Certificate Series Recap – Project Portfolio Management Masterclass, Session 3

Please find the following transcription of our PPM Masterclass webinar being provided by MPUG for the convenience of our members. You may wish to use this transcript for the purposes of self-paced learning, searching for specific information, and/or performing a review of webinar content. There may be exclusions such as those steps included in product demonstrations. Watch the complete webinar at your convenience. The speakers for this transcribed session are Dr. Shan Rajegopal and Rich Weller, who will be designated as [Dr. SR] and [RW] respectively to indicate the speaker in question. 

The speakers for today’s transcribed session are Dr. Shan Rajegopal and Rich Weller of Pcubed who will be designated as [Dr. SR] and [RW] respectively to indicate the speaker in question.


[RW]- Thanks Kirk. As we’re bringing things to life here, I just wanted to spend a few moments kicking things off. If you’ve been with us since the beginning, you’re actually—this is probably the fifth time if you’re actually counting that you’ve heard us give our intros here so I won’t bore you with my details if you’ve heard that in the past already. But what you’ll see today as we move forward is, again, you’ll see me leveraging my strength and knowledge around Microsoft Project Server 2010 and showing how you can institutionalize or implement some of the processes, the portfolio management processes and concepts that Dr. Shan is talking about. I’ll actually kind of show you how you can implement that or institutionalize those things through Microsoft Project Server. So with that, Dr. Shan, I think I’ll toss it over to you and let you work your magic from here.



[Dr. SR]- Haha. Thank you Rich and thank you Kirk. And again, everybody, welcome to the final series of our Portfolio Management Masterclass. This is a—I’ll give you an overview that identifies what we have done so far and as you can see, we have finished until the deployment of portfolio management and managing the complexity—we will cover half of that on this front end and then we go on into the resource management. And then we will cover the embedding and hopefully by the end of today, we should have able to tackle any questions you have in the deployment of portfolio management within your organization.

Just a very quick background, I think—I do not want to repeat myself. I’m leading on Innovation and Portfolio Management Practice and just to—what do you call—give you a quick heads-up is that if you are in my LinkedIn, you will see some of the articles that are appearing that I put in my LinkedIn—if you are not on LinkedIn, you are most welcome to link in with me. My book will be out next month. It’s been [inaudible] with publishers so it’s being released next month and we’re having several launches coming up. And hopefully, I’ll be able to meet some of you at those launches.

Just a very quick recap on what we have done with our objectives, we have understood and we are preparing and organizing the company to accept—we have done that. We are in the execution phase in this moment in portfolio management and how you go about doing it from a process perspective as well as the technology as an enabler to supporting the Microsoft Project Server 2010 and we will focus a little bit on the embedding and how you can sustain the management capabilities.


I know we are being restricted within the two hours to talk about a lot of these subjects but it will be good just to give you some hints and some of the experiences that we have in relation to deploying and working with organizations, small and large, in terms of implementing portfolio management.


4- Deploy Portfolio Management: Managing the Complexity

[Dr. SR]- So deploying portfolio management and managing the complexity—in managing complexity, I wanted to cover three key areas. One is the portfolio governance and performance monitoring. The other is on benefits management and then interdependencies and finance and risk management. Again, it is to understand that when you talk about portfolio, you cannot run away without continuing this part of the overall activities that need to be done.


Portfolio Governance

[Dr. SR]- Portfolio governance—this is a very basic overview slide which gives you what is a portfolio governance is all about. In a lot of circumstances, you should be well familiar with governance from your own experience in projects and program work that you have done. However, if you look very carefully in terms of governance work, it’s that portfolio we divided up into two key areas: that is the portfolio planning and prioritization, whereby we look at the framework of how prioritization is based on, what is driving the organizations with respect to the technology mix, the vision and strategic plan, what the business budget and what are the projects that are being decided upon, the strategic aspects of it.

What we normally do is that we provide a checklist of kind of the questions for the governance board so that they know what are the questions to ask and that is one of the key steps that as a portfolio manager, if you are supporting when putting companies in their place, you should prepare those kind of set of questions.

In the next of the portfolio management itself, that is the monitoring the performance of the projects and programs within the portfolio—so when you look into the programs or the impact in terms of the projects, you have what is a resource, what are the risk, what are the lead scenarios you are looking at—so it comes underneath the portfolio management marks to look at. And here you prepare regular status reports that highlighting your portfolio planning prioritization and you’re monitoring of those projects.

In the prioritization, the planning and prioritization, sometimes we also must ensure that the in-flight projects are also to be looked at—are they going to be part of the portfolio or are they going to be out of the portfolio.

The final [inaudible] tactical and more operational slide is the projects and programs management [inaudible], which is managing the program and project execution which you all know and are very familiar with.

I think the essence here that I want to highlight with the governance is if you are the head of a portfolio management office or if you are a corporate portfolio manager, your role becomes very critical in the sense that you are ensuring that you are pointing the right information and evidence and data to the board, but ultimately the management is going to make the critical decision and you are ensuring all of those are information that are being built up, are up to date and you are reliable with the information you are looking at. From an organizational perspective, the governance will take into account how are they going to make the decision work and with accountable for it—and that becomes key at the senior executive level; you have to decide what’s in, what’s out and how to move forward and what’s the progress of the projects within the portfolio.


So governance is a very key part of it and if you look into our framework when we have the portfolio governance, we also surrounding that—we have what we call the communications, because ultimately it has to be conveyed, communicated to the rest of the organization knows the people who are involved—so what’s the decision made, why is such a decision made, the transparencies of it; the biggest key stakeholders need to communicate it correctly. Portfolio governance together with the communication framework and inter-department counseling of the overall management for the portfolio manager.


Examples of Portfolio Performance Dashboards

[Dr. SR]- These are some examples of portfolio performance dashboards—[inaudible] each organization has a preferred interest in what they want to track and for [inaudible] some standards, these are printed out from our Server 2010 which Rich will go into details to explain some of it, just what you can end up tailoring it to your own needs and prepare those reports.


Portfolio Performance Results on Six Key Metrics – The Best vs. Worst

[Dr. SR]- I just want you to have a look at this portfolio performance results on six key metrics: the best versus the worst. This is a quite interesting study that actually highlighted where does portfolio performances are top of the list for different organizations and from different senior executives. And there’s no right or wrong answer, once you’re back [inaudible], this is a reflection back, right, and [inaudible] your top two key metrics would come out and why is that so—because each organization on [inaudible] each sector where you are working, you will have a different performance focus.


I’ve done this with a lot of my fashions and workshops across the globe, and you’d be surprised in nearly—some people work more on projects done on time and with no gridlock and good balance of projects, some have focus a lot on portfolio containing very high value projects for them, some are spending reflecting the business strategy [inaudible]—so again, this would be reflected on how you want to portray your performance, portfolio performance to the organizations. Think of, when you’re free, when you have this downloaded, track back and see where it comes in and how do you target it in portfolio performance presentation.


Benefits Management Overview

[Dr. SR]- What I touch on next is the benefits management—again, benefits management is a big [inaudible]—we, at the moment we have not designed a very special series offering purely for benefits management, which is part and parcel of our overall portfolio management series line offering. Just finished a six month engagement with a large oil and gas company, to do their tracking of their benefits management. Again, in the UK, the government is also emphasizing a lot on ensuring value for money—they are investing so much of money so am I getting all the benefits in this required.

What was interesting was that I think the last session in which we were cut off half-way through, the day I was invited to a kind of breakfast session for a CIO conference in London and, in that presentation, in that breakfast session—we had CFOs, some project [inaudible] for CFOs, two CEOs and quite a bit of CIOs present and it was quite interesting because it was research done by, I think CIO Connect, one of the independent body in the UK and he asked us several questions at different levels.

One of the biggest challenge when the CFO highlighted was—we investing so much of money with projects and programs, I’m not seeing any benefits that are coming out of it, and that is still, still a big question mark: Am I investing 50 million here in some cases, in some 60 million or 80 million dollars for policy programs and what am I getting out of that. Like it or not, sooner or later this is going to be a very, very significant topic for organizations because when everything else is cut and squeezed, you want to know what the best value that you can get.

Benefits, when generalized, means in terms of when getting a positive outcome, a change of outcome which is very positive for the organization and for the key stakeholders.

The essence in the new benefits management and when you look at it, how benefits are identified and are they defined clearly and linked to strategic outcomes to look at. Are the business areas, if there are business areas involved, are they committed to the identified business and their realization and to encourage ownership and responsibility for adding value through the realization process—this is a [inaudible] for a big challenge.

One of the organizations we are working with—they introduce the set program in and then what happened is that once the program goes live, the next follow up is that actually, the tracking of the benefits goes to the business units and you start to realize the business units are more interested in following up. So again, how the ownership and the correct [inaudible] ownership are key in thinking and change of the behavior that are needed in terms of tracking the value of a program: for example, like a self-deployment or a CRM deployment or in other cases could be a product launch.

The ability to proactively manage the process of benefits realization and measuring it is a key part of organization’s continuous investment in what we are doing. Using benefits to direct the program and provide focus for delivering change and realize it and ensuring benefits realization is tracked and recorded to ensure achievements are properly identified and recognized—most cases, I’ve realized that were due in a quarterly and we do an annual, I’m sorry, a monthly base and then roll it up into a quarterly and then roll up into annual base for benefits. Most, couple of organizations that I worked with on benefits—they [inaudible] for maximum find for returns and the government reasoned even I was doing more for their research, resulting in them being able to look at benefits for about ten years. So probably, different sectors were in certain different demand.


The essence is, at the moment, the biggest challenge is actually the conversion of those benefits into dollar value and [inaudible] at the moment. The last organization I did work was focus on dollar [inaudible] and I convert it into dollar value and that’s fine for a start-up. As you progress, we will then go further into it.


Best Practice Benefits Management Process

[Dr. SR]- The process of implementing benefits management—if you look at this as similar to what we have as the approach we look at it in the process-wise, it’s similar to the way in which we describe the portfolio. But let me just quickly, as I said, move on and give you an overview that’s attached within the benefits that’s needed to be done.

The first key step is identify and structure the benefits. And when you structure and identify the benefits at a very high level of activities, include like who, identify the benefit owners, creating a benefit map, baselining and target setting, creating a business case, conduct benefits management maturity assessment—you can do it if you want to but leave that aside. But the essence is creating a business case and baselining and target setting.

This is actually very much linked to your portfolio management so when you’re submitting your business case, this is going to be part of the portfolio of your program that is going to be in—so this will be part of the benefit impact statement that we have covered, will come into your created business case. So your business case will comprise of the benefit impact statement that we have discussed in the last two sessions in a portfolio. So that is the front end.

The next step is plan benefits realization—you need to have a very clear defined metric framework, which include the performance indicators, key performance indicators in some cases we have according to value metrics. Again, it’s a very intricate level of working into details in terms of how the benefits are going to come out, identifying the performance and working back into the key performance indicators and then the value metrics.


We have—it depends on different organizations but normally, in [inaudible] a pretty good work in this particular field or in the value metrics; we have worked with two big companies using an account as the baseline in terms of value metrics and when we [inaudible] the value metrics where the senior executive of the company, the [inaudible] who looked at and then worked out toward a KPI and then worked into the PIs and we wrote it up the other way round also. That becomes quite important, thinking behind the need to [inaudible]. We recommend quite strongly to have a benefits management office as part of the portfolio management to make sure those are locked in. The aligning of benefit strategic drivers, which we have talked about strategic drivers and benefit impact statements—this will link up very well into it and validating the projects and benefits plan.

Next is to executing the benefits plan—once the projects are approved and the benefits plan are approved that will be part of the overall program and project plan, in some cases you start to realize that the benefits can be, once the projects are started off, it can be part of that so that when the projects are being executed, it can create milestones for the benefits. Or it could be that the benefits can be derived after the completion of the projects. In that case, the milestone tracking of those benefits will come after the [inaudible] life or after the projects is completed. You can actually cut it and shape it, create a structure to check it accordingly on the projects. In some cases, we have also tied some of this with the wider Life Cycle processes [inaudible].

The next step is on benefits tracking and measurement. We integrate the benefits tracking and monitoring mechanism with an implementation plan and then go ongoing benefits data generation and capture and aggregating it on a regular basis; and by building it up to make sure that the benefits reporting and monitoring are done. Again, you can cut and slice how the dashboards are going to look like from a value metric perspective or key performance perspective. And then you’re making sure that to define the reporting process and it’s clear for who is the audience you’re looking at.


Finally, on benefits realization, it’s actually how you realize your accumulated benefits—I go on a quarterly, annually and five year review cycle to look at. In some cases, of course, you may also have further potential benefits coming up and reviewing the benefits management maturity assessment towards the end. Again, one of the key things is that in most cases, I found that the challenges—people are able to understand program benefits [inaudible] and that there are projects and programs that are part of the portfolio—it’s also that you can track this as the benefits tracking on a portfolio basis can be done, so rolling it up into a portfolio level. Please understand that you can do it individually at a program level or you can do it on a portfolio level because you want to make sure that the benefits on this particular initiative is part of a portfolio you are looking for to be in the value proposition.


Inter-Dependent Projects and Portfolio Management

[Dr. SR]- Next key area of consideration in a portfolio is the inter-dependent projects that you need to look at. Again, I am, is all of you have [inaudible] are managing projects and programs must very well understand how inter-dependencies is a key part on large program executions. The key thing you need to bear in mind is that you need to understand that you identify the dependencies, you map the dependencies, you monitor the dependencies and you manage the dependencies.


In a portfolio perspective that we have discussed earlier, there is no—what we call—automatic way of capturing dependencies. It is, you have to go into the program, identify the dependencies and capture it and then log it onto the system, into the software. That is the key part of it. If you’re not doing it, it can be a big issue because it can give rise to a lot of problems; expecting that this project is in or out, if the last project is a dependent project and it’s not in, it’s going to be a major issue. Please bear in mind that you need to capture it and load it into your software.


Adjusting for Risk or Uncertainty

[Dr. SR]- The final depart of the complexity in portfolio is actually a risk, adjusting your risk and uncertainties. All of you must be very familiar with risk and quite a lot of you have worked on risk area; any projects and programs will look at risks. Specifically from a portfolio perspective, the risk will be bigger when you look at—so you need to understand from different angles where the risk is coming in from. It could be from execution risk, it’s quiet—it’s like a lot of the complexities involve technology or sponsorships. It could be a project or investment risk you’re looking at, an industry risk, regulatory, country or economic—any of those risk can play a role and have an impact.

If you look into the ideal, desirable state of portfolio, which I showed you in our first session on a slide, you start to realize the risk and resource management—the center of the whole piece, of portfolio planning and prioritization and benefits and the monitoring of performance is a circle it goes in. Again, risk is an integral part of it and sometimes we abuse risk as, what we call, a second or third level of a cut for the portfolio in terms of investment cycle that we look at. It can be useful to that.


One of the organizations that we worked with, the brand and reputation of the organization and risk is a key part for them when they launch various programs—that is another key thing that you need to be aware of in terms of organizational needs in terms of risk.


  1. Deploy Portfolio Management: Resource and Capacity Optimization

[RW]- Dr. Shan, this is Rich Weller. I was wondering if I could pause you for just a moment. We did have some questions come in. I was wondering if we could address some of those that are in the queue right now. We do have a couple of questions with respect to portfolio governance and I think that’s referenced on slide 109 so if you could possibly hop back to that slide, 109, for just a moment. There’s a few questions on that slide.

The first question is, “With respect to those three different streams there, can you tell us what are the roles that we would see that comprise each one of those boards or each one of those levels—what are the roles that might be associated with each level that’s on that page?”

[Dr. SR]- Alright, ok. Good question actually. When you look into the portfolio planning and prioritization, we will look into quite senior level people to be involved in—[inaudible] levels or CIO levels and even CEO levels will be participating to that board. Normally, we recommend that we flip that in prioritization to work on a quarterly basis for review. We recommend that quite strongly but I’ve seen on an annual—sorry on a half-yearly basis participating on that.

The portfolio management performance monitoring—again, this is all or most—this would be quite commonly on quarterly basis that they have this reporting. Normally, the written IT or the CIO would be in and operational, the weekly operational, a CEO will look at and normally they will track at the high level programs and that.

And then the others are many projects and programs at a lower level.

Does that answer the question?

[RW]- Yeah. Not only did you answer the question about the roles but also the frequency so we appreciate that. That was another question in the queue. There is still one question here on the slide that remains and that is, “Is there any one role that might be consistent, as far as a member within each one of those, like for instance a role that would attend all three sessions?”

[Dr. SR]- All three sessions—ok, well, a portfolio manager would actually be supportive of all three sessions, I will say that. But again, it depends on which portfolio governance they’re looking at. If it’s from an IT perspective, IT projects for example, if they’re looking at and through the whole portfolio for IT programs and enabling IT business, IT projects—in that case, the CIO will sit in the portfolio management monitoring and the portfolio planning and prioritization—the CIO will sit, definitely will sit on that. He will not sit at the Projects Program level. I think the director will sit into that.

The portfolio manager will prepare the materials that need to be ensure that it’s going through and will sit in but may not [inaudible]—they may not contribute, I’m not too sure of that. Depending on how sure the portfolio manager’s role is in that organization.

[RW]- Alright. Well thank you, Dr. Shan, I think that takes care of all the questions that are in the queue for right now.


[Dr. SR]- Ok. That’s very good and there are no other questions? Good. In that case, we will move onto the next—it is the Deploying the Portfolio Management on the Resource and Capacity Optimization.


Resource Optimization? The Forgotten Link to Achievability

[Dr. SR]- This has been on an interesting—what do you call—interest of mine I’ve had for a long period of time actually: resource optimization, the forgotten link to achievability. Why I’m saying it as it’s been in my heart for a very long time is if you look at this particular cartoon—this has been done some times ago, you can see in two or three. [Transcription Note- The cartoon is Dilbert and the following words in quotation marks are direct from the cartoon slide on the video.] “In only one week my project team has created a time line and identified the resources we need. Next week, we plan to revise the time line and re-examine our resource needs.” “Good work.” “There must be a thousand ways to say I haven’t done anything.”

Again, why I’m saying it is that this is pretty anecdotal but it’s actually very true in the sense that over the years, I’ve been in this particular field on project, program and portfolio work—I realize that most of the senior executives that when they look at, they’re looking at an investment amount of [inaudible] try to cut five percent, ten percent I’m happy and forget about it and they assume that everything else will be done automatically. And that’s where the challenge comes in because resource management and resource optimizations is really what we call hands-on work, very deep and technical perspective. Quite a lot of senior people doesn’t’t think very deeply into it. Hopefully over the years, they are changing because resource has always been a major issue in getting things done.

I remember there was an organization I was speaking to, she was one of the senior executives, she was telling me, “Oh you know, what are you worried about resource. We can get our resource anyway—we can always contract out and get resources. There’s no problem. Just focus on the portfolio optimization,” that was quite a bit of a shock for me to listen. I mean, fine, they have the [inaudible] but the budget is limited, number one. Number two is that sometimes with a key resource you think you can get it when you can’t unless you already planned out with respect to what is your, what kind of key resource you are looking at.


My personal experience in the—what do you call—the biotechnology sector as well as in the R & D sector, resource is a key part for the success because of the specialty of what they do. When I was in the, supporting the aerospace industry, the defense contractors who makes unique [inaudible], gadgets—it is those individual resource is the key part of a success. So again, dependent on the organizational, sorry, dependent on the sector and industry that you’re working with, it’s something that should not be taken for granted. That’s the key message that I like to highlight.


The Management Team Speaks

[Dr. SR]- I’ve come across—these are all real examples—I’ve come across management team who says, “I don’t have a clue what people are working on.” I’ve come across CIOs, CEOs who’ve highlighted this particular comment and they said, “We start all kinds of projects but have trouble finishing them,” “I can’t tell if our resources are focused on our high priority projects,” or its corollary, “We kill projects but they keep coming back like zombies.” So again, these are all the management who find big issues: And in boom times or bust, “We don’t know what skills to cut or add when budgets are reduced or increased.”

What does this show? Management are later, when they’re—they meet for approval, approval and decisions, they start to realize that from the execution side of it, they are facing a lot of challenges.

The Front Line Managers Speak

[Dr. SR]- Now, if we’re looking at the front line managers, some of the comments from the project managers, “I don’t get the promised resources at the right time—or not at all.” Or the resource managers: “Management never sets priorities and is always asking us to do more without considering the current workload.” That is another major issue—do you expect, Oh everybody can get this done and this is obvious to do. At or after phase gates, “That’s not MY plan!” These are real life comments.


In my Life Class bookshops with review on portfolio management, I do, we do an exercise actually which actually highlights some of these frustrations among executives or managers and that will kind of bring out within them what are the challenges that they face: they don’t manage their priorities correctly, they don’t manage their resource correctly.


Map Resource Capacity and Demand

[Dr. SR]- So the essence is, what is resource manager even doing in Egyptians time: people talking about resource managing, managing resource well. From our perspective, when you look into the resources, what we are looking at is mapping the resource capacity and demand. What you want to do is define your resource pool: what is available, who are available, what kind of skill sets do they have in our organization who can get this projects done. Most people and most resource managers and those who are, again, seasoned in the organizations and doing the projects and programs will have a few or some of these, some of these folks who are in mind, organizations who are capable in this area that are good in these and so forth. You will have a certain feel for that. But it’s important to make sure that the resource pool is very clearly defined.

The next thing you need to do is estimate the resource demand, what is demanded. Portfolio is a key, very important part so for you to actually plan and forecast with respect to what is a demand in terms of those and capabilities and skills that are needed for you to achieve the project. Mapping those two together, analyze your capacity versus your demand. This is very fine tuning and fine balancing them is needed.


I used to joke actually, something like a kick point or sometimes we call it the bending point, bending moment you look at it. It’s like, it’s a kick point if you play golf, for example, when you swing the golf club and it hits the ball, there is a point when the metal actually banks and depending on the bank, it actually pushes the ball to the limit that you are targeting for. That’s a theory called the kick point. In an organization, again, that is also the balance that is needed where the capacity versus demand comes in. And here it’s important is to make sure that you have the facts right with respect to how you manage that kick point.


Building the Organizational Breakdown Structure (OBS)

[Dr. SR]- This is an example of building the organizational breakdown structure. I know some company do not have this, some don’t want to do it, alright. But it’s important to get a feel for how you can break it down into different levels and what are the skills that are needed either by group skills or by names to give you a good feel on your capacity when you are looking at.

Compare and Contrast


[Dr. SR]- Again, they ask us sometimes to understand the critical skills, the critical resource that are needed to be able to complete your task or complete your project. That’s the key. The OBS, if you identify, you can actually compare and contrast when it provides an analysis of the resource pools are against it and helps to identify any mismatch between people and skills. Sometimes they put—what do you call—competency levels within the skill-set, I’m not sure any one of your organizations are doing it—so you can have it through competency levels, you can look at all capabilities for individuals. Management consulting, [inaudible] for Level 1 through Levels 5, Level 6 and so forth. You may want to put in certain levels to help you to manage—a lower level will have a longer time to get things done compared to higher levels and so forth, the skill sets.


Real Resource Availability

[Dr. SR]- The other thing is, in real resource availability is when you look at—I don’t need to go into any of this detail but you must be aware of the effect on multitasking and contention issues. What is the level of multitasking, how much can I, can an individual do. Again, independent organizations, the level and also the type of work that is involved in doing. Now what do I mean by that—several companies that I was talking to and have been involved in, they put in like 80 percent of people’s time should be in project work and 20 percent in business as usual. [inaudible]

Now, whether an individual works from one project to another, how many projects can an individual work—again it’s quite difficult to highlight but we emphasize the essence of the contention issues when someone is involved in a particular project, when they go into another project or two to do, if they lack time to do the task needed to be done in one project and move onto the next—it’s very important because there will be a lag time that you have to build out and work on. Again, what level of similarities and tools and templates are available for him to do that task will make a key difference.


The other key and important thing is checking for real availability. Sometimes people will say they are available but actually they are important to other projects. And beware of resource optimism. This could be an emotional, psychological part of human beings but [inaudible] is like, we’re pretty optimistic, which is good sign. But in resource optimism, you’ve got to be careful because sometimes they say, “Yes we can do that second project. No problem,” but then they start to realize that those skills might not be available in the time that you need them. At the portfolio level, having that picture accurate in mind is important.


Summary of Resource Management as Four Distinct Processes

[Dr. SR]- Here we do—it’s what is called a summary of resource management as four distinct process. This is one of those things we normally spend quite a lot of time with organizations as we go through in terms of what is the resource forecast: so what is the capacity planning that you have, what is the demand that you have, and then you go into managing the resource schedule, making sure the resource optimizations are done and then the resource execution looks into the details of work and time management.

In the capacity planning, what we look at is where the resource capacity is at the organizational and functional level. Demand management actually looks into what are the resource needs at the portfolio, program, project and departmental level. This window [inaudible] into the capacity and demand management, which of course we’re going to talk in more details using the server but the key success factor for a capacity planning is to define the key roles across the organization. That is of key importance and making sure that we have identified the skill sets and the kind of constraint, the resource constraint that can occur if these skills are not available. And then quantifying the true resource capacity and transferability—again, it’s important to think whether your skills are transferable or not to another project. Non-project timework, those calendars and availability of external resource—this can also be part of contingency plan if you want to look at, depending on the kind of skill sets you need.


The demand [inaudible] creating an accurate estimate in terms of what is operational activities, what is strategic projects involved, how do you balance the whole of the portfolio, programs and projects and the task dimensions, planning for the long term or short term projects and accounting for the cross functional and shared resources you are kind of looking at.


The Levels of Resource Management—Tactical to Long Range

[Dr. SR]- I just want to talk a little bit on this a bit more to highlight to you [inaudible] the resource schedule and resource execution because the resource schedule provides a project time and priorities via location. Let me just show you the other slide, what we normally do in a resource level of resource management is actually to look at it from a tactical to long range plan.

The resource forecast that we are looking at is looking up to 3 years or 36 months, and then with focus on over next 12 months to 24 months. I know of companies that actually do it for up to 60 months, 5 years plan because their resource is very key, the requirements for that. For them, you need a 5 years plan in terms of what is the critical resource that is needed for them to do it because they are life cycled for—their particular program is 30 years, life cycle, so I think they’ve been working on for in the industries I’m looking at. So the first design site itself is 5 to 7 years we are looking at. For those kind of organizations and those kind of major programs, you need to look into next 60 months of resource loading that you are looking at and what kind of skill set that will be needed.

The next level you can look at is the resource schedule, up to 12 months—I normally work on a quarterly basis to look into the generic role based restructure and what are the skills that are needed. This is a medium term focus in terms of the scheduling and location support and the project scheduling, change control and driving people interventions. This is also used sometimes for recruitment and procurement side.


Then the resource execution which is more into detail, which is typically up to 3 months and it goes with the main resource and on a daily basis. It covers from the [inaudible]. From a portfolio perspective, the resource focus is key.


Summary of Resource Management as Four Distinct Processes Continued

[Dr. SR]- If I just go back for a moment to look into my L1 range resource focus there, they look at the capacity planning and demand management. And then they—there’s a long-term view. When resource is scheduled, we’re looking into when we’re optimizing it, making sure that we balance the long and short-term view and it looks into the quarterly, within the next 12 months to focus on. This is where you start to realize when you don’t have your—what do you call—your portfolio reported on a quarterly basis, it helps very easily saying that the project if it were approved now is going to be large and resource heavy; you can actually put it in as part and parcel of your performance indicators, portfolio performance dashboard.

You can also do, in that L2 and the resource scheduling a [inaudible] impact analysis. If you have this and you do not have the—you can create that kind of sensibility testing and answers. Your resource execution in L2, the details and those of you who will be needing more [inaudible] in terms of tracking the detailed planning, time tracking, status report and collecting, collections, [inaudible] importing as a couple of process governance that is in place.


Consolidate Resource Information

[Dr. SR]- Ok. The final thing that you do is you need to consolidate the resource information; then we have the capacity and demand and getting the whole report up. What we need to do now is we agree to move on to using the server as an example and Rich will be talking in terms of how we’re going to optimize using resources. Before we hand over to Rich, if there are any questions, I can take on very quickly. Rich?

Step 4b: Analyze Scenario [Transcription Note- Slide was switched but topic is still same]

[RW]- Yeah, there’s a couple of questions in the queue here. Kirk, if you could go ahead and work on switching hands, we’ll take care of the questions. The first one is with respect to the organizational breakdown structure. The question coming across here is, “Who builds that and, I as a project manager, where might I find that information? Who is usually responsible for creating that OBS, that organizational breakdown structure and maintaining it?”

[Dr. SR]- Good question actually. It depends on the organization. The one that I have seen across is mainly [inaudible] to buy the resource managers. If they have a resource manager in the organization, they do that. Normally, they work quite closely with the [inaudible] chart people and they prepare that. If they do not have a resource manager, probably, in that case you may have the [inaudible] program management office for example: they will do that. They have done seemingly the most work on it. Yes, this will be the tool that I would think that has outcome across that has done it.

[RW]- Ok. Another question here, around the whole concept of portfolio management and resource optimization, this is kind of a long-worded question but to narrow it down, “From your experience, in order for that to be successful, does that have to be owned by a particular organization and if so, what organization owns the portfolio management process and the resource optimization process.”

[Dr. SR]- Ok. I would say it has to be owned and without any ownership, nothing will get done. That’s for sure. Normally, we recommend that the portfolio management office should have an ownership of that process plus the resource comes under the portfolio management process. We actually recommend it even as it can scale up, it can go to the enterprise portfolio management office and import directly to the COO or the CFO needed. If it’s an IT base, there may have an IT PMO or IT in the price portfolio management office that report to the CIO to work on it. But the answer is that you must have an ownership.

I very strongly recommend it in one of the articles that I’ve written—that the CFO should be involved in this. He is now putting the money in and discussing the CEO where the program needs to be funded, so there must be an oversight on that. I know that can be quite difficult for a lot of companies to look at but what I have seen is that the CIOs, if it’s IT based, the CIO of the enterprise PMO, enterprise portfolio management office is comprised of program management and portfolio management into that, and including benefits and resources is part of the enterprise portfolio management. The enterprise portfolio management then report to the executive, who then reports either directly to the operational COO or the CIO or the CFO. That would be the strong recommendation.

However, saying that, depending on the maturity of the organization, it can vary. I would also strongly recommend you to look into where the maturity of the organization comes in and you may start off with one sector and [inaudible] it bigger. We have, there’s a lot of books as well as articles and return in terms of the maturity level of a program and portfolio management office that where you can [inaudible] and I would recommend you to read my book next, read one chapter located on setting up portfolio management office and how the different portfolio management office can be set up and how you can create a set of excellent support, organizational implementation for portfolio process, benefits tracking and resource management.

[RW]- Ok. Well thank you very much for that, Dr. Shan. What I’d like to do is pick up now and begin to talk to the group today about enabling some of these processes within Microsoft Project Server 2010. As I have been talking over this series of sessions, I’ve actually been taking us through a high level process here for doing just that: enabling a project server to help us with portfolio optimization. We actually, in session number 2, got half-way through this process box of Analyze Scenario.

But in order for me—and I know we’re talking today about resource optimization—but in order for me to make the story make sense, I feel I must go back and recap real quickly on a little bit of what we covered in session 2 around optimizing on the cost side of things. Bear with me just a moment and it will just take me a couple seconds to, again, walk through some of these slides that we covered during session 2 and if we didn’t’t have that couple week break in-between the two sessions, I wouldn’t’t do this. I feel it’s necessary for the continuity of this process so that you can see and remember what we talked about.


Analyze Cost [“Review”]

[RW]- So again, we’re analyzing our scenario based upon cost. What we did within Microsoft Project Server 2010, we pulled a number of projects into our portfolio and the total cost of all of those projects came to $19 million and then we said, “Hey wait a minute. We only want to set up a budget or establish a budget for $10 million,” so we have the ability to input right into the tool, “This is the targeted budget: $10 million,” and from there, Microsoft Project Server actually kicks projects out based upon their strategic value. We can see where we did have 23 projects selected. That was our total in our portfolio. When we established that budget constraint of $10 million, Microsoft Project Server kicked out a number of projects because of their lower strategic value and now we’re down to a portfolio of selected projects and there are only 13 projects in the portfolio now.

Force In/Out [“Review Continued”]

[RW]- What we did as we were playing our “what if” games as we can do within the system, we said “Hey you know what—we’ve got a couple projects that we need to force into the system,” and that’s what we did. We forced a couple projects in. One was a pet project, in this case, and another one was a compliance project, one that we had to do. We kind of overrode the system and said, “Let us manually force these two projects in,” but in return Microsoft Project Server said, “Well if you have this constraint established, I have to kick out some projects.” In return, Project Server kicked out three projects and now we’re down to a portfolio of 12 projects.


That’s what we covered in session 2. I know I went through it pretty quickly today, around budget and establishing a cost constraint. Really though, it was a recap from session 2.


Analyze Scenario [Step 4b Continued]

[RW]- What I’d like to do now is move onto performing scenario and analysis with respect to resources. This is kind of the second half of analyzed scenario process and really the meat of what we wanted to cover today with respect to resource optimization. Where we pick up is once we have our analysis complete with respect to the cost scenario, we do a save on that, a “Save As,” or a save on that scenario so it retains the information that “Hey this is our targeted portfolio of 12 projects based upon our constraint of $10 million,” and we save that information into Project Server. And then we kind of move on within the tool to the next screen in the process, if you will. And that, as you can see here, we’re on the Analyze Resources page. We’re looking at our portfolio of 12 projects but as we look at this portfolio of 12 projects, we now see that there are only 8 that are selected and then there’s 4 that have been not selected or kicked out. We can also see that, over here on the left in this metrics quadrant, we can see those 8 projects are selected so that’s a 1 to 1 with this section. So now you may say, “Why did the tool kick a certain number of projects out,” and keep in mind we’re analyzing our resources.

If we were to click on this option here of this “Requirements Details,” then we’re able to see a culmination of capacity and demand coming together in one area. If we choose this option here to highlight our deficit, Microsoft Project Server in return will do just that. It will highlight, in pink, the months in which we have an over allocation problem. In other words, somewhere within this month, we have a project where we’re asking—where we have demand for a particular resource is higher than the capacity or the availability for that resource based upon these roles that we establish. Everything that you’re seeing here can be configurable: these roles can be established based upon the primary roles of your organization.

Again, if we were to enable this check box, we get to see the highlighted time phased data where there are over allocations and then if we were to slide down the screen a little bit, we can actually see the projects—so the top portion are the projects that are selected in the portfolio, the bottom portion are those projects that got tossed out because of our lack of availability of a resource to do the work that is associated with that project. This page or this screen, again, it does just that. It pulls our resource capacity and our resource demand together and shows us that comparison.


The other thing we’re able to do from here is we have the ability to play additional “what if” games. For instance, what we’ve done here is we have said, “What would happen if we were to hire two individuals to fill that gap in the resource supply.” By inputting the 2 in this field here or this section here and then clicking on “Recalculate,” the tool will then move—in this case, it moved two projects back into the portfolio and basically it’s saying—based upon the hiring of these two additional resources, we now have the capacity to do these two additional projects. These projects, those two projects were in the “not selected” area and are now into the selected portion. We’ve gone now to 10 projects selected.

Save Analysis


[RW]- Ok. Perhaps we say, “I like that concept, I like that scenario. That seems like a doable option if we can agree upon that,” and we do a “Save As.” We can then kind of name that scenario and that’s what we’ve done here. If we return within Project Server to the portfolio analysis page, which is here on the menu, we can see that scenario where we just saved the higher two, we can see that listed here within our various scenario options.


  1. Select Projects

[RW]- And so that’s all of the slides underneath this “Analyze Scenario” process. The next process we want to look at is “Selecting the Projects.” Where we would go from here is from, we would, from the—from this screen, there’s an option where we can actually compare the different scenarios. So if we were to click on that “Compare” option, here again we get to see a comparison of those different scenarios that we saved over our process of analyzing the scenarios. We can see—in this case, the different scenarios that we saved are in alphabetical order. But the first one that we saved was our initial baseline where we had all 23 projects in the portfolio and then we trimmed it down, trimmed it down until we got down to this selection of where we have 12 out of 23 projects in the portfolio with a total cost of $10 million. We can see that as our final scenario there.

If we were to slide on down the screen in this view, we could see for each one of those scenarios—they’re now listed vertically here, with the column headings at the top—for each one of those scenarios, we can see the projects, whether they were selected—here’s your projects on the left—we can see whether those projects were selected or not, and if they were forced in, we can see what the reasoning for forcing those projects into the portfolio was. We can see that from this view.


That really takes care of process step number 5 of selecting projects.


  1. Update Portfolio

[RW]- Now we move onto the last step in the process, which is updating the portfolio. Once we pick one of those scenarios or one of those, one of those scenarios that we said yes, that’s the portfolio that we want to move forward with and we want to execute against. We have the ability through Microsoft Project Server to—actually, depending upon the way you have the tool configured, it does have the ability to build automated work flow within the system and if we have things configured properly, simply clicking on “Commit,” we can read the comments here with respect to what this option does, Commit: It allows us to commit the current portfolio selection scenario. Project constraint data will not automatically be overwritten but the selection decisions will be written to specific fields within the projects and the views.

To boil that down and put that into common terminology, when we click on Commit, things are going to happen and based upon how we have things configured: for instance, maybe we have a project which is in the very early initiation or before initiation, in the idea stage where we have a potential project and that was one of the projects that we pulled into the portfolio and it also was one of the projects that was in our scenario that we wanted to commit and simply by clicking on commit—perhaps we have our system configured that allows that project to actually move from an ideation stage over to an initiation stage or over to a planning stage automatically and if we have the system configured that way, that stage field within the tool, within Project Server will automatically change for us.


We can see here a message after the fact, “Project selection states and plan dates for all projects in the analysis will be committed to the project server database. Committing project selection states may trigger work flow actions for individual projects.” It’s kind of telling you, “Hey if you continue forward here, these things really are going to change and you could be impacting the information that’s out there in your project management information system.”


Some Tips Based on Our Experience

[RW]- That really concludes my process for, or the process that we’ve established for enabling this portfolio or resource optimization within Microsoft Project Server 2010. Dr. Shan, I think at this point perhaps I could turn it back over to you and/or see—maybe we could see if there’s any additional questions out there that we should answer.

[Dr. SR]- Sure. That’d be fine. Is there any questions?

[RW]- You know what, yeah there’s a few questions that have queued up. If you can continue on, let me try to filter through them and remove the duplicates and try to consolidate some of these questions so we can speak intelligently to them.

[Dr. SR]- Not a problem. You can handle the [inaudible] so I can take it over. Can Kirk do that? Thank you.

Rich has gone into detail over your, using the portfolio server and how you manage your resource capacity versus your demand. In fact, I would like to admit that I was quite pleased to see the 2010 has actually done a lot of work, I mean they have done a lot of improvement compared to the older version that they had. Having [inaudible] Microsoft before, obviously only they would know what I meant by that. I think probably, some of you may also know that you will be working with Microsoft for a long period of time; so I’m quite well aware of the incremental improvement they have done. In fact, in terms of resource management with this current tool, it’s very flexible and it’s [inaudible] to see that it’s quite successful in some of the companies that we have actually used and we have deployed and implemented it.

The other key thing that’s also, we wanted to—I wanted to share is some tips based on our experience and for you to keep it in your mind. First thing is keep the First Stages Simple. So, using your governance model and trackers that are easy to adopt. Now the other key is focusing on “Key Resources” that are causing the pain. So again, coming back to your industry sector, you find that there are critical resources that you need to identify and make sure those are managed correctly. 6 months maximum look ahead to start with, that is a good point to look at. Don’t plan at too low a level—that’s absolutely true, especially when you’re looking at it from a portfolio perspective and also in terms of forecasting, don’t go down below half a day FTE, 0.5 FTE days when forecasting.

The second thing we can give to you is “Roll out in Phases.” Use a “pilot” if possible. Implement a “quick win” to stem the initial problem. That quick win instance is important because organizations and [inaudible] and executives are quite keen to know what kind of low-hanging fruits there are to have quick wins. This is very important because what it does is that it gives them the [inaudible] of you rolling out your portfolio management in the organization. In my earlier book, there are ten commandments that I’ve highlighted. One of them is actually, “Go for High Value, Low Cost effort in terms of getting your portfolio done to show the quick wins.”

Just for your info, and it may also be of interest, what we have actually created is a simple Excel spreadsheet which actually identifies some quick wins for portfolio work in terms of a very simple questionnaire that actually highlight what is the maturity level of the organization in portfolio and using Forester’s study in terms of the saving that you can come up with. You can actually calculate for the kind of saving and over the period of time, you can gain pushing on the maturity level of the portfolio. Those are quite good, especially via internal business case to push the organization to say, “Hey we do need portfolio [inaudible] organization.”

Agree on Activities Prior to Launch—this is making ground rules, making sure there’s a clarity in terms of governance, meeting the rules, the frequency of the meetings and how you’re going to manage any conflict coming up and what is the escalation route. That is coming to the agreement on the ground rules. I think with ground rules, one of the most common is the terminology. You need to probably have a glossary because there’s too many—what we call—TLAs, three letters acronyms, flying around everywhere and all of us will get confused. Within the organization, within the sector, please make sure you have that kind of a glossary, the knowledge to find out and aligned.

The final tip is actually Pay Sufficient Attention to Change Management. Involving SMEs, Subject Matter Experts, from the relevant Business [inaudible] as part of the design and adoption phases. For me, the key part here is actually with respect to how you manage the overall portfolio process as part and parcel of the organization in business as usual. It’s not like one of—it is also a huge amount involved in behavioral change. What do I mean by involved by behavioral change. It is a portfolio manager, his teams and the people who are involved in the projects and program management. They need to understand what this portfolio is all about and as a result, if you have the wrong metrics and the wrong approach, you have wrong behaviors coming up.

This was—in the beginning of the week in fact, I was at a very large organization where they wanted me to address a large project and program management community, telling them what a [inaudible] portfolio is and why should a project and program manager should understand portfolio. One of the key thing is that if the project and program manager do not understand how a portfolio, in fact, helps them in managing the priorities correctly, giving them the time for them to focus on their projects correctly or how they can actually feed in the benefits of those projects and programs into the portfolio—if they are clear on that, it makes things much easier and it makes it easier for the community, the project and program portfolio community to work in unison. That is very powerful in terms of managing those kinds of changes and the management of the—what do you call—the individual behavioral change.

This would be very much aligned also to the different stakeholders who are involved in other project design and so forth. There’s a level of communication and messaging that need to be [inaudible] going forward.


Keep all of that in mind when you deploy portfolio management, it’s actually a basic change management process that you’re looking at. Technology and processors are easy. It is the essence of the people part, making sure people are or have in mind and are hooked in correctly and are actually supported together with the top-down level of support that is needed to move this execution part of it.


“It is good to have an end to journey towards, But it is the journey that matters, in the end” [Ursula Le Guin]

[Dr. SR]- Now, this is a quote which I like to highlight. Some of you may know who she is, Ursula. She is one of a very famous science-fiction writer. One of the things that she mention is, “It is good to have an end to journey towards, but it is the journey that matters in the end.” Ultimately, if you are looking at portfolio management as the way forward within the organization, I think the journey that goes through to achieve that and converting the portfolio management process as a—it’s part and parcel of your business process—the learning curve that goes through is the most powerful learning you can have.


Do you have some questions that we can tackle?

[RW]- Yeah, Dr. Shan. This is a great point—there’s a question here that I think is a good point to interject, “What advice would you have for those organizations in which pet projects seem to get inserted all the time and those are very disruptive to our work. Any suggestions or recommendations there?”

[Dr. SR]- Yes I have actually. First thing, depending on the pet project, who it is from—one of the ways to approach pet projects is to actually follow a very quantifiable way of making your decisions. What do I mean by quantifiable way of making decision? If you’re looking to the last two sessions, we discuss one of the key essence of portfolio management was identifying what your strategy is, converting those strategy into strategic drivers, prioritizing those drivers in relation and putting the projects in line with those drivers. That will make a huge difference. That means you have the consensus of the executive team, that this is the direction that the organization is moving towards. In that sense, it’s easy to find that the pet project that comes in—you can always ask in a very nice way, “Where this pet project does fits into the various strategic drivers, which is part of the strategy, where does it fit in?” If it doesn’t fit into anyone, it’s a good way of saying it may not be in now but it may be in later.

Now if it can fit into any one of them, then if you put it into the portfolio and see whether it falls in or out of it. Ultimately, of course, what we need to look at is that when we do the particular cut for the project that comes in, let’s assume this project falls in the gray line area. This pet project just fulfills one of those drivers and is part of the strategy. It is a pet project of, let’s say some quality people, or [inaudible] saying, “Ok this is a pet project.” It falls in the gray area. In that case, that particular gray area will be the decision making for the senior executives who decide, whether they want it in or they do not want it in. If they want it in, something must be taken off for it to be in. In that case, the portfolio office or the portfolio manager will actually record all those assumptions down. If the senior management says, “Yeah we’re going to have this in.” That’s fine. That has been recorded and the decision has been made to be in. Saying that, ultimately the decision do rest in the executive board. But how it is presented and prepared by the portfolio team makes a huge difference and the execution part of it.

I will, one example specifically, in the aerospace sector that I worked with—there was a pet project [inaudible] come in on the basis of—what we call as—strategic projects, they call it. What do you mean, strategic. When you say strategic, it means the project cannot make money because it is going to invest a lot of time and went in with a very low bid. The reason why they went in was basically they wanted to get entry into a certain customer base they were looking at. Some of this pet project [inaudible], some of the projects senior executives put in could be, have some other reasoning behind it: because they want to enter a certain market or they’re going to test certain market for example. They could use that as a basis.


Does that answer the question?

[RW]- Yeah, I believe so. And Don is contributing some comments that I was going to add also—that if we have our process in place and our templates in place to support that and we’re leveraging our business case and developing that, that should help quantify the value of the various projects or potential projects and that could help weed out those pet projects and bring more light to them.

[Dr. SR]- But saying that, it’s good to have process. I sometimes say process and technology are good to highlight it. The essence sometimes in the—whoever’s pet project it is, his, or she’s a very powerful figure and they can actually influence very strongly. I mean, the government, the UK government, I’ve seen that happening actually. But again, the underlying assumption of is it being recorded down as a first level and then they come back again: they can actually question it very well because this has been taken in and this has been taken out, as a result. This is what we are able to fulfill and not. It goes back to that particular individual. That is one of the ways to change behavior. Slowly but surely, you can do that.

Ok. Another question, anything else?


[RW]- Nothing right now, Dr. Shan.


Goal of Resource Optimization

[Dr. SR]- Alright. Good. Then we’ll move onto the next slide is the Goal of Resource Optimization. Now of course, ultimately what we are looking at is the consciously aligning of business strategies with project work using fact-based information and I think a very good business sense. You’re balancing resource requirement and you’re authorizing the projects and resources so you can see how one needs to balance it.

What we’re doing is from the portfolio server, which Rich has highlighted, you start to realize what level will you be able to cut is your cost investment—so when the investment moves up, the priority moves up and then further, you refine that prioritization with your resource that you put in and then you again, you adjust the resource you need, your optimized portfolio that can be well executed. This process we are advocating is proud, tried and tested and it is useful for a lot of organizations. There’s a couple of people who have asked the question and I’m sure a lot of you who have been involved in businesses and in organizations across the world and over the years—you start to realize that sometimes you need some good key processing [inaudible]. But the process cannot drive you too much. It has to be simple, yet it must have a very good validity in terms of looking at it.

When we cover market conditions, when you start to realize that everything is shrinking, everything is tightening up, people are [inaudible] their budget—you start to realize you need to have a better performance for organizations. In that sense, it’s very important to ensure that you are investing correctly in terms of your money, that you’re also investing the right resource to get the optimum output for your organization’s performance. This is then becomes how you, as an organization, can function more effectively.

Over the years, I have found that the way that companies are structuring and changing is expected to change further. We will not get what we were able to do the last five, ten, fifteen years. Things are changing a lot more and the way that we apply some of the thinking behind it is going to be changed also. Ultimately, when you are drawing a line on the execution side of the organization, is how you are balancing your investment and your capability to execute that investment you look at.

[RW]- Hey Dr. Shan. We’ve got a question here coming across. When we perform our portfolio optimization, should we pull in our in-flight projects into that analysis along with our potential projects? What’s the recommendation there?

