Introduction to Program Management

James J. Jiang

University of Central Florida, U.S.

Organizational Maturity in Project-based Organizations

Definition: “the extent to which an organization practices organizational project management (OPM)”Extent implies “levels”Lets consider questions regarding different levels of

successWas the project done right?Was the right project done?Were the right projects done right?Were the right project done right, time after time?

Introduction

Financial portfolioRole of top management in creating

purposeful project investmentsLink projects to business policy and

organizational strategyTerms portfolio and program are often used

interchangeably

Why need Programs?

In order to allow for autonomous projects on the one hand side

But on the other hand side to assure the benefits of organizational learning, economies of scale, and networking synergies in a program,

A specific program-organization is required.

Program Definition

A program is a temporary organization for the performance of processes of medium and high complexity, which are closely coupled by common overall objectives. (Gareis 2000)

Program Advantages

The advantages cited by organizations using programs include:greater visibility of projects to senior management and

more comprehensive reporting of progress at higher levels

better prioritization of projects; more efficient and appropriate use of resources; projects driven by business needs; better planning and coordination; explicit recognition and understanding of dependencies

Program Examples

Typical programs examples: the development of a “product family“ (and not

of a single product), the implementation of a comprehensive IT-

solution (such as SAP), the reorganization of a group of companies in a

holding structure, and large investments, such as an oil platform.

Comparison of Programs and Projects

Program Project

An organizing framework A process for delivering a specific outcome

May have an indefinite time horizon

Will have a fixed duration

Evolve in lines with business needs

Has set objectives

May involve the management of multiple related deliveries

Involve the management of single deliveries

Focus on meeting strategic or extra-project objectives

Focus on delivery an asset or change

Program manager facilitate the interaction of numerous managers

Project manager has single point responsibility for project’s success

Major Perspectives of Program Management

Program management (Pellegrinelli 1997)

The technical and planning aspectsScarce resource managementEstablishment of appropriate information

systems

Program configurations

Three archetypal configurationsPortfolioGoal-orientedHeartbeat

Portfolio programs

Include relatively independent projects but have a common theme.

Emphasis is efficient resource utilization and leveraging existing knowledge or skills.

Goal-oriented programs

programs which enable the management of initiatives or developments outside the existing infrastructure or routine.

provide a means of dealing effectively with situations where uncertainty prevails and learning is a prerequisite to making progress.

Heartbeat programs

Enable the regular improvement of existing systems, infrastructure or even business processes,via increments to functionality or occasionally an

overhaul of the system or facility itself.Minimize disruption to operations, Maximizing the amount of new functionality or

capability delivered to the business. E.g.: Projects related to core IT systems.

Program Management: Classification in IT Consulting firms

Programs by technology/ platformPrograms by clientPrograms by business vertical

Program Roles and Structure

Typical program roles include: program owner, program manager, and a program coordination team, project ManagerUpper Management

Typical program communication structures are program owner meetings and meetings of the program coordination team .

Program Manager’s Role and Responsibilities

Program Manager

Effectiveness Coordination Efficiency

Prior to project execution

Identification of business opportunities

1. Resource planning

2. Synergy identification

Resource selection

Project execution

Identification of bad projects

1. Participation in steering groups

2. Prioritization

3. Collection & aggregation of reports

1. Initiate reviews

2. Handling of reviews

3. Coaching of project managers

4. Process Improvement

Issues in Program management

1. Project selection

2. Maximizing value of project portfolio

3. Balancing/prioritizing project portfolio for resource allocation

4. Best practices for managing project portfolios

Project selection process

Criteria for project selectionProduction factors

Time until ready to installImpact on business processes

Marketing factorsSize of potential market for outputConsumer acceptance

Financial factorsPersonnel factorsAdministrative and misc factors

Selection models

Non-numeric modelsSacred cow, operating necessity, competitive

necessity

Numeric modelsPayback, NPV, ROI

Scoring modelsWeighted factors models

Risk models

2. Maximizing value

Allocating resources for maximizing value of portfolio in terms of firm objective

Expected commercial value (ECV)Function of (NPV, Strategic importance, probability of technical/commercial success, development costs, commercialization costs)

Productivity index (Similar to ECV but also considers R&D expenditure remaining)

Dynamic rank ordered listRank projects according to importance, NPV, internal rate of return and cal mean

Scoring modelsscale 1-5 on reward, strategy fit, strategic leverage, prob of commercial success, technical success

Balancing project portfolioBalancing high-risk breakthrough R&D projects

versusLow-risk projects that produce near-term returns

through incremental improvements to existing products

Perform high quality analysis of each project Identify appropriate level of problem: technology,

portfolio, strategyGenerate creative, achievable alternativesDevelop reliable informationEstablish values and trade-offs: time and riskApply logical reasoningBuild commitment to action

3.Balancing project portfolio

Plot projects on a portfolio grid according to technical difficulty and commercial potential

4 quadrantsBread and butter projects (low % and low

value)Oysters (low % of success but potential value)Pearls (high success, high value)White elephants (low potential value, long term)

4. Best practices in PPM

Senior management buy-inIdentify PPM focus areas and provide proof of

conceptDevelop governance process for projects

Makes PPM implementation easierUse proven PPM toolsDevelop a “common currency” to evaluate

projects based on contribution to business objectives

Optimize portfolio against constraints

Comments?

How does your organization select an project? Is there a common goal among the selected

projects? Has the organizational goal been supported (i.e.,

aligned with) by those selected projects?Do your employees understand the differences

between “project management” vs. “program management”?

Do your organization implement the best “program management” practices?