Red, amber, green

Red, amber, green

With multiple projects earmarked for your IT resources, which do you give the green light? How do you track their progress and decide which to retire? Senior executives share their portfolio management strategies.

Setting the framework Carol Abernethy, Ministry of Justice: Early July last year, we released the strategic plan for the combined agencies?–?the old Ministry of Justice and the old Department for Courts. It was excellent timing for us to kick off the development of our Information Systems Strategic Plan (ISSP) that would be a significant enabler to being able to achieve the vision articulated within the Strategic Plan.

The ministry’s ISSP has identified some 28 initiatives that need to be done over a period of time to deliver the future technology environment needed to support the business. We have a bid process every year whereby various business units, including ourselves, put forward bids for items of work that might be in the IT world... We’ve established a very strong IT governance process and framework, which has within it a review cycle. If something comes up out of the woodwork we have a process of then reviewing the work program to understand where this new item might fit in. And if it has a higher priority, what needs to be stopped or de-scoped to make room for it.

Allan Sainsbury, Ministry of Foreign Affairs and Trade: I’ve walked into an environment where a formal project framework is not embedded in the culture of the organisation, an environment where there’s no project portfolio management at all, and they work in silos of delivery.

One of the key problems I’ve got now is establishing a project office. They understand there is a governance requirement, that they need to understand how their investment works, but they don’t really have a view of what the particular dependencies around their overall project management. They see projects as being something that is IT, not business.

Carol Abernethy: Over two years ago that’s exactly where we were. The establishment of our IT governance framework was critical, because there was lots to be done, and just like all other organisations, we don’t have a bottomless bucket of money to do these things, or the capacity to be able to do them all anyway.

We’ve also put in place an engagement model that defines some principles and practices around how you might engage and work with your partners out in the business. In addition, we have a national office program office which is responsible for ensuring we have best practice project management practices and disciplines across the organisation. When you set up a project, how do we kick it off? Who’s going to lead it? What does the steering committee look like and what does it do? What’s the project lifecycle? What templates do I use, for example, to develop my business case document?

While the program office currently operates only across what we might consider to be the IT projects the view is that, longer-term, we will extend its reach across all projects within the ministry.

How to prioritise projects

Paula Beever, NZ Fire Service: When we go through scoring a project, the first thing we look at is alignment with strategic objectives. If you can’t find a very clear strategic objective, you’ll never get the scoring that will push the project through. That’s really what drives the individual projects.

Allan Sainsbury: I’ve taken a first principles approach. Where you have a vacuum it’s essential to establish rules that are clearly understood and standards-based. I’ve set some standards based on PMBOK [Project Management Body of Knowledge], so at least we put our frameworks in place very quickly, but I think that should be fundamental in gaining control first. You do your governance framework around that.

Warwick Sullivan, Ministry of Health: All the projects we have coming downstream are seriously large projects with important ministerial/government policy decision to enact or support. They’ve all got very well demonstrated outcomes in terms of the health of New Zealanders. How do you balance these against each other? We’ve had a look at this at some of our meetings with our executives and sponsors and said, you can’t balance child health proposals against cardiovascular proposals against diabetes proposals against primary care proposals because they’re all equally important, and it just depends on how well you draw up the words. It depends on how many of the 54-plus health strategies you can attack at once.

So there’s a major prioritisation issue. It’s actually about understanding the resource problem and being able to solve that. Sometimes it can be as simple as finding the money and acquiring the resources because you have to do the projects.

Another problem is balancing new activity against maintenance?–?we could quite easily end up spending all our time and available resources doing projects to support new imperatives across the health sector, but then we’d have a number of systems that would fall over tomorrow.

...And when to terminate them

Alan Dempster, Victoria University of Wellington: We actually have in our project framework a step that evaluates projects to be killed at three or four points on their lifecycle. It’s documented and is a part of our framework. So nobody is frightened about doing it. They will address it up front and ask, ‘Have we reached a point where we’ve got to consider this for termination?’

Building an effective PMO

Hadyn Easte, AUT: Historically, a PMO has often been set up as the fall guy, somebody the business shoots at. One of the mistakes when setting up a PMO is when you take accountability out of the business. You take the accountability away from the sponsor. The sponsor is the one that must make the resources available, must understand the strategic fit, and must be ultimately accountable for the delivery of the business benefits.

Murray Collins, Genesis Energy: We have a relatively mature PMO that uses a repeatable methodology (Project Management Institute-aligned) that’s applied to all project delivery. A PMO administrator is responsible for enforcing this function. The advantage of the methodology is that it will scale. I’m always conscious that the PMO has to be positioned to management to be adding value, there has to be a value proposition in it, not a perceived bureaucracy. To that end, project managers are measured by the success of their outcomes, not by the amount of documentation they produce.

Carol Abernethy: We have a PMO, we call it our national office program office. It sits separate to our various business units. Currently there are two people in the program office and part of their role is to support the IT Governance Committee itself. They’re also responsible for establishing the project management disciplines and frameworks across the organisation with the view that ultimately that will be across all projects, regardless of what kind of project they might be. They have also identified preferred suppliers for doing independent quality assurance across our IT projects.

Channa Jayasinha, Ministry of Economic Development: We have a very small PMO. We have five project managers, a project administrator and a PMO manager. Part of the PMO direction is to deal out the framework for managing projects and then communicate that to the businesses. Every month, every project goes through an IQA, Independent Quality Assurance, which is led by the PMO manager. The CTO is involved. The business owner is involved and the project manager is involved.

We spend half an hour a month on each project going through a set of iterations. So that may actually stop the finger pointing as well, because we engage the business in that process.

Working with business units...

Warwick Sullivan: We just had a big meeting at which we called all our project sponsors in and gave them 15 minutes each to do a pitch about their project and what resources they would require. By quickly describing the project we got an appreciation of the project complexity and the resources required?–?this was not just IT but also a couple of the other business units that directly support information processing and analysis. Then, on the whiteboard, we collated the resources we thought their project would require from us.

The project sponsors saw their project was one of more than 70 and needed so many architects, business analysts, quality people, and so on. All they could see were these numbers on the whiteboard and go, ‘Oh, we’re competing against those.’ They suddenly started to realise the big picture problem.

Hadyn Easte: I manage a division that tries to be very customer-focused. Rather than saying no to the customer we prefer to make strong recommendations. We have a saying for this in the ICT industry, its called ’herding cats’. What I say to the customer is, ‘If you want A, it’s going to cost you $10 million. If you want B it’s going to cost you $8 million. I would recommend B.’ Often I know before I’ve even finished saying it, they’ll go for option B. So as project managers you try to guide the customer, to steer them.

We herd them in a particular direction we believe they should go. That presupposes you get sufficient exposure to what the business problem is so you’re able to offer objective and valuable recommendations.

...And other sectors

Carol Abernethy: We have to work very closely with the justice sector, which often means working with Corrections, Police and Land Transport. So we have a further governance body. The CIOs from those agencies and myself get together monthly. We have a collective responsibility to make sure that, where we need to be working on joint programs, we’ve got good structures, standards and practices in place to ensure a successful outcome.

Warwick Sullivan: We’ve started to do portfolio management at the group level and move up. It’s about having transparency of information. There are even larger discussions about the need to do more portfolio management across the health sector. I believe that our director general and the CEO of ACC are talking about this?–?we know the sector can’t absorb the amount of change the larger funding organisations in the sector prescribe, and this needs to be managed. The health sector project prioritisation space can be thought of as an onion with a number of layers. At the top level you’ve got to invest in all the layers to some degree. What is needed is a means of commonly representing all the different needs, different approaches, and different tools to achieve common understanding.

Prepare for staffing issues

Carol Abernethy: When you have a large IT portfolio, you’re also competing for people in the business doing other non-IT related projects or fulfilling key core service delivery roles. Often you’re pulling on the same people for involvement in your change programs. This, of course, can cause resourcing conflicts. So it’s important you have an agreed view about prioritisation of the work program across the organisation.

Keep on tracking

Warwick Sullivan: To ensure that projects from different areas of the Ministry are able to be supported over the long term, we instituted a concept called Acceptance to Service (A2S) and it’s a formal process. I chair that board?–?my infrastructure manager is responsible for making the recommendation to me because

it’s going to go in his performance agreement. In meeting the customer needs, there is a Service Level Requirement which becomes the Service Level Agreement after further negotiation?–?the requirements should hopefully have come

from the Project Vision. We put the requirement to complete the A2S onto the project on day one. As the project starts, we say here’s this process that you must complete?–?this is what you’re up for. So whilst you might be going and thinking you’re delivering a box with a cool application on a number of screens, be aware that you’ve also got to produce an operations manual, a capacity plan, a service management process, a support model, training courses, funding for future training. Especially training –?don’t expect the people who are going to be maintaining this will remain in the organisation for the next 20 years.

