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Project Portfolio Management (PPM)Project Portfolio Management (PPM)
Microsoft Office
Project Portfolio Server
Ann-Charlotte Arrhenius
Microsoft Office
Project Portfolio Server
Ann-Charlotte Arrhenius
April 18, 2023Portfolio Management Overview 2
UMT have a Proven Track RecordUMT have a Proven Track Record
We have implemented PPM solutions in over 50 clients within Fortune 1000 type companies. Our solution enables companies to Create, Select, Plan and Manage their project portfolios at all levels.
As the pioneers and thought leaders of this area we believe we are genuinely the best at what we do, which is making your strategy work effectively.
UMT, established in 1989, specializes in project portfolio management, and deploys the most sophisticated software tools available today.
With offices in New York and London, UMT’s consulting services enable companies to manage their project portfolios throughout their lifecycle. Our software was recently sold to Microsoft to be added onto the Enterprise Project Management Solution.
Voted World #1 in the 2004 MetaSpectrum Review of PPM
April 18, 2023Portfolio Management Overview 3
Project Portfolio Management
Alignment Alignment with Business with Business Objectives Objectives
Integrated Integrated Delivery Delivery Framework Framework
Real-time Executive Real-time Executive Decision SupportDecision Support
Portfolio Portfolio ManagementManagement
Investment, Resource and Investment, Resource and Prioritization DecisionsPrioritization Decisions
Integrated Portfolio of Integrated Portfolio of Managed ProjectsManaged Projects
Consistent, Repeatable Consistent, Repeatable Project DeliveryProject Delivery
PMO / EnterprisePMO / EnterpriseResource Resource ManagementManagement
CorporateStrategy
Programs andInitiatives
Projects
Project Project ManagementManagement
April 18, 2023Portfolio Management Overview 4
Select & Deliver the Right Investments… Select & Deliver the Right Investments… S
ele
ct
the R
igh
t P
roje
cts
Deliver the Projects Successfully75% 100%
66%
100%
0%
Portfolio Management
Project Management
50%Value Realized
50 % Value Lost
Portfolio Management enables organizations identify and select the investments that will maximise
Business Value
Project Management ensures organizations to successfully deliver the investments and realise the Business Value
April 18, 2023Portfolio Management Overview 5
To Be Successful Organizations Require Both Disciplines
Portfolio ReportingBenefits Realization
PROJECT MGT.Project PlanningCost ManagementResource ManagementTime ReportingChange ManagementIssue ManagementStatus ReportingEarned Value Analysis
PORTFOLIO MGT,Process DefinitionGovernanceBenefits ForecastingPrioritization / ValuationPortfolio OptimizationAdv Portfolio AnalyticsCapacity Planning
Have I selected the right investments?
Do the investments align with the strategic objectives?
Do I have sufficient resources to deliver the selected investments?
Will the investments be delivered on time and within budget?
Are my investments delivering the forecasted benefits?
PPM answers the following
questions:
April 18, 2023Portfolio Management Overview 6
What is Project Portfolio Management (PPM)? What is Project Portfolio Management (PPM)?
Management Discipline – improves alignment between strategy
planning and business/IT; strengthens governance; improves project
definition, portfolio selection, resource planning and executive reporting
Comprehensive Project Inventory – develops and captures
new, ongoing and carryover work centrally to provide transparency around
how key Business Drivers are supported and how resources ($/FTE) are
dispersed
Transparent & Actionable Decisioning Framework – provides ongoing and actionable portfolio analysis and reports to the
decision-makers to enable improved investment viability and accountability
PPM is: a management
discipline that helps organizations achieve
maximum project portfolio value
through the continuous process of
evaluating and managing projects
against key performance metrics
and strategic business objectives.
PPM is: a management
discipline that helps organizations achieve
maximum project portfolio value
through the continuous process of
evaluating and managing projects
against key performance metrics
and strategic business objectives.
Workflow With Roles & Responsibilities – provides clearly
defined roles and responsibilities throughout the process and Governance
framework
Analytical software toolset – leverages toolsets to capture project
inventory and to ensure optimal, consistent and fact-based portfolio selection and
planning decisions by simultaneously evaluating and comparing competing
project ideas and resource needs (e.g., what-if, sensitivity analysis, optimization,
etc.)
“Alignment is the essence of management” Fred Smith, Chairman Federal Express
April 18, 2023Portfolio Management Overview 7
•Reasons for project failure are plentiful; emphasis on execution failure and / or lack of project management capabilities
• Is this the only - or even the primary - dimension to reduce value of the project portfolio?
OverviewOverview
•This presentation suggests that when selecting projects, it is essential to take a portfolio view, rather than a project by project view
• It will discuss how effective selection techniques can be applied in practice
April 18, 2023Portfolio Management Overview 8
Benefits of a Portfolio Management Approach:Confidence, Transparency and FlexibilityBenefits of a Portfolio Management Approach:Confidence, Transparency and Flexibility
Key BenefitsCreates a common currency for comparing investments and making better-informed decisionsEnsures decisions made according to supportable data, not politics or ‘noise’Reduces senior management time spent on decision-makingReduces overall spend by eliminating low value investments Uses a benefits-led approach to delivering strategic projectsEnables greater focus on high-value initiativesPromotes organisational agility through modelling of ‘what-ifs’ and other detailed scenario analysis
Specific Examples“..we saved $5 to 10mm (out of a budget of £50mm) in the first year alone, on projects that would have gone through automatically before” – Paul Bateman, Director of Enterprise Governance, Axa Financial
“UMT’s solution led our Senior Executive Team to increase the 2004 budget to allow additional projects to be funded, based on their proven strategic value” – Frank LaRocca, CIO Keyspan Energy
“Capable of solving exceptional business problems” – MIT Sloan Review, May 2004
April 18, 2023Portfolio Management Overview 9
Stages of ExcellenceBasic World-Class
PPM Maturity Stages
Val
ue
to O
rga
niz
atio
n
Ad hoc
No Portfolio Inventory or Process
-“Just Do It/FIFO”-Success is random-Poor transparency
Project
Inventory
Processes are defined & documented, and most
projects are aligned to Business Driver
All projects are consistently captured in a project
inventory
Project
Portfolio
Portfolio analysis is repeatable, predictable, and consistently used to evaluate and optimize project portfolio
selection
Portfolio Management teams are able to understand, analyze, & recommend
optimal portfolio bundles and schedules to technology
and business partners
CrossPortfolio
PPM is adopted and used consistently across multiple organizations and portfolios
Portfolio Analysts can compare and leverage
portfolio analysis information across multiple departments
Consistent measures enable cross portfolio analysis, selection, planning and
management that supports predictive modeling and
internal / external benchmarking
Enterprise
PPM is optimized across the enterprise with a focus on continuous risk mitigation
and value creation
Project portfolio performance and risk data is understood
and can be compared at the individual, cross-LOB, and
enterprise levels
Senior leadership is able to leverage PPM analysis when
allocating funds to various portfolios
Ability to measure and benchmark entire portfolio
lifecycle
Portfolio Value = Value Potential x Ability
to Realize
Crawl Walk Run
Success Comes With Iteration & Increasing SophisticationMoving Up The Portfolio Maturity CurveSuccess Comes With Iteration & Increasing SophisticationMoving Up The Portfolio Maturity Curve
April 18, 2023Portfolio Management Overview 10
Application Analysis &Renewal Strategy
ApplicationOperations &Maintenance
Application Portfolio
Management
PortfolioValuation &
Selection
PortfolioExecution
Project Portfolio
Management
New Project Requests
New / Enhanced ApplicationsNew / Enhanced Applications
Business StrategyBusiness Strategy
IT StrategyIT StrategyCurrent Investments
NewInvestments
The Task of Continuously Renewing the Company Assets Capabilities is the Greatest Challenge Facing any CEO and CIO
Portfolio Mgmt: Synergies Between APM & PPM Portfolio Mgmt: Synergies Between APM & PPM
April 18, 2023Portfolio Management Overview 11
CreateCreate SelectSelect PlanPlan ManageManage
Portfolio Prioritization & OptimizationPortfolio Prioritization & Optimization
The next slides provide an overview of the Business Alignment Framework embedded in the Portfolio Optimizer
Ensure the selected project portfolio aligns with the organization’s strategic priorities
April 18, 2023Portfolio Management Overview 12
Business Alignment Framework:
Business Driver DefinitionBusiness Alignment Framework:
Business Driver Definition
Define Business Drivers & Impact
Statements
New Project Requests
Carry-Over Requests
Prioritize Business Drivers
Prioritize Requests
Optimize Project Requests
• Strategic Value
• Financial Value
• Risk
• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis
Select Portfolio
Optimize Project Requests
DefineDefine PrioritizePrioritize OptimizeOptimize SelectSelect
‘‘The Business Alignment Framework ensures a The Business Alignment Framework ensures a RationalRational rather than rather than Emotional Emotional approach to project selection’approach to project selection’
11 22
33
44 55
April 18, 2023Portfolio Management Overview 13
Pre-defined workflows ensure the projects are subjected to the appropriate governance controls throughout their
lifecycle (i.e. proposal to post-implementation).
Capture all project requests within a central repository and define business case templates to standardize the
data collection across the organization.
Portfolio BuilderCreate: Business Case DevelopmentPortfolio BuilderCreate: Business Case Development
Capture Project Requests / Ideas
1
2
Governance Workflow
April 18, 2023Portfolio Management Overview 14
Business Alignment Framework:Business Driver Definition (Theory)Business Alignment Framework:Business Driver Definition (Theory)
Business Drivers are a series of short, sharp statements that express the shared focus of the organization in actionable terms
Strategic Goal 1
Strategic Goal 2
Business Driver 1
Business Driver 2Business Driver 3
Business Driver 4
Business Driver Criteria:
They Address a Strategic Goal They Are Actionable They Are Measurable
They Are Attainable They Are Unique They Are Clear to Decision Makers
April 18, 2023Portfolio Management Overview 15
Business Alignment Framework:
Business Driver Definition (Example)Business Alignment Framework:
Business Driver Definition (Example)
Strategic Goal:
Business Driver Name: Business Driver Name:
Retain existing clients Grow Customer Share of Wallet
Dedicate our resources to those market areas where we can maintain our existing client base and increase share of market of current clients
Business Driver Definition: Business Driver Definition:
Sell additional products to existing clients
Maintain clients and remain competitive in existing markets
KPI’s:
• Client Satisfaction Rates• Client Retention Rates• Variance in % Market Share
KPI’s:
• % Increase of Market Share• Increase in Revenue
April 18, 2023Portfolio Management Overview 16
The Role of Impact Measures:
• Impact Statements are defined by the Executive team
• Impact Statements provide a quantifiable link between the measurable Business Drivers and the project requests.
Business Alignment Framework:
Impact Statement Definition (Theory)Business Alignment Framework:
Impact Statement Definition (Theory)
Impact Statements are derived from KPI’s and used to quantify the impact of each project request against each of the Business Drivers
Business Driver 1
Business Driver 2
Extreme
Strong
Moderate
Low
No Impact
Extreme
Strong
Moderate
Low
No Impact
Project
The Impact Statements should clearly communicate the metrics that define the level of impact a project request may have on Business Drivers.
Note: Existing KPI's / Balanced Scorecard/ Other metrics may be used
Impact Statements ensure that each project requests impact on the Business Drivers are evaluated consistently using the same metrics.
