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Management of Portfolios (MoP®) study guide mind map by Mind Map: Management of Portfolios
(MoP®) study guide mind map
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Management of Portfolios (MoP®) study guide mind map

MoP® is a registered trademark of AXELOS Limited. MoP® logo courtesy of the AXELOS Limited. Trademarks are properties of the holders, who are not affiliated with mind map author.

Steps in a evolutionary implementation of MoP® (7)

1. Obtain a single, complete view of the organization’s portfolio of change initiatives - inc. costs, benefits, schedule, risks and performance to date

Benefit - Savings from removing duplicate, non-strategically aligned and poorly performing initiatives - and in so doing, improved deliverability

2. Complete a portfolio delivery plan and monitor progress against it on a regular basis

Benefit - Implementing regular progress reporting will highlight gaps and stimulate questions and debate

3. Start tracking completed programme and project performance compared to forecast and use this in initiative forecasting

Benefits - Improved business case forecasting and so improved investment appraisal and portfolio prioritization; the act of implementing rigorous evaluation will send clear messages that portfolio management means a more disciplined, end-to-end, and evidence-based approach to managing change; and it will also help ensure more robust and reliable business cases

4. Review the current portfolio and identify dependencies - not only those where one initiative is dependent on the output of another, but also where several initiatives make calls upon a limited resource

Benefits - improved understanding across the portfolio and so earlier resolution of potential problems

5. Establish clear governance structures so that stakeholders understand where decisions are made and using what criteria

Benefits: This helps ensure decision-makers get the information they require to manage the portfolio

6. Define a standard set of investment criteria including attractiveness / return and achievability / risk in terms of the incremental impact on the existing portfolio, to be used to appraise and prioritize initiatives

Benefits: This helps ensure that limited resources are allocated with maximum impact

7. Apply staged release of funding linked to stage / phase gates

Benefits - Investment of resources is linked to confidence in successful delivery; rigorous start gates ensure that programmes and projects are initiated in a controlled manner

MoP® Official resources

Copyright © AXELOS Limited.

MoP® sample exams, available online

Foundation, http://online.apmg-exams.com/index.aspx?subid=98&masterid=32

MoP® examination syllabus

http://www.mop-officialsite.com/nmsruntime/saveasdialog.aspx?lID=74&sID=42

MoP® glossary

http://www.mop-officialsite.com/nmsruntime/saveasdialog.aspx?lID=105&sID=40

MoP® website

http://www.mop-officialsite.com/

MoP® Official publications

Copyright © AXELOS Limited.

Management of Portfolios

ISBN-13: 978-0113312948

Published: 2011

Pages: 153

http://www.amazon.co.uk/Management-portfolios-Stephen-Jenner/dp/0113312946

The most important, key position on MoP® preparing for exams Foundation and Practitioner.

An Executive Guide to Portfolio Management

ISBN-13: 978-0113312603

Published: 2010

Pages: 36

http://www.amazon.co.uk/An-executive-guide-portfolio-management/dp/0113312601

MoP® - process based standard and framework (not methodology) for general (not industry specific e.g. IT or Engineering) corporate-wide / holistic Portfolio Management. MoP® is one of the 12 recognized globally and practically proven management standards from AXELOS® Global Best Practice family of UK standards.

MoP® first and current version was published in 02.2011.

How MoP® fits into AXELOS® Global Best Practices family of UK standards.

MoP® in AXELOS® Global Best Practices family

AXELOS® Global Best Practices family of standards from UK.

PRINCE2® Agile, see PRINCE2® Agile mind map

ITIL®, see ITIL® mindmap

M_o_R® - Management of Risk, see M_o_R® mindmap

MoV® - Management of Value, see MoV® mindmap

MoP® - Management of Portfolios, see MoP® mindmap

MSP® - Managing Successful Programmes, see MSP® mindmap

PRINCE2® - PRojects IN Changing Environments, see PRINCE2® mindmap

P3O® - Portfolio, Programme and Project Office, see P3O® mindmap

yet remember - "In reality there are no such things as best practices. There are only practices that are good within a certain context."

Since 2000 the Office of Government Commerce (OGC), former owner of PRINCE2® (and other Best Management Practices) has been the custodian of the portfolio on behalf of UKG. In June 2010 as a result of UKG reorganisation the Minister for the Cabinet Office announced that the PRINCE2® functions have moved into Cabinet Office.

AXELOS are a new joint venture company, created by the Cabinet Office on behalf of Her Majesty’s Government (HMG) in the United Kingdom and Capita plc to run the Best Management Practice portfolio, now called AXELOS Global Best Practice

https://www.gov.uk/government/publications/best-management-practice-portfolio/about-the-office-of-government-commerce

MoP® consists of: 5 Principles, 2 Portfolio Management Cycles, 12 Portfolio Practices, 6 Key Functions, 3 Portfolio Approaches, 7 Steps, 5 Roles, 9 Documents.

Download: Best Management Practice - MoP Overview presentation [2011]

MoP® Portfolio Management Principles (5)

What are principles?

Watch: 5 key principles of MoP® - Latte experience of Management of Portfolios (MoP®) from CC Learning (by Elissa Farrow)

Principles are universally applicable statements., Principles are generic principles - the way in which they are applied must be tailored to suit the organizational circumstances, whilst ensuring the underlying rationale is maintained., Prainciples are the common, universal and high-level factors that underpin success., They provide guidance to organizations., They guide the organization on what to aim for.

1. Senior Management Commitment

Senior managers should (amongst others) publicly champion and positively communicate about the value of portfolio management, participate in decision-making about the composition of the portfolio, explaining the rationale for decisions, and take a portfolio-wide rather than a departmental or individual perspective.

Any change initiative struggles without it, so top-level support comes first in MoP®’s list. Change initiatives must have public champions to communicate the value and benefits of Portfolio management. They need to use both the stick and carrot - ensuring compliance with PfM standards and personally demonstrating the behaviors essential to the success of the Portfolio., No ‘pet projects’ - not even the Chief Executive's!

Keys to Success, Senior management champion, A management board member champions the implementation of Portfolio Management, Publicly championing the value of portfolio management, Clearly defined roles, responsibilities and accountabilities, The roles of key positions are clearly defined and understood, Explaining the rationale of decisions to their staff, Active engagement in creating decision-making structure, The management board makes decisions regarding prioritization of change initiatives and allocation/re-allocation of funds, Participating in decision-making, A compelling vision for the portfolio, So senior managers can see how it relates to the organization’s strategic objectives, Alignment with the reward and recognition strategies, Reflecting new ways of working and required [corporate] behaviours in senior managers’ personal objectives, Ensuring compliance with porfolio governance, Walk the Talk

2. Governance Alignment

Effective portfolio governance reflects and is consistent with the wider organizational governance model.

Without proper governance - including clarity about what decisions are made - PfM will fail. MoP® provides examples and diagrams of a successful Portfolio governance structure - from Programme and Project mangers up through the Portfolio Progress Group to the Director / Investment Committee level., Supporting these are the P3O® model and, working alongside them: Business As Usual areas which will be impacted by the change., A full set of role descriptions are provided in the MoP® manual as ready-to-use templates

Keys to Success, Clearly defined roles, responsibilities and accountabilities, Particularly in relation to what decisions are made, where, and who is involved, Portfolio governance is consistent with the wider organizational governance structure, Including for financial, risk and performance management, Shared understanding, Stakeholders should be able to describe how and where portfolio decisions are made, Agreed escalations process, To facilitate more effective, coordinated decision making due to the consideration of consistent data, Aligned meetings schedules, To facilitate more effective, coordinated decision making due to the consideration of consistent data, Sub-portfolios are periodically reviewed by the organizational portfolio governance body, To ensure: they are consistent with the organizational portfolio; initiatives are not being deliberately disaggregated to avoid portfolio governance; and investment decisions are optimal at the sub-portfolio/departmental level and at the organizational or corporate portfolio level.

3. Strategy Alignment

The ultimate objective of portfolio management is to facilitate the achievement of strategic objectives.

Change initiatives which do not deliver benefit = waste and confusion. The ultimate objective of PfM is to achieve the strategic objectives of the organization. MoP® suggests a driver based model starting with very high level strategy, down to strategic objective then benefits and finally, change initiatives that will deliver them., It provides useful, practical, examples for the private and public sectors.

Keys to Success, Strategic objectives are supported by driver-based analysis., To make the implicit value/logic chain explicit., Benefits are clearly and consistently identified., So the contribution of initiatives to strategic objectives is clear and Initiatives can be appraised and prioritized on a level playing field., Collaborative working with strategic planning., The Portfolio Office works closely with strategic planning and performance management departments/functions in linking the forecast impact of the portfolio with the strategic objectives and performance targets, Regular review at a portfolio level., To ensure the portfolio remains aligned with the strategic objectives., Regular review at an initiative level., The strategic alignment of individual initiatives is reviewed at key points in the project life cycle via regular stage/phase gates., Early involvement improves quality., Involvement of key departments/functions that will appraise potential investments early in the development of the business case enhances collaborative working and the quality of business cases.

4. Portfolio Office

The ultimate objective of portfolio management is to facilitate the achievement of strategic objectives.

There has to be a business area which provides up to date and accurate information to allow good decision making by Portfolio Managers. This is the role of the Portfolio Office and this MoP® principle is strongly linked to the AXELOS standard: P3O®. MoP shows different P3O® models including linked (but temporary) Programme and Project offices as well the permanent Portfolio office and aligned Centre of Excellence (CoE)

Keys to Success, Organizational status, The Portfolio Office reports directly to the management board and is independent of PPM delivery responsibility to ensure its analyses are objective; to help overcome silo-based interests; and to demonstrate the importance of effective Portfolio Management to the organization, An agreed mandate, The management board agree the Portfolio Office Terms of Reference, Vision and Blueprint, Collaborative working with BAU and other departments, With functions such as BAU, strategic/business planning, budgeting and resource allocation, project and programme management, performance management, and corporate governance, Appropriately skilled and experienced, To ensure its reports are credible. These skills include: strategic planning, investment appraisal, programme and project management, risk management, benefits management and financial management, Regular measurement of progress, The Portfolio Office regularly reviews progress and adapts its activities, and the Portfolio Management processes, accordingly

5. Energized Change Culture

The extent to which an organization (division or team) has mobilized its emotional, cognitive and behavioural potential to pursue its goal

Success is only possible if people are engaged, focused on the appropriate goals and feel a sense of working together as one team.

