Closing the Gap Between Strategy and Results

RPM Systems Corporation

Copyright © 2011 RPM Systems Corporation

Strategic portfolio management expands strategic throughput to close the gap between strategy and results.

Strategic Portfolio Management optimizes the management of funds, resources, dependencies, and work sequences producing tangible deliverables that meet the expectations of the stakeholders.   

Performance Based Planning manages a portfolio of projects in the presence of unstable funding, emerging requirements, and deliverables and resource dependencies to provide actionable information in units of measure meaningful to the decision makers.

The result is a measureable increase in the Probability of Program Success.

These activities increase the probability of success for a portfolio of projects through the seamless integration of the four domains shown in Figure 1:

  1. Executive ManagementProgram Governance.
  2. Portfolio ManagementValue Delivery.
  3. Project and Program Management – Technical Delivery.
  4. Operations ManagementSustainable Value.

The activities of successful project, program, and

 portfolio management, on the right of Figure 1, require the synchronization between the dependencies of each project, the funding profiles for the program and its flow down to projects, the resources assigned to the projects, and external drivers for the collection of projects. Management of these drivers requires an integrated solution that increases the probability of success for the portfolio and its projects:

Expanding Strategic Throughput

 Closing the Gap between Strategy and Results

Glen B. Alleman

Mr. Alleman leads the Program Planning and Controls practices. In this position Glen brings his 30 years’ experience in program management, systems engineering, product development, and general management to bear on the problems of performance based program management and risk reduction.

Mr. Alleman’s experience ranges from real time process control in a variety of technical domains to product development management and program management in defense, aerospace, and federal contractors including Logicon, TRW, CH2M Hill, SM&A, and several consulting firms.  You can follow Glen at Herding Cats.

Mr. Alleman earned a BS in Physics from University of California, Irvine (UCI), and an MS in Systems Management from the University of Southern California (USC).

Steve Garfein, PMP ®

Mr. Garfein is the thought leader in Expanding Strategic Throughput.  He is the founder of RPM Systems Corporation, see RPM History.

Mr. Garfein has assisted a wide spectrum of organizations in project, program, and portfolio management.  See list of publications and case studies.

Beginning in 1988 he constulted to Microsoft on the development of Microsoft Project and related solutions. He was a member of the management team that developed the Apache helicopter where he led the effort to validate its cost / schedule control system with the US Department of Defense.

Mr. Garfein earned a BS in Business from UCLA and an MBA from the University of Southern California (USC).  He is a visiting professor at the University of Technology Sydney (UTS) in Australia.

Strategic Portfolio Management provides actionable information to the portfolio owners to maximize the effectiveness of a project’s funding and resources.

Figure 1 – Strategic Portfolio Management, supported by Performance Based Planning, is an integrated solution to deliver value in the presence of shifting priorities, variable funding, resource and technical interdependencies.   

Based on figure 1.3 in The Standard for Portfolio Management, 2nd Edition, 2008

Successful Project Portfolio Management requires day-to-day visibility to cost, schedule, and technical performance of each project and their interdependencies

Delivering value from a strategic portfolio of projects begins with defining the high–level outcomes before a program is approved and continues through the identification, profiling, tracking, and embedding of benefits from these deliverables as shown in Figure 2.

This approach is different from the simple measures of cost and schedule performance. With the defined and measured value portfolio trade space, decisions can be made in the best interest of the stakeholders as well as compliance with the contract’s cost and schedule measures.

This involves assessing risk against the proposed outcome of each project’s deliverables to confirm how this value can best be achieved. Effective management of the benefits, across several programs or projects, allows management to make strategic adjustments in resources and ensures that the programs continue to contribute to strategic objectives in a changing environment in the presence of constraints.

This will lead to reprioritizing or revising the scope of some projects, replanning or postponing them. It also provides an opportunity to re–deploy resources freed up through the efficiencies being delivered, to derive new benefits while work is underway and to minimize unwanted side effects from these disruptions.

Executive Management of a Strategic Portfolio of Projects

Figure 2. Strategic portfolio management ensures projects are aligned to business and technical strategies and these strategies are being executed according to plan. The result of this alignment optimizes the strategic throughput, using the available resources and funding.

The Project Portfolio Management (PPM) process provides information to the organizations that acquire and deliver data about its projects. This information becomes the basis of decision making in the presence of changing funding sources, conflicting resource demands, emerging technical and operational requirements, and other program constraints. Portfolio management provides five Critical Success Factors that:

  1. Maintain alignment between the portfolio’s collection of projects and the dependencies between these projects and the mission and vision of the organization.
  2. Allocate financial resources, assess of the impact of changes in those resources, and the forecasting of needed financial resources needed to maintain technical and programmatic performance of the portfolio of projects.
  3. Allocate human resources, the dependencies and availability of these resources, forecast of the demand for existing and future human resources, and the impact on project and portfolio performance.
  4. Provide Measures of Effectiveness (MoE) and Measures of Performance (MoP) for projects, collections of projects, and the Portfolio as a whole.
  5. Establish a risk based decision making process based on probabilistic models of cost, schedule, and technical performance, connected with Risk Retirement plans to handle identified and emerging technical and programmatic risks.

Portfolio Management

Portfolio Management closes the gaps between project management strategies and results.