Achieving a balance of executive involvement at the right level and on the right projects requires 5 key elements within a project portfolio management framework. 1. Standard project data, consistently collected and turned into meaningful dashboards and reports If standard project data is consistently collected, dashboards and reports can provide information to executives about which projects are “on track” and which are “at risk”. At a minimum, dashboards and reports should show progress to date against milestones, budgets, and hours (actual vs. planned). This reduces guessing and wasted time and effort by executives. 2. The categorization of all projects into groups / tiers We recommend that projects be categorized into groups or tiers; this helps identify and highlight the projects of greatest import to the executives. There are various ways to group or tier projects – this can be done simply by relating each project to the organization’s goals, or it can be done by weighing multiple project attributes for each project. These attributes include size of project (in dollars or hours), ROI, importance of the project, whether it is tied to a regulation, etc. The resulting tiers may be Critical, High, Medium, Low. Reports and dashboards can be organized by tier to drill down on the most important projects to the executive team. 3. Clear project / portfolio governance, with a clear path for the escalation of risks, issues & decision-making Now that executives have visibility into the projects requiring the most oversight, how do we make sure that they still don’t get pulled into day-to-day project decisions? A clear project and portfolio governance structure with a clear set of rules for escalating only the most important challenges is critical. Integrated project change management ensures that project teams have the tools and process to apply these rules and determine whether they need to escalate a project challenge. The project team should escalate only those decisions that they cannot make to the next level of governance (who, in turn, will escalate the decision if they cannot resolve it). For most organizations, we recommend at least three levels of project governance for change decisions, risks, and key issues. Level one is the project team, level two is the department or area leaders for the project, and level three is the executives of the organization along with the affected department and IT leads. These guidelines also empower project managers and project teams to make the important day-to-day decisions. 4. A phased-gating or project check-in process for all projects As projects are planned and then executed, we recommend a consistent process where project teams are required to “check-in” or obtain approval to move to the next project phase or milestone. The project group or tier should determine who needs to be involved in the check-in or approval to advance meeting. For instance, a low tier project may only require the involvement of the responsible IT manager and the business owner. The more critical the project, the more executive oversight is required to ensure that a project does not get too far along without the perspectives of IT leads, stakeholders, and executives (e.g., level three governance). 5. A corporate culture that encourages the self- reporting of risks / issues If an organization accepts that even the “best laid plans” sometimes need to be revised and that everyone can “learn from their mistakes,” project managers and teams are more likely to raise the flag and bring to attention a challenge. Adding project health indicators to the regularly collected project data is a great way to allow project teams to self-report whether their projects face issues. Project health indicators use established project parameters (overall project health, project budget, resources, etc.) and magnitudes to alert to a possible or existing challenge. For instance, project budget health indicator may be set from green to orange if the project team suspects that their budget will be impacted or changed, but by less than 5%, and red if over 5%. In conclusion, ensuring a consistent management of the project portfolio on an ongoing basis means establishing a framework that enables decisions to be made at the lowest level possible, and only escalated if there is a need for executives to get involved, such as for a change to a mission critical project, resource availability or needs, budget issues, etc. Dashboards and reports which include health indicators ensure that project challenges are identified early and that executives can be involved in resolving important project challenges sooner than later.
Take a look at the first two blogs in this series: An Overview of Portfolio Planning & Management (PPM) Annual Portfolio Planning & Strategic Alignment
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