Information About Project Portfolio Analysis Frank Westermann PMO15BR6 Corporate Technology
Agenda Introduction Motivation Project Portfolio Approach Analysis of Project Portfolio Summary Strategy Level Portfolio Level Project Level
Organizational Setup: CT RTC SYE PAM Is Managed as a Corporate Function Separately managed Power and Gas Wind Power and Renewables Energy Building Technologies Mobility Digital Factory Process Industries and Drives Financial Services Healthcare PG WP Power Generation Services PS EM BT MO DF PD SFS HC Corporate Services Global Services GS Corporate Governance Communications and Legal and Human Corporate Controlling Corporate Core Development & Markets Government Affairs Compliance Resources Technology and Finance CD GM CG LC HR CT CF Regions Managing Board
We Support All Divisions and Corporate Functions, Completed More than 400 Engagements around the Globe
We Analyze Project Business Capabilities and Provide Beneficial Input to Increase Project Business Performance Offerings Assessments of Project Business Project Business Coaching Operative Project Services Project Evaluation MPM Project Business Assessments & Checks MSM Service Business Assessments PPMA Project Portfolio Assessments PCM People and Competency Assessment Coaching of Project Manager Coaching on Portfolio Topics PM Process Definition & Implementation Good Practice Exchange Early Warning System of CT internal Projects Project Office Functions Workshops (e.g. team building, project start / set up) Customized Project Trainings Project Evaluation Recovery Concepts for Critical Projects
Agenda Introduction Motivation Project Portfolio Approach Analysis of Project Portfolio Summary
Projects and Boats Need a Well Managed Port ( folio) Strategy Sales project Process improvement project Internal projects, e.g. for standardization and R&D Project in execution phase Projects
Project Portfolio Drives the Information Flow between Strategy and Projects Strategy Strategic Goals Portfolio Information Project Portfolio Project Frame Conditions Project Information Projects
Why Do You Need a Well Managed Port ( folio)? Strategy TRANSPARENCY Complete view of benefits, risks and resources in all projects PROJECT PORTFOLIO MANAGEMENT PERFORMANCE STABILITY Project patterns, e.g. regarding risks, used to optimize project planning and achieve stable project execution Projects
Why Do You Need a Well Managed Port ( folio)? Strategy TRANSPARENCY Complete view of benefits, risks and resources in all projects PERFORMANCE STABILITY Project patterns, e.g. regarding risks, used to optimize project planning and achieve stable project execution PROJECT PORTFOLIO MANAGEMENT RELIABLE DECISION BASIS Right project decisions supported by suitable options, e.g. regarding resource allocation EFFECTIVE BUSINESS Full realization of business and organizational potential Projects
PROJECTS Main Goals of Project Portfolio Are Strategy Goals of Project Portfolio TRANSPARENCY PERFORMANCE STABILITY RELIABLE DECISION BASIS EFFECTIVE BUSINESS Complete view of benefits, risks and resources in all projects Project patterns, e.g. regarding risks, used to optimize project planning and achieve stable project execution Right project decisions supported by suitable options, e.g. regarding resource allocation Full realization of business and organizational potential
Agenda Introduction Motivation Project Portfolio Approach Analysis of Project Portfolio Summary Strategy Level Portfolio Level Project Level
IMPACT OF DECISIONS Main Drivers of Business Success Are the Right Decisions on Higher Organizational Levels React on all relevant influences in your market environment (e.g. within a growing or shrinking business) Strategy Project Portfolio Projects Business Success shown with different criteria profit margin in % market share in % market share growth technological leadership Drive the right decisions to optimize your benefits with your own resources
IMPACT OF DECISIONS TYPICAL QUESTIONS Project Portfolio Important Questions for Business Success Are the strategic goals clear for everybody in your organization? Strategy Are the right activities performed to support your strategic goals? Project Portfolio Projects Do the decisions optimize the benefits within your limited resources? Do you get the right project information to make optimal portfolio decisions? Do the decisions in the portfolio level support the projects adequately?
Major Topics within the Project Portfolio Are Benefits, Risks, Resources and Stakeholders COMMUNICATION AND DECISIONS REGARDING Strategic Level Portfolio Level Project Level BENEFITS All sorts of benefits from projects (e.g. sales from projects, change orders, usage of own products) depending on the targets of the organization. RISKS All sorts of risks (e.g. technical, commercial and legal risks), documented in LoA and managed later on in project execution. RESOURCES All sorts of organizational resources, e.g. quantitative and qualitative human resources, financial resources or other resources, e.g. tools. STAKE- HOLDERS All sorts of stakeholders within the project business, externally (e.g. customers) and internally (e.g. own employees, Siemens partners).
