High-performing organizations achieve results by utilizing portfolio management to select the right projects at the right time with the right resources based on a data-driven selection methodology. Portfolio management adds value to an organization’s bottom line by optimizing the organization’s capacity and capabilities to meet the demands of an ever changing market and technology trends. It does this by providing insight and global visibility of the organizations approved set of strategic criteria against a backdrop of organizational constraints. This presentation provides a few of the value creation processes that implementing a best in class portfolio management solution can provide to your organization. To learn more: http://developingaculturethatworks.com/

1. Principles of Execution
The Value of Portfolio Management

2. Gerald’s Background
 Gerald is currently the President & CEO of
Principles of Execution, a Strategic Project
Portfolio Management and IT
Governance consulting firm based in the
Metro Washington, DC area.
 18 years as an IT Project Management
consultant and earned the PMP, MCSE,
MCTS, CQIA, ITILv3 and COBIT 4.1
Certifications
 Acquired certifications in PM and BI from the
University of California, Berkeley, as well as
an Executive Leadership Certification from
Cornell University.

3. Objectives
 Portfolio Theory and Portfolio Management
 The Impact of PortfolioStat
 IT Governance and Portfolio Management
 Implementing a Portfolio Office

4. Portfolio
Theory
Portfolio
Stat
Governance
Setting Up
the PMO

5. Napoleon said,
“All plans are useless, but the act of
planning is essential.”

6. What is Portfolio Theory?
“The theory states, that for any allocation
of resources, there is an efficient set that
yields the greatest return for a given
level of risk, while the right level of
resources to allocate to projects cannot
be known without considering further
factors. What is clear is that once that
level of investment is determined, there is
then an optimal set of projects to
implement for a given level of risk and
investment.” Simon Moore

7. What is Portfolio Management and
Governance?
 Portfolio Management is a capability that enables organizations to analyze,
select and manage a collection of project investments that are aligned with
your company’s goals and objectives within a data driven decision making
framework.
 Portfolio Management also coordinates the acceptance, approval,
postponement, rejection or cancelation of a project which will not realize the
proposed benefits or the corporation’s strategic outcomes.
 Governance is the process of putting policies, procedures and processes in
place to guide organizational operational activities and changes.
 Governance warrants the achievement of an organization’s objectives by
strategically aligning daily activities, setting direction, providing guidance on
decision making and monitoring performance.

8. Benefits of adopting Portfolio
Management?
 Positive impact on project
performance and the
organization’s overall project
portfolio
 PPM increase the organization’s
project management capability
effectiveness and efficiency
 Organizations that implement
PPM have better executive
engagement

9. The Corpus Callosum for the Business
or Agency

10. IT Portfolio Management Statistics
 84% of companies
do not use a
business case
 83% of companies
only adjust their
budgets once or
twice a year
 67% of IT
organizations are
not able to adjust
to market trends
when needed
67%
83%
84%

11. Portfolio Efficiency Frontier
Organizations that use the EF methodology are
able to reduce waste or increase value creation by
20 to 40%

12. Seven deadly sins of Portfolio
Management
1. Narrowly Defining the Portfolio
2. Investment Decisions Are Like New Year’s
Resolutions
3. Decibel-Driven versus Data-Driven Decision
Making
4. Too Many Metrics, Not Enough Time
5. One-Size-Fits-All Portfolio Management
6. If we install this software, we will be able to
optimize our corporate portfolio
7. It is all about the projections

13. Is PPM a Bridge or a Hub?
PPM
Budget
Scope
Opportunity
Demand
Resources
Risks  Strategic & Tactical
Plans
 Business Performance
 Project Control
 Change Control
 Cash Flow
 Resource Availability

14. A Successful Project Portfolio
Management Capability
Should address the following
questions:
 Are we investing in the right
things?
 Are we optimizing our capacity?
 How well are we executing our
projects?
 Can we absorb all the changes we
are implementing?
 Are we realizing expected returns
and benefits?

15. Portfolio
Theory
Portfolio
Stat
Governance
Setting Up
the PMO

16. What is PortfolioStat?
 PortfolioStat is a requirement from the
Federal CIO for all government Agency CIO’s
to lead an annual IT Portfolio Investment
review session with the goals of eliminating
duplication of commodity IT services and
move to a shared solution paradigm and
assess the maturity of the agency’s portfolio
management processes.
 “PortfolioStat will help implement the Shared
First initiative and the requirements set forth
in the Executive Order 13589 (Promoting
Efficient Spending),6 which targets employee
IT devices as a primary area for eliminating
waste and duplication.” Source: M-11-29

17. Mandate for PortfolioStat
 On March 30, 2012 the Federal CIO released a memorandum calling
all Federal Agencies to implement a formal PortfolioStat process.
 M-11-29 requires that agencies “pool their purchasing power across
their entire organization to drive down costs and improve services for
commodity IT”.
 Key areas to be addressed are:
– IT Governance
– Commodity IT
– Program Management
– Information Security
 Major Goals:
– Establish a Commodity IT Investment Baseline
– Develop a plan for the consolidation of Commodity IT
– Reduce Duplication of Commodity IT Services

18. Proposed PortfolioStat and Commodity IT
Workflow

19. Portfolio
Theory
Portfolio
Stat
Governance
Setting Up
the PMO

20. Portfolios, Programs and Projects

21. Five Critical Decisions IT
Governance must address
IT principles, what are the guiding values of the
organization?
IT architecture, how will we define the integration
and standardization of IT solution requirements?
IT infrastructure, which shared and enabling
services will we implement within the organization?
Business applications, What specific business
applications will we run within the organization?
IT investment, which initiatives will we select and
optimize and fund?

22. Governance Design Framework
Enterprise
strategy and
organization
IT Organization
and Desirable
Behavior
IT governance
arrangement
It Governance
mechanisms
IT metrics and
Accountabilities
Business
performance
goals

23. Portfolio
Theory
Portfolio
Stat
Governance
Setting Up
the PMO

24. Questions to consider for your
PMO
 What are the organization’s strategic objectives?
 What other projects are competing for resource that will keep the
organization from accomplishing its strategic objectives?
 Do we have the right resources and do we have sufficient resources
to complete the approved projects?
 What is the root cause to project issues?
 How do we do projects here?
 How can projects be completed more quickly?
 How do we get more projects done with the same resources?
 How do we achieve project execution predictability and reliability; on
time, on budget and within scope while delighting our internal and
external customers?

25. Where Should You Start?

26. Eight basic stages to Portfolio
Management
 Develop an IT Portfolio Management game plan
 Planning the IT Portfolio
 Creating the IT Portfolio
 Assessing the IT Portfolio
 Balancing the IT Portfolio
 Communicating the IT Portfolio
 Develop and evolve IT Portfolio Government
Organization
 Assess the IT Portfolio Management processes
and execution strategy.

27. Portfolio Governance Operational
Model
Portfolio
Managed
Services
Portfolio
Resource
Management
Program
Managers
Project
Managers
Portfolio
Environment
Technical and
Physical
Resources
Portfolio
Governance and
Admin
Boards and
Committees
Contracts,
Budgets, Metrics
and Reporting
Portfolio
Center of
Excellence
Education and
Training

28. PPM Governance Decision Process
Portfolio
Lifecycle
Decision
Makers
Key
Decision
Meeting
Frequency
Meeting
Input
Portfolio
Strategic
Planning
CEO, CIO VPs and
Senior Mgt
3 to 5 year
Strategic Vision
Annually
Strategic Plan and
Annual Budget
Portfolio
Management
Office
CIO, Director
EPMO, SBU
Executives, Mg. Dir
Prioritize Project
Proposal, Approve
Charters
Quarterly
Review Business
Case, Report on
Alignment of IT
Portfolio Spending
Program &
Project
Execution
Project Managers,
Senior IT, Business
Lead
Day to Day Project
Management,
Resource
allocation, project
tracking
Weekly
Project Execution
plan, track and
monitoring

29. Q&A

30. Portfolio Management Training
Click here to learn more.

31. Principles of Execution, LLC
Gerald J. Leonard
PMP, MCTS, CQIA, ITIL, COBIT
President/CEO
Gerald@Principlesofexecution.com
http://www.principlesofexecution.com
Building the foundation for effective execution to increase your organization’s productivity!