IC1 – PLANNING FOR SUCCESS CASE STUDY 1

IC1 – Planning for Success

Team 1

Project Masters

UMUC – ITEC640

IC1 – PLANNING FOR SUCCESS 2

Table of Contents

Question 1:.......................................................................................................................................3

Project Portfolio Management/View Advantages.................................................................4

Challenges of Project Portfolio Management........................................................................5

Question 2:.......................................................................................................................................5

Question 3:.......................................................................................................................................7

Question 4:.......................................................................................................................................8

References......................................................................................................................................10

IC1 – PLANNING FOR SUCCESS 3

Question 1: How is managing IT projects from a project portfolio view different from a single-

project view? What are the advantages? What are some of the challenges?

A portfolio is a collection of projects “grouped together to facilitate effective

management of that work to meet strategic business objectives” (Project Management Institute,

Inc., 2008, p. 8). According to De Reyck and Lockett (2005), project portfolio management

(PPM) focuses on doing the right IT project while project management focuses on doing a single

IT project right. In order to determine if a project should be undertaken, it should be evaluated

against several criteria. Marchewka suggests the evaluations should be done from a financial,

customer, internal business and an innovation and learning perspective (Marchewka, 2009, p.

61).

Applicable to every type and size of company, project portfolio management is all about

getting the biggest bang for the buck, states Haynes, (2010). It also prevents companies from

allocating money on ill-conceived projects or diverting funds from highly deserving ones.

The scope of project portfolio management is far-reaching. According to Marchewka

(2009), often discussed in terms of the IT organization, it is ideally practiced at every level of an

enterprise. Although individual projects are conceived, championed and executed at the

department or organization level, higher level oversight and objectivity is needed to make the

hard decisions that cut across the entire portfolio. The project portfolio at each level allows

executives to prioritize competing projects, select those that offer the highest potential payback,

and provide ongoing management to ensure that projects remain aligned with larger business

goals.

Managing IT projects from a portfolio perspective is called Project Portfolio

Management (PPM) and require more organization resources than Project Management (PM)

which is more closely associated with the managing of a single project. Levine (2005) on page

496 defines PM as the application of knowledge, skills, tools, and techniques to project activities

to meet project requirements. Similarly PPM is the art and science of applying a set of

knowledge, skills, tools, and techniques but to a collection of projects in order to meet or exceed

the needs of an organization.

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PM requires the participation of several core components of the firm. Furthermore, it

requires the integration of several systems within the organization. PPM is accomplished in two

phases; prioritization and selection of projects and an effective managing of projects within the

portfolio (Levine, 2005, p23).

Levin and Rad (2006) make it clear that projects are recognized as major components of

almost every organization’s work. Managing organizations by projects is no longer the

exception, but rather, the norm. Many organizations view successful projects as a competitive

advantage and establish full-scale portfolio management systems to assist in ensuring project

success. With an increased recognition of the project management profession, the focus of

organizational attention is no longer on only one or two large, complex projects. Instead, the

organizational attention is focused on the management of the collective set of all projects (Levin

& Rad, 2006, p7).

The objective of a well-constructed PPM system is to ensure that with limited resources

and available time, the organization selects the projects that facilitate its success. A prioritized

list of projects can ensure that organizational objectives and portfolio priorities are in concert

(Levin& Rad, 2006, p7).

Project Portfolio Management/View Advantages

PPM helps with the definition and cohesion of all IT project goals and objectives to better

ensure that resources are leveraged to maximize the return on investment, the internal rate of

return, net present value, or economic value added to the bottom line.

Many companies concentrate their management efforts on executing individual projects,

but fail to give the same attention to the project portfolio itself. The result is sub-optimal

performance and returns for the portfolio as a whole. Project portfolio management attempts to

rectify this situation by ensuring; project diversity, balanced risk, resource allocation, problem

corrections, adjusting business goal alignment, support and oversight.

