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  • How can Project Portfolio Management Help Fix a High Project Failure Problem?



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    April 8th, 2013

    What follows is the story of a company with a few issues (more than I thought I was getting myself into). I happily started work at an IT Project Management Organization (PMO) of a large healthcare organization. I had been told there was one thing to be done for the PMO – help them develop project prioritization. Easy!

    I quickly found out that the PMO had a large project failure rate. Other issues included:

    • Continuous mergers and acquisitions resulted in siloed, independent businesses with no incentive to work toward common goals,
    • Business and IT didn’t work well together,
    • People didn’t want to change (that’s normal),
    • There was no view of resource capacity to demand (they had an excruciating manual, time consuming, inaccurate method for handling resource assignment),
    • There was no single view of all projects,
    • And of course projects were failing (a very bad issue for a PMO to have).

    THE PROBLEM

    The highest value projects were not getting done.  With no prioritization and no view of true resource demand to capacity, low-value projects were gobbling up resources needed by high-value projects. This caused the more valuable projects to be stalled or stopped in mid-implementation. This also resulted in corners being cut when project managers tried to shotgun projects through the lifecycle to ensure they did not lose precious resources. Project planning was one key phase that was shortened or skipped altogether, leading to a higher rate of project failure.

    the-problem

    It was easy to get a project into the queue. Projects under a certain budget limit could be submitted and were automatically put in the project queue to be resourced within a week. Anyone could submit a project request and provide very minimal supporting information.

    WHAT WASN’T WORKING???

    I kept hearing that they had a prioritization method but they seemed very hesitant to let me know what it was. When I found out what the process was, I understood their hesitancy – they were embarrassed. The steering committee was to give each incoming project a priority of high, medium or low. Guess what? All projects were high priority.

    For higher cost projects, IT Governance did exist. In the fall of each year, the IT business unit directors would provide business case information for projects they wanted to implement in the coming year. The regional leader would review and accept the projects he or she deemed priority for the site; and an oversight committee eliminated additional projects from the plan to lower the total site budget to match what they could allocate. The results of these meetings determined each site’s budget. In the following year, the sites were free to substitute other projects for those that had been approved, making this an exercise in obtaining funding, not in proper portfolio planning.

    THE FIX

    working

    For the PMO, we determined that the two main issues to be resolved were lack of resource management and prioritization. They concluded that implementing project portfolio management could resolve both issues and result in successful planning and project management.

    The goals for the Portfolio Management implementation were as follows:

    • Tie projects to the corporate strategy,
    • Develop business cases for all proposed projects,
    • View projects across all sites to determine opportunities to combine efforts,
    • Improve project planning,
    • Develop application standards and application portfolio management.

    We developed a model for scoring project requests which would serve as the basis for prioritization. The model was based on research of best practices in the industry and tied to the organization’s strategy. Once the model was in place, it was used to prioritize the projects submitted for the yearly budget to demonstrate to the decision makers why they should fund the proposed projects. They now had clear insight into what should be done (prioritization) and what could be done (resource management). Including portfolio management in the project lifecycle greatly improved the organization’s ability to successfully implement projects. It is well known that Portfolio Management is intended to maximize the benefit from an organization’s portfolio of projects; but it also helps ensure project success by “sizing” the portfolio to fit the available resources.

    DID THE PEOPLE LIKE THIS CHANGE?

    The PMO wanted and needed this change. They clearly saw the value of the change. But what about all the business unit managers that wanted to just ask for a project and get it done? You guessed it, they didn’t like it. What was the culture missing that would convince people this change is good? They needed to change from many separate business to a unified whole, making decisions based on the value to the whole organization. We utilized change management best practices by including the business unit leaders in developing the prioritization model, giving them ownership of the solution. We also kept in touch with people impacted by the change regularly to keep them informed of progress and remind them of the business return to be realized from the new process. We worked with people to understand their issues and deal with resistance.

    WHAT IS SO GOOD ABOUT PROJECT PORTFOLIO MANAGEMENT (PPM), THE CURRENT PROCESS WORKS FOR ME?

    We got this question from the people who were getting their projects successfully completed and didn’t have to do anything to justify the budget. We needed to explain the value of Project Portfolio Management. In a nutshell, Portfolio Management determines how to objectively judge which investments will provide the best return and help the organization meet its strategic goals. What a great idea!

    This blog was contributed by Carolyn Reid, MSS Consulting Manager

    For questions about Successful Project Implementations, Performance Management, or Project Portfolio Management contact us at info@msstech.com

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    Cite this blog post:
    MLA: Reid, Carolyn. “How can Project Portfolio Management Help Fix a High Project Failure Problem?” MSS. MSS. Blog. 08 April 2015.
    APA: C Reid. (2013, Apr 8). How can Project Portfolio Management Help Fix a High Project Failure Problem?