Over the last little while, I have been asked to write introductions to, or testimonials for a number of books on Project Portfolio Management (PPM). This has caused me some angst because, while PPM most certainly has its place and is a valuable management tool, the name also unfortunately perpetuates the myth that IT projects, in and of themselves, deliver value. As discussed in an earlier post, Get With The Programme!, we need to move beyond IT projects to comprehensive business change programmes.
The concepts of portfolio management (as related to IT investments) and programme management were introduced in The Information Paradox. While portfolio management has seen significant adoption since then, largely in the form of PPM, the adoption of programme management has been slower, which certainly contributes to the popularity of the PPM term. (It would likely help if we could all agree on a common spelling of program/me!)
I have heard number of arguments against using the term “programme” including that we are making things too complex by introducing another term, it scares people, and it doesn’t apply to small enterprises etc. The reality is that much of what we are enabling with IT today is complex – very complex, and denying that results in even greater complexity. Taking the programme view facilitates better understanding – shared understanding – of complexity and, as a result, more effective management of change. Regarding scaring people, I always say when I am presenting or discussing this topic that if the audience doesn’t leave both excited and scared, they haven’t “got it”. As Albert Einstein once said “You cannot solve a problem by applying the same thinking that got you into the problem in the first place.” We need to shake people out of their complacency and get them to think and act differently. I also believe that the concept of programme applies just as much to smaller enterprises – appropriately scaled to fit size and culture.
Programme management does now appear to be gaining some momentum. In addition to ITGI’s Val IT™, both OGC and PMI have programme-related materials. In a recent research paper, Gartner states “Organisations are discovering that program management is a level of business discipline that is key to delivering business outcomes”. It goes on to say that “We are focusing on a specific research project that addresses strategic program management – an emerging discipline focused around the multi project delivery of business outcomes…we believe that this is the management construct best suited to enable better business engagement, value delivery and risk.”
The definition of Portfolios, Programmes and Projects – as introduced in The Information Paradox, and continued in Val IT – is illustrated in the figure below.
Given the above definitions and relationships, I would strongly recommend adoption of the term “Programme and Project Portfolio Management”, or P3M to better reflect both the relationships between portfolios, programmes and projects and the need to have all 3 in place. Indeed, I usually portray this with the “3” in superscript (which WordPress doesn’t seem to like) as I truly believe that it is “P to the power of 3 M”. While all three are necessary, none are sufficient on their own. All three, working together, are needed if enterprises are to:
- Identify, define, select and execute new investments in IT-enabled change such that they maximize value creation and sustainment, taking early corrective action when this is at risk
- Make intelligent spending decisions, focusing on spend that creates or sustains value, and avoiding the value destruction inherent in across-the-board (percentage) cuts
- Ensure that their ongoing investments optimize benefits – contributing to the creation and sustainment of value – and again, where this is at risk, take early and appropriate corrective action
- Deliver business and technology capabilities in a reliable, responsive and cost-effective manner
The relationship between Portfolios, Programmes and Projects, in the context of value management, is illustrated in the figure below.
There is an argument that you shouldn’t consider portfolio management until you have dealt with project and programme management, i.e. get delivery right before you determine if you are doing the right things and creating or sustaining business value. I clearly do not agree with that argument – as Peter Drucker said “There is nothing worse than doing well that which should not be done at all!” Portfolio and Programme Management are the vehicles that bridge the gap between strategy and execution – ensuring alignment with business objectives and delivery of value through investments in IT-enabled change by effectively understanding and managing that change. Project management ensures that the technology and business capabilities required to enable the IT-enabled change and the resulting benefits and value are delivered. If we are to realize the full potential of IT-enabled change and translate that into real and sustainable business value, we need to work to all three of these areas – we have no choice!