Management of Portfolios Overview

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1 Management of Portfolios Overview Management of Portfolios is a Trade Mark of the Office of Government Commerce in the United Kingdom and other countries The Swirl logo is a Trade Mark of the Office of Government Commerce

2 Programme Introduction in Portfolio Management MoP Principles Definition Cycle Delivery Cycle And now? 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 2

3 Strategic objectives 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 3

4 Change the Business Run the Business The Context of Portfolio Management Mission Vision Business Plans Portfolio Sub Portfolio Programma Programma Project Project Project Activities 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 4

5 Portfolio Programme - Project Permanent Organisation Portfolio Programme Project Why Work on mission Realising the Strategy Steering of resources Reaching of objectives Reaching of results Time horizon Eternal Eternal in it s intention Temporary Finite Decision making Periodically Fixed frequency Management gates Agreed moments Phases Stages Is meant to Effective and efficient process execution Optimise resources and dependencies Realise unique objectives Realise unique results Is ready when the Year has ended Strategy accomplished Objectives are reached Result is ready budget, processes, Alignment Coherence T, Q, Resources Steering on procedures and policies Means 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 5

6 MoP and the OGC s Best Management Practice Guidance Glossary Models Guidance Portfolio, Programme and Project Maturity Model (P3M3 ) Management of Risk Management of Value Portfolio, Programme and Project Offices (P3O ) ITIL PRINCE2 Maturity Model (P2MM) Portfolio Management (MoP ) Programme Management (MSP ) Project Management (PRINCE2 ) Crown Copyright 2011 Reproduced with permission from OGC M_o_R is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries PRINCE2 is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries MSP is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries ITIL is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries P3M3 is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries P3O is a Registered Trade Mark of the Office of Government Commerce MoP is a Trade Mark of the Office of Government Commerce in the United Kingdom and other countries MoV is a Trade Mark of the Office of Government Commerce in the United Kingdom and other countries 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 6

7 Launched Januari _MoP_Introduction Portfoliomanagement v0.1.ppt / 7

8 Portfolio and Portfolio Management Portfolio The totality of an organization s investment (or segment thereof) in the changes required to achieve its strategic objectives. Portfolio Management Portfolio Management is a co-ordinated collection of strategic processes and decisions that together enable the most effective balance of organizational change and Business As Usual _MoP_Introduction Portfoliomanagement v0.1.ppt / 8

9 Principles of MoP Senior Management Commitment Energized Change Culture Portfolio Definition Governance Alignment Energy Portfolio Office Portfolio Delivery Strategy Alignment 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 9 Crown Copyright 2011 Reproduced with permission from OGC

10 Cycles of MoP Doing the right things Doing the things right 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 10 Crown Copyright 2011 Reproduced with permission from OGC

11 Definition Cycle: doing the right things The purpose of the portfolio definition cycle is to collate key information that will provide clarity to senior management on the collection of change initiatives that will deliver the greatest contribution to the strategic objectives, subject to consideration of risk/achievability, resource constraints and cost/affordability _MoP_Introduction Portfoliomanagement v0.1.ppt / 11 Crown Copyright 2011 Reproduced with permission from OGC

12 5 practices of the Definition cycle Understand Categorize Prioritize Balance Plan To obtain a clear and transparent view of status, progress and forecast To make it easier for senior decision makers to understand the make up of their portfolio and thus to make decisions To choose the initiatives which to invest in, to allocate resources to, to give priority over others. To ensure that the resulting portfolio is well balanced. to collate information from the portfolio definition cycle and create a Portfolio Strategy & Delivery Plan 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 12

13 Delivery Cycle: doing the things right The purpose of the portfolio delivery cycle is to ensure the successful implementation of the planned change initiatives as agreed in the Portfolio strategy & Delivery Plan, whilst also ensuring the portfolio adapts to changes in the strategic objectives, project and programme delivery, and lessons learned _MoP_Introduction Portfoliomanagement v0.1.ppt / 13 Crown Copyright 2011 Reproduced with permission from OGC