Paula Beever: We’ve only been going for about three years, but everyone puts up a business case and it identifies the brilliant changes this is going to make to the organisation, how much more we’re going to be able to do or quicker or cheaper or whatever, and along the way they identify a number of outcomes. We’ve certainly been monitoring the outcomes are delivered from the project, but we’ve now taken it to the next step and said the outcomes of the project are project-related, but they’re not necessarily what the organisation was looking for. The organisation wasn’t looking for outcomes for a project. It was looking for change, it was looking for benefits.

So now, on the end of every project plan, there has to be a benefits map that says ‘These are the benefits we’re looking for to the organisation’. What do we need in addition to the completion of this project for those benefits to be delivered? The process of drawing the benefits map forces you to recognise there are a number of assumptions dotted through your business case. We continue, after the completion of the project, to monitor the benefits map to try to see if we can spot the benefits that were anticipated by the visionary who wrote the business case.

The leadership imperative

Hadyn Easte: In the projects or programs I’ve managed, the best sponsor is the one who has some skin in the game. You’d be surprised how you can move project roadblocks when the outcome of that project or the realisable benefit of that project is directly correlated to the future promotion of that executive. Is there a methodology for getting that engagement, that meeting of the minds which has to happen between the sponsor and his or her lieutenant, which is effectively the project or program manager? Doesn’t that just come back to effective leadership? How often have you seen a significant cultural change when a strong leader practices transparency and leads by example? And how often have you seen or been involved in projects where, if you go through the often painful exercise of sorting out the leadership or sponsorship issues upfront, then the project just seems to glide from then on? Everybody lifts their game with good leadership.

Lessons from closures

Alan Dempster: Service management frame-work is one of the changes we’re implementing at the moment. The question came from realising project closure outcomes. So a project closure report might say, ‘We need to do this, we need to do that, we’ve identified this problem’. We track those and actually make sure that they are delivered with an action, either as a new project or a project recommendation or as a production activity, so some area needs to be changed or some other action has to happen.

Carol Abernethy: We have closure reports that come through when a project is finished, and we were seeing lots of really good information in them. At our IT governance committee meetings we do talk about all the great successes that have happened during the project, and about the things that potentially we can learn from. This is then summarised noting key action points and is published by our program office.

Murray Collins: It’s important to have the ability and maturity in the organisation whereby a final report can be tabled for critique. It might not be a beautiful read but at least it’s an open and honest opportunity to learn from the project outcomes, positive or negative, without being ridiculed.

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Proceed with caution

By treating IT investments as a portfolio, it is possible to accommodate a mix of projects with varying risks and returns, reports Forrester analyst Craig Symons. He lists five best practices to maximise value from these investments:

• Segment the portfolio. Include all active and proposed investments, segmented into innovation, growth, and sustaining categories to ensure the mix matches their strategy and enterprise architecture maturity.

• Implement shared accountability. IT and business should share accountability for the project’s total success or failure.

• Employ full life-cycle management. Improve the accuracy of business cases by holding post-implementation audits, tracking actual benefits realisation over the life cycle of the investment, and feeding this learning back to the organisation.

• Use a consistent, credible value methodology. A standard methodology allows the steering committee to compare different project proposals to make fact-based decisions.

• Conduct regular portfolio reviews?–?and make tough decisions. Should you continue, accelerate, reduce or stop the funding? Anecdotal evidence suggests identifying and terminating failing projects early on so resources can be redeployed on more strategic initiatives is one of the biggest advantages in active portfolio management.

Source: Forrester

On the panel:

Carol Abernethy, general manager technology and services, Ministry of Justice

Paula Beever, national director, fire risk management, NZ Fire Service

Murray Collins, IS program manager, Genesis Energy

Alan Dempster, director of IT services, Victoria University of Wellington

Hadyn Easte, divisional manager, Auckland University of Technology

Channa Jayasinha, chief technology officer, Ministry of Economic Development

Allan Sainsbury, IT director, Ministry of Foreign Affairs and Trade

Warwick Sullivan, chief technology officer, Ministry of Health

Stuart Preston, country manager, CA New Zealand

Bob Fowler, director, business service optimisation, CA Australia

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