It was very timely that I began reading this book just as the new UK Government took power. There were a lot of promises and discussions over the need to change government procedures, policies and services, and to look at major programmes of work and decide which ones should progress and which should not. I was intrigued as to how a fellow Civil Servant, Stephen Jenner, had successfully approached project portfolio management and what he advised when undertaking major change programmes.
As Jenner recognises, this book is orientated towards large IT projects, but the principles, processes and advice can apply to, and can be accommodated by, any portfolio of projects. This book contains many examples and case studies, both within the public and private sectors, and from various countries. It is also refreshing to see a good mix of research based theory and statistics combined with demonstrated experience from application (along with references to each as page footnotes). Each chapter ends with a useful summary of key points and ‘take-aways’.
The book begins with putting forward a case for project portfolio management (including the origins), discusses issues with demonstrating the case for project portfolio management, and the application to information technology and new product development. Jenner then discusses the prerequisites for success: a clear corporate strategy, top management support, a suitably skilled and independent portfolio analysis function and modular/incremental project planning. Discussion includes the view that an organisation needs to have mature programme/project management before considering implementing portfolio management; Jenner counters this with his view that portfolio management can be implemented alongside a low maturity project management implementation – the decision whether a project contributes to an organisation’s strategy is independent of whether the project is managed well or not.
The next four chapters discuss the four key portfolio processes. ‘Establishing the Portfolio’ discusses use of metrics for project Attractiveness (investment justification re: return, strategic impact or mandatory requirement), Achievability (technical and project deliverability and benefits realisation) and Affordability (upfront investment and ongoing running costs). Establishing portfolio scope, standardised processes, templates, guidance and investment criteria is covered briefly. A range of approaches to portfolio segmentation are described, which projects will be allocated to for assessment (e.g. business applications, mandated/legal, replacement infrastructure, new infrastructure) – for example mandatory projects have to be undertaken and have funds allocated, as long as they are really mandatory!
‘Investment Management’, notably the longest chapter, begins by suggesting organisations should focus on the benefits of a project and treat the project as an investment. The chapter discusses techniques to appraise projects attractiveness and achievability, and understanding issues around reliable estimation, and ways to reduce ‘optimism bias’ and ‘strategic misrepresentation’, both of which are prevalent within project management and ‘selling’ a project in a business case, especially for pet projects. The techniques outlined help to portray an independent look at the business case, prioritising and balancing the portfolio, as well as ensuring alignment with the organisation’s strategy. Jenner also comments on the need to weigh data analysis and management dashboards with management judgement, and the need to utilise dashboards as management aids as opposed to decision making tools (especially when taking into account potential bias and organisation politics).
‘Managing the Portfolio In Flight’ highlights that a portfolio is not a one time assessment, but is a fluid and changeable beast, which needs to adapt to reflect business and policy changes. Jenner discusses use of frequent reviews and stage gates – thus preventing projects from starting that do not meet organisation strategy or investment management criteria, and stopping underperforming projects before too much expenditure has occurred. The chapter also discusses regular review of the overall portfolio of projects to maintain balance and progress as well as the portfolio process itself, thus ensuring consistent buy-in and commitment from the business, as well ensuring the portfolio is working optimally.
‘Active Value Management’ begins by challenging portfolio managers to ensure that project business cases are robust and realisable (i.e. are not optimistic or biased). A move towards funding linked to benefits is suggested, as well as making sure the business know what benefits they are buying (often not the case in reality). Jenner argues that there needs to be a shift from benefits realisation to value creation, i.e. true value occurs after the project has been completed, and that benefits should be managed at the portfolio level, with continual engagement with the users and dissemination of lessons learnt.
‘Implementing and Sustaining Progress’ discusses that successful portfolio implementation is achieved through incremental steps, and that building upon existing good practice to more advanced stages may take several years, but with benefits realised at each increment. A number of success factors are indentified, including involving the business from the start and keeping them engaged, continuity and training in key personal. Beyond this, Jenner acknowledges that there is a need to look beyond just processes, ensuring effective governance is in maintained, and recognising that commitment and patience are required.
The final chapter on ‘Measuring Success’ discusses the success of portfolio project management implementation within an organisation, where it is recognised that organisations will vary in their acceptance and maturity. It is argued that there is not a one size fits all framework or assessment – it is suggested that the organisation engages to assess what ‘good looks like’ given its specific circumstances. As well as measuring the process maturity, Jenner argues that a range of indicators need to be assessed to include management satisfaction, as well as delivery, efficiency, balance and impact.
I hope the current government has read this book when looking at prioritising and progressing projects across the various departments! It is about time there was a positive change, and if lessons from this book are utilised, then we can look forward to seeing a structured approach to implementing the change required and reaping the benefits.
My one concern with the approach outlined in this book (which is robust) is the amount of time and effort required to establish and then maintain the portfolio. I am worried that the current negative view of portfolio and programme management offices within the industry may perceive this level of assessment and perceived bureaucracy as one step too far and delay project delivery. However, given time, I hope this view will change and that more organisationally aligned projects will be put forward and delivered within a structured portfolio framework.
This book is for all those approaching portfolio management, either fresh, or with a fresh pair of eyes, whether in the public or private sectors. Every manager, from project to portfolio, can gain from reading this book, and apply principles that will provide benefit and transform your projects.
Transforming Government and Public Services – Realising benefits through project portfolio management
By Stephen Jenner
Published by Gower Publsihing Limited, 2010
This book review was originally published in Project, Association for Project Management, Aug/Sept 2010, Issue 231, p40.