PnP Portfolio Management – Motivations

The introduction can be found here.

This is the second installment of our series on Product and Project (PnP) Portfolio Management. The intent of the series is to provide a simplified look of some essential concepts and their relationships to each other. The audience is for organizations considering Portfolio Management as a tool to support their business objectives and decision making therein.

In this installment we will take a look at the motivations that drive organizations to incorporate PnP Portfolio Management as a discipline and tool.

"In the beginning was nothing… and then there was light. There was still nothing but now you could see it!"

Company Driven

A company driven initiative is where C-Level management is motivated to lead the company in the right direction in a more effective and efficient way. They recognize that a portfolio management approach can be applied  across any business line, product group or functional area. A reasonable communication from the CEO may start out with, “To align our efforts, assets, costs and funding to ensure focus on our strategy, bottom line,…”. Of course the words may change but the message supports the intent to gain insight and utilize that information in investment decision making.

Positive signals:

• The decision to embrace Portfolio Management was preceded by open and continuous communication during the ideation and initiative development
• C-Level backing and visibility
• Realistic expectations with clear lines of accountability
• Iterative Start (e.g. Resource Management, Budget Planning, Strategy Planning)
• Follow through!

Warning signs:

• The “Surprise, we’re doing this” message when news of Portfolio Management direction comes in the form of water cooler discussions or organizational charts with "TBD" in leadership positions
• Portfolio Management appears as part of your yearly performance review or bonus objectives
• No plans and/or schedules and no indication when to expect them, from whom and how you are expected to participate
• Change in management

IT Driven

Until recently, IT Project Portfolio Management (PPM) had led the charge utilizing the techniques as a management and planning tool. Initially leveraged with a project-centric bias, its use has expanded to areas of application maintenance, service and support. This history also explains why most IT shops leave PPM ownership in the inappropriate PMO, not exactly the ideal home.

Advanced usage by IT shops leverage the information in budget cycle analysis and product/project/feature prioritization, looking at historic plan versus actual information across numerous variables such as resource, expense, capital and support spend.

Positive Signals:

• Key data input such as time accounting, expense and capital spend, service indicators and project performance metrics are standard operating procedure (SOP)
• Information is being evaluated on project health, business value, duplication of effort, assets management and control
• The classification and categorization of the knowledge model that evolves with the business

Warning Signs:

• Ownership in PMO, Development or Operations
• Critical data missing from the model, for example: non-discretionary versus discretionary budget allocation, projects plan versus actual, strategic versus tactical asset spend, etc.
• The CIO thinks your talking about day-trading when discussions of portfolio management are at the table

Grass Roots Driven

Believe it or not, the transition to IT and/or Company embraced portfolio management can occur from the bottom up. Many functional areas (e.g. procurement) have their own portfolio/inventory tracking mechanisms (e.g. spreadsheets) and utilize this information on a regular basis (i.e. analytics).

Unknown or forgotten by senior management, these are the linchpins from day to day and year to year successful operations and cost management. It would be important for upper management to do an inventory of what groups have asset or performance information littered throughout the organization. This may reduce the cost of initial data setup, although it may be at the expense of integrating as-is content.

Summary

This concludes our second entry in the topic of Product and Project Portfolio Management... our next post will focus on key data and supporting relationships that are critical to successful IT Portfolio Management implementations.

Until next time sportsfans...

Product and Project Portfolio Management

Introduction

Axiom:1 has provided consulting services for Portfolio Management to a number of clients. We have found that a many of them had the best intentions of creating a Portfolio Management discipline, or approach, in their business but lacked some essential understanding that would have avoided tremendous overspend, false starts or failed attempts.

Our posit is that most, if not all, decisions made in an organization can be greatly enhanced by utilizing Portfolio Management disciplines that produce various insights about their product and service offerings investments.

This is the first in our series on Product and Project (PnP) Portfolio Management. The intent of the series is to provide a simplified look of some essential concepts and their relationships to each other. The audience is for organizations considering Portfolio Management as a tool to support their business objectives and decision making therein.

In this first part of the series we begin with some introductory ideas used as the foundation for future posts.

Terminologies and Concepts

A Portfolio is the appropriate mix of investments (e.g. products, projects, resources, services) held by an organization and grouped together in such a way as to facilitate effective management.

Portfolio Management is the combination of disciplines, techniques and practices used to provide insight into the state of the portfolio, through careful assessments, as it relates to the strategic goals of the organization (e.g. increase revenue, open new markets, increase productivity, etc.).

The main concepts to provide today are:

• Product
• Project
• Resources
• Lifecycle

Product

A Product is anything that can be offered to a market that might satisfy a want or need. In general usage, product may refer to a single item or unit, a group of equivalent products, a grouping of goods or services, or an industrial classification for the goods or services. Some industry examples include Insurance Policies, Payroll, Landscaping, Tax Preparation or Stock Trading.

A product, in its lifetime, will have multiple projects associated to it and will consume resources in various ways that enable, sustain, progress or fix the product. A product has resource allocations both directly to the product or temporarily in supporting projects.

Project

There are many written definitions of a project, however, for those looking for a formal definition of a project the Project Management Body of Knowledge (PMBOK) defines a project as a temporary endeavor undertaken to create a unique product, service or result. The temporary nature of projects indicates a definite beginning and end. The end is reached when the project’s objectives have been achieved or when the project is terminated because its objectives will not or cannot be met, or when the need for the project no longer exists.

Projects require various forms of resource and said resources may be allocated in whole, or in part, throughout the project lifecycle.

Resources

Resources are those things (tangible and intangible) that can be combined to produce products and services. Two main characteristics of resources are utility and quantity (often in terms of availability), therefore the scarcity of resources may cause supply shocks. Common resources of focus in PnP Portfolio Management are people, capital and expense budgets, hardware, software and other consumable artifacts.

Lifecycle

A lifecycle describes the progression of something from conception (ideation) until it no longer has any value (decommissioned). In PnP Portfolio Management typical lifecycle ranges used for measurement intervals are weeks, months and years.

Summary

This concludes our first entry and introduction to the topic of Product and Project Portfolio Management... our next post will focus on the various motivations of PnP Portfolio Management.

Until next time sport fans.....

"It's easier than you think…"

The most dreaded words for us are "BPM requires too much overhead". Why? Because the job just got harder by having to first get through a misaligned perception.

The earmarks of BPM academia can be found in most books on the subject and, to complicate matters even further, there are a number of practitioners who believe the only way to treat each engagement are to take a formal "top down" approach. On the other side of the coin there are the software vendors that would prefer you purchase the solution on the promise that the sun will shine brighter. This "bottom up" approach is viewed as the "what BPM is" because the marketing of BPM drives the perception that BPM is only a technology. Either approach, taken to the extreme, can be dangerous.

We've previously spoken of the confusion growing in the industry around whether BPM is a methodology, a technology or a way of thinking . The problem, or salvation, is that it is all that and more. We believe that the opportunity for Process Improvement can be a hybrid of both a top-down and bottom-up approach, add into that recipe experience, practicality and a dash of "Just Do It" enthusiasm. Given this mix you're likely to find that ROI achievements are closer, and less expensive, to obtain.

The CEO, CFO and/or CIO do not want to hear that in order to achieve BPM returns they have to ship everyone off to Tibet to learn the teachings from the masters for six months. They need solutions yesterday and, with the speed of change occurring in the business world, the tomorrows are coming faster than ever. By the same token senior management does not enjoy when a multi-million dollar system investment needs to be scrapped because it didn't do what they expected, or they didn't invest in the process definition and organization changes to support a new approach.

Not in this economy! Now, more than ever, realistic and practical approaches are needed. The economy has reduced the workforce for a number of companies, which are now faced with the burden of producing the same, if not more, with fewer resources. At some point when things pick up you need to ask whether you want to hire back into the same inefficient processes you've always had, or do you want to do something about it? And if you want to do something about it, has the perception of cost or approach dissuaded you from taking that step?

One of the major disappointments in the software development arena is most approaches (waterfall, RUP, Agile, etc.) are perceived to be a total and immutable commitment to a methodology. While each is somewhat malleable within their own framework, they aren't suited for every single problem. The more successful development manager is going to view each as being a different kind of tool and they have the flexibility to choose which tool is best suited to a set of architectural changes or feature requests.

