the potential for vast savings.

CHARTER

The EPMC provides an environment where experienced portfolio management practitioners can share ideas, technologies, processes, tools, challenges, and successes.

GOALS

The organization’s goal is to create a community of senior portfolio management executives representing a broad spectrum of industries and organizations, in order to fuel the expansion of the portfolio management body of knowledge. Over time, the EPMC aims to create an open infrastructure that will help establish capability standards, and allow member organizations to exchange assets, such as processes and technologies. By educating companies on the portfolio management approach, the EPMC can help guide new practitioners, create new ideas and tools, and over time improve the quality of deployment and the performance of member organizations. To help achieve this goal, the EPMC has been featured in leading publications, including CIO magazine, CFO.com, and Computerworld.

Contact the EPMC at www.theepmc.org, or [e-mail].

Acknowledgements

The journey through Portfolio Management has been very rewarding for me, as it has given me the opportunity to work for some of the best companies in the world and learn from some of the greatest business minds. Throughout this journey, I have been able to forge strong professional and personal relationships while implementing Portfolio Management at Johnson & Johnson and MGM Mirage. Along the way, several individuals have been instrumental in providing me with the guidance, opportunities, and insights I needed to excel in this field. I would also like to recognize and thank my fellow EPMC members who worked countless hours to make this book a reality. Lastly, I would like to thank my wife and family for all of their support and understanding, which have enabled me to pursue my passion for Portfolio Management and spend time away from them writing this book.

Michael Gosnear

I thank my family for their support and Franklin Templeton Investments for allowing me to learn, grow, and apply the profession.

Mike Mee

I owe a deep debt of gratitude to my parents, who encouraged and supported me to be all that I could be. I also had many wonderful teachers that informed and inspired me. Of many great teachers, Professor Ron Howard of Stanford University made a particularly profound impression and set me on a life long career in decision consulting. I learned most of what I know about portfolio management from colleagues at, and clients of, SRI and SDG, as well as all the great clients I had during 7 years at HP. I also must single out my wife, Kasee, and two kids, Chris and Jennie, who were shortchanged for years while I put career first. Of them all, I dedicate this book to my loving wife, Kasee.

Michael M. Menke

First and foremost, I give thanks to my family who supported my quest to create this book with my EPMC colleagues. To my Tony, who often played Mr. Mom and indulged my late nights. To our wonderful children, Jordan and Malana, who give meaning to my life. Many thanks to the business leaders who invested time to coach/mentor me through the business quagmire. And those who saw my potential and gave me a chance. Also, thanks to my core friends and extended family who are there when I need them. Lastly, most sincere thanks to those who said that I couldn’t. You made me fight harder, which made me stronger; and now I am better for it. May this serve as a small inspiration for others to stay their course despite the noise. I dedicate this to book to those with big dreams for whom failure is not an