Portfolio Management

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What Can Project Leaders Learn From How Financial Planners Manage Risk?

11 October 2010 - POSTED by Ty Kiisel

A balanced investment strategy has proven to be the most successful approach for maximizing return while reducing risk in an investment portfolio. Does the same approach apply to the successful management of an organizations project portfolio?

An experienced financial adviser will tell you that a balanced investment strategy is the most successful approach for maximizing return while reducing risk in your investment portfolio. The investor works to balance return and risk by diversifying investments in both high risk/high return and low risk/low return opportunities. Understanding each investor’s overall risk tolerance is crucial to crafting a meaningful investment strategy.

Successfully managing an organization’s project portfolio to maximize return while reducing risk requires the same approach—an understanding of the organization’s risk tolerance, and investment strategy that takes that tolerance into account, and an execution that aligns with the organization’s strategic and financial goals.

Although there are many organizations that believe it’s better to be safe than sorry, that might not be the case. Value-driven risk management acknowledges that some risks are positive opportunities to be pursued, while others aren’t worth worrying too much about, given the likelihood of occurring.

The first step to evaluating the viability of any project is to determine it’s potential value, based upon pre-determined metrics that reflect:

The project goals
The project costs
Th project’s alignment to the mission and vision of the organization
The organization’s risk tolerance
The project risks and any mitigation plans

Pre-determined metrics for evaluating project objectives, risks, business value, and alignment to organizational strategic and financial goals enable project decision-makers to manage technology and implement systems in a disciplined way that balances the need for positive return from investments with the costs associated with maintaining an innovative and productive line of business.

Maximizing project investments from the ground up depends on how successfully we can manage and lead project teams. I don’t believe that keeping people busy is the challenge—however, choosing the right projects is sometimes problematic for business leaders.

Poor decision-making leads to bad project investments. Much like how a skilled investment adviser makes decisions, the key to making good project decisions lies with pre-determined metrics for evaluating potential projects to validate initiatives from the ground up.

Project portfolio management software and work management methodologies that facilitate and encourage this type of evaluation before a project even starts will make the process easier to implement—however balancing risk and return is more than plugging numbers into a software program. It requires an organizational commitment to not only doing projects right, but doing the right projects.

How do you balance risk and reward?

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Project Management Knowledge Areas

30 September 2010 - POSTED by Jessie Warner

The PMBOK describes nine knowledge areas or categories of the project management discipline. Gaining expertise in any one of these knowledge areas can help you become a rock star in your organization. Understanding and applying all nine will make you irreplaceable. Throughout my next series of articles, I will be discussing each area in detail and identifying specific examples and techniques to help you become that irreplaceable rock star.

To begin this new series, I want to reference Kathy Schwalbe, Ph.D, PMP, and professor at Augsburg College in Minneapolis, Minnesota. As an active member of the PMI and an expert in the industry, she has written several textbooks and how-to guides on the subject. In her book “Information Technology Project Management," she describes each of the nine knowledge areas and identifies some of the tools and techniques used in each area. These knowledge areas include:

1. Integration Management – Project selection methods, project management methodologies, stakeholder analyses, project charters, project management plans, project management software, change requests, change control boards, project review meetings, and lessons-learned reports.
2. Scope Management – Scope statements, work breakdown structures, mind maps, statements of work, requirements analyses, scope management plans, scope verification techniques, and scope change controls.
3. Time Management – Gantt charts, project network diagrams, critical-path analyses, crashing, fast-tracking, schedule performance measurements.
4. Cost Management – Net present value, return on investment, payback analyses, earned value management, project portfolio management, cost estimates, cost management plans, and cost baselines.
5. Quality Management – Quality metrics, checklists, quality control charts, Pareto diagrams, fishbone diagrams, maturity models, and statistical models.
6. Human Resource Management – Motivation techniques, empathic listening, responsibility assignment matrices, project organizational charts, resource histograms, and team building exercises.
7. Communications Management – Communications management plans, kickoff meetings, conflict management, communications media selection, status and progress reports, virtual communications, templates, and project web sites.
8. Risk Management – Risk management plans, risk registers, probability/impact matrices, and risk rankings.
9. Procurement Management – Make-or-buy analyses, contracts, request for proposals or quotes, source selections, supplier evaluation matrices.*

*Schwalbe, Information Technology Project Management, Sixth Edition, 2010.