The success of the Portfolio depends as much on people as process so this principle recognizes the need for an engaged team working together to define and deliver the Portfolio. Here, MoP® gets into the ‘softer side’ by looking at areas such as communication, the learning organization and listening and engagement with staff.

Keys to Success, Collaborative working environment, Include adapting the performance management and reward and recognition systems to reflect and encourage the desired behaviours, Proactive communications, Regular, proactive and compelling communication is published about the objectives of the portfolio and progress made, A learning organization, Lessons learned are captured, disseminated and acted upon, Clarity about expectations, Train people so that they understand what is expected of them, Effective processes, Are perceived as consistent, transparent, accurate, objective and fair, Roles and relationships are agreed, Roles are documented and help people understand their contribution to the strategic objectives, Monitor organizational energy, Assess the types and depth of energy present, Demonstrable senior management commitment, Senior managers ‘walk the talk’, Listen and engage, Include feedback from key stakeholders in the portfolio performance metrics

MoP® Portfolio Management Cycles (2)

Portfolio management does not have a mandated start point, middle or end, rather all practices are found within two continuous portfolio management cycles: the portfolio definition cycle and portfolio delivery cycle.

Both Cycles must continuously rotate because planning and delivery are constant activities in PfM.

The rotation speed of the Cycles will vary for each organisation., Some organisations work in highly volatile markets and energy will transfer between the two Cycles regularly, which will cause a change in rotation speed.

Both Cycles contain the totality of all PfM Practices.

All PfM Practices are continuously used (albeit at different times they may attract more emphasis).

The Cycles can only rotate successfully when the collective energy of the people within the organisation is directed and managed in effectively.

Portfolio Definition Cycle

Purpose, The purpose of the portfolio definition cycle is to collate key information that will provide clarity to senior management on the collection of change initiatives that will deliver the greatest contribution to the strategic objectives, subject to consideration of risk / achievability, resource constraints and cost / affordability.

Focuses on ‘doing the right things’ by collating key information that will provide clarity to senior management and the wider audience with regards to the collection of change initiatives and how these initiatives will deliver the greatest contribution to the strategic objectives. The 5 practices within the portfolio definition cycle include:, see Practices

Well Functioning Portfolio Definition Cycle, Clarity on the high level scope, schedule, dependencies, risks, costs (and affordability) and benefits of the potential change initiatives., Enables the portfolio governance body to make informed decisions on the composition of the portfolio to optimize strategic contribution., Helps the organization match the planned changes with its capacity to deliver, without over-committing, or alternatively, having excess idle resources.

Ineffective Portfolio Definition Cycle, The portfolio won’t represent the best use of available resources in the context of the organization’s strategic objectives, aggregate risk and available resources., Pet projects will consume resources at the expense of higher priority initiatives and initiatives will be started without considering their fit with the current portfolio., Delivery will be impacted with too many, or poorly scheduled initiatives, with conflicting resource requirements and unbalanced impacts on BAU.

Portfolio Delivery Cycle

Purpose, The purpose of the portfolio delivery cycle is to ensure the successful implementation of the planned change initiatives as agreed in the portfolio strategy & delivery plan, whilst also ensuring the portfolio adapts to changes in the strategic objectives, project and programme delivery, and lessons learned.

Focuses on ‘doing those things right’, ensuring the successful implementation of the planned change initiatives as agreed in the portfolio strategy and delivery plan, whilst also ensuring that the portfolio adapts to changes in the strategic objectives, project and programme delivery, and lessons learned. The 7 practices within the portfolio delivery cycle include:, see Practices

Well Functioning Portfolio Delivery Cycle, Resources, risks and dependencies will be efficiently and effectively managed and senior management will gain greater control over the change portfolio., Improved delivery on time and to budget., Improved benefits realization., The portfolio remains strategically aligned - by enabling resource re-allocation when required.

Ineffective Portfolio Delivery Cycle, Many initiatives will not be delivered on time and to budget., Demand and supply for resources won’t be matched resulting in shortages and idle capacity., Inadequate action will be taken to address poor performance and delivery slippage., Initiative scheduling results in unnecessary operational disruption., The portfolio will not adjust to shifts in business priorities and consequently money will be spent unwisely., The contribution to strategic objectives will not be optimized.

MoP® Portfolio Practices (12)

MoP® Portfolio Definition Cycle Practices (5)

Purpose, The purpose of the portfolio definition cycle is to collate key information that will provide clarity to senior management on the collection of change initiatives that will deliver the greatest contribution to the strategic objectives, subject to consideration of risk / achievability, resource constraints and cost / affordability.

1. Understand, Purpose, To obtain a clear and transparent view of: what’s in the current portfolio and the project development pipeline; performance to date; and, looking forward - the forecast costs, benefits, and risks to delivery and benefits realization, An initial understanding of the portfolio scope including change initiatives that already exist or need to exist, Keys to Success, What is the current portfolio and the project development pipeline?, Forecast costs, benefits, and risks to delivery and benefits realization, The portfolio scope is clear, Consistent data, Undertake sufficient research, The portfolio office and strategic planning work collaboratively, Effective relationships are developed with PPM pofessionals, Prepare an interim status report

2. Categorize, Purpose, The purpose of the categorize practice is to make it easier for senior decision makers to understand the make up of their portfolio and thus to make decisions on balance and on the optimum use of available funding and other resources, Organize change initiatives into groups, segments or sub-portfolios based on the strategic objectives or other groupings as required, Categorization organizes change initiatives into groups, segments or sub-portfolios based on the strategic objectives or other grouping as required. Common approaches include categorization by:, Strategic objective, Line of business, Geographical area, Type of initiative, etc., Keys to Success, Use categorization to assess strategic alignment, Aids strategic alignment as the allocation of available resources to individual segments should reflect their relative priority, Categories should suit the circumstances, Be creative in presentational formats, Tailor the investment criteria, Be sensitive to how the analyses may be perceived, Categorize by:, Strategi cobjective, Line of business, Geographical area, Type of iniative, Mandatory, Commercial, Business Continuity, Operational excellence

3. Prioritize, Purpose, The purpose of the prioritize practice is to help senior management and the portfolio governance body answer the following questions (subject to consideration of an appropriate balance between risk and return)., Which initiatives should the organization invest in?, What are the most important initiatives?, What initatives must be resourced above all others?, Answering these questions is only possible when all initiatives have been prioritized, Prioritization can be done for the portfolio as a whole or when the portfolio has been divided into several categories or segments, for each category or segment., Rank the change initiatives within the portfolio (or portfolio segment) based on one or more agreed measures., e.g., Net Present Value (NPV), Internal Rate of Return (IRR), Return on Investment (ROI), Total Cost of Ownership (TCO), TCO refers to the deployment and operational cost of a system for a specified period of time., Total Cost of Information (TCI), Equity Value Analysis (EVA), Payback / Payback Period, How long it takes for the benefits to outweigh the accumulated costs (either discounted or undiscounted). A time measure., Download: TCO, NPV, EVA, IRR, ROI Getting the Terms Right [CIOview by Scott McCready], Keys to Success, Tailor the investment criteria, Management board involvement, Use multi-criteria analysis, Evidence-based assessments, Be creative in presenting the findings

4. Balance, Purpose, The purpose of the balance practice is to ensure that the resulting portfolio (from the prioritize practice) is balanced in terms of factors such as:, Timing, Coverage of all strategic objectives, Impact across the business, Stage of initiative development, Overall risk vs return profile, Available resources, Ensure that the portfolio is balanced in terms of timing; contribution to strategic objectives; business impact, risk and resource, Keys to Success, Balance follows identify, categorize and prioritize, Set the expectations of the portfolio governance body, Consult widely, Present findings creatively, Evidence findings, Exercise discretion, Use analyses to inform decision-making

5. Plan, Purpose, The purpose of the plan practice is to collate information from the portfolio definition cycle and create a portfolio strategy and delivery plan which will be approved by the portfolio direction group/investment committee, Both documents can be combined in a single document (Portfolio strategy and delivery plan), Collate information from the portfolio definition cycle and create a portfolio strategy and delivery plan that can be agreed and published widely, Objectives:, Provide a longer term overview, Provide clarity to stakeholders, Motivate people to commit to the delivery of the shared goals, Convert the balanced portfolio into a plan, Provide a baseline (the portfolio delivery plan) against which progress can be monitored, reviewed and managed (via a portfolio dashboard), Keys to Success, Summarise the results of the definition cycle in a portfolio strategy and delivery plan, Provide a clear line of sight Provide a clear line of sight (timing,resources, milestones, risks, benefits), Prepared by the portfolio office, Endorsed by the PDG / IC, Keep it simple

MoP® Portfolio Delivery Cycle Practices (7)

Purpose, The purpose of the portfolio delivery cycle is to ensure the successful implementation of the planned change initiatives as agreed in the portfolio strategy & delivery plan, whilst also ensuring the portfolio adapts to changes in the strategic objectives, project and programme delivery, and lessons learned.

1. Management control, Purpose, Once agreed, the portfolio strategy and delivery plan forms the baseline for what is to be delivered, The purpose of the management control practice is to ensure that progress, at an individual and portfolio level, is regularly monitored against this baseline, This helps to ensure that delivery stays on track and that the portfolio remains strategically aligned, Both individual and portfolio level decisions are made regarding progress against the portfolio delivery strategy and plan, Keys to Success, An effective business change lifecycle, Clearly defined and understood processes, From project initiation to post implementation review, Reliable forecasting, A summary investment appraisal template, Staged release of funding, Effective progress reporting, Regular progress-reporting via a dashboard report, Prompt progress reporting, Regular review of performance and continuous improvement, Stage or phase gates assessing individual initiatives at key points in the project/programme life cycle, Guidance and templates, Regular portfolio-level reviews to assess performance and continued strategic alignment

2. Benefits management, Purpose, The purpose of the benefits management practice is to clearly identify and manage the benefits being realized from the portfolio, so helping to ensure the best use of available resources and that the contribution to operational performance and strategic objectives is maximized, Keys to Success, Consistent approach, Benefits management framework, Benefits tracking and reporting, Clear arrangements for benefits tracking and reporting at a portfolio level, including via the portfolio dashboard, Evidence based forecasting, Portfolio-level benefits realization plan, Benefits Eligibility Rules, A common set of Benefits Eligibility Rules including a consistent approach to benefits categorization, Ongoing management of benefits, Re-appraisal stage gates, Re-appraisal of the benefits case at stage/phase gates and portfolio-level reviews, Link to portfolio reporting., Post-implementation reviews, Regular and robust post-implementation reviews and feeding lessons learned back into forecasting and the benefits management processes, Arrangements to manage post project/programme, Effective arrangements to manage benefits post project/programme closure.

3. Financial management, Purpose, The purpose of the financial management practice is to ensure that the portfolio management processes and decisions are aligned to the financial management cycle and that financial considerations form a key element in all decisions regarding the commencement and on-going viability of change initiatives, both at an individual and at a collective level, Keys to Success, Selection investment criteria, Selection of appropriate investment criteria including financial metrics such as Net Present Value and hurdle rates of return, Involve financial experts, Clear rules for cashable benefits, Clear rules for valuing efficiency savings and treatment of cashable benefits, Clear rules for cost forecasts, Clear rules for compiling cost forecasts in business cases and adjusting for optimism bias, Align cycles, Business cases include financial plans completed on a consistent basis, A financial plan must be incorporated within every business case, Staged release of funding, The application of the concept of staged release of funding linked to stage/phase gates, Portfolio-level financial planning, The portfolio delivery plan should include a portfolio-level financial plan, Regular reporting of progress, Monitoring spend in year via the portfolio dashboard

4. Risk management, Purpose, The purpose of the risk management practice is to ensure consistent and effective management of the portfolio’s exposure to risk at both individual and collective level., This is crucial to the successful delivery of change initiatives, to delivery of the portfolio as a whole, and ultimately the achievement of the organization’s strategic objectives, Keys to Success, Align the portfolio risk management strategy with the organization’s risk management strategy., Strategy., Collaboration with risk department., Regular reviews., Effective escalation., Budgetary risk contingency, Involve experts., Risk-based prioritization., Incorporate risk into the business change lifecycle., Portfolio risks., Incorporate risks into portfolio reporting.

5. Stakeholder engagement, Purpose, The purpose of the stakeholder engagement practice is to provide a coordinated approach to stakeholder engagement and communication, Ensure the needs of the portfolio's customers (both internal and external stakeholders) are identified and managed appropriately, Keys to Success, Work collaboratively with the organization’s communication team., Shared vision and communicate., Value communication., Involve stakeholders., Collaborate with communication., Align plans from individual initiatives with the overall portfolio plan., Ensure a tailored approach., Incorporate a feedback loop., Use contemporary communications., Focus on senior management., Proactively support., Consistent approach.

6. Organizational governance, Purpose, The purpose of the organizational governance practice is to ensure clarity about what decisions are made, where and when, and what criteria are used, Ensure portfolio management governance is aligned with the wider organizational governance structure enabling clear understanding of all decisions, Keys to Success, A shared vision for the portfolio, The Portfolio Strategy contains a vision of the portfolio’s objectives, Framework: objectives, processes, roles, The Portfolio Management Framework includes a description of what Portfolio Management is designed to achieve (and the measures used to assess this), the key processes and governance structures, Oversight, escalation, monitoring, Governance oversight of initiatives should extend from start gate to post-implementation review, Clarity about governance, Escalation paths with control/tolerance limits are clearly defined, Regular reviews of business cases and progress, Shared understanding of the governance structure and processes, Role profiles are prepared for key positions, and terms of reference are agreed for the portfolio governance bodies

7. Resource management, Purpose, At some level the amount of resources available to deliver change initiatives is constrained, The purpose of the resource management practice is to put in place mechanisms to understand and manage the amount of resources available and required to deliver the changes, More informed decisions to be made concerning the initiation and scheduling of initiatives to match resource availability, More efficient and effective use of available resources – less ‘down time’, improved balance between internal and external people, and limited resources allocated to initiatives in priority order, Improved realization of benefits as the scale and timing of business change required is proactively managed to ensure it is achievable, Improved delivery since initiatives will be less likely to be held up by temporary resource shortages or bottlenecks, Keys to Success, Set portfolio-wide standards for resource forecasting, Use business cases to create a portfolio resource schedule, Review the resource schedule regularly, Implement dynamic resource management, Understand demand, Understand the supply, Match demand and supply, Gap closure:, a. Planned recruitment, b. Negotiating contracts with external agencies, c. Staff development, d. Re-scheduling delivery

MoP® Roles and Responsibilities (5)

Portfolio Direction Group or Investment Committee (PDG/IC)

Purpose, This is the governance body where decisions about inclusion of initiatives in the portfolio are made., No initiative should be included within the portfolio or funded without the PDG / IC’s approval.

Makes decisions about inclusion of initiatives in the portfolio and as such approves the portfolio strategy and delivery plan

Responsibilities:, Agree the portfolio management framework, Approve the portfolio strategy and delivery plan, Decide on the scope and content of the portfolio, Ensure that the portfolio is suitably balanced, Ensure that resources are allocated appropriately, Ensure that the portfolio development pipeline is adequately balanced, Ensure that initiatives progress through the pipeline at an adequate speed, Undertake regular portfolio-level reviews to assess progress, Review recommendations from the PPG/CDC and make decisions accordingly, Resolve conflicts between portfolio delivery and BAU which cannot resolved within PPG/CDC, Promote collaborative working across the organization, Undertake periodic reviews of the effectiveness of portfolio management

Portfolio Progress Group (PPG) or Change Delivery Commitee (CDC)

Purpose, This is the governance body responsible for monitoring portfolio progress and resolving issues that may compromise delivery and benefits realization.

Is responsible for monitoring portfolio progress and resolving issues that may compromise delivery and benefits realization

Responsibilities:, Agree the processes within the portfolio delivery cycle and ensure that they work effectively, Ensure that all initiatives comply with agreed delivery standards, Monitor delivery of the portfolio delivery plan including:, Ensure effective action is taken to address overspends., Take prompt action to consider reallocating the funds to other initiatives., Review and resolve key portfolio-level issues., Ensure that risks and dependencies are effectively managed., Ensure that limited resources are managed effectively and efficiently., Monitor and approve changes to the benefits forecast., Approve communications on portfolio progress, Make recommendations to the PDG/IC for the termination of initiatives, Escalate issues that can’t be adequately resolved to the PDG/IC, Undertake periodic reviews of the effectiveness of portfolio delivery

Business Change Director or Portfolio Director

Purpose, The business change or portfolio director is the management board member who is responsible for the portfolio strategy and provides clear leadership and direction through its life.

A board member responsible for the portfolio strategy and providing clear leadership and direction through its life

Responsibilities:, Champions the implementation of portfolio management, Secures the investment to implement portfolio management, Provides overall direction and leadership for the implementation and delivery of the portfolio, Gains relevant management board approval for the portfolio strategy and delivery plan, Promotes an energized culture that is focused on collaborative working in the interests of the organization as a whole, Ensures that the portfolio evolves to reflect changed strategic objectives and business priorities and that resources are reallocated where necessary., Ensures that the portfolio management practices are documented in a portfolio management framework and that they are amended in the light of lessons learned.

Portfolio Manager

Purpose, The portfolio manager coordinates the effective and efficient operation of the portfolio management practices and provides support to the business change / portfolio director, portfolio direction group / investment committee and portfolio progress group / change delivery committee - including ensuring that they receive the information they require to enable them to discharge their responsibilities., The portfolio manager reports to the PDG/IC and in particular to the Business change director or Portfolio director.

Coordinates the effective and efficient operation of the portfolio management practices and provides support to the above mentionned roles

Responsibilities:, Drafts the portfolio strategy and delivery plan, Keeps the portfolio management framework up to date, Challenge the project and programme managers on their progress reports, Prepares the regular portfolio dashboard, Ensures business cases are prepared on a consistent and reliable basis, Undertakes investment appraisals and reports, Coordinates portfolio prioritization exercises, Ensures that dependencies are effectively managed, Leads on the portfolio communications plan, Identifies constraints within the portfolio and works to overcome them, Identifies improvements to the portfolio management practices

Portfolio Benefits Manager

Purpose, The portfolio benefits manager ensures that a consistent ‘fit for purpose’ approach to benefits management is applied across the portfolio and that benefits realization is optimized from the organization’s investment in change.

Ensures a consistent fit for purpose approach to benefits management is applied across the portfolio and that benefits realization is optimized from the investment in change

Responsibilities:, Develops and maintains the portfolio benefits management framework, Provides training and awareness-sessions on the application of the portfolio benefits management framework, Ensures that benefits forecasts are consistent with the organization’s benefits eligibility rules., Promotes effective benefits management practices, Facilitates benefits-mapping workshops, Provides advice and support colleagues on benefits forecasts and benefits management strategies, Provides assurance on the effectiveness of benefits management practices at programme and project level, Maintains the portfolio-level benefits forecast and ensures that double counting is minimized, Coordinates the production of the annual portfolio-level benefits realization plan, Consolidates progress reports for the portfolio dashboard and for periodic portfolio-level reviews, Escalates any benefits-related issues via the portfolio manager to either the PDG/IC or PPG/CDC, Sets and maintains standards for benefits forecast and identify lessons learned

Approaches to implementing portfolio management (3)

There is no one right way to implement portfolio management – it all depends on the circumstances

Big bang

Business change programme in its own right, 1 big programme

Implementation is viewed as a business change programme in its own right and is planned with: a business case; a compelling vision for the future state; a Blueprint or Target Operating Model; and an implementation plan agreed by the management board.

