Last week I went along to the PMOSIG conference in Coventry, the theme for the day was portfolio management and the delegates were specifically interested in what this means for PMOs. One of the presentations on the day was Stephen Jenner’s brilliant presentation on “Portfolio Management – Influencing the Weather?”. Stephen Jenner is one of the authors of the new guidance from the OGC on Portfolio Management so the conference was timely. Rather than giving a lowdown on the guidance – which would have been fine if not a little dry – we were treated to a hour of realism on portfolio management.
Much as been stated about the benefits of an organisation taking a portfolio management view of their change initiatives (and in some cases including business-as-usual activities);
- Improved strategic alignment – doing more of the right projects
- Removal of redundant and duplicate projects
- More effective implementation of projects and programmes via management of the project pipeline, dependencies and constraints
- More efficient utilisation of resources including project managers
- Greater benefits realisation
- Improved accountability and corporate governance
*Taken from Stephen Jenner’s presentation
The interesting facts thrown up in Jenner’s presentation however was the lack of real hard and fast figures that show portfolio management as a structure to realise all of the above benefits. The Jeffery and Leliveld survey showed that “65% of CIOs believed that IT project portfolio management yields significant business value, although only 17% appeared to be realising the potential benefit in practice“. There is no real evidence either that an increase in maturity = an increase in performance; many believe it works but where’s the evidence?
The presentation went on to talk about the overoptimistic business case writer or project appraiser where it is still unclear about what an organisation is actually getting for its money. Business cases benefits are often overstated with costings and timings understated leading to a delusional optimism. In some cases Jenner went on to say that some business case writers are downright criminal and fraudulent.
The presentation concluded with seven key areas where a portfolio management organisation should focus its efforts including making sure it is measuring the right things and in turn be able to realise the benefits of having the portfolio management structure in the first place. It seems that for many organisations it is not necessarily a fact that portfolio management is not working for them but rather they don’t know because no-one thought to measure it correctly (or in some cases, not bother at all);
- Use a Benefits Eligibility Framework
- “Book” the anticipated benefits
- Appraise potential investments from more than one perspective
- Use Reference Class Forecasting
- Stage release of funding
- Measure the impact of portfolio management
- Be wise enough to play the fool
Take a look at a section of Stephen Jenner’s presentation – his energy and passion for the subject was excellent
Take a look at the presentation (available to download) and the rest of the PMOSIG conference outputs directly from the PMOSIG website
Image – clspeace