5 Level Organizational Maturity in Project Portfolio Management. Project Portfolio Management Deployment Guide

October 6, 2011 by smsadmin
Filed under: Project Management

Organizational Maturity in Project Portfolio Management

Level 1 If a formalized project portfolio management unit exists in the enterprise, it is very modest and not very sophisticated. It will probably be commissioned to develop basic practices for project selection and project performance.
Level 2 The PPM unit will develop some standard processes and practices for PPM. This unit will probably handle project prioritization processes as well as cross-project critical processes. Further, the PPM unit will probably attempt to institutionalize the PPM practice across the entire enterprise.
Level 3 The PPM unit will establish and monitor use of a complete project portfolio management methodology. Extensive training will be provided to all personnel who would be involved in this process.
Level 4 The PPM unit will promote the use of a comprehensive, and possibly singular, portfolio management system across the enterprise. PPM will be fully integrated into business processes as part of the adoption of the management-by-projects concept.
Level 5 The PPM unit will monitor the enterprises portfolio, which will probably be running at peak efficiency, for opportunities to recommend continuous improvements in models, indices, processes, and procedures.

Maturity in Project Portfolio Management
This instrument provides a preliminary determination of the maturity of project portfolio management (PPM) in an organization. If the attributes of the organization are such that the responses to more than 75% of the statements in each level are affirmative, then it is highly likely that the organizational maturity is at that level.

The Organization is at Level 1
If Most of These Statements Describe Your Portfolio Management Environment
? Projects are not selected according to set criteria.
? The organization lacks a strategic plan.
? Projