Lee Merkhofer Consulting Priority Systems
Implementing project portfolio management

Keys to Implementing Project Portfolio Management (Continued)

8.   Follow a Roadmap for PPM Implementation

The steps for successfully implementing PPM depend on your organization's particular situation. However, in many cases, I have found that the following sequence of 9 steps effective: (1) assess your current capabilities, (2) analyze the stakeholders, (3) form teams, (4) develop a charter, (5) design your PPM approach, (6) pilot test the approach, (7) acquire or create a PPM tool, (8) roll it out, and (9) practice continuous learning.

PPM road map

Figure 4:   PPM implementation roadmap.

Step 1:  Assess Current Capabilities

Warning signs that implementing PPM may be difficult:

  • Little appreciation for training and process engineering
  • Stated policies in conflict with actual practices
  • Shoot-the-messenger mentality
  • Mistake-fearing culture
  • No recognition of the distinction between bad decisions and bad outcomes
  • Management unaccustomed to managing by numbers
  • Expectation that new process initiatives will provide instant gratification
  • Fear of visibility, measurement, and accountability
  • History of new initiatives that fail to sustain support and commitment

Begin with a gap analysis focused on your organization's current capabilities with regard to the activities addressed by PPM. Evaluate the current project portfolio and the methods used to select projects. Consider the adequacy of the governance structure. Identify what components of the portfolio management process are in place compared to what is needed. Compare estimated project costs and schedule performance with actual results. How well is resource demand managed? Assess the effectiveness of the process by which projects are prioritized. Investigate whether the project portfolio appears to contain a reasonable mix or balance of project types. Is project progress assess based on ability to achieve forecasted project benefits rather than on delivery vs. the project plan? Are benefits from projects tracked and actually realized?

Information can be collected and documented through interviews, participation in meetings, reviewing documents, etc. What works well and what doesn't? Understanding of PPM maturity levels is useful in this regard. Compare your assessment with industry standards and PPM best practice, as characterized here and elsewhere. The goal is to identify differences between your current practices and what should be. Identify the areas of greatest need. The results will help you make the case for PPM and determine the PPM approach that will be appropriate for your specific situation.

Step 2:  Analyze Stakeholders

Tips for achieving change

  • Be patient
  • Set modest, progressive goals
  • Prioritize your success criteria
  • Build motivation throughout the process
  • Surround yourself with a team you trust
  • Train your team
  • Have an effective management framework

From Christian Vallancourt, "Six Steps Toward Embracing Change," Information Management May 30, 2012.

Identify all PPM stakeholders. Key stakeholders include corporate executives and senior management responsible for business lines and support services that require projects either to support operations and/or to deliver products and services, program and project managers who propose projects and compete for funding, middle-level managers who provide resources to plan and execute projects, and project managers who plan and deliver projects. Determine their expectations, needs, concerns, and level of acceptance. Stakeholder interviews identify critical issues and capabilities that help guide the design of the PPM approach. Also, understanding concerns can enable you to identify political conflicts that could occur as well as mitigation tactics.

Based on your stakeholder analyses, you can determine the amount of education and selling required. "Lunch and learn" sessions can be an effective forum for imparting understanding and assuaging the fears of impacted parties. Convey the business value motivating the effort and show people how PPM will directly benefit them, for example, by enabling them to take on bigger, better, and more strategically important responsibilities.

Step 3:  Define PPM Implementation Teams

To ensure buy-in, as well as to enable you to obtain full understanding of the issues, the PPM approach should be designed as a collaborative effort. You will need a Core Team responsible for developing and implementing the approach, and an Executive Steering Committee to provide leadership and policy-level inputs, and to approve key design choices. You may also need to identify technical teams to help you to address specific, technical issues related to the design of the method you will use to evaluate certain types of project benefits. Obviously, you should include critical stakeholders as members of your teams.

PPM implementation teams

Figure 5:   PPM implementation teams.

At this stage you are essentially beginning the establishment of your PPM governance structure, since subsets of your Core Team and Executive Steering Committee will likely become the Portfolio Management Team and Executive Team, respectively, that you will need for ongoing portfolio management.

Step 4:  Develop a Charter

As with any other major project, creating a PPM charter is a valuable step. At minimum, the PPM charter should include statements from the Core Team indicating the objectives that you expect to achieve by implementing PPM and your initial scope. The charter should communicate the PPM value proposition—Why do this? The scope establishes the types and categories of the organization's projects that will be managed within the portfolio(s). The charter should also document the schedule and potential risks to success. Get agreement on the charter from your Executive Steering Committee, as well as from your other key PPM stakeholders. The charter will provide direction and make defining requirements much easier.

Step 5:  Design Your PPM Approach and Value Measurement Framework

Develop your organization-specific approach to PPM as well as the framework you will use to value projects. You must also define the PPM process by which projects are proposed, evaluated, and prioritized, and resources are allocated. Knowing your approach and how you will estimate project value will, in turn, allow you to determine what information needs to be collected to support the process and the quality assurance mechanisms that will be required. From there, you can determine what existing processes need to be realigned or improved, and the new processes that must be implemented based on your PPM requirements.

Bear in mind that you are building the PPM of the future. Establish PPM on a scalable model. It will help ensure that major components of your approach do not become obsolete as your organization evolves. Do a logic "walk-through" to help assure you that the approach will work.

Step 6:  Pilot Test the Approach

Implement your approach and value-measurement framework sufficiently to conduct a pilot test. If your value measurement framework is a qualitative model, have those responsible for setting priorities test whether the documented logic efficiently leads them towards comfortable conclusions. If your value measurement framework is a quantitative model, you can do a paper-and-pencil application, or create a quick-and-dirty spreadsheet implementation.

Conducting a pilot test allows you to test major components of your PPM approach in a controlled environment while it is still fairly easy to make changes. Importantly, you can explore how easy or difficult it is for the inputs required to evaluate projects to be generated. You will get a good indication of sticking points, which you can address either through training and documentation, or by refining the approach. Importantly, you can test whether the value measurement model and associated project prioritization logic produce reasonable results. Showing that the logic will correctly prioritize difficult projects is critical for easing stakeholder concerns.

Check stakeholder satisfaction carefully. Almost certainly, the pilot test will point to important changes that you should make before purchasing or implementing software and propagating the approach through the organization. Revise the design, and develop a plan for completing the remaining steps of the implementation. The plan should be communicated to key stakeholders to solicit feedback. Include initial executive introductions to and senior management training in the necessary concepts and processes.

Step 7:  Build or Acquire a PPM Tool

Practicing PPM does not necessarily require a sophisticated PPM tool. As indicated above, spreadsheet software may be adequate. If you intend to purchase software, the page on best-practice and the papers "PPM Tools-Which Approach is Best?" and "How to Evaluate and Compare PPM Tools" provide guidance. Tools generally provide three basic functions, data acquisition and management, decision support, and reporting and graphing. Available tools differ considerably in how well the accomplish each of these functions.

According Forrester Research:

"[T]he issue [behind customer dissatisfaction with PPM tools] is not PPM, the issue comes down to the overall vendor selection process. Too often enterprises do not do enough upfront planning prior to vendor selection. "

R. Wang, Forrester Research, quoted by D. Sears in, "Is Project and Portfolio Management Software Failing You?", in The Bottom Line by Ed Cone, Aug. 14, 2008.

You will want a tool that is capable of accommodating your value measurement framework. Also, the tool should have features that are appropriate for your situation. You need to take care on both counts. With the exception of tools that include or are based on general-purpose modeling and analysis platforms, most tools have limited capability to accommodate customized value measurement models. Consider ease of use, ability to import/export data from your other systems, customer service, vendor financial status, cost, ability to grow with your evolving needs, etc. Tools may be delivered as single-user, desk-top applications (e.g., built using Excel), desktop/server multi-user applications, or web-based applications. Increasingly, companies are offering to host "on demand" PPM services, wherein access to the PPM tool is provided for a monthly fee. Again, conduct pilot tests to ensure that the tool has been properly configured to meet your needs.

Step 8:  Roll It Out

Once you are confident that your approach and associated tool will work, executive management should give their approval to roll it out. Materials produced in documentation will help you communicate the new approach to the rest of the organization. Be sure to allocate sufficient time within the budget cycle to allow necessary training and build familiarity with the new process. Set realistic expectations, and be very clear about roles. Signal types of change to be expected, and communicate the value to be gained from achieving such changes. Let people know that you expect challenges, especially early on, but balance this against the anticipated pay-off. Expect some resistance from project managers.

Step 9:  Practice Continuous Learning

To improve you must get better as you go. Effective PPM needs to be a living process within your organization. Do a thorough "lessons learned" review following the first full-scale application. Involve senior managers in the assessment. Keep what worked, change what didn't work, and learn to do it faster, better, and more efficiently.

Critical Success Factors

Do you need to do absolutely everything I've described to implement PPM? No, but the more of these success factors you nail the better your chances of success and the more value your organization will reap from PPM. Realistically, few organizations have the ability to fully achieve all these keys to success without help from PPM experts. But, you don't necessarily need consultants and expensive software to do well enough to get the job done.

However, and I admit that I am biased, you should consider getting help. PPM involves specialized expertise that may be in short supply within your organization. A consultant provides access to best practices and brings an outsider's perspective. Consultants generally get access to senior executives and can serve as catalysts for change. Your consultant should provide training and facilitate your PPM implementation process. Just be sure that any consultant you consider hiring is a real expert with real experience. Much of my work involves fixing flawed or stalled PPM implementation attempts.


"PPM isn't rocket science. It is a straightforward process that simply provides assurances that the right projects are being commissioned in the optimal sequence in a way that minimizes risk and maximizes the value achieved."

Michael Wood, Oct 1 2012, www.gantthead.com

PPM can enable your organization to dramatically improve efficiency, effectiveness, and productivity while reducing exposure to risks related to project failures. However, do not make the mistake of trying to implement a cookie-cutter solution that is ill-suited to your situation. Understand the keys to success. A quality PPM implementation will enable you to derive much greater value from your project portfolios. A poor approach can harm your organization by increasing costs, wasting valuable time, and generating useless and inaccurate information. Invest the upfront effort it takes to identify and understand alternatives and to make the right choices for your institution.