April 18, 2023Portfolio Management Overview 17
Thresholds
Extreme
Strong
Moderate
Low
Impact StatementsAssociated KPI’s
Business Alignment Framework:
Impact Statement Definition (Example)Business Alignment Framework:
Impact Statement Definition (Example)
Driver Name: Grow Customer Share of Wallet
Definition: Sell additional products to existing clients
• % Increase of Market Share
• Increase in Revenue
Increases Revenue per client by more than 15% and increases Market Share by 5%
Increases Revenue per client by between 8% -14.99% and increases Market Share by 2% - 4.99%
Increases Revenue per client by between 3% - 7.99% and increases Market Share by up to 1.99%
Increases Revenue per client up to 2.99% and increases Market Share up to 1.99%
April 18, 2023Portfolio Management Overview 18
Business Alignment FrameworkPrioritization & OptimizationBusiness Alignment FrameworkPrioritization & Optimization
‘‘The Business Alignment Framework ensures a The Business Alignment Framework ensures a RationalRational rather than rather than EmotionalEmotional approach to project selection’approach to project selection’
Define Business Drivers & Impact
Statements
New Project Requests
Carry-Over Requests
Prioritize Business Drivers
Prioritize Requests
Optimize Project Requests
• Strategic Value
• Financial Value
• Risk
• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis
Select Portfolio
Optimize Project Requests
DefineDefine PrioritizePrioritize OptimizeOptimize SelectSelect11 22
33
44 55
April 18, 2023Portfolio Management Overview 19
Business Alignment Framework:
Business Driver PrioritizationBusiness Alignment Framework:
Business Driver Prioritization
The Pairwise Comparison is a proven technique for deriving relative priorities or weights for Business Drivers through performing one-to-one comparisons.
Indicates relative
importance of Driver A vs.
Driver B (row vs. column)
The same stakeholders who defined the Business Drivers should prioritize them. This ensures consistent understanding and better buy-in to the priority assessment conclusions.
Steps to Success:
Assess Divergence of Opinion: Each Stakeholder involved in the Business Driver Definition should prioritize the drivers independently
Build Consensus: Invite all stakeholders to a Prioritization Workshop and collaboratively complete the Pairwise Comparison Matrix. Encourage the group to openly discuss the importance of each Business Driver pairing for the upcoming planning period.
Compares the relative importance of Driver B
vs. Driver C (row to
column)
April 18, 2023Portfolio Management Overview 20
Business Alignment FrameworkPrioritization & OptimizationBusiness Alignment FrameworkPrioritization & Optimization
‘‘The Business Alignment Framework ensures a The Business Alignment Framework ensures a RationalRational rather than rather than EmotionalEmotional approach to project selection’approach to project selection’
Define Business Drivers & Impact
Statements
New Project Requests
Carry-Over Requests
Prioritize Business Drivers
Prioritize Requests
Optimize Project Requests
• Strategic Value
• Financial Value
• Risk
• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis
Select Portfolio
Optimize Project Requests
DefineDefine PrioritizePrioritize OptimizeOptimize SelectSelect11 22
33
44 55
April 18, 2023Portfolio Management Overview 21
Portfolio Optimizer
Select: Portfolio Prioritization
Portfolio Optimizer
Select: Portfolio Prioritization
Use proven techniques to define and prioritize
business drivers
Derive a priority score to evaluate each project request (i.e. Strategic Value, Financial Value, Risk)
Prioritize Business Drivers
Prioritize Projects
3
Assess the impact of each project request against the prioritized business drivers
Strategic Impact Assessment
Business Drivers
Pro
ject
s
4
5
Analyze the project portfolio before attempting to make funding decisions
6
Cost
L -
Pri
ori
ty -
H
Investment Maps
April 18, 2023Portfolio Management Overview 22
Business Alignment FrameworkPrioritization & OptimizationBusiness Alignment FrameworkPrioritization & Optimization
‘‘The Business Alignment Framework ensures a The Business Alignment Framework ensures a RationalRational rather than rather than EmotionalEmotional approach to project selection’approach to project selection’
Define Business Drivers & Impact
Statements
New Project Requests
Carry-Over Requests
Prioritize Business Drivers
Prioritize Requests
Optimize Project Requests
• Strategic Value
• Financial Value
• Risk
• Assess the Portfolio
• Constraint Analysis
• Advanced Analysis
Select Portfolio
Optimize Project Requests
DefineDefine PrioritizePrioritize OptimizeOptimize SelectSelect11 22
33
44 55
April 18, 2023Portfolio Management Overview 23
7
9
8Utilize sophisticated optimization algorithms to maximize the
portfolio’s strategic value under varying budget constraints (i.e. cost, resource etc.)
‘What If’ Analysis
Efficient Frontier Modeling
Business Alignment Analysis
Portfolio Optimizer
Select: Portfolio Optimization & Analytics
Portfolio Optimizer
Select: Portfolio Optimization & Analytics
Benchmark the selected portfolio against the Efficient Frontier
Calculate and communicate the selected portfolio’s alignment with the organization’s strategic priorities
April 18, 2023Portfolio Management Overview 24
11
12
Identify resource surpluses and deficits across the planning horizon and maximize resource utilization by proactively scheduling the project portfolio to best fit the available resources.
Create real-time project and portfolio performance scorecards to ensure Executives and PMO’s gain visibility, insight and control across project portfolios within the organization.
Portfolio Scheduling
Portfolio Dashboard
Portfolio Planner & DashboardPlan & Manage: Schedule and Track the Portfolio
Portfolio Planner & DashboardPlan & Manage: Schedule and Track the Portfolio
Resource Surplus & Deficits
10
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April 18, 2023Portfolio Management Overview 34
The UMT Portfolio Management architectureThe UMT Portfolio Management architectureModular, proven, leading-edge softwareModular, proven, leading-edge softwareThe UMT Portfolio Management architectureThe UMT Portfolio Management architectureModular, proven, leading-edge softwareModular, proven, leading-edge software
Central RepositoryTM
• SQL or Oracle Db• IIS Web Server• Thin Client
Financial (GL) Time ReportingEnterprise Integration:
Process:
Tools:
Portfolio Portfolio BuilderBuilderTMTM
Portfolio Portfolio OptimizerOptimizerTMTM
Portfolio Portfolio PlannerPlannerTMTM
Portfolio Portfolio DashboardDashboardTMTM
CreateDefine projects to deliver strategy
SelectPrioritize & optimize portfolio on rational
grounds using common currency
Phase: Plan‘Roadmap’ start & end
dates according to resource availability
ManageWorld-class PMO, track
benefits, report progress, mitigate risk
Define Drivers
Develop Project
Inventory
PrioritizeProjects
PrioritizeDrivers
Define Impact
Statements
Optimize Portfolio
Se
lec
t P
ort
foli
o
Optimize Project Schedules
Define Competencies
Project Requirements
CompetencyAvailability
Analyze Supply
vs. Demand
Reporting
Implement
Initiation
Design
Construct
Test
Gates
Sta
tus
Re
po
rtin
g Issues
Risks
CR’s
Resource
Milestone
April 18, 2023Portfolio Management Overview 35
MS Project Server Integration MS Project Server Integration Synchronising Project Update with Portfolio AnalysisSynchronising Project Update with Portfolio AnalysisMS Project Server Integration MS Project Server Integration Synchronising Project Update with Portfolio AnalysisSynchronising Project Update with Portfolio Analysis
Note: Workflow is configurable and customizable per client specification.
UMTPortfolio Manager
Microsoft Project Server
UMT Portfolio Manager™ and MS Project Server integration points:
Project ideas are entered and analyzed before being selected in the UMT Portfolio Manager and exported to MS Project
Server to enable detailed project planning (e.g., task level). Detailed project plans can be synchronized with the projects in UMT Portfolio Manager in terms of schedule data (i.e. at
the phase and milestone level only) and resource data (i.e. by competency or skill type) Resource availability data can be uploaded to the UMT Portfolio Manager from the MS Project Server, and used for
scheduling analysis UMT’s Microsoft Gateway can be used on a periodic basis to synchronize Baseline, Actual & Forecast data with UMT
Portfolio Manager for portfolio reporting and portfolio re-prioritization and optimization.
April 18, 2023Portfolio Management Overview 36
Seamless Integration with Microsoft's EPM SolutionSeamless Integration with Microsoft's EPM Solution
UMT Project Portfolio Server integrates with the EPM Solution to allow organizations to quickly deploy ‘Top Down’ portfolio analytical techniques on top of the leading enterprise
project management platform.
Executives Portfolio AnalystsProject Managers
Application Managers Project Managers
PMOsResource Managers
Team Members
Line of Business Systems