Business Decisions within Siemens Organizations Are Made at Project, Portfolio and Strategic Level (Example) Strategic Level Analysis and Definition of Target Markets / Customers and Solutions Preparation and Target Definition within annual Business Review / Strategy Meeting Targets for allocated organizational units and BTA s with Regions Regular Monitoring of Business Targets Portfolio Level Regular Project Selections / Decisions e.g. within PM020 / PM040 / LoA Meetings / Sales Project Boards Regular Resource Planning and Allocation Regular Jour Fixe (incl. Project / Resource Decisions) Regular Project Reviews and Reporting with Escalation from Projects / Customers Project Level Planning of Project Planning of Project and Target Setting Monitoring and Reporting of Project, Decision Making within the Project Lead management Opportunity development Bid preparation Contract negotiation Project handover Project opening & clarification Detailed planning Purchasing & manufacture Dispatch Construction Installation Commissioning Acceptance
Agenda Introduction Motivation Project Portfolio Approach Analysis of Project Portfolio Summary Strategy Level Portfolio Level Project Level
Project Portfolio Analysis Supports Different Organizations Analysis of Project Portfolio Organizations Strategic Level Portfolio Level with Project Business + decision power regarding own resources e.g. Business Unit, Business Segment, Regional Unit, Portfolio Function Benefits Project Level Risks Resources Stakeholders
Goals of the Analysis Are to Improve Activities in an Organization on Project, Portfolio and Strategic Level Goals of the Project Portfolio Analysis: Show transparency of the organization s strengths and weaknesses regarding important topics on project, portfolio and strategic level Identify improvement areas Set preconditions to take action Strategic Level Portfolio Level Project Level Benefits Risks Re-sources Stakeholder
Project Portfolio Analysis Based on Standards and Project Business Experiences Structure and content from worldwide standards (PMI, OGC, GPM) + Requirements from PM@Siemens regarding Project Portfolio + Experiences from more than 400 project business analysis (e.g. MPM Assessments) and improvements within Siemens maturity in project business Independent and external view Confidentiality of the results + International Norms: e.g. ISO 21502, DIN 69909 + Results and success leverages from international Multi Project Studies (TU Berlin / TU Darmstadt) = Project Portfolio Analysis Methodology Practical improvement recommendations References to good practices
ORGANIZATIONAL LEVELS Project Portfolio Analysis Covers 3 Dimensions within the Organization Monitor & Control Decide & Act Identify & Analyze Strategic Level Portfolio Level Project Level Benefits Risks Resources Stakeholders ANALYSIS TOPICS
Procedure and Results of the Project Portfolio Analysis Strategic Level Portfolio Level Analysis Project Level Project Portfolio Analysis Results Benefits Risks Resources Stakeholders Strategic Level Portfolio Level Interviews and document reviews to evaluate the organization Project Level Benefit Risk Resource Stakeholder Analysis results include the current status, charts and improvement recommendations
Our Main Approach is to Minimize the Analysis Time Needed for the Organization Planning and preparation Individual Interviews with some from group interview* ~ 2 d Generate Final Report Kickoff Meeting with all project members 1 h Review of Documentation Final Presentation 1,5 h Interview with Senior 2 h Generate Report and Evaluation Group interviews with several employees (portfolio topics) Coordinator Feedback* ~ 1,5 d ~ 6 h = Activity with interview partners = Activity without interview partners * individual interviews between one to two hours = Activity with all project members
Report Contains a Rating for Each Topic Area Project Portfolio Analysis Results Strategic Level Portfolio Level Project Level Benefit Risk Resource Stakeholder Big improvement potential Medium improvement potential Small improvement potential
Organization Gets a Benchmark Comparable to other Organizations
PROJECTS Stages for a Systematic Project Portfolio 5 BUSINESS POTENTIAL OPTIMIZED Full business and organizational potential are used and optimized 4 BUSINESS POTENTIAL TRANSPARENT Clear business and organizational potentials to make right project decisions 3 PROJECTS PERFORMANCE OPTIMIZED Analyzed project patterns to optimize project planning and performance 2 PROJECTS PERFORMANCE TRANSPARENT Full transparency about benefits, risks, resources and stakeholders of all projects??? 1 Resources Benefits PROJECTS PERFORMED Projects performed, but no full transparency or optimization of all projects
Agenda Introduction Motivation Project Portfolio Approach Analysis of Project Portfolio Summary Strategy Level Portfolio Level Project Level
Project Portfolio Optimize the Business Information for Innovation and Optimization Projects Run the business: Do the things right Project Portfolio Optimize the business: Do the right things Frame Conditions for Business Success
Sales Projects Customer Projects R&D Projects Internal Projects Service Projects. Projects Customer Service Service Definition Internal Services. Service Project Portfolio Versus Projects & Services Business Strategy People & Competency Assessment (PCM) Strategic Goals Project Information Project Portfolio Project Portfolio Analysis (PPMA) Project Business Service Business Maturity in Project Business Assessment (MPM) Maturity in Service Business Assessment (MSM)
Contact Information Frank Westermann Senior Key Expert Consultant Siemens AG CT BE&QM PPC ISP PR PAM Otto-Hahn-Ring 6 81739 Munich Germany Phone: +49 89 636 633930 Mobile: +49 173 2533283 E-Mail: frank.westermann@siemens.com
Thank You Name: Frank Westermann Web: www.siemens.com Email: frank.westermann@siemens.com Twitter: LinkedIn: Facebook: Google+: