Project & Portfolio Management - Improved decisiveness by implementing PPM methodology

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1 In collaboration with Project & Portfolio Management - Improved decisiveness by implementing PPM methodology Sweden, KTH 11 november 2008

2 Head of Engagement Managers Jonas Winqvist Principal Capgemini Sweden. P.O. Box 825 Gustavslundsvägen Bromma Mobile Tel: Jonas.Winqvist@capgemini.com Responsible for Capgemini service offering, PPI Project Performance Improvement in Sweden More than 13 years of management consulting experience Certified project manager International experience from large global transformation programmes Sida 2 26 november 2008

3 The Capgemini Group has more than employees and offers Consulting, Technology and Outsourcing services world wide With over people in over 30 countries we have a strong global presence Our revenue for 2007 was 8,7 billion euros Our head office is based in Paris, France We are more than employees in India We are management consultants working with Capgemini Consulting We are 1300 consultants in Sweden We are divided into three disciplines and five industries Capgemini Consulting Technology Services Outsourcing Services Manufacturing, Retail & Distribution Energy, Utilities & Chemicals Telecom, Media & Entertainment Financial Services Public Services Our business mix enables us to deliver integrated solutions Business Mix Local Professional Services (Sogeti) 16% 11% Outsourcing Services 39% 34% Capgemini Consulting Technology Services Our Mission & Vision Our Mission: Enabling Transformation Our Vision: Enabling Freedom We advise and support you in transforming your organisation, from strategy through to execution. We provide innovative solutions supported by our deep sector and functional expertise. Sida 3 26 november 2008

4 Capgemini contribute to thought leadership on a global basis in all sectors Energy, Utilities & Chemicals Financial Services European Union Climate Change Objectives Smart Metering: The holy grail of demand-side energy management? Risk-based asset management in the 21st century utility sector European Energy Markets Observatory Capgemini is the sponsor of Platt s annual Global Energy Awards Cooperation with KTH Royal Institute of Technology World Retail Banking Report w/ ING & EFMA Global Financial Services Lab World Wealth Report w/ Merrill Lynch Nordic Asset Mgmt. System Survey present s World Payments Report w/ ABN AMRO & EFMA SEPA Forum Asset Mgmt. Forum Strategic Risk Mgmt. Forum World Insurance Report Manufacturing, Retail and Distribution & High-Tech Public Sector Cars online Europe's most prestigious Supply Chain Award 3rd Party Logistics The Future Automotive Enterprise Sales Force Effectiveness Web Based Survey on electronic Public Services Building the Intelligence bridge Transformation in the Public Sector Information Technology and the Electronic Health Record Sida 4 26 november 2008

5 We use the star model to analyse and improve an organisations capabilities Resources Competence Processes, Roles, IT-tools, Starmodel* Strategy Culture Organization Responsibilities Governance, Incentives Organisational change To create a change, there is a need to have a holistic view on the situation The solution is often to rebalance the organizations eco-system using Change in structure Change in tools Change in incentives Companies tends to overemphasis the need for structural change A challenge for a management team is to create an environment that allows people to act, develops peoples capabilities and stimulates peoples willingness to act * Star Model - Edvard E Lawler III, From The Ground Up, 1996 Sida 5 26 november 2008

6 Only 29% of all IT projects are successful* Relative share of projects that meets time, cost & quality goals Only 29% of all IT projects are successful (finished in budget, on time and in quality) 53% of all IT projects are challenged (significantly late, have budget overrun or expected quality is not delivered) 18% of all IT projects fail (they are never finished or their results are in use) On average, 15% of total IT budget comes from bad projects Additional costs of approximately 7% of IT budget is due to budget overruns of challenged projects The trend today is Companies uses more time and resources in projects Business drives development through projects An increasing number of projects demand methods, processes and IT-tools to secure management with correct information in order to initiate right projects and be in control of development Source: Chaos Research Report, 2004: IT Projects in US companies under evaluation; Chaos Research Report, 2004: Third Quarter Research Report Sida 6 26 november 2008

7 Empirical observations: Few companies has a developed project culture In our experience, Capgemini has come across following generic behavior 1. Companies tend to prioritize operations before projects when there are a conflict 2. Project managers tend to underestimate risks (amount and risk level) in order to create a feeling of having control 3. Companies believe that killing a project is a failure, therefore tends not to do that 4. Companies accept splitting up the project in small pieces (assignments) to avoid using the corporate project model/method 5. Companies let special interests from strong line managers influence prioritizing of projects with consequences on corporate optimization 6. Project managers asking top management for advice are considered as incompetent Too many companies only addresses structural change to professionalize an organizations capabilities in project and portfolio management Sida 7 26 november 2008

8 Companies has very often financial constraints, thus in need for prioritizing and balancing the portfolio Process IT-plan Business plan Suppliers Top down Bottom up Business control Laws/regulations $ Portfolio Unions Staff Customers Risk levels Top line growth Bottom line improvement Legacy Market development Production optimization Our experience is that companies seldom has methods or tools to balance the portfolio Sida 8 26 november 2008

9 Approaches to portfolio and program management PROCESS DESIGN Balancing the portflolio ORGANIZATIONAL DESIGN Introducing PMO (????) Managing power in and between projects and organizations Decisions making and follow-up management Sida 9 26 november 2008

10 Strategic approach to portfolio management: Balancing the portfolio through strategic alignment Process 1 2 The methods starts with prioritize strategic goals and then identify business impact in order to create a project ranking list Sida november 2008

11 When the ranking is done, the portfolio can be analyzed and rebalanced Process 1 2 In what if-scenarios, different limiting factors can be tried out in order to simulate consequences Sida november 2008

12 The first dimension to determine a PMO is to evaluate in which phases the PMO should work Organisation Phase: Create initiatives/portfolios Select initiative/project Plan project Govern progress & benefit tracking Process: Analyse strategic goals Identify need for development Categorise initiatives Create portfolios Prioritize strategies/ goals Prioritize initiative Identify b-case Scenario planning Choose portfolios Define project demands Define deliverables Initiate projects Define Competence demands Identify resources Tollgates Initiation Design Construction Test Implementation Status Reports Reports Issues Risks Deliverables Time Milestones Tool: Most of the PMOs are only working in the Plan & govern phase Sida november 2008

13 The second dimension is to determine the PMO role Organisation "Enterprise" Project/Program Management Office Business PO No. 1 Business PO No The administrator Builds on "repository" of standardized project methodology, tools and knowledge via limited, parttime support for maintaining and disseminating Business PO No The Project Coach" Project office assumes willingness to share project management activities and responsibilities across organization's functional units, and uses the office to coordinate communication 3. The Top mgmt Advisor Concentrates project management capabilities and responsibilities within the project office, and may provide the direct management of projects Sida november 2008

14 The distribution of decision-making power is close to a normal distribution, but with high variance* Organisation No authority Some authority Very significantly authority But the real problem is that the mandat does very seldom correspond to tasks Source: The Multi-Project PMI: A global Analysis of the current state of Practice by PMI Dr. Brian Hobbs University of Quebec Montreal 2008, a survey with 500 respondents Sida november 2008

15 With better preparations, the management teams can focus on taking the right decision and follow up its implementation When implementing a decision logg, the management team became more focused on taking decisions, using the tool to communicate to staff and securing realization Sida november 2008

16 CONCLUSIONS????????????????????????????????????????????????? Sida november 2008

17 Next step?????? Need to know more about????? Expected outcome of the Cap/JIBS project???? Need support from???? Regarding what????? Sida november 2008

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