The Future of Project Portfolio Management

1. The Future of PPM:
Portfolio Decision Optimization
David G. Ullman, Robust Decisions
ullman@robustdecisions.com, 541-754-3609
Harvey A. Levine, The Project Knowledge Group
March 1 2009
RDI Confidential, 2009 1
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2. We live in an economically strapped world where it is
essential to have a portfolio of successful projects
• Yet few IT projects are successful
– 35% (2006 Chaos Report from the Standish Group)
– 50% (SAP)
These are self-reported
• Many are late or over budget numbers, so reality is
– 46% (Chaos) worse than these values.
– 40% (SAP)
• 80% of new technologies not used as intended or
abandoned within six months of implementation (Ernst &
Young)
Why is this so hard??
Projects are not aligned with strategic initiatives.
Poor decisions are made, decisions based on uncertain information.
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3. Project success can be improved by treating Portfolio
Management as a dynamic decision-making process
Dr. Robert Cooper, in Chpt 7.2 of PROJECT PORTFOLIO
MANAGEMENT (Harvey Levine, 2005) states:
“Portfolio management is a dynamic decision process, whereby a
business’s list of active new product (and development) projects is
constantly up-dated and revised. ….. The portfolio decision process
is characterized by uncertain and changing information, dynamic
opportunities, multiple goals and strategic considerations,
interdependence among projects, and multiple decision-makers and
locations”
In the years since this quote was published, PPM systems have
matured and capable decision-support tools have been developed.
Now, it is time to fuse these technologies to optimize portfolios.
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4. Portfolio Management requires decision’s that
address 6 key portfolio questions
Will this project Why are we
cause excessive doing this
multi-tasking, or project?
delay other critical
work? What are
Does the value
the key
equation fully
risk areas?
consider all risk
and uncertainty
issues?
What areas of
uncertainty endanger
the realization of
What strategic
benefits?
initiatives does
this project
support?
Portfolio Management Team (PMT)
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5. Answering these questions requires customized
acquisition and analysis methods
• Since 1995 Robust Decisions Inc. (RDI) has been
quot;Very powerful!quot; Intelligence
developing decision management tools: Community Executive
– Accord™ – A general decision support tool “BTS is the only technology I
– BACH™ – currently under development with Lockheed Martin know of that can fuse uncertain
information and guide team
for use by Intelligence Agencies to fuse uncertain evidence decisions. We are applying this
– Compare2™ – recently developed internet offering helps technology to support
Intelligence analysis for the US
customers compare products
government.” Rick Behrens,
• All use the Bayesian Team Support (BTS) engine and Chief Technologist, Edge
Consulting (Prime Contractor
interfaces – customized to fit the application - to to Lockheed-Martin), Feb
2009.
manage uncertain information
Compare2
Accord
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6. All RDI decision support tools share a common
compute engine: Bayesian Team Support™ (BTS)
• Captures and manages uncertain information
• Uses patented, state-of-the-art AI methods
• Fuses multiple stakeholder evaluations
• Is modular - compute engine separable from user interface
• Produces decision metrics:
• Satisfaction – how good is the project for this portfolio
• Decision Risk – what is the risk in selecting the project based
on the uncertainty
• What-to-do-next to lower the risk
• How does this project rank, compared to others
Easy to achieve integration and licensing
• BTS is in Java with SQL database
• Many features are Web enabled
• Can be licensed by incremental feature
added, by use, or by seat
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7. Applying BTS to Portfolio Decision Optimization
can be achieved with modest effort
• The compute engine that supports the PDO decision making
functions exists, is fully functional, and is used in other
applications.
• It can extend traditional PPM systems to support organizational
decision makers answer their most pressing questions in a
manner that:
1. Aligns portfolios with strategic initiatives.
2. Allows organization to actually manage uncertainty and risk
3. Treats portfolio management as the dynamic decision-making process
that it is.
contact
David G. Ullman
Robust Decisions
ullman@robustdecisions.com
541-754-3609
RDI Confidential, 2009 7
ullman@robustdecisions.com