Webinar reporting findings of PPDE research.

1. Project portfolio delivery performance:
What really makes a difference
Initial findings from PA’s survey into
the drivers of delivery effectiveness
Jon Hughes, Tim Pare
June 10, 2009

2. A bit about us…
Jon Hughes
Jon is head of PA’s Business Transformation Group in North America
and is a Member of PA’s Management Group. He specializes in helping
clients deliver transformational change, and draws on a background in
industry and consulting spanning over 20 years.
Tim Pare
Tim is one of PA’s leading program and change managers with over
20 years’ experience in successfully shaping and delivering large and
complex initiatives.
Tim leads the survey team and its deployment across PA’s geographies.
© PA Knowledge Limited 2009. 01020-6 PPDE webinar slides Page 2

3. Seize the crisis – PA’s Cost Reduction webinar series
PA’s webinar series:
• Business process simulation: Forecasting the
benefits of process change
• Improving portfolio delivery effectiveness in a
downturn: What really makes a difference
• Business processes under the microscope
• Surviving a downturn through effective
restructuring
• Getting real value from your support functions
“Surviving and thriving in the economic crisis”
A handbook for corporate leaders
We are now living through a major economic crisis,
brought on by one of the most serious financial
downturns in history. This book is about how to
respond.
© PA Knowledge Limited 2009. 01020-6 PPDE webinar slides Page 3

4. Improving overall delivery is a key imperative for project-based
organizations
Pressure to deliver Conventional improvement approaches
projects continues to grow may have reached their limits
In organizations that deliver projects, there is Conventional approaches to improvement have
perpetual pressure to do it better. tended to include:
This might be because customers want: • Intensive support for a few high profile
projects/programs
• Improved reliability: ensuring you can deliver
on promises every time • Investment in training or recruiting project
managers
• Results faster: and therefore cheaper
• Establishing PMOs
• New technology: driving rapid ‘ideation’ to
product launch and shorter lifecycles • Redesigning or buying new processes and
systems to standardize the approach.
Or maybe you need: These changes will deliver benefit to specific
• More capacity: to deliver more without programs but are often not sustained or do not
increasing cost deliver performance improvement across the
organization.
• To focus effort on the ‘right things’: aligning
better with strategy
• Increased profit: by doing things more cost
effectively
• Greater market share often generated from
breakout innovation
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5. The aims of our survey were to answer a number of questions
Key questions: The survey covered two key dimensions…
1. Is there a simple model to define Practice Maturity:
current state and required
a measure of the quality of practices
developments to become a high
organizations operate
performer?
And
2. What are the critical elements in this
model that differentiate the Great from Delivery Effectiveness :
the Bad (or the Good from the Not So
a measure of the quality of outcomes
Good)?
organizations experience as a result
3. What is the optimum organizational
model to deliver the most effective
outcomes?
4. Where should an organization focus
efforts to become a high performer
based upon its starting position?
© PA Knowledge Limited 2009. 01020-6 PPDE webinar slides Page 5

6. The first dimension – maturity – is a key driver of delivery effectiveness – with
caveats
A range of practices can contribute to,
or impede, overall delivery performance:
• Design Authority practices
• Governance practices
• Portfolio management practices
• Project management practices
• Workforce management practices
• Resource management practices
• Financial management practices
Becoming more mature in these practices
will, in general, improve effectiveness.
Organizational complexity
and culture also play a part.
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7. The second dimension – delivery effectiveness – is measured across a range of
outcomes
Portfolio outcomes
Portfolio balance The overall portfolio is optimized to maximize value and achieve a good strategic fit.
90% of projects meet strategic project criteria; aggregate value meets/exceeds targets.
Portfolio Highly transparent, dynamic tracking facilitates realignment of portfolio according to current needs, constraints. Actual
adaptability value delivered meets/exceeds targets
Accountability Accountability is well understood. Achievement of respective portfolio, resource and project delivery targets drives
behaviors across the organization.
Resourcing outcomes
Supply capacity The organization's capability profile (staff skills, numbers) is the desired shape, with sourcing used to augment capacity.
95% achievement of FTE targets for project vs business as usual activities.
Demand estimating The quality of business cases is high. Project and business-as-usual demand estimates, and subsequent re-forecasts, are
realistic, enabling variances and changes to be incorporated without excessive disruption. 95% of projects completed on
budget.
Allocation The ‘right’ resources are allocated to projects based on priority, availability, skills & experience and development potential.
95% of committed FTE resources delivered to projects.
Utilization Resource management goals are measured to show progress against a balanced scorecard (e.g. utilization, recruitment
and sourcing targets). 85% utilization achieved for key project resources.
Project outcomes
Delivery reliability Work is initiated in waves, focused on delivering quickly and regularly, with visible results through the year. 95% of projects
completed to budget, on time and scope.
Stakeholder Stakeholder feedback is routinely obtained. 90% of stakeholders give a satisfaction rating of at least 8/10.
satisfaction
Process Iterative/concurrent development, multi-disciplinary collaboration and streamlined decision-making optimize delivery.
effectiveness 20% annual reduction of projects failing to meet their objectives (cost, time & scope).
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8. All the practices influence effectiveness – but not all have an equal impact
Outcomes Practices
Portfolio Project Workforce Resource Financial
Design authority Governance
management management management management management
Portfolio balance
Portfolio adaptability
Accountability
Supply capacity
Demand estimating
Allocation
Utilization
Delivery reliability
Stakeholder satisfaction
Process effectiveness
Overall effectiveness
Significant Significant 2x impact of 3x impact of
at 5% at 1% other domains other domains
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9. Organizations in each performance quartile exhibited stark differences
1st quartile
2nd quartile 1. The best performers did everything
3rd quartile appreciably better – indicating a focus
4th quartile
on getting their organizations to work
as a system
2. The essential differences between 2nd
& 3rd quartile firms were in workforce,
resource and financial management –
the practices concerned with adequate
staffing and funding of the portfolio
Maturity
3. The most significant differences
between 3rd and 4th quartile firms
were in governance, portfolio and
project management – indicating a
focus on conventional areas of
improvement
4. The least effective – 4th quartile –
Design
authority
Governance
practices
Portfolio
management
Project
management
Workforce
management
Resource
management
Financial
management firms did most things poorly (although
process practices practices practices practices practices
the Design Authority domain was a
Practice domains
relative strength)
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10. Resource and financial management are key differentiators
Performance quartiles
3.0 Quartile 1 (highest)
Quartile 2
Quartile 3
Quartile 4 (lowest)
2.0
Resource management score
1.0
0.0
-1.0
-2.0
-3.0
-3.0 -2.0 -1.0 0.0 1.0 2.0 3.0
Financial management score
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11. Organizational complexity and culture play parts in improving performance
¾ of hybrid ⅔ of decentralized
organizations were organizations were
in Quartiles 1 & 2 in Quartiles 2 & 3
¾ of centralized
organizations were
in Quartiles 3 & 4
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12. The findings suggest a layering in how organizations apply the practices
Overall maturity
• Consistency is key – deficits in the underlying practice
domains impede overall effectiveness, but not in equal measure All practices
Differentiating practices:
• Ensures projects are adequately staffed and funded to deliver
• The domains that appear to be under-managed by over half Financial Resource
of the respondents Management Management
• Dependent on underlying domains and require significant practices practices
additional effort and focus
Integrating practices:
• With the fundamental building blocks in place, these
add demonstrable additional value – up to a point Design Portfolio Workforce
• These domains are where organizations have Authority
Governance
Management Management
traditionally focused efforts at improving practices
practices practices practices
overall delivery
Foundational practices:
Project Management practices
• The fundamental building blocks of delivery
• Key source of data to enable other domains
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13. Rapid improvements are possible – with efforts focused on specific
improvement objectives
Overall delivery effectiveness
Continuously improve
Increase effectiveness
Improve reliability
Gain control
Time
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14. Improving effectiveness requires a clear idea of where you currently stand
PA’s survey remains open and can be accessed at: www.portfoliodiagnostic.com.
How do you compare What is driving your
Where should you focus improvements ?
to your peers? performance ?
Maturity vs Effectivene ss
80% Average - Cordis
ACME 90th percentile 75th percentile 25th percentile 10th percentile
100%
Outcomes Q1 Q2 Q3 Q4
70%
Portfolio balance – defining what you want to achieve
ACME
60%
Portfolio adaptability – tracking and adapting the portfolio
to current needs
50%
Accountability – taking ownership of delivery
40%
Supply capacity – understanding what resources you have
Maturity
30%
Demand estimating – understanding what you need
50%
20%
Allocation – matching demand and supply
10%
Utilization – understanding what you use
Process – achieving efficiency/effectiveness in delivery 0%
Design Authority Governance Portfolio Project Management Workforce Resource Financial
Delivery reliability – how well you deliver on your promises practices practices Management practices Management Management Management
practices practices practices practices
Stakeholder satisfaction – how well your delivery is
0% perceived
0% 50% 100% Overall outcomes – how effective is your overall delivery
Effectivenes s
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15. In summary, our key findings are
1. Maturity is a key driver of delivery effectiveness – with caveats
2. All the practices influence effectiveness – but not all are equal
3. Lower quartile performers appear to have focused on a subset of practices –
the conventional areas
4. Resource and financial management are key differentiators
5. Non-centralized planning and delivery models appear to deliver better results
6. Focus on what you need to do to improve outcomes.
© PA Knowledge Limited 2009. 01020-6 PPDE webinar slides Page 15

16. What’s next?
We will: We would like you to:
• Send you a copy of these slides • Invite colleagues and contacts
• Follow up with the interim report to complete the survey
at the end of June
• Identify anyone else who may
• Issue the next report and webinar Q3 09. want to attend another webinar
• Send you a copy of our Surviving and
• Provide any feedback to
Thriving publication – E-mail:
jon.hughes@paconsulting.com tim.pare@paconsulting.com
Jon Hughes Tim Pare
4601 N Fairfax Drive 4601 N Fairfax Drive
Suite 600 Suite 600
Arlington, VA 22203 Arlington, VA 22203
Tel: +1 571 227 9800 Tel: +1 571 227 9273
Mobile: +1 202 459 8970 Mobile: +1 571 215 1332
E-mail: jon.hughes@paconsulting.com E-mail: tim.pare@paconsulting.com
© PA Knowledge Limited 2009. 01020-6 PPDE webinar slides Page 16