Making It Simple

Making It Simple Demian Entrekin December 18, 2007

Project Portfolio Management Applying PM Principles

I recently interviewed a manager who had just completed the first phase of a Project Portfolio Management (PPM) implementation.  They were at that point when the visibility is starting to yield results but there are still skeptics lurking about.  We started out by discussing the challenges they had been facing prior to making the move.  What problems were driving you to change what you were doing?  What was the pain?  The answer was pretty straightforward: Everyone was doing things in a different way.  The desktop toolset and the manual approach to projects were not working.

We dug a bit deeper.  Over the past few years, their business had grown at a steady pace, and the team was increasingly faced with managing multiple development centers and different teams in different time zones.  The more we talked, the more it became clear that their project environment had simply become too complex to manage.  This was no academic discussion of subtle gains in their Internal Rate of Return (IRR) and Net Present Value (NPV).

With overlapping schedules, distributed teams and conflicting priorities, the senior management team couldn’t get answers to questions like, “Who is doing what?” and, “Where are we spending our time and money?”  These are pretty basic questions, and they can challenge organizations with a fair degree of predictability.  The fact of the matter is that traditional, decentralized approaches to managing projects have failed.  They point us inexorably toward unmanageable levels of complexity.  Removing complexity is one of the major drivers behind implementing a PPM solution, and indeed the entire PPM market as a whole.

Complexity is inherent in the very nature of a project-driven organization.  Individual projects are dynamic entities, and as the number of active projects grows, the relationships between and across the different teams and schedules can spider out into a significant matrix management nightmare.  Bearing down on this matrix we face the neverending queue of proposed projects and mid-stream change requests.  This is the nature of project-based work.  When the list of new projects stops, you’re probably already out of business.

For many organizations, this matrix can devolve into crisis.  You might think that the word “crisis” is an overstatement, but in a heavily project-driven organization, crisis management can become the standard operating procedure.  People get used to constant crisis.  They accept crisis management as normal.  It’s all too easy to throw up your hands and concede the issue.  For organizations that choose predictability and coordination, crisis management is not an acceptable operating model.  From my perspective, complexity and crisis are close relatives.

Of the many reasons to implement Project Portfolio Management, removing complexity should sit very close to the top of the list.  Sure, there are other solid reasons to implement PPM, such as balancing the supply of resources versus the demand for new projects.  Another typical reason that has gained currency lately is the trend toward aligning project investments with the business.  Business alignment is particularly relevant in IT departments.

Unfortunately, not all organizations recognize that implementing a PPM solution is a golden opportunity to simplify and streamline their work processes.  Many PPM implementations attempt to replicate the enormous complexity that was caused by the lack of a PPM solution.

Let me be as clear as I can: Moving from a decentralized project management approach to a centralized project portfolio approach is a huge opportunity to simplify.  Clean house.  Standardize.  Tame the crisis culture.  There are several ways that PPM simplifies the project driven organization:
 
Information Management:
Managing a project-driven organization requires a significant amount of information.  That information takes many forms, including proposals, project plans, resource assignments, work estimates, standard templates, status reports, etc.  Certainly the actual management of people on a day-to-day basis is huge, but managing information can consume tremendous amounts of time.  Distributed and decentralized data leads to poor visibility, unreliable data, idiosyncratic process and unnecessary manual overhead.

Standardized Process:
Many organizations want to manage their project teams through a standardized process, also known as a project management methodology.  The point is to gain predictability and control.  With centralized PPM in place, organizations have the ability to standardize their project process.  While some project managers see this as a limitation on their autonomy, others see it as an opportunity to spend more time working toward the deliverables of the projects themselves.

Status Reporting:
I can’t count the number of times I’ve heard someone say that every project manager reported project status in their own way, or that if there was a standard report format, it was created manually by the project manager.  With a PPM implementation in place, producing a consistent status report should be as simple as pressing a button.  To be fair, the data has to be accurate, but that would be true no matter what tools were used by the organization.

These are just three of the ways that PPM helps simplify the management of project-driven organizations.  There are more, but these three appear consistently among all the organizations I’ve interviewed.  And what’s at stake?  Why do we care?  How about these stakeholder staples: controlling costs, accelerating time-to-market and improving employee morale?

But there is a price to be paid.  There is work to be done to make the transition from decentralized ad hoc project management to centralized project portfolio management.  First, the key stakeholders have to make the commitment.  If they don’t commit, inertia will prevail.  Second, there’s usually a mess that needs to be cleaned up.  Automating a broken process is never a good idea, and someone has to assemble, compare and clean the information.  Finally, leadership will have to communicate the purpose and the benefits of the PPM implementation.  When left to figure things out for themselves, most people will assume the worst. 

And the company I interviewed?  “We’ve still got work to do, but now we can see who is doing what and where we’re spending money.”  I’d call that progress, plain and simple.