Stay tuned for my next article about Integration Management in which I will identify four keys to help you better integrate projects, resources, and people into your work management process.

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Going the Extra Milestone

22 September 2010 - POSTED by Doug Den Hoed

Choose Your Path

Most Project Management Software has the ability to mark certain Tasks as Milestones. Some PPM softwares also offer a set of customizable Milestones — a "Milestone Path" – to encourage standardization across Projects. A few sophisticated Project Portfolio Management Software packages even let you pre-assign a Milestone Path to Tasks in a Template, ensuring consistency across Projects.

However, what if the detailed Tasks required to support the work plan don’t align well with the Milestones the Project Management Office (PMO) wants to see? Or what if Projects encompass multiple, similar Milestones across large parts of work? Even in some of the most advanced Project Management Tools, the built-in Milestone features simply can’t accommodate these requirements.

Fortunately, there is a different technique that not only addresses these limitations, but opens the door to a whole new way of presenting Project Information in a Gantt Chart.

Trial Run

The screen-shot below represents a complex Project. There are lots of detailed Tasks required for execution, but in a way that doesn’t align very well to the Milestones the PMO needs to track. Furthermore, the Project plan Branches at Stage 2 into Parts 1, 2, and 3: similar sub-Projects with different timing and effort, but the same Milestones across them. A high resolution version and sample MS Project file are also available for download.

Going The Extra Milestone Example

The shaded portion at the top represents the normal Project Details. The bottom half is the new concept: a Project Summary of what people outside the Project most care about. In this case, it contains a summary "Highlights Task" for Part 1 (red), 2 (yellow), and 3 (purple). Beneath each Part are three "Milestone Tasks": PSum Stage 1, 2, and 3. Each has a token Duration of 0.1 Hours for percent complete calculations, and zero Work required.

The vertical lines highlight the trick. The PM drags constraints from the appropriate Tasks in the Project Details — regardless of where they are buried — to the corresponding Milestone Tasks. PSum Stage 1 and 2 are Start-to-Start constraints, and PSum Stage 3 is a Finish-to-Finish constraint. As the constraints snap the Milestone Tasks in place, they roll up and drive out the footprint of their Highlights Task.

This Project Summary technique offers several interesting effects and opportunities for you to:

Plan the Project Based Work as needed, decoupling it from the PMO Milestone requirements
Meet the need of some complex Projects to show repeating Milestones across sub-Projects
Quickly "collapse down" to a simplified view of the Project Highlights
Search for the Milestone Tasks alone across multiple Projects, and view them in Gantt format, removing the noise of the Project Details
Leverage the resulting predictable Percent Complete values (0%, 33%, 67%, and 100% in this example) to perform additional logic — in @task, for example, you could put Custom Data behind the Highlights Task and add a Calculation Parameter to compute which Gate each Part is at over time
Create additional Project Summaries based on other Tasks for different viewers

Crossing the Finish Line

I hope the Project Summary technique inspires you to rethink how you structure Projects in your Project Management Software. I should note that, in the case of @task, there is no built-in way for the Milestone Tasks to automatically complete when their controlling Predecessor completes. I’m working on it…but that’s another article.

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Four Things You Should Expect From Any Project Management Solution

16 September 2010 - POSTED by Ty Kiisel

As complicated as we try to make it sometimes, getting work done should really be pretty simple. If you break down what organizations really need to successfully execute project-based work, the list is relatively short:

A solution that will help business leaders sift through project requests and evaluate each request based on business value, alignment with strategic objectives, and any potential risks compared to the project rewards.
A solution that will help manage "the process" of project planning, implementation, and execution to ensure that projects stay on track and are completed on time, on budget, and with the desired functionality.
A solution that makes it easy for project team members to participate in the project management process. Making team members jump through hoops or forcing them to become project management experts to complete tasks will only accomplish one thing—discourage them from participation.
A solution that gives business leaders access to real-time data validates that decisions made in the board room are being executed by project teams, and guarantees that they are looking at timely and accurate information for making future decisions.

Looking at the above list points out three obvious requirements any project management solution must include in order to make a work management methodology more effective and efficient:

It must meet the needs of project teams: I look at this from a garbage in, garbage out perspective. If project teams don’t have an easy-to-use way to input timely and accurate project data into the system—they won’t. It doesn’t matter how sophisticated a project and portfolio management solution’s reports or dashboards may be, if it’s difficult for team members to use, it will only provide inaccurate and out-of-date information of little or no value to the organization.
It must meet the needs of project managers: Helping project managers "manage" the process doesn’t mean forcing them to manually input status information to push up to the executive suite. It means automating the collection of project information so every time a team member updates their status, that information is automatically rolled up into the appropriate report or dashboard. That way, managers can spend more time helping team members be effective and successful, and less time collecting data and building reports.
It must meet the needs of executive decision-makers: Formalizing the project selection process makes it possible for business leaders to make data-driven decisions about which projects to pursue and which to abandon. This enables them to make strategic decisions rather than knee-jerk reactions. In today’s economy, business leaders need a handle on what’s happening within their organizations right now—not yesterday, last week, or even last month. Accurate and timely information is often the difference between a business that is successful and thriving and one that is losing market-share and failing.

How do your project management tools address the needs of executives, project managers, and project teams?

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Welcome! – PPM Software from Oh to Go | AtTask

8 September 2010 - POSTED by Adam Clark

Welcome to the Blog!

Welcome to “PPM Software: From ‘Oh’ to Go”, where we’ll discuss tips and advice that will help you successfully:

1) Identify if you need PPM software

2) Identify your best PPM Software Options

3) Evaluate and select the best PPM Software for your business

4) Purchase your PPM Software (Getting the “Best Deal”)

5) Implement your new PPM software solution

Before we dive into the five items above, I would just like to briefly discuss what PPM software is and what it’s supposed to help you do, so you can decide if this blog will be helpful to you or not.

PPM (or PM) Software…What is It?

PPM stands for Project Portfolio Management. However, that doesn’t really explain what it is, so take a few minutes to talk about a few definitions. You can choose the version you wish to read:

The Shortest Version

PPM Software is a tool to help you get work done on time and on budget.

The Short Version

PPM Software is really any software solution that you use to identify, prioritize, manage, and analyze your work. Its purpose is to increase effectiveness and efficiency of your work activities so that you can get more done on time and within budget (Helps you make more money).

The Medium Version

PPM is a term that is often used by project managers and project management organizations, “…to describe methods for analyzing and collectively managing a group of current or proposed projects based on numerous key characteristics. The fundamental objective of PPM is to determine the optimal mix and sequencing of proposed projects to best achieve the organization’s overall goals…” (http://en.wikipedia.org/wiki/Project_Portfolio_Management). PPM software, also called Project Management (PM) software, facilitates the above described process by providing businesses tools that help manage any combination of the many different aspects of project management such as scheduling, task management, cost control and budget management, resource allocation, collaboration, communication, quality management and documentation or administration systems.

The Long Version

OK, let’s be honest – Most of you really don’t want to read the long version, so let’s skip it. However, if you actually do, let me know and I can provide a separate post dedicated to a more detailed and intellectual discussion about what PPM Software is.

Is This Blog Going to Help Me?

Basically, if any of the above definitions describes something you might looking for, then this blog will be helpful.

Wikipedia lists more than 80 different Project Management Software options. That’s right, 80! Also, a Google search for “Project Management Software” will return hundreds of pages of website links ranging from consultants, software vendors, resellers, and much more.

Wading through all that on your own, especially if you’re not sure how to begin, can be quite an intimidating task. However, it doesn’t have to be painful, disappointing, or disastrous. In fact, it can result in one of the best moves your company has ever made – and you’ll be a large part of that! With a straightforward approach and plan, you can be successful – Let’s get started!

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5 Keys to Effective Status Reporting

26 August 2010 - POSTED by Ty Kiisel

Long before the prime-time police drama Law and Order, there was Dragnet. As a kid, I used to watch Dragnet’s Joe Friday interview people, investigate crime scenes, and catch the bad guy every week. Every episode started with, "The story you are about to see is true, the names have been changed to protect the innocent."

When interviewing witnesses, Friday was famous for his deadpan, "Just the facts, ma’am." He didn’t have the time to waste with superfluous information, if he had the "facts" he could solve the crime.

