PROJECT PORTFOLIO MANAGEMENT at IT Services Hungary Ltd

1. PROJECT PORTFOLIO MANAGEMENT
at IT Services Hungary Ltd
Budapest, 26 February 2014
László Balogh – Head of SPM CoE

2. THE COMPANY
– public –
3/3/2014
2

3. OWNERSHIP HISTORY
– public –
3/3/2014
3

4. HEADCOUNT DEVELOPMENT & EDUCATION

In 2012 IT Services Hungary became the largest ICT
employer in Hungary.

Based on Aon Hewitt & AIESEC Hungary "Employer
Brand Survey 2012" our company is the most famous &
the third most attractive IT employer in Hungary!
79%
65%
44%
– public –
3/3/2014
4

5. THREE MAJOR LOCATIONS
Understand where your
business is vulnerable
Rehearse Your Plan
Cultural Change



Define your Business
Continuity Startegy
Develop your Business
Continuity Plan
Debrecen and Budapest are fully
equipped
Business contingency solutions.
Operation started at 1st of June
2012 at Pécs, as third location
– public –
3/3/2014
5

6. OUR CUSTOMERS
– public –
3/3/2014
6

7. PPM IMPLEMENTATION - BACKGROUND
– public –
3/3/2014
7

8. WHY
does need a SSC for project portfolio management?
 The company increased by 300-500 FTE every year from 2007 – capacity, quality and efficiency had
to be developed continuously. These activities were managed in projects from the beginning.
 Main categories of projects
 Infrastructure (office, IT)
 Organizational development
 Quality improvement
 Projects were controlled and decisions were made on top management level. After awhile it was not
enough.
 The change in the management team brought changes in management style and expectations
 Resource conflicts between projects

9. WHAT?
„Implement project portfolio management framework to achieve ITSH strategic goals, by defining the
roles, processes and toolset needed and redefining existing processes (e.g. project management).”
HOW?
1. Collect and analyze the expectations and define the requirements
2. High level planning of the solution
3. Involve third party to develop and implement the project portfolio management solution – issue a
tender.
4. Implementation
5. Fine tuning
6. Lessons Learnt and planning further development

10. PREPARATION
– public –
3/3/2014
10

11. HIGH LEVEL EXPECTATIONS
 Demand for Project Portfolio Management on ITSH level – two level in the project portfolio
(ITSH/Company level and Service Line level)
 Management decision about the elements of the project portfolio
 Management control on the progress of the projects
 Ensure the transparency of the projects - Transparent and objective view about the real project cost
and benefit
 Result oriented approach during the execution
 Business (performing Service Lines) and PMO has distinct needs, interests, expectations to PM’s
involvement in project execution
 Enhance project resource allocation efficiency, project priority influences resource allocation

12. THE ORGANIZATIONAL CONTEXT OF
PORTFOLIO MANAGEMENT*
Strategy Managament
Office
Portfolio Management
Project Management
Office
* PMI - The Standard for Portfolio Management

13. PROJECT PORTFOLIO MANAGEMENT
BUILDING BLOCKS
„Doing the right things”
Project Evaluation
and Selection
• Standardized project
initiation
• Project evaluation based
on the strategic goals
• Selection of the project
ideas (go/no go decision
by Project Board)
„Doing the things right”
Project Steering and
Controlling
• Standardized project
management process
especially monitoring,
controlling and reporting
• Central project repository
as the central source of
the basic project
management data
„Exploit what we did”
Post Project Control
• Analyze project real
benefit compered to the
plans
• Lessons & Learnt

14. ITSH PROJECT PORTFOLIO STRUCTURE
Company Level /ITSH Project Portfolio
ITSH strategy related projects
Global/TS rollout projects
Major local customer projects
SL initiated projects with high impact on
ITSH/other SLs
• Major deal transitions
•
•
•
•
• SL strategy related projects
• SL transitions
• SL operational projects
SL Level Project Portfolio

15. THE SOLUTION
– public –
3/3/2014
15

16. PROCESS HIERARCHY AND STEERING LOGIC
Executive Board (EB)


Verification of the PP
Top level control on the PP
Vision
Mission
ITSH Strategy
Project Portfolio Board (PPB)


PP reporting to EB – creating PP (incl. priorization + IN/OUT
decisions)
Portolio Change control
Project Portfolio Manager (+ team)



PP reporting to PPB – recommendation for PP
Monitoring & controlling
Portfolio Change management
Head of PMO/SLs/Project steering


Project Portfolio
Management
Demand management
Project management
Project Demand
Management
Project /Program
Management
–public–
3/3/2014

17. HIGH LEVEL PROCESS
Allocate PMO
PM
Submit
initiation
Prioritize
projects, Create
PP
Portfolio Selection
Project
proposal
Demand
mgmt.
Project
charter
PP
system
Project Initiation
Verify
the PP
Re - prioritization Re - allocation
Portfolio Forecasting,
Monitor & Control
Follow-up
actions
Portfolio Follow-up
Quality mgmt.
tool
Project and PP
report
Planning
Recording
closures
Quality
mgmt.
Project
Closure
Execution
Change
Control
–public–
3/3/2014
17

18. HIGH LEVEL ROADMAP
The continuous improvement of level 1-3 and the development of level 4 are both suggested
simultaneously. All department are on the same maturity level
Enterprise
Portfolio
Level 6
Cross
Portfolio
Level 5
Defined
benefits
Level 4
Level 3
Level 2
Level 1
Project
Alignment
Structured
Processes
Initial
Process
All department are on the same maturity level
Cross portfolio awareness, optimized resource management
Promised benefits are monitored
Project selection aligned with strategy, portfolio is documented
on company level. Well defined and detailed processes
 Enhancing
maturity and
processes
All projects are captured, cost are planned and controlled,
Standards for project management on company level
 In depth
expansion
 Supportive tools
and practices
Decisions are made on project-level.
Poor transparency on company level.
– public–
3/3/2014
18

19. Evaluation
– public –
3/3/2014
19

20. Common positive feedbacks
First steps of efficient project portfolio management, the development needs to be continued
Project categorization is transparent and effective
Operating central project portfolio
Demand management – Project cannot start without approval, management knows the projects on a high
level
• Process of project portfolio is transparent and effective
• Role of the PPB – a dedicated unit was established, who deals with the project portfolio
• Reasonable achievement according to the current project maturity
•
•
•
•
–public–
3/3/2014
20

21. Common suggestions, areas to be improved
• More specific project prioritization – the current method and prioritization process is not effective, needs to
be improved
• Templates for project proposals – Based on the prioritization and the available information the project
proposals should be submitted in a standardized way
• Critical resources – What are the critical resources in case of projects, what are the limits?
• Sending the project proposals and pre-prioritization several days in advance to the meeting
–public–
3/3/2014
21

22. Other feedbacks
• Project portfolio trainings – efficiency can be improved by shaping project portfolio attitude of the
stakeholders
• Limited capacities of PMO, PPM and business owners
• Roles and responsibilities – PMO and PPM roles are different, it is not effective that one person holds these
positions
• Benefit calculation and business case – differences in the expected complexity of the project proposals
• Project funding – after approval it should be clear who finances the given project and in what rate
• Maximization of the number of projects – How many projects can run simultaneously?
–public–
3/3/2014
22

23. Related topics under discussion
• Project portfolio for external and transition projects
• SL poject portfolios
• Standardized project evaluation
• Project and portfolio management awareness development

24. Actual hot topic - Project prioritization
– public –
3/3/2014
24

25. High level methodology, dimensions
Business
priorities
•
•
•
•
•
Benefits
Costs
Benefit
Opportunity cost
TSI expectation
Human
resource
needs
•
•
•
•
Duration
PM-FTE needs
Total FTE needs
FTE limits
Management
priorities
• Strategy and
goals
• Business
• Resources
–public–
3/3/2014
25

26. Business priorities
Based on the quantifiable estimation of the business owner
Question
Weight
Value
1
2
3
Payback period of the project
40%
Never/over 3 years
1-3 years
In 1 year
Estimated project cost
20%
High
medium
low
Benefit of the project
20%
no/low
moderate
high
How should the rejection affect the company/service line?
20%
no/low
moderate
high
Based on the qualifiable estimation of the business owner
Is the project a TSI expectation? (Yes/No/Don’t know) – If yes, the project automatically gets 3 in the last
parameters
–public–
3/3/2014
26

27. Qualifiable business priorities
Question
Weight
Value
1
2
3
Payback period of the project
2
never
1-3 years
In 1 year
Estimated project cost
1
20M+ HUF
5-20M HUF
0-5M HUF
Benefit of the project
2
or
or
or
How should the rejection affect the company/service
line?
2
or
or
or
The qualifiable estimation of the business owner - value + written explanation:
• Benefit of the project
 If the project will be delivered successfully the expected business benefit is low, moderate or high? (e.g.
revenue, efficiency, reputation, future business, etc.)
• How should the rejection affects the company/service line?
 In the case the project will be rejected or failed the expected (negative) effect on the business is low,
moderate or high?
Business priority: the weighted average of the value of each project = ∑value x weight
–public–
3/3/2014
27

28. Thank you!