A time bound implementation phase is followed by live running encompassing all portfolio definition and delivery practices., Most appropriate where top-down approaches to strategy formulation are applied, where the environment is relatively stable, and where PPM is already relatively mature.

When?, Most appropriate where top-down approaches to strategy formulation are applied, where the environment is relatively stable, and where PPM is already relatively mature.

Evolution

More evolutionary or incremental approach, Step by step

Here a more evolutionary or incremental approach is taken starting with areas of greatest need or those where rapid progress can be made, and the organization’s approach to Portfolio Management then evolves to reflect its needs, opportunities and lessons learned., Most appropriate in less stable environments and where strategy is itself emergent.

When?, More appropriate in less stable environments and where strategy is itself emergent.

Ad hoc

Like evolution, but without plan, No detailed master plan, no lessons learned

As with the evolutionary approach, there is no detailed master plan, but there is no expectation that the approach will develop and no commitment to capturing lessons learned to inform development., Instead implementation is more opportunistic., Applicable where existing practices are less mature and where senior commitment to organization-wide, end-to-end Portfolio Management is less well embedded.

When?, Applicable where existing practices are less mature and where senior commitment to organization-wide, end-to-end portfolio management is less well embedded.

Objectives of Portfolio Management

1. The change initiatives that are being delivered (and those in the development pipeline) represent the optimum allocation of resources in the context of the organization’s strategic objectives, available resources, and risk or achievability.

2. The portfolio is sufficient to achieve the desired contribution to strategic objectives.

3. All initiatives are necessary to achieve the desired contribution to strategic objectives.

4. The selected change initiatives are delivered effectively and cost efficiently.

5. All the potential benefits are realized.

Benefits of Portfolio Management

1. More of the ‘right’ programmes and projects being undertaken in terms of: greater financial benefits and measurable contribution to strategic objectives.

2. Removal of redundant & duplicate initiatives.

3. More effective implementation of programmes and projects via management of the project development pipeline, dependencies, and constraints (including resources, skills, infrastructure, change appetite, etc.) and redirecting resources when programmes and projects do not deliver or are no longer making a sufficient strategic contribution.

4. More efficient resource utilization.

5. Greater benefits realization via active approaches to exploitation of the capacity and capability created across the organization, capturing and disseminating lessons learnt.

6. Enhanced transparency, accountability and corporate governance - and assurance on consistent and competent programme and project management.

7. Improved engagement and communication between relevant stakeholders in communicating strategic objectives, and the means by which they will be achieved.

8. Improved awareness of aggregated risks.

9. The benefits from senior managers engaging in debate on the contents of the portfolio.

10. Improved cross-organizational collaboration in pursuit of shared goals.

MoP® Portfolio Management Key Functions / Activities (6)

The 6 key functions/activities that Portfolio Management needs to coordinate with to achieve strategic objectives

1. Business As Usual (BaU)

Portfolio management and BaU combine to realize strategic objectives.

Portfolio management controls the major changes to BAU., Successfully implemented changes allow benefits to be realized and operational performance improves.

2. Strategic/Business planning

Strategic planning sets the context within which portfolio management operates while portfolio management provides crucial information for strategic decision making.

3. Budgeting and resource allocation

Portfolio management provides the means by which the link between strategy and (financial) resource allocation can be maintained.

4. Programme and project management

Portfolio management delivery capability organization-wide (standards, processes, staff development), and manages the change initiatives at a collective level (limited resources, overall risk management, dependency management, ...).

5. Performance management

Portfolio management should align with the organization’s performance management system (e.g. align reporting, engaging performance management early on in the development of business cases, etc.).

Portfolio management can imply changes to the performance management system (e.g.the way individual performance targets are framed on organizational objectives).

6. Corporate governance

Portfolio management supports effective governance by (amongst others) inking delvery of the organization’s strategic objectives with investment in change, by providing a framework of rules and practices for managing the delivery of the portfolio, and by clarifying responsibilitiy and accountability for decision making on which projects will be funded and on what basis.

MoP® Products (Portfolio Documentation) (9)

Portfolio Management Framework

To provide all stakeholders with a single, authoritative and up‑to‑date source of advice on the portfolio management practices adopted by the organization and its governance arrangements.

Portfolio Strategy

The portfolio strategy is a document to communicate a brief description of the vision and objectives for the portfolio and the means by which these objectives will be achieved and must be endorsed by senior management.

Normally it will have a time horizon of several years.

Portfolio Delivery Plan

The portfolio delivery plan provides a more detailed understanding of the usually annual delivery schedule, cost and resource allocations, and the benefits to be realized.

Portfolio Benefits Management Framework

To provide a framework within which consistent approaches to benefits management can be applied across the portfolio.

Portfolio Benefits Realization Plan

To summarize the benefits forecast to be realized in the year ahead and so provide a clear view of the planned returns from the organization’s accumulated investment in change.

Portfolio Financial Plan

To summarize the financial commitments inherent in the approved portfolio for the year ahead as a basis for formal senior management budgetary approval.

Portfolio Resource Schedule

To provide a baseline against which to manage demand and supply for constrained resources.