14 7 practices of the Delivery cycle Management Control Benefit Management Defined processes, Guidance and templates, Regular progress-reporting, Stage or phase gates and Regular portfolio-level reviews To clearly identify and manage the benefits being realized from the portfolio Financial Management Risk Management Stakeholder Engagement To ensure that the portfolio management processes and decisions are aligned to the financial management cycle To ensure consistent and effective management of the portfolio s exposure to risk (and dependencies) at individual and collective level To provide a coordinated approach to stakeholder engagement and communication Organization Governance To ensure clarity about what decisions are made, where and when, and what criteria are used. Resource Management To put in place mechanisms to understand and manage the amount of resources available and required 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 14

15 Key functions that Portfolio Management needs to coordinate with 1. Business As Usual 2. Strategic and business Planning Portfolio Management 3. Budgeting and Resource Allocation 4. Programme and Project Management 5. Performance Management 6. Corporate Governance 7. Corporate functions 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 15

16 2. Portfolio Management and Strategic and Business Planning Figure 3.2 Crown Copyright 2011 Reproduced with permission from OGC 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 16

17 Roles in MoP Portfolio Direction Group (Investment Committee) Takes decisions about inclusion of initiatives in the portfolio. Portfolio Progress Group (Change delivery) To monitor portfolio progress and resolve issues. Business Change Director (Portfolio Director) Board member responsible for portfolio strategy and leadership Portfolio Manager Coordinates effective and efficient operation of portfolio management practices Portfolio Benefits Manager Ensuring a consistent approach to benefit management is applied across the portfolio 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 17

18 MoP documentation 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 18

19 The objectives of Portfolio Management The change initiatives that are being delivered (and those in the development pipeline) represent the optimum allocation of resources in the context of the organization s strategic objectives, available resources, and risk or achievability. The Portfolio is sufficient to achieve the desired contribution to strategic objectives. All initiatives are necessary to achieve the desired contribution to strategic objectives. The selected change initiatives are delivered effectively and cost efficiently. All the potential benefits are realized _MoP_Introduction Portfoliomanagement v0.1.ppt / 19

20 Change the Business Business change strategy Are we doing the right things? Validation Business change value Are we getting the business benefits? Business change governance Business change design Are we doing things the right way? Verification Business change delivery Are we getting things done well? 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 20 Crown Copyright 2011 Reproduced with permission from OGC

21 The benefits of Portfolio Management More of the right programmes and projects - greater financial benefits and measurable contribution to strategic objectives - removal of redundant & duplicate initiatives More effective implementation and delivery of programmes and projects More efficient resource utilization Greater benefits realization Enhanced transparency, accountability and corporate governance Improved engagement and communication between relevant stakeholders Improved awareness of aggregated risks Commitment of senior managers on the contents of the portfolio Improved cross-organizational collaboration in pursuit of shared goals 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 21

22 Portfolio Management is not... Just another process, system or overhead A group of project people who sit in isolation and produce a plan summarizing what is already scheduled Programme or project management on a bigger scale Just reporting A rigid, bureaucratic constraint on management decision-making Just a list of all existing programmes and projects A bureaucratic process that prevents or stops programmes or projects for no good reason 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 22

23 Benefits of MoP A framework thus adaptable Integral part of the Best Management Practice Guidance No mandatory techniques Enables the realization of the benefits of Portfolio Management Certifiable, comprehensive, concise 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 23

24 Maturing MoP 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 24

25 MoP Certification Foundation MoP -Framework knowledge Multiple choice exam 50 items, 40 minutes, 50% pass mark English language only Closed book, translated word list and dictionary allowed Practitioner (as of September 12 th ) Applying MoP -Framework knowledge scenario based Objective Testing Exam 4 questions with 20 items each, pass mark is 50% English language only Open book, translated word list and dictionary allowed 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 25 Management of Portfolios! Lia de Zoete 2011 Capgemini. All rights reserved.

26 Accredited Training Organizations for Management of Portfolio Foundation training is usually 2 days 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 26

27 37779_MoP_Introduction Portfoliomanagement v0.1.ppt / 27

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