TechnologyProject management – A better way to manage?

Project management - A better way to manage?

Portfolio project management, where a single manager controls all IT projects, can often make better use of resources as well as affording more operating flexibility. Garry Ingram explains the benefits.

As the slowdown bites, IT managers are being asked to deliver more with fewer resources in a shorter time. And as project management margins are squeezed, they have less space to manoeuvre and fewer options to ensure projects are completed on time, and to specification. Many believe the traditional way of dealing with each IT project separately is inefficient. There may be benefits in developing a broad vision of objectives and management across multiple, perhaps unrelated, projects. This approach is sometimes called portfolio project management.

Phased developments Under traditional project management, each project has a separate, dedicated team, controlling resources, timescales and scope. The business benefit is only achieved upon completion. But this approach may be wasteful, and may become harder to justify given growing budget constraints.

With portfolio management, a single manager controls all projects. Resources are deployed across multiple projects, and decisions are made to deliver the maximum business benefit. Projects are assessed in terms of potential benefits, leading to more phased implementations and earlier ROI. The advantage is that staff can be used much more flexibly, as resources can be shared between the projects on a part-time or sequential basis. In theory, the total resources allocated per project decreases, making the process more cost effective, although sometimes it may lead to a delay in completion. Portfolio management requires an appreciation of the business objectives for all of the projects involved – termed a scope framework. Thus it is crucial to gain a thorough understanding of the business benefit of each project as well as its relative priority. To do this, IT managers should define overall objectives and identify a business sponsor for each project. They must quantify the benefit for each project on a simple scale, and identify subsets of the functionality that are sufficiently modular to be implemented independently. This allows implementation in phases, and managers should estimate the percentage of the project’s business benefit as well as the duration that each phase represents. This process enables the manager to gain a helicopter view of all projects in the portfolio, and based on the quantifiable benefits, the manager can assign an appropriate level of priority to each project.

Team changes
Staff must be allocated to working groups. These groups will not necessarily be restricted to a single project, and individuals must clearly understand their roles and responsibilities. They need a structure that allows individuals to communicate easily with one another and the portfolio manager. To create efficient groups, managers define the role of each person and their responsibility within every project stream. Some staff might be involved in a single project while others could be working on multiple assignments. Managers also need to implement a reporting mechanism that highlights the impact of slippage, or early completion, across the whole portfolio. They may need a progress-tracking system that is responsive enough to detect overruns for those who are only working one day a week on a project, if such overruns could have a knock-on effect or cause delays elsewhere in projects.

Communication needs
Communication is paramount. Good structures and mechanisms for reporting and tracking are needed, and internal communications must be as clear as possible. Since working groups are less cohesive than traditional teams, the portfolio manager must take more responsibility, encouraging information-sharing among staff.

One of the benefits of portfolio work is the ability to use resources and information across multiple projects but to realise this the whole portfolio team must see the big picture. Then they will understand if it is necessary to make changes which may harm an individual project but benefit the overall portfolio. Traditionally, each project has a board that focuses on the objectives of that project. The portfolio manager must have the flexibility to move the focus and the resources between projects. Clearly, this may cause changes that benefit one business area over another. To ensure this flexibility, the portfolio board must have responsibility and authority for all the business areas affected by the projects.

Authority to make changes must be assigned to the portfolio manager at portfolio rather than project level. And finally, any changes to the estimated business benefit or the assigned level of priority for a specific project should be raised as a formal change.

Decisions, decisions
Decision-making is usually more straightforward when only a single project is being managed. With portfolio management it is necessary to consider the effect of decisions on all projects if they have inter-dependencies.

But this can lead to more creative solutions. The important thing is to monitor business benefits and encourage cross-project thinking. When an issue is raised, its impact on the individual project and the portfolio must be assessed. Analysing the impact on the project – as in traditional management – identifies any implications for timescales and costs. From the scope framework, the priority of that project and the percentage of business benefit within the current phase can be identified.

This information will then give an indication of the impact of the issue on the entire portfolio. All the standard project management tools can be applied, such as altering the time, cost and scope of an assignment. However, portfolio management adds another level of flexibility – the option to shift resources from one project to another. Any such decision should be based on achieving the maximum possible benefit across the portfolio. In the right circumstances, portfolio management can make more efficient use of resources to achieve greater business benefits. But it is not always straightforward. It requires the adoption of a more strategic, business-focused view. It also calls for staff to recognise that some projects might suffer for the greater good, and they have to trust the portfolio manager to make the right decisions.

– Garry Ingram is a senior consultant and project manager at OCS Consulting.

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