Portfolio Stakeholder Engagement and Communication Plan

To provide a framework for coordinated and consistent communications across the portfolio.

Portfolio Dashboard

To provide the portfolio governance bodies with an overview of progress against plan.

Basic Definitions (according to AXELOS®)

Portfolios / Programme / Project Management

Portfolio Management, A coordinated collection of strategic processes and decisions that together enable the most effective balance of organizational change and business as usual (BAU).

Programme Management, The action of carrying out the coordinated organization, direction and implementation of a dossier of projects and transformation activities to achieve outcomes and realize benefits of strategic importance to the business.

Project Management, The planning, delegating, monitoring and control of all aspects of the project, and the motivation of those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope, benefits and risks.

Project / Programme / Portfolios

Portfolio, An organization’s change portfolio is the totality of its investment (or segment thereof) in the changes required to achieve its strategic objectives.

Programme, A programme is a temporary, flexible organization created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the organization’s strategic objectives., 3 types of programmes, Vision-led programme, Emergent programme, Compliance programme

Project, A temporary organization, usually existing for a much shorter time than a programme, which will deliver one or more outputs in accordance with a specific business case., A particular project may or may not be part of a programme., Whereas programmes deal with outcomes, projects deal with outputs., 5 types of projects, Compulsory project, Not-for-profit project, Evolving (Agile, RUP) project, Customer/supplier project, Multi-organization project

Output, Capability, Outcome, Benefits

Output, The deliverable, or output developed by a project from a planned activity. Any project's specialists products. (tangible or intangible), e.g., A new just-in-time stock control system, A new IT system, Staff training programme, Revised process

Capability, The completed set of project outputs required to deliver an outcome; exists prior to transition., e.g., The combination of the outputs ready to ’go live’.

Outcome, A new operational state achieved after transition of the capability into live operations. Result of the change derived fron USING the project's outputs., e.g., The right materials are available, at the right time, and in the right place

Benefit, The MEASURABLE improvement resulting from an OUTCOME perceived as an ADVANTAGE by ONE or MORE of stakeholders, which contributes towards one or more organizational objectives(s)., e.g., Fewer stock-outs and consequent interruptions to production., Reduced obsolescent stock and hence lower write-offs., Reduced stock holdings and so less working capital tied up.

Dis-benefit, An outcome perceived as NEGATIVE by ONE or MORE stakeholders. Dis-benefits are actual consequences not risks.

Interactive MoP® Glossary

Interactive MoP® Glossary

This freeware, non-commercial mind map (aligned with the newest version of MoP®) was carefully hand crafted with passion and love for learning and constant improvement as well for promotion the standard and framework MoP® and as a learning tool for candidates wanting to gain MoP® qualification. (please share, like and give feedback - your feedback and comments are my main motivation for further elaboration. THX!)

Questions / issues / errors? What do you think about my work? Your comments are highly appreciated. Please don't hesitate to contact me for :-) Mirosław Dąbrowski, Poland/Warsaw.

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Organisational Energy (4)

Organisational Energy represents the collective effort, motivation, teamwork, management and leadership that is critical in order to keep the PfM Cycles rotating.

Organizational energy is the extent to which an organization (division or team) has mobilized its emotional, cognitive and behavioural potential to pursue its goals.

A focus on Organisational Energy links to the human side of change and hence Change Management.

Connection

How people link themselves, their values and their work to the purpose of the organization.

Content

Work stimulates and provides a sense of achievement.

Context

Working practices support and enable people to do a good job.

Climate

How the organization helps people to grow, achieve their potential and do their best.

MoP® Lite Techniques (9)

Driver-based strategic contribution assessment

This is a technique used in value management and focuses on the functions needed to satisfy the objectives of the change initiative. Each function is known as a value driver and they are given a ranking which enables value for money to be calculated.

Three-point estimating and reference class forecasting

These are estimating techniques. Three point estimating allocates a pessimistic, optimistic, and most likely estimate for an activity. Statistical analysis is used to generate a range of estimates for a particular project or program to produce a more reliable estimate. Reference class forecasting refers to previous projects and encourages previous lessons to be learned and applied to the work in question.

Multi-criteria analysis

This technique combines financial metrics with other factors (which may be weighted) under the headings of return or attractiveness and risk or achievability

Decision-conferencing

Managers debate in a workshop the relative weightings attached to an organization's strategic objectives. Those objectives that score the highest become the ones to focus on as they will contribute the larger return.

Staged release of funding

Staged release of funds is linked to stage of phase gates. Funds are only released if the work at the gate is acceptable and permission is given to proceed into the next stage or gate.

One version of truth reporting

In this technique all data used for portfolio progress reporting comes from a single source managed by the portfolio office. Individual initiatives and other functions will provide data to the single source.

The champion-challenger model

Everyone is expected to comply with the defined portfolio process which is known as the current "champion". Anyone can recommend a change to the process. This change is known as the "challenger"; and if agreed it becomes the new "champion".

Clear line of sight planning and reporting

This technique seeks to ensure a transparent chain from strategic intent through to benefits realization

Management by exception

Only variances from a plan that exceed a pre-agreed limit are escalated