Realising the benefits of
portfolio management
5 tips for a successful implementation!
The attractiveness of web based applications is leading to a revolution in the way we manage portfolios of projects. Many organisations are moving away from the quarterly data collection routine using Excel spreadsheets, and a central resource to collate data and report on it, towards a web based single entry system.
There are many benefits to the project teams responsible for entering project information, including:
- Ability to enter data remotely and at any time
- Dispersed project team members can enter different aspects of project information
- Easier to train team members and also to handover
- A user friendly interface and automated report generation
- Ability to easily enter financial and non-financial information e.g. milestones, risks, issues and other key performance indicators
Equally, the central performance management resource can now also spend less time collating data and formatting reports and focus on putting in place processes to ensure that project teams submit data in time for reporting deadlines and spend more time digesting the information and highlighting issues to senior management. There are of course many benefits for the senior management that will be using these reports for decision making purposes, including:
- Monthly or quarterly snapshots of the status of the portfolio
- Highlighting of any issues that require management intervention
- Improved ability to prevent duplication of effort and manage interdependencies
- Aids project prioritization
- Improved visibility of all project teams
- Easy access to historical information
TIP 1 : Document stakeholder expectations
In the simplest of cases, there are typically at least two sets of stakeholders. The senior management that need to use the data for managing the portfolio as a whole and the people that enter the data and who are generally the same people responsible for the performance management of their individual project. The expectations of each stakeholder group can vary quite significantly. Senior management will want to have enough information in the system to improve the decision making process and enable the coordination and management of complex projects, avoid duplication of effort, identify dependencies and also to have an overview of the portfolio.
However, in order to gain engagement from key project members it will be important that the tool can also meet some of their needs in day to day project and performance management of their projects. This can mean the addition of lower level features that interest this stakeholder group, for example, risks and issues reporting facilities and detailed planning capability. This group will also want reassurance that there are no duplicate requests for information and, if they already have systems in place, that there is some way of interfacing with incumbent systems.
Balancing and managing this set of expectations is an important challenge for anyone responsible for rolling out a portfolio management system.
- Ensure that each stakeholder group is clearly identified
- Document the expectations of each stakeholder group and ensure that they are kept informed with how the roll-out is progressing with respect to their interests
TIP 2 : Identify what’s in and what’s out
Before you start to think about what tool to use, it is important to clearly define exactly which projects will be managed through the system. Communicating this early on in any implementation ensures that confusion in the roll out phase is avoided.
Commonly, the IT function tends to be the first to implement a portfolio management system. However, this is not always the case. Many Business Units and Functions tend to also run numerous projects at any one time. Examples of portfolio types that have benefited from portfolio management systems include:
- IT projects
- Savings or synergy projects
- Procurement projects
- Group wide cross Business Unit and cross Function initiatives
- New regulation compliance projects
- New business pilot projects
Indeed, many of these Business Units and Functions may already be running some kind of performance management system for these projects and so it is important to be very clear right from the beginning the purpose and scope of any new portfolio management system.
TIP 3 : Select the right system
Once the decision to go with a certain system has been made, it is basically irreversible, at least in the short to medium term. The implementation of a new system is a costly exercise that also requires a step change in behaviours from the organisation. Typically, there is large resistance to change and so any implementation needs to be well thought through to retain its credibility.
Web based systems are becoming more and more powerful for portfolio management, however they can also bring with them limitations in how quickly they can be adapted as time goes on. This issue is one of careful balance between the tool collecting the data you need versus the data requirements being dictated by the limitations of the tool itself. For this reason, some organisations tend to go down the bespoke development route instead of reaching for an off-the-shelf solution. It should be remembered that even with an off-the-shelf solution, a large amount of time is required in configuring the system to meet your portfolio management requirements and also that off-the-shelf does not mean bug free!
Key considerations include:
- System technical requirements
- Ease of configuration and customisation
- Ease of data migration from incumbent or legacy systems
- Features to enable report design, distribution and automation
- Version control and data security
- User friendliness
- Resources and time required for complete implementation
TIP 4 : Keep it simple and drive for visibility
Once the system has been selected, you can get started on configuring. It is best to have run a small pilot at the system selection phase to ensure that the tool will have all the capabilities that will be required and also so that it is clearly understood what the particular limitations are.
When deciding what information the system should collect it is important to remember the associated burden that will be placed on project teams on supplying this data. In the design phase of implementing portfolio management systems, it is tempting for stakeholder groups to over-engineer the requirements only to find that project teams will push back on any demands for information that are too onerous.
To support the system, you need to carefully build a robust process around it.
- Make it clear what information is mandatory for reporting purposes
- Communicate the reporting timetable in advance to project teams
- Ensure support is in place and that individuals have received training
- Have a process to manage system change requests
TIP 5 : Communicate consistently
Often, the most challenging part of implementing a new system is managing the change and getting people on board. Engaging with project teams throughout the process, from the design phase to implementation, is key in ensuring that they take ownership for their delivery. Having the visible endorsement of senior management is vital in gaining traction. They will need to show how they will use the information that is created through the portfolio management system. The biggest fear of most project teams is spending a lot of time populating reporting systems with no feedback on whether their information is ever used in the wider management of the portfolio.
- Communicate with all project teams right from the beginning and take the time to understand any resistance
- Have visible senior management backing for the implementation
- Continue to communicate the benefits of the system to project teams
- Give access to support and training to the project teams