Previously we discussed about how PM software is helpful in the field of IT Professional Services Automation. Let’s understand how Portfolio management is important and drives organisation towards success in IT Professional Service Automation.
A major challenge faced by IT project and program managers in the field of IT Professional Service Automation is the effort required to establish a method for selecting, tracking, and controlling the projects within or assigned IT organization. Projects start for lots of reasons. There are business needs, strategic goals, performance improvement objectives, new business ventures, internal infrastructure enhancements and many more reasons. The problem is that sometimes organizations lose track of the projects in progress and in many cases, the justification behind a project is forgotten.
Let’s start with Project Selection. It’s important to consider the needs of the key stakeholders involved. Stakeholders have different perspectives and priorities that must be considered during the selection process. Projects should be selected based on some type of governance process with the needs of the organization as the major driving factor, followed by the needs of the stakeholders. A basic rule to follow is to ensure that all projects, regardless of their complexity and level of priority, are linked in some way to the organization’s business objectives. Failure to establish a link indicates that the project should not be considered and should not set in motion to consume organizational resources.
A business case, a cost / benefit analysis, feasibility study, payback period analysis, ROI or some other specific criteria should be in place before projects are approved and chartered. If you review the project selection methods described in the Project Management Institute’s PMBOK Guide, you will find the statement that all projects should be supportive of the performing organization’s strategic goals.
Project selection also refers to the need of considering alternative ways of performing the project before making a final decision. Sometimes a critical project arises that may very well affect the survival of a company. A selection process for these types of projects may be very short but, for other projects, selection is the most critical component in the field of IT Professional Service Automation.
Once selected, a company’s IT projects should be considered as key investments in the overall investment strategy. We place our own financial investments in portfolios that are managed by professionals so why not do the same for our IT projects? Once the projects have been selected, portfolios make it easier to ensure that critical resources are balanced properly and priorities are established. Portfolios can be established to group projects by category such as high risk, complexity or size, compliance, regulatory, or projected revenue. Portfolios also make it easier to identify where resources can be mined to support higher priority and strategic projects or what projects should be suspended or cancelled.
Another benefit of IT Portfolio management is that it can be used to establish the big picture of what exactly everyone is working on. If you don’t have a Portfolio in place for your projects, try this approach. Assign a project manager or staff person to identify every project assigned to the organization. This means projects in progress, projects just getting started, projects in close out process, and projects external to the organization but consuming IT resources. Categorize the projects as follows:
- Stand-a-alone (no dependencies to other projects),
- Projects that are dependent or inter-related with one or more other projects (define the dependencies).
- Example: project A requires specific deliverables from projects B and C before it can be completed.
- Projects that are external to the organization- Using IT resources but not initiated or approved by the IT department.
- Projects that conflict with other projects (improving a system on one project while another project is working to remove the same system).
- Projects in progress that do not have a clear connection or linkage to strategic goals or departmental objectives (in other words, there is no justification for their existence).
There may be many more categories, but these will give you an idea. The goal is to find out just what your resources are working on. Once this is done, create a project organization chart that will illustrate the project and their consumption of resources. This data can then be used to make decisions about what projects to place on hold, which ones to terminate, and how to better utilize the resources and the budget of the IT department.
A quick model for project selection within a portfolio:
- Define the project by name (and number if applicable)
- Brief scope description (reason for the project)
- Identify start date and estimated completion date
- Resources currently engaged (by type and number of each)
- Customer or target organization
- Expected benefit- revenue, value
- Project Budget- total estimated budget and actual costs to date
- Project Priority level
Establishing a PMO (Project Management Office) will assist in the portfolio management process. PMO’s, when properly organized provide consistency in the project selection process as well as in methodologies and procedures. A PMO supports projects in progress through project reviews, assessment of risks, and can offer data that may be used to determine which projects should
be postponed or cancelled when financial conditions drive changes in business priorities.
Portfolio Management isn’t a new concept but it can help establish control in the IT Professional Service Automation. The steps listed above could help save a few budget dollars and assist in reallocating important and scarce resources to the projects that are essential for an organization’s success.