[Dr. SR]- Good question actually. It varies with companies. Some companies use—what do you call—the Life Cycle as a way of saying, “If it’s in my Phase 1 or Phase 2 of my Life Cycle, I put that into the portfolio.” Everything past Phase 2 will automatically get continued. What I would recommend quite strongly is actually to look into the value proposition of the in-flight projects to look at. As long as in-flight projects are 2 years running or 3 years, if it goes into the cycle you need to understand whether it still gets the value or benefit that you are looking at, is it maintaining or has that been changed. Ultimately, without a score card, the market changes that happen—that particular program that you are running may not be producing that kind of benefit or be invalid in that particular time, after a year for example. My recommendation is to go and look into the in-flight projects or program to see what the value proposition is, does it still remain the same in the second year when you put it into a portfolio. That would be my recommendation.

Any other questions?

[RW]- No. That’s good for now. Thanks, Dr. Shan.


[Dr. SR]- Ok. Good.


  1. Embed and Sustain Portfolio Management Capability within an Organization

[Dr. SR]- How to embed and sustain portfolio management capability within an organization—now, there is a huge amount of subject—what do you call—discussion in terms of embedding capabilities within an organization and it is not much different in one sense when you look into portfolio capability. Portfolio, there’s a few things that one has to value in mind.

Before I go into that, I’ve actually had some screenshots [inaudible] Server 2010 Dashboards and I think probably, for maybe, Rich if you want to add in anything, you’re always welcome to do so. I got two, I think we’ve got two screenshots of that. Is there anything you want to add onto this?

[RW]- No. But actually—sorry—yeah, the reporting. We do have a number of screenshots here with respect to reporting from Microsoft Project Server 2010. The views that you’re seeing here, most of which these dashboards are not out of the box. They require a little customization. I believe all of the reports that we’re going to see here are developed. [Transcription Note- Each portfolio name depicted will be italicized and enclosed in parentheticals before a new one is mentioned to indicate when a slide is being shown and respective transition to the next for greatest clarity possible.]

(Business Intelligence Center- Costs and Resources)

[RW]- This one actually is, this one actually is the simpler of some of the reports that we’re going to see. This one here is built using the Excel Services feature of Project Server 2010. Not too difficult to do. Some of the other reports, for instance, some of the more complex reports we’re looking at here—on the right especially—are developed using SSRS, Sequel Service Reporting. Those are a little more complex to build and require some customization, kind of development work. The moral of the story is these views that you’re looking at here, these dashboards are not out of the box and I just want to make sure that we make folks aware that these require a little additional work. The reason being, at least in my mind, is because every organization is different on what their KPIs are, what’s important to them and at the various levels within the organization, there are different information that’s important. Because of that, that’s, in my mind, why a lot of the reports need to be created.

[Dr. SR]- Very good, Rich. I agree 100 percent with what you’re saying. And that is also actually why, when you are looking at embedding and sustaining—because sometimes these reports are key for executives to track. Because ultimately, you wouldn’t know how well you’re performing unless you’re tracking something. That’s an old saying. You wouldn’t know how much you can jump unless you have imagined them [inaudible] in terms of jumping. Same thing, reports are very important. One cannot take them for granted because from an executive management viewpoint, if I have invested so much money to get portfolio process in place for helping me with some decisions and those decisions that I have made: are they trackable? Are they visible to me in a very clear way so that I don’t have to [inaudible]? I know the reliability of the data and it shows me that I’m keeping on track with what I’m supposed to do.

Once they are comfortable with that kind of reporting and the dashboard are very clear to them, this is my benefits [inaudible], this is my portfolio, projects and program which involve my cost profiling, it involves my resources—I am very clear how we are programming. What it means is that in the tip of their fingers, they know exactly how well the health of the program, the projects, ultimately the portfolio and ultimately the strategy that has been implemented have been tracked. In that case, that will give them a higher level of confidence in the way that they are driving the organization. Just as the word dashboard indicates, it gives them that [inaudible] that they’re moving in the right direction.

Once they know they’re moving in the right direction, they know the investment they have done in having the portfolio process follow with the technology that they have invested in, is giving them that confidence level—in that case, it becomes much easier for the portfolio management team and those people involved in the portfolio process, it’s easier for them then to—what do you call—sustain the growth of that within the organization.


Information Required to Optimize and Balance: A Recap


[Dr. SR]- One of the factors that we have highlighted here is actually Information Required to Optimize and Balance. It’s kind of a quick recap, in fact. We’re kind of repeating—just kind of a summary. If you see anything in here, one of the key takeaways you are looking at is the conscious alignment of project work to business strategies, the resource capacity, what is the resource requirements. Decision dimensions—this goes back to what Rich and I were talking about in respect to what is the investment you are looking, in terms of the investment versus what is the resource you are looking at and the multiple scenarios you are looking at. Underlying assumptions is very key—I’ve discussed and responded to some of the questions, make sure that all assumptions are recorded down and this is very important because it helps in the key learnings and if there’s some problems, you can understand why you made that decision based on what assumptions. Consistent planning process actually facilitates that with respect to ensuring that all of the demand are captured in a very systematic and transparent way which I underlined in the strategy.


Sustaining the Portfolio Capability

[Dr. SR]- Going back to sustaining the portfolio, to look at—once a day, the senior executive understands this is the value they are getting out of it. It’s much easier than to transfer the skills and knowledge to the key stakeholders. The key stakeholders must also understand that a portfolio is creating transparency, it is providing accountability and it is providing value for the organization. In that case [inaudible] to understand, you start to realize that it becomes easier for you and the portfolio team to ensure that this is sustainable.

The other recommendation that we have quite strongly is creating the standardization in terms of templates for structure and data collection and reporting. One of the key problems is sometimes the reliability of the data in the reports. Sometimes the CFOs will be doubtful of the reliability of the data or the benefits you promised and are they getting the benefits. Creating that consistency, this is what we call the truth that is coming up. It’s there. This makes a huge difference for executives. The more they are convinced that this is what it is, that it is the true depiction of what is happening within their company, the more convinced they will become and the way they will support this particular process.

In the same sense, when you have an easy to capture information, which is all systemized, it becomes much easier to work because people in the front end who are involved in different projects doing work, they have a lot of other things they are doing—sometimes making it easy for them makes a lot of the [inaudible] work and something from the portfolio perspective easy. As a result of that, what will become is that in their mind, this is easy to do. It means they have more time to do other things. As a result, it becomes a good behavioral change.

Training the intact Portfolio team whenever possible—because again, portfolio is going up because there’s a lot of [inaudible] that are happening in that particular field. On top of that, how it links from the end to end process right from the strategy creation to that of the innovation demand, getting the demand in innovation and linking with your strategy, making the investment, implementing it, making sure the value and benefits are achieved and how the company shares values and are affected—you start to realize that it’s a total end to end process that we are looking at. The more the portfolio and tech portfolio team are trained, you start to realize the way they vocalize their thought, the way they explain their roles within the organization—it will shift. They are [inaudible] in a very dramatic way.

I have come across portfolio managers who have moved out the curve very high because the way they start to explain in terms of return of investment, the managing investment linking to the corporate share values—I’ve seen portfolio managers who moved up to a senior director level right to the level of sitting on the board. There are situations where you do not think portfolio is the end; actually, it is a stepping stone for going into a higher level. The only thing is that your vocabulary will have to change when you start talking and when you talk to the right circle of senior executives, your own vocabulary will have to change to meet the expectation. And that will make a lot of impact in terms of the portfolio’s recognition of portfolio within the organization.

Continuously monitoring Portfolio performance and taking necessary corrective actions as overall portfolio and your ability to track and monitor how your overall project and program and where the direction on the organization is moving and the alignment of the strategy makes a huge difference. Many report on a quarterly or a half yearly basis—they don’t just look at the performance. Link it to your strategy, link it to how many of those projects and programs are going to achieve, which meets which of those strategies against product releases and any other IT enabled business projects—how is it enabled businesses. Those are the kind of things that need to be captured.

I’ve seen so many reports which are very straightforward, very dull to read and no kind of a link to the strategy. I would implore and I would ask portfolio managers to start to think in that level of strategic arena, how does it link because now you know the whole process, you understand where the link of strategy is successful initiative that have been launched. You must be able to link to that and that will make a great impact when executives are looking at the half-yearly reviews to see, “Ah this is what we are achieving.”

Marketing people are really good at this, to be honest, because if I look into CMOs, Chief Marketing Officers—in fact, I was speaking to a CMO in the—what do you call—the CIO Conference I was attending. Marketing people very much love portfolio, to be honest, because for them it drives the overall organizations in terms of how to meet the customer’s needs. All the top CMOs are great advocates of portfolio, who manages the product release. This is more toward product release that they look at.

Final sustaining is communicate, reward and recognize. Communication—if you are doing a brilliant job, you need to make sure that everyone is aware of what you are doing. So communication, not only that you are tracking and monitoring all of this [inaudible] but also communicate success throughout the organization [inaudible] portfolio in that, [inaudible] isn’t there some form of announcement that can be made. Why don’t you do that and that makes a huge difference. If you are in a position of senior level that you can reward and recognize people who have contributed and putting in as a short case at promoting internally, why don’t you do that. That will make a huge difference.

I remember several years ago, I was involved in a very large program where I worked. I had to set up a procurement portfolio office basically, so it’s kind of a categorization where you do a kind of rework, most people who I work [inaudible] with the categorization [inaudible] but what they did is a categorization based off of, and instituted as part of a portfolio work that they were involved in. And I was asked to set that up as an office to manage the various categories that comes in and how they manage the savings that come out of that. One of the key things we looked at or actually to continue the success for, was communication of successes, was how much of savings that particular category came up with and how it was done and promoted. Sometimes, creating and communicating success is good. Most of the time, unfortunately as human behavior is, we tend to look at the failures. It’s good because you tend to learn a lot from that but at the same time, you also need to appreciate some successes and that is also a good thing to look at, to motivate people.


These are some simple, like hands, five tips that we can take away with respect to sustaining portfolio capabilities. But again, this is part and parcel of a change in behavior that we look at. It takes a lot of effort from a lot of people to lead the teams, to maintain this [inaudible]. Because I have come across organizations which is [inaudible], we didn’t finish the portfolio, where the senior executive left or they moved on, and [inaudible] dies down. That is one of the dangers that can happen. So please bear that in mind, the sponsors who are doing and supporting portfolio implementation, if they are leaving, you need to make sure that the right successor is in place.


“It’s not the strongest of the species that survives, nor the most intelligent either; but the one most responsive to change”- Charles Darwin: The Origin of Species

[Dr. SR]- As in the famous Charles Darwin’s words, right? “It is not the strongest of the species that survives, nor the most intelligent either; but the one most responsive,” and I think everybody would agree with that. It is how you respond to change that makes a huge difference among organizations. I’d like to share a short story, if I may. [inaudible]. I, myself, I have a lot of, my personal experience is quite a bit of change in my own life. I used to run an office in Singapore, more than a decade back. 13, 14 years ago. I ran an office in Singapore for the APAC region. During that time, I had a very close friend of mine—a Chinese man actually, his name is Casey Tung—he was quite a senior executive in one of the—what do you call—the recycling world.

One day actually, he invited me to come in and said, “Shan you have to come and meet someone.” So I said, “Ok.” I went with him to meet this very old Chinese man. I do not know whether you, some of you may be familiar with—in the [inaudible] nation aside, a nation specific to Asia, people love—what do you call it—numerology and so forth. This guy, this Chinese man actually, does numerology. It’s very interesting; he does with numbers, actually. He did some numbers on me and said, “Shan, your life is going to change.”

It’s really not—over the last 15 years, my life has changed a lot. But what was interesting was he shared a story with me in terms of change and I’d like to share that particular story to this, your audience, about [inaudible]. Being a Chinese man, he mentioned a story about mainland China—in the early days in China, there is always the master and the disciple that is involved in learnings. He said this master knows everything and so the disciple is very frustrated. He said, “How does this master know everything I ask,” cause he can answer everything. So he thought that, “I will come up with a brilliant question for him and a brilliant question would be one he cannot answer.” What he thought of was this, “I’m going to get a bird in my hand and I’m going to hold it behind my back and then I will ask him whether the bird is alive or dead. If my master tells me the bird is alive, I can squeeze the neck of the bird in my hand and then show him it is dead. If he says it is dead, I can show him the live bird.”

So what he did was he caught hold of a bird, put it in his hand and put it behind his back, ran to his master and said in a very nice way, “Master, can you please tell me whether the bird is alive or dead.” As you know, the master looked at his disciple in a very serene way, smiled and said,

My son, all is in your hands.

So what it means is that any change that you’re going to have in your life personally or that you’re going to have within your organization, all is in your hands. You need to actually drive it to make those changes. All my life, the 15 years since that particular story, I find that really useful because ultimately, anything that’s going to happen is manageable within your hands. It is you that is driving it and will make the difference. And likely, the team that you’re working with and you need to drive the particular team—make sure that this is a good process, this is the way that we need to move forward.


You all have attended the class understanding what is portfolio. I know it’s a webinar base and it’s different from a live class, different from a live [inaudible] exercise; but you understand the concept. The essence of everything is that the power is in your hands. You need to manage this. If you say, “I have this portfolio and this is a very good project,” [inaudible], how do I make this happen, how do I prove to my organization that this can be done and that is the powerful way that you can make things happen. Nothing can change unless someone makes the effort to make the change. I will end this session with that: all is in your hands. Don’t just follow. Innovate, think and lead. Make your footprints in the world that you are involved in.


Session 3 End

[Dr. SR]- With that, we come to the end of session 3. And we have about—we’re open for questions. And you’re welcome for questions

[RW]- Yeah, Dr. Shan. This is Rich. There’s about 3 questions here and if you could let me just kind of talk for just a moment. I think we, based upon those last words that you used there, I think we can kind of address 3 of them in a row. One of the statements was, “Hey guys. You did a great job explaining the concepts here, the process, you even showed us the tool. How do we do it now? What are the next steps?” And I really loved your last slide and the words around your last slide and that is, “It’s up to you. You be the difference. You make the change.”

That’s the first bullet point. Another question was around ROI, return on investment for such an initiative, “How do we document and how do we show that?” My recommendation is as you’re taking that lead, as you’re getting all fired up and saying, “I want to make a difference. I want to change my organization or I want to be the factor that brings about change,”—handle it like any other project. Develop your business case. Pull that information together around the scope of what it is you’re wanting to do, whether it’s process or even—if it’s just process and maybe some simple templates or if you want to leverage a more enterprise project management information system like Microsoft Project Server 2010—pull your business case together, document it, get folks involved who can help you build that and develop that ROI for taking on such an initiative. With that said, if you need some help, reach out to either Dr. Shan and I. I tried to scramble in the background to find—cause I know I’ve got it—actual hard ROI for implementing Microsoft Project Server 2010 or Microsoft Project Server. I couldn’t find it quickly. But if you send me the request for that information via email, I promise I’ll get it back to you.

[Dr. SR]- Sorry. Just to add on to that, Rich, we have actually done quite a bit of—what do you call—business case prep for our clients, actually. For the ROI, for deploying portfolio management. In fact, I was writing an article on that—on how you calculate the ROI. [inaudible] anybody who comes to you, you can just also, we can send them or refer them to that particular article which is you know, inside magazine. It wasn’t in estimation cost and it [inaudible] one of those things you look at when you do your other work calculation for portfolio initiative.

[RW]- Another question coming across here, “Hey. Our organization could never afford Microsoft Project Server 2010. Is there a PPM light?” I can tell you speaking—not a sales pitch here, Kirk. Not meaning to get too sales oriented here but I can tell you that Pcubed does have a portfolio accelerator solution—that’s a combination of a process and an Excel based tool on steroids, and with our guidance, yes, we can help you optimize your portfolio in a rather speedy fashion.

[Dr. SR]- Just to add on to that, Rich, is that we have done the portfolio accelerator even for lots of organizations, to do as like a test run, as a pilot for them because a few of the portfolio [inaudible] and it’s much easier for them, later on to make a decision—whether they want to go for a [inaudible] system or not.


[RW]- Yeah. That’s true, because I’ve implemented both. The steps are pretty much the same, the process is the same, just the tool is different. So that’s good. There are a number of questions here with respect to the details of Microsoft Project Server 2010. I would actually, rather than attempt to click around in the tool—I would again ask that any folks that had a specific question with respect to a project server and its capabilities that we didn’t get to here, just send me the email or send me an email with your question and I will respond right away, send you screenshots or additional material to support the answer.


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