So what do you do?

The BPM space is starting to trend the same way, so here are a few pointers we practice to keep approaches realistic, manageable and efficient:

·       Be Real: Change is not limited to a new technology. Often times a process and, more importantly, people need to change as well. A good look at both helps identify where roadblocks are likely to occur and a good head start on correcting those issues.

·       Think Like an Artisan: Start with the realization that the technologies, methodologies and types of cultural changes necessary are the tools to get the job done. An experienced and practical facilitator will recognize that and set about picking the right approach and right technologies to address the need. This requires an agility in thinking from the target audience be it middle, senior or executive management.

·       Leverage Existing Talent: Consider pairing up some of the more rigorous thinkers with the "out of the box", or more cavalier thinkers. It may take some getting used to, as both these types will need to learn and gain insight into the positive aspects of their respective approaches.

·       Go Iterative: Taking small “Just Do It” steps are a good way to avoid analysis paralysis. Put realistic boundaries around scope and accept that, in post-reviews, changes may be necessary. This is a kind of mini Process Improvement opportunity that may result in a slight increase of cost, but avoids a complete restart or abandoning of the effort.

·       Produce and Discuss Metrics: This must occur from various perspectives including the Customer, Finance, Process, Technology and People. Avoid glossing over indicators that may not look good, instead ask the question… “Why?” And then put in action plans to overcome the obstacles.

These are simplified descriptions but it holds true to the tenets that most things in Process Improvement and Technology changes don’t require boiling the ocean.

Until next time sports fans!

The hidden gems of quality...

There is a significant relationship between quality, metrics and Process Improvement endeavors. So much so that we've developed a white paper that shows, by example, where even minimal effort can realize appreciable rewards to ROI.

The white paper PDF can be read by clicking here . We hope you can find some value in the concepts and ideas and, of course, we welcome any feedback and opinions.

Until the next time sports fans...

Technology is not a BPM panacea...

Axiom: If you purchase the technology first you will pay magnitudes more in the long run.

You will end up spending more time which will delay the delivery of success, and money which in this economic environment that isn't exactly a recipe for advancement. Given that there are a few very practical steps that can be taken to achieve significant ROI while potentially transforming the company to meet the 21st century head on, why would you consider any other way?

BPM Technology

It is becoming more and more difficult to separate the technology of BPM from the practice. With many vendors hawking their products as BPM, versus the more appropriate Business Process Management System (BPMS), it is no wonder that confusion may abound.

There is no question that these technologies play a major role in realizing the benefits of a practical Business Process Transformation (BPT) endeavor. Furthermore, there is no question that a few vendors have truly remarkable products that can help, but buying the technology to achieve this results should never, not even ever, be the motivation for the activity.

The terrain is littered with the failed attempts that started with the purchase of a "silver bullet" technology (and the managers that recommended them), only to find their success as taking up space in the IT coffers and the finance groups maintenance accounts payable ledger.

Practical guidelines

Here is the short version of the types of questions that we ask at Axiom:1, Inc. when working with a new or existing client. While on the one hand we use this for structuring our engagement, it's primary purpose is to help us, and the client, get an understanding of the readiness to undertake a technology implementation:

1. Is your vision and mission defined? Depending on the scope of the perceived problem space this may be at the functional, organizational or company level.
2. Do you understand your processes? Especially the ones that are critical the success of the vision.
3. Are there process owners?
4. Do you understand your culture? Are they ready for the change?
5. Do you know your strengths, weaknesses, opportunities and threats?
6. Do you have a modeled process that shows benefits to Customers, Finance, Process and/or Culture?
7. Do you have metrics, both performance and results oriented, in place? Are they significant and relevant?
8. Do you have a plan that covers the above?
9. Do you have a technology evaluation program?
10. Do you have the budget?
11. Is there support at the executive levels?

Getting these ducks lined up will pay dividends galore in the long run:

• A significant reduction in costs and effort when guided by a solid plan.
• Tangible support from upper/senior management.
• A clear understanding of what process changes are going to truly be beneficial to the company.
• A plan of execution including transformations of the values/people/functions where needed.
• Ownership and accountability.
• Relevant measurement and feedback loops.
• The right technology to do the job.
• Significant reduction in the "fits and starts" that accompany ill guided approaches.

More to come sports fans, stay tuned....

Is that a culture in the petri dish?

Now that you've secured support from C-Level management you may feel lighter than a hot air balloon rising over a early morning sun on the Serengheti. Of course you do! That was the easy part and often mistaken as a sure fire ticket to success. Enter at your own risk as you are about to face the biggest challenge of them all... The Corporate Culture!!!

It is the corporate culture that has been breeding untended for possibly decades. If it is a positive "can do" or "let's try" culture you may have a good chance of smooth sailing. Ironically enough a predominate experience is that many organizational cultures have undergone a mutation resulting in a working force that doesn't trust management or coworkers, and is rife with politics. I say ironically because, after all, don't you all work for the same company? Don't you share the same goals and objectives?

In line with our comments that suggested senior management support would enhance your chance of success: If you are in a situation where the culture has grown around empire building, mistrust and contention, where the individuals desire for control and political maneuvering inhibits positive evolution you will not, let me repeat, you will not succeed.

How the organizations culture got to be this way may be an interesting intellectual endeavor, suffice it to say that it didn't just happen on it's own. More often than not the behavior of the organization is a reflection of the behavior of it's senior management and that could mean you as well (yes, we are pointing directly at you). Does "monkey see, monkey do" ring a bell? From a practical perspective it makes sense to become a change agent and start at the senior leaders and aim to adjust their thinking and practice to dramatically and significantly improve the odds of success.

The bigger and broader the changes you need to make for your business process improvement goals, the more important it is to focus on the organizations learning and growth potential. You will, should and better make it a point to focus on the individuals who will be doing the real work day after day with the changes before moving on to any implementation. Enlist your HR group to help in programs that affect an open and caring relationship with the entire organization. If you already have a communicative, collaborative and considerate culture that are all aimed in the right direction, count your lucky stars. However, most companies should consider addressing the culture issue as it stands to use some work... especially in todays environment.

There are numerous tome's written on the subject of being a positive change agent and one approach in particular is worth noting: Lift - Becoming a Positive Force in Any Situation is a insightful, thought provoking and practical perspective on positive influence that may be worth your time, and better enable you as a change agent.

Has anyone seen the mission?

Previously I spoke of the essential and necessary commitment to a process improvement program, be it facilitated by outside consulting or as part of an internal group: Commitment to change!

While what I am going to describe is not guaranteed to get the undying support needed, using certain techniques at the onset of the approach may strengthen the probability of commitment from the CEO or CIO as well as establishing a “thinking” Sr. Management team. All this for the price of a nice dinner with a reasonable bottle of wine for a few friends!

The activity is the establishment of the Vision and Mission statement for the organization and ensuring that they are clearly defined and understood. "Wait!", he/she says, "Don’t we already have those? Haven’t we been working for all those years looking at the company slogans on our internal portal? Seems like a waste of time to me!" Does it? Here’s a quick test: Perform one-on-one interviews, back to back, with the members of the Sr. Management team, as well as the CEO, and ask these questions:

1. What is the vision statement for the organization?
2. What does the vision statement mean to you?
3. What is the mission statement for the organization?
4. What does the mission statement mean to you?

Possible outcomes:

1. Each and every interview results in a rock solid shared understanding and meaning of the Vision and Mission statements.
2. The number of definitions and understanding of the statements are different for each interview! This assumes everyone can recite the vision and mission statements!! This assumes the organization even has them!!!
3. Some variation of #2.

OK, so what does it mean? Clearly, if the outcome of your work is that everyone can recite and has a shared understanding of them then you can move on to the next steps of the assessment. But, and this is where the majority of us will find ourselves, if the result is anything else then there is one very important indicator here:

If the Sr. Management team does not unanimously understand the Vision and Mission and what it means to their respective responsibilities… how can anyone expect that the organization is succeeding at driving to the same goals? How many cooks are in the kitchen?

Until the next time sportsfans…..