In reality, reporting the status of all project-based work to stakeholders isn’t much different. Here are five suggestions that will make your project-status reporting run smoother:

When you do your reporting is often as important as what you report. Make sure the timing of your report will provide the most benefit to the stakeholders involved. For example, reporting on a problem when there is still time to do something about it is valuable—waiting until it’s too late, isn’t.
Make sure the information you are reporting is accurate and trustworthy before your presentation. Out-of-date or inaccurate information is of no value for making decisions. Validating that status information is timely and up to date is critical for making well-informed decisions.
Present information that is relevant to your audience. Different information is important to different individuals and job roles. For example, information that would be important to share with the project team would probably not be relevant to the CEO.
Ensure that the information presented is in the medium best suited for the audience. A PowerPoint presentation might not be necessary for a team meeting, but could be important when presenting to the executive team.
Make sure you have all the details of what you’re presenting. There’s nothing worse than sitting in front of a room full of stakeholders not knowing the answer to your CEO’s questions. If you don’t have the full details of what you’re presenting, make sure you have someone there who does to help with the presentation.

Leveraging your project and portfolio management software to capture status information as tasks are completed is valuable, particularly if your project software provides the reports and dashboards stakeholders need to review information and make decisions. However, taking a little time to consider each of these elements before your next status meeting will help make your presentations more effective.

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The Underlying Assumptions of PPM

24 August 2010 - POSTED by Jessie Warner

Many organizations want to go straight from spreadsheets to PPM without ever understanding the fundamental principles that govern project portfolio management. May I suggest five underlying assumptions that must be in place for organizations to fully adapt the PPM methodology? *

Five Underlying Assumptions of PPM:

Employees have a basic understanding of project management principles
The staff has a desire to select projects based on a structured system
The organization has a process for evaluating project performance based on specific goals and commitments
A team is created for portfolio governance
The organization has project management tools that support PPM functions

First, for an organization to effectively implement PPM it must have a staff that is capable of managing and supporting the process. This is often accomplished through the creation of a centralized project management office or PMO. The PMO consists of professional employees that understand the basic principles of project management and have the required knowledge and capabilities to create and manage a system for project standardization and consistency.

Second, once a PMO has been created, or a similar department or group, the PMO must have a desire to develop a structured approach to selecting projects. This approach should be based on a fair and balanced ranking system, one that selects projects based on a clear set of criteria and objectives. The projects selected should be aligned with business strategies and placed in portfolios that represent the tactical implementations of such strategies.

Third, after projects have been selected for the portfolio, they must be managed using a process that evaluates project performance based on specific goals and commitments. The PMO must be able to assess the ability of the project to continue to meet the original selection criteria. Projects that fail to provide adequate value or are inefficiently using resources must be delayed or terminated based on the established culture and practices of the PMO.

Fourth, in addition to the creation of a PMO or project group, new roles will need to be created to govern PPM and monitor the performance of the project portfolios. This team will be able to act for senior executives (or may include the executives) to oversee the portfolios.

Fifth, the PMO should review its current project management tools for support of the new PPM functions. If the existing software does not support PPM or doesn’t provide the functionality needed, the PMO should evaluate alternatives and choose a set of tools that best fits the organization’s goals and processes.

In conclusion, if an organization is seriously considering a move to PPM or is looking to improve its PPM processes, it must build a foundation that adheres to the underlying assumptions of project portfolio management.

*Adapted from “Project Portfolio Management” by Harvey Levine, pgs. 29-30.

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Successful Work Management: Sharing What Works

18 August 2010 - POSTED by Ty Kiisel

Learning project management best practice doesn’t just happen. Especially for those who don’t come from the traditional IT project portfolio management background.

Over the last couple of years I have noticed that there is a lot of project-based work accomplished by managers who aren’t formally trained project managers as companies turn to projects for increasing productivity. Because these "accidental" project managers are often left to themselves to figure out the best ways to manage projects, motivate teams, and get work done, searching out information to help learn best practices becomes critically important. That being said, some of those "accidental" project managers turn out to be incredibly effective and some of the most intuitive and successful managers.

Without getting into a discussion about certification and formal training, there are other ways for budding project managers to learn the ropes. (Anyone considering the path of the PMP should talk to Josh Nankivel at PM Student or Derek Huether at HueCubed, both of these guys are great resources for preparing for the PMP exam.) I’d like to talk about some less formal ways we share information and learn best practices.

