© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Contact: Michael S. Kenny, Managing Partner
Our Perspective:
Portfolio Management

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© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Agenda
1. What is Portfolio Management?
2. Portfolio Management: Prioritization
- Techniques: Inventory & Categorization
- Techniques: Prioritization Criteria
- Techniques: Capacity & Resource Management
3. Portfolio Management: Governance
4. Typical Portfolio Management
5. Concluding Remarks
3

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
What is Portfolio Management?
4
Project Portfolio Management: “Everyone says they are doing it, but few
are, and those that are, are unsure if they are doing it right.”

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
What is Portfolio Management?
5
Project Portfolio Management (PPM) is the continuous
process of identifying, selecting and managing a
portfolio of projects in alignment with key performance
metrics and strategic business objectives.3
§ Strategic Decision Making (Governance)
– Are your programs and projects specifically aligned to
your business and IT strategies?
– Are you selecting the right programs and projects?
– How do you balance selection and execution?
§ Prioritization
– What are your priority programs and projects?
– What programs and projects have you deprioritized or
cut in the last year?
– Are your best resources on your priority programs or
projects?
§ Risk Management
– How are you managing portfolio risk?
– How are you managing your program and project
execution risk?
– How are you managing your financial risk?
§ Value Realization
– What is the portfolio overall business value?
– What business value is being delivered by the, programs
and projects?
– What metrics are you using to track value?
§ Governance
– What is your governance & execution process for the
portfolio, programs and projects?
– How are you managing stage-gates?
– How are you managing portfolio, program and project
dependencies?
“Portfolio Management is the coordinated management
of portfolio components to achieve specific
organizational objectives.” – PMI1
“The totality of an organization’s investment (or segment
thereof) in the changes required to achieve its strategic
objectives.” – OGC2
Project Portfolio Management: It is really about five areas… but much more
than managing a list.
SelectionExecution
1. Project Management Institute. (2008). The Standard for Portfolio Management Second Edition.
2. Office of Government Commerce. (2010).P3M3 – Portfolio Model.
3. Microsoft (2008). Project Portfolio Management. Doing the Right Things Right.
Many varying definitions from PMI, OGC, Microsoft
and others.

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Portfolio Management: Prioritization
6
Along with project prioritization comes de-prioritization and project elimination.
Typical Behavior
§ Everything is a priority, we have to do it all.
§ Managing a list to do as many projects as we can.
§ IT unable to deliver a certain number of large projects but
still tries and fails.
Questions
§ What are your priority programs and projects?
§ What programs and projects have you deprioritized or
eliminated in the last year?
§ Are your best resources on your priority programs or
projects?
Unfortunately, typical de-prioritization happens organically… very few projects
get de-prioritized and even fewer are eliminated.
Case Study: U.S.-Based Multinational Consumer Products Company.
The executive team began with a list of ~ 30 strategic initiatives. They agreed the following reviewing and prioritization criteria:
– Maximize speed to market.
– Support the parent brand.
– Maximize ROI.
– Minimize risk.
– Maximize value to internal and external stakeholders.
– Minimize attract, retain and develop the employees resources.
– Support process and IT development.
The team concluded that the criteria were not all equally important, so they weighted each on a 10-point scale to achieve a balance between
short-term and long-term needs, and external and internal stakeholders.
Categories
Mission-critical: Most deserving of resources at this time.
Important: Will pursue now but with less emphasis mission-critical.
Wait-listed: Depending on freeing up of resources.
On hold: Will not undertake or plan in this prioritization period.
Adapted from Harvard Business Review February 2009: Which Initiatives Should You Implement?; hbr.org/2009/02/which-initiatives-should-you-i.html

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Techniques: Inventory & Categorization
7
1. Enforce a single point of entry and
standard process for project intake /
submission.
2. Collect your most important attributes
(Meta Data) used to categorize projects.
§ Project Cost, Effort, Resources, Duration, Phases,
Schedule, ROI.
§ Business or IT Imperative, Stakeholders.
§ Department and organization impact and outcome.
3. Create Master Program and Project
Inventory with multiple filters and views.
Even though Portfolio Management is much more than managing a list, you
must begin with a single categorized and well managed list.
”Keep the Lights On” (KLO) 10%
(Maintenance, Bug Fixes)
Enhancements 60%
(Improvements, Compliance,
Regulatory, Contractual)
Growth
30%Innovation
30%
Required
Illustrative Categorization
Elective

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Techniques: Prioritization Criteria
8
1. Prioritization criteria for elective (discretionary) projects.
§ Clearly delineate between required and elective.
§ Based on Business and IT objectives and strategies.
§ No more than 1-3 criteria per objective or strategy.
2. Simple scoring model.
§ Weighted based on direction from Executive Governance.
§ No more that five to seven levels of scoring - odd, even scores.
§ Work the middle of the distribution - the tails should be obvious.
3. Escalate only elective (or elective vs required disputes) projects through the
Governance process.
4. Communicate portfolio meta data and categories to Executive Governance.
5. Learn how to say “no”, a lot, and apply rigorously.
Along with project prioritization comes de-prioritization and project elimination.

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Techniques: Capacity & Resource Management
9
1. Capacity Planning
§ Identify peaks and valleys in overall resource demand by skill level.
§ Evaluate resource supply based on five to seven skills.
§ Adjust the project portfolio delivery schedule to minimize resource deficits and
surpluses.
§ Set utilization targets for defined sets of people, usually by title or skill.
2. Resource Management
§ Match specific, named resources to work demand.
§ Forecast resource availability and communicate assignments.
§ Establish rules of engagement on how resource conflicts are resolved.
Prioritization and portfolio scheduling must also take into account the critical
constraint of resource and other capacity.

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Portfolio Management: Governance
10
Governance should be like a root canal – the pain before and during is forgotten
soon after.
Current governance is more about tracking success rather than a process that
facilitates making hard decisions and weighing business tradeoffs.
Example: University of Texas at Austin
IT Governance Values
§ Transparency — Governance structure and process must be clear.
How decisions are made and who has input rights and decision-
making rights must be readily apparent to campus.
§ Communication — Communication must occur into, out of, and
across the committees and with campus.
§ Accountability — Committees and task forces must be held
accountable for delivering on their responsibilities. Clear escalation
paths for issue resolution must be defined.
§ Responsibility — Governance structure must focus on results
rather than implementation and project management.
§ Appropriate representation — Constituency groups across
campus must be represented.
§ Active support — Governance structure requires staff to support
the process. Agenda setting, meeting logistics, issue tracking, and
communication are all essential aspects of active support.
Typical Behavior
§ Green-Green-Red.
§ Steering committees are a “show.”
§ Governance process not followed. Stage Gates missed.
§ Dependencies managed at project level only.
Questions
§ Are your programs and projects specifically aligned to your
business and IT strategies?
§ What is your governance and execution process for the
portfolio, programs and projects?
§ How are you managing stage-gates?
§ How are you managing portfolio, program and project
dependencies?
Source: UT Austin.

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Portfolio Management: Governance
11
Executive Governance
§ Establish and drive organizational
strategy – IT and Business.
§ Decision making for elective projects
§ Budget allocation for prioritized
projects.
PMO
§ Execute and monitor
projects.
§ Exercise stage gates.
Business and IT Owners
§ Submit project requests with key
attributes - Project Cost, Effort,
Resources, Duration, Phases,
Schedule, ROI.
Establishing a structure, roles and responsibilities lead to successful portfolio
governance.
Project Prioritization Committee
§ Discards low-value, low urgency initiatives
and approves obvious ‘go’ projects.
§ Escalates elective initiatives to Executive
Governance which are then evaluated
based on strategic alignment, value to the
organization and funding.
Illustrative Governance Structure.
Executive
Governance
Project
Prioritization
Committee
Portfolio/Project
Management
Office
Business
Owners
IT
Owners

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Portfolio Management – What Not To Do
12
There is a true hunger for improved Portfolio Management and great execution
still has a ways to go.
1. There is only a loose connection with organizational strategy and projects are not tied to specific
measurable strategic objectives.
2. De-prioritization happens organically. Very few projects get de-prioritized and even fewer are
eliminated.
3. Risks are identified at the project level and only after budget and schedule approval; contingency has
no relation to risks.
4. Governance is more about tracking (success) rather than making hard decisions and tradeoffs.
5. Portfolio management is more about a list and visibility than strategic decision making.
6. Much portfolio, program and project governance is status reporting instead of active engagement.
7. The budgeting / funding process drives sub-optimal selection (intake) and execution.
8. There is a lack of, and appetite for, hard-core portfolio, program and project metrics.
9. There is limited program and project execution accountability.
10. Most organizations significantly overestimate their ability to both select and execute (leadership,
capacity, rigor) programs and projects.

Kenny & Company is a management
consulting firm offering Strategy, Operations
and Technology services for our clients.
We exist because we love to do the work. After
management consulting for 20+ years at some of the
largest consulting companies globally, our partners
realized that when it comes to consulting, bigger
doesn’t always mean better.
Instead, we’ve created a place where our ideas and
opinions are grounded in experience, analysis and
facts, leading to real problem solving and real solutions
– a truly collaborative experience with our clients
making their business our business.
We focus on getting the work done and prefer to let our
work speak for itself. When we do speak, we don’t talk
about ourselves, but rather about what we do for our
clients. We’re proud of the strong character our entire
team brings, the high intensity in which we thrive, and
above all, doing great work.
Work with us. Experience the Difference.

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
APPENDIX

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Maturity Model: Governance & Prioritization
16
A PPM maturity assessment identifies current organizational maturity and
prescribes the path to achieve future competency levels.4,5
4. Chevron (2008). Evolution of the IT PMO and Alignment with Business Strategy.
5. CIO Executive Board (2007). Lightweight Portfolio Stewardship: Sustaining Executive Engagement Throughout the Portfolio Lifecycle.
This represents a sample the Governance and Prioritization competencies of a much broader Project Portfolio Management maturity model.

© 2017 Michael S. Kenny & Company LLC. All rights reserved.
Portfolio Management: Apply Metrics
17
Category Key Questions Sample Metrics
Portfolio Mix Is our funding aligned to strategic
objectives?
% of Portfolio spend in “run the business”
% of Portfolio in “grow the business”
% of Portfolio in “innovate the business”
% of Portfolio in Short/Med/Long-Term
projects
% of Portfolio in Large and Extra Large
Projects
Demand and Capacity Do we have the right prioritization
and sequencing of projects given
the current capacity?
% of growth in project intake
% of growth in initiatives
Resource utilization (human, material
capital)
Recruiting pipeline
Production capacity
Value For our portfolio, to what extent
did we achieve our objectives?
% on time
% on budget
Portfolio and sub-portfolio IRR
$ saved for consolidation efforts
Financial Management How effectively are we managing
program and project budgets and
what are the financials?
% variance to plan
% funding in-flight
$ committed but not spent
Tracking the success of your Portfolio Management process includes asking
hard questions and tracking metrics.
Illustrative Metrics.