Project portfolio management cannot eliminate performance problems, states (Charvat

2003), but it can help address them early on before they worsen. Swiftly recognizing, escalating

and responding to execution issues keeps projects on track and avoids compromising dependent

or downstream projects. Project portfolio management provides continuous management

IC1 – PLANNING FOR SUCCESS 5

oversight, regular communication and coordination, and constant course correction to minimize

project drift, re-direct projects when business objectives change and maintain alignment.

By elevating the prioritization and oversight responsibilities to the executive level,

project portfolio management ensures that projects receive the backing they need to succeed.

Executives have the authority and business knowledge to ensure alignment between projects and

business strategies; to fine tune the timing and order of projects to exploit synergies, avoid re-

works and eliminate redundancies; to optimally assign resources; to direct funds to the most

valuable initiatives; and to help resolve critical performance issues.

Additional advantages of portfolio management is that by adopting a systematic process the

organization will know more about its capacity and limitation to carry out any proposed project.

Levine (2005) details six steps that are common in project portfolio initiatives which

demonstrate great advantage to organizations and is instrumental in successful project

completion, jumps in productivity, quality and revenue.

1. Analyze the overall project environment. Before moving to remedy the situation an

organization need to take a long, hard look at the status quo. Interviews and other assessment

tools reveal the nature of the gap between current approach to management and a systematic

portfolio approach. Most important is the knowledge of the current process for project initiation,

implementation, measurement of results, and closeout or termination.

2. Develop project portfolio objectives. The senior management team need to undertake

the definition of specific, strategically linked objectives for building the project portfolio. The

outcome of this process is the full commitment of senior executives to clear and commonly held

objectives to guide difficult decision making.

3. Analyze resource capacity. An understanding of organizational project capacity is an

essential precursor of balanced decision making about resources such as project development

time vs. man hours available, facilities, and technologies.

4. Gather and organize data on current and anticipated projects. Whatever the project

management methods used in various parts to the organization project data need to be collected

and reported in a consistent format for evaluation.

5. Evaluate the project portfolio. Based on the objectives developed and the project data

collected, senior mangers evaluate each project for inclusion in the portfolio going forward.

IC1 – PLANNING FOR SUCCESS 6

When there is expert facilitation individual members of the team will assess their personal risk

tolerance, understand their contribution to the decision process and build commitment to the

portfolio plan.

6. Implement a complexity reduction system. Install a simple and sustainable

management system to control project proliferation permanently. Continuous portfolio

management ensures that every project plays a part in helping the organization achieve its

business objective (Levine, 2005 p477-479).

Challenges of Project Portfolio Management

The following are results when organizations don't practice project portfolio

management; overlapping projects, redundant projects, projects that are not aligned with

business strategies, an unbalanced project portfolio, too heavily weighted toward aggressive or

conservative projects. Projects do not occur in isolation, and seldom execute perfectly according

to plan. Many issues affect their performance and the quality and usefulness of their deliverables,

including; misalignment of projects and their business objectives, delayed projects, dependency

conflicts, execution difficulties, overlapping and redundant projects, resource conflicts, and

unrealized business value.

Strategic and tactical execution issues challenge every project, wasting resources and

opportunities, diverting management attention and hindering corporate plans. Economic

conditions may force budget cuts, key personnel may leave, specifications may change and

technologies may fail to perform as advertised. Overlapping projects are responsible for

inefficiencies and waste budget dollars, time and resources. These projects undermine each

other’s progress and potential benefits. People are often assigned to several projects at the same

time. Those with special expertise or scarce skills may be in high demand, causing bottlenecks.

Ultimately, every project generates deliverables that the company uses to derive business value.

When those deliverables are late or incomplete, the business loses opportunities; whether to earn

revenues, acquire customers, or perhaps fix a problem.

Challenges arise when projects increase, become more complex, and must compete in an

environment with constrained resources. Project Management Organizations (PMOs) have arisen

within many commercial and government organizations to serve as project and portfolio process

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owners, financial stewards, and centers of expertise. Specifically the following challenges are

often commonly recognized; increasing numbers of potential projects in which to invest,

difficulty aligning projects and portfolios with organizational objectives, difficulty achieving

consensus among competing stakeholders regarding project priorities, inadequate measurements

methodologies to determine project benefits, costs, and risks, overemphasis on project execution

without due diligence on portfolio selection and alignment, and more complex and challenging

project constraints, including budgets, personnel, risk, time, and compliance (Levine, 2005,

p158-159).

Question 2: With a tightening of budgets for IT projects, what was the significance of

Agere involving the business units in making decisions about work prioritization and

resource allocation?

According to Mescall (2010), the CFO holds the purse strings to all departments and it is

his or her job to make sure those any and all projects, is supporting the overall company goals

and business strategies.  Therefore, the enlisting of the business unit is critical to overall PPM

goal of maximizing resources to achieve companywide goals and business strategies.

The solution for Agere was to apply its hard earned lessons and methodologies to every

IT project in the portfolio. As a result, IT can now better meet the needs of the business units –

while operating under a drastically reduced budget. Project time frames and cost estimates are

predictable and accurate, and the portfolio of IT projects supports Agere’s key business goals.

Agere formed a program management office (PMO) to develop standards, identify cross-project

constraints, provide consistent project management support for key initiatives, and measure the

success of the portfolio. Today, the PMO can provide commit dates for all projects based on

projections of resource consumption and capacity. Agere passed through seven stages on the

road to program management success:

Step 1: Block and tackle

Step 2: Move beyond the basics

Step 3: Repeat and extend

Step 4: Involve the business units

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Step 5: Integrate with financial management

Step 6: Decentralize project management

Step 7: Simplify project management

Levin and Rad (2006) coincide with the Agere Systems involvement of the business unit

in making decisions about work prioritization and resource allocation with a tightening of

budgets for IT projects. Implementation of a PPM process requires a dedicated commitment from

upper management since the implementation can be a major culture change. To support this kind

of decision making and oversight, projects and programs must follow a consistent data collection

and reporting process. A centralized view of the enterprise’s projects shows their

interrelationships and priorities. The result is a PPM system that is fully strategic and mission-

driven. This formalized relationship means that the projects in the portfolio will be managed in

an informed rather than ad hoc manner and will provide the foundation for transferring data and

establishing a process for logical and methodical decisions (Levin & Rad, 2006, p8).

Question 3: Chris Morris believes that Agere will view project management the way IT sees

it: as a core competency. Do you believe project management should be a core competency

for most organizations?

For many organizations the capacity to effectively and efficiently manage projects from

conception to completion should be considered a core competency, states Youker, 2006. This

means the entire project life cycle not just the implementation phase. Thus project management

includes selecting the right projects as well as good implementation. Some people call this

Strategic Project Management or just Strategic Management. What does all this mean for the

Chief Executive (CEO) who thinks that Project Management should be a Core Competency in

his organization?

First, the top management team needs to know and understand project management. The

organizational structure and culture needs to be amenable to PM. Some methodology for cross

functional communication and cooperation needs to be in place. Then the various management

systems for selecting projects and managing the project life cycle and project implementation

need to be developed and implemented. The total reward and punishment systems of the

IC1 – PLANNING FOR SUCCESS 9

organization need to support the implemented project management system. Next the

management systems need to be documented and all of the necessary people trained. Finally, the

CEO needs to be totally committed and involved over time to be sure that Project Management

in fact does become a true “Core Competency” in the organization.

The overall performance of the organization is directly tied to the the organization in

managing the entire suite of projects. In turn, project management performance is partly tied to

having best practices in managing projects and partly tied to strategic planning in selection of

those projects (Levin & Rad, 2006, p10-11). Thus PM and specifically PPM must become a core

competency for organizations that hold progress, growth and change as a means to achieve

business advantage and therefore business success.

Question 4:

Should all projects be planned using a project management software tool?

Managing a project that will require the contributions of multiple individuals or teams using a

multi tiered development plan over a fixed area of time, project manager should consider using

project management software to help organize the elements of a project into milestone goals and

organize the efforts of the development team in an efficient manner. Examples of such projects

include software application development, game development, execution of an advertising

campaign, web site design and development and nearly any kind of project at varying levels of

complexity can be documented and conditions forecasted to allow for more organized leadership

and properly focused team members assigned to specific tasks to fulfill the overall goals of the

project.

Project management software should help in all phases of the project, including

brainstorming and flow-charting tools to assist in workflow and design management.

Brainstorming management utilities can help organize and coalesce abstract design ideas into a

fully developed product and workflow management tools can help make the production,

marketing and evolution of this product as efficient and organized as possible.

No matter how big the project is project manager should map out the milestones, team

member core competencies and assign tasks using project management software such as Visio

IC1 – PLANNING FOR SUCCESS 10

from Microsoft. Certain tools such as Microsoft Outlook, which provides very basic project

management tools as well as commercially available brainstorming and project mapping

software solutions that can help streamline development cycles and organize the information

structure of company’s management teams.

Projects planned using a PM software tool can have problems if the software does not aid

the stakeholders in project management and error checking. According to Norton (2008) there

are five problems that may arise when using a PM software tool. Problems surface when there is

too much emphasis on maintaining the plan rather than managing the project. Maintaining the

detail estimates against actuals of a plan can be a full-time task which leaves little time for issue-

management. Problems can be generated by the mythical man-month. The unrealistic assuming

that if a task takes ten days then ten people applied to the task can do it in a day. Problems occur

with poor estimates. The accuracy of estimates is vital to the identification of the critical path

and the key milestones of the project. Problems stem from uncertain skill levels.

Problems happen when work breakdown is not analyzed properly. Some plans fail

because the work broken down into tasks does not match with how people work resulting in

recording discrete units of work as time against the plan to represent an accomplished part of the

plan instead of monitoring what people are actually doing (Norton, 2008, p261-262).

When a project manager is sufficiently skilled to overcome the problems detailed earlier

then the benefits of using a PM software tool are advantageous. Most software tools have several

functions. A budget and cost control function can compare actual and budgeted costs for

individual resources or activities or for the whole project. The calendar function can be used for

reporting purposes and to define working periods. The graphics function displays tasks in a Gantt

chart. The multiple projects handling function can store many projects very easily. The activities

planning function maintain detailed tasks lists and create critical path analyses. The scheduling

diagrams function builds charts and diagrams based on the task and resource list and all their

associated information. The resource planning function ensures the project has the correct level

of manpower, equipment and material at the right place at the right time and in the right

quantities. The resource histograms function provides the project manager with a visual display

showing the usage and availability of resources over the project’s life. The reporting function

delivers the facility to generate standard reports such as progress to date budget reports,

IC1 – PLANNING FOR SUCCESS 11

allocation of resources reports, WBS and financial reports (Norton, 2008, p260-261). From these

PM software tool functions we gain accuracy, ease of use, ability to handle complexity, what if

analysis, and timesheet recording, projects should be planned using a project management

software tool.

Several factors need to be determined before implementing a project management tool on

the project. One of the key elements to consider is the complexity of the project. For a short

project with limited stakeholder involvement, a small budget, clearly defined objectives and

mature approach may be managed with a task list. Also, a maintenance or operation kind of

project may also better be accomplished with a checklist.

It is important to keep in mind that utilizing a project management software tool does not

mean implementing project management best practice. It takes process, people and tools to

successful approach a project. Both Microsoft Project and Primavera are powerful tools which

can do many good, and harm on a project. It is very important to have the proper process in

place with the trained personnel to maximize the benefit that the tools can bring to a project.

References

Marchewka, J. (2009). Information technology project management: providing measurable

organizational value (3rd ed.). Hoboken, NJ: J. Wiley & Sons.

Project Management Institute, Inc. (2008). Project management body of knowledge (4th ed.).

Newtown Square, PA: Project Management Institute, Inc.

De Reyck, B. Lockett, M., et. al, (Oct. 2005), The impact of project portfolio management on

information technology projects, International Journal of Project Management, 23(7),

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4G1R40N-1/2/3d3cfc4f11a81c26e18944b26165fc23

Lenfle, S., Loch, C., (Nov. 2010), Lost Roots: How Project Management Came To Emphasize

Control Over Flexibility And Novelty, California Management Review, 53(1), pgs.32-55.

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