Anyone who has read this blog for any length of time knows that I am a big supporter of the social network of project managers on Twitter who so willingly share valuable information with the rest of us. There is a tremendous amount of really good, real-world information, available to anyone who is willing to do a little bit of digging. There are excellent blogs, webinars, user groups, conferences, tradeshows, and seminars. In fact, it’s never been easier to learn how to best implement sound work management methodologies within your organizations.

I think this almost instantaneously available information benefits the project management community. We are very fortunate as project professionals that there are so many talented and capable people willing to share their insight into what makes successful projects click and what it takes to be a skilled project leader. I believe this "community" lifts the profession and creates greater perceived value in the workplace.

I know that I enjoy the time I spend with my peers in person, on the phone, and even online. I think it helps me be better at what I do and inspires me to share with the rest of the community. As I talk to people about what makes them successful, it’s rarely a discussion about software (although the right software tools contribute to project success). It’s usually about implementing sound methodology and best practices.

Why don’t you give it shot. Ask a question via someones blog or on Twitter and see how willing they are to help you find an answer. You might be surprised at how quickly someone who normally charges hundreds of dollars and hour in consulting fees will step up to answer your question.

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Can your PPM software defuse a bomb?

10 August 2010 - POSTED by Doug Den Hoed

Spy vs Spy When Companies Merge

Synergies…Efficiencies…Economies of scale….that all sounds great! Why wouldn’t two big companies want to merge?

Well, one reason might be that if they’re in the same industry, they probably use a lot of the same software, and sorting out which packages to Retain and what to Decommission is an enormous undertaking.

It’s a good thing that one of my clients knew about AtTask when they needed to sort it all out.

The AppRat Team

Our Applications Rationalization Team (or AppRat, as it’s more commonly referred to) was charged with sifting through 4000+ software applications as two major companies merged. Initially, we tried to use a combination of a small website database and spreadsheets stored in Livelink to keep track of things. It didn’t work, as this diagram shows, so we converted to @task.


Before: Web DB/Livelink/Excel - Limited access to Web DB - Restricted to 99 custom columns - Daily extract to Livelink - Repetitive data reformatting - Data staleness caused confusion		After: @task - Multi user environment - Unlimited custom parameters - Common view to all users - Reusable custom reporting - Real time reporting for all audiences

Ownership vs Usage

The AppRat team set up a single Project with a Task for each of the 4000+ apps they needed to either Retain or Decommission. Behind each such app Task, they also tracked over 100 custom data parameters to help guide the Work Management. Often, apps were used by more than just one department. And sometimes, the Owner making the Decision to Decommission an app wasn’t the same as the User(s) wanting to Retain it.

Hence the bomb scare that lead to this post.

Always cut the Red Wire

With all that data flying around, it’s easy to see how certain scenarios could be overlooked. Recently, our executives challenged us to prove that we were only Retaining what was Used, and that we were Using what we Retained. Huh. Sounds obvious…but we really weren’t sure how to show it. So we decided to build a dashboard to look for exceptions.

It worked. We can now spot and defuse explosive exceptions right away. There’s a screen shot below with a real example.

The moral, though, is that by leveraging @task’s flexible custom data and exceptional custom reporting, we used our IT Project Portfolio Management platform to solve one of the more challenging aspects of the merger.

That’s dynamite.

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Selecting Projects for Your Pipeline

5 August 2010 - POSTED by Jessie Warner

Harvey Levine, in his book Project Portfolio Management, discusses the processes that comprise PPM. On page 24, he provides some great insight into how projects should be selected for the pipeline. He explains that during the selection phase you should establish a structured process to:

Guide the preparation of project proposals (business case) so that they can be evaluated.
Evaluate project value and benefits.
Appraise the risks that might modify these benefits.
Align candidate projects with enterprise strategies.
Determine the most favorable use of resources.
Rank projects according to a set of selection criteria.
Select projects for the portfolio.

By establishing a clear process for project selection, you have created a template that can be used for all future projects. The best way to establish this process is to create it using an online project and portfolio management tool. With PPM software, you have a central repository of information and quick access to all of the projects within your portfolio.

The software allows you to create a project or process template that outlines the steps needed to properly prepare a business case, evaluate project value and benefits, and align the project with enterprise objectives. The criteria you establish in the beginning will make it easy for you to measure risk, rank projects, and determine the most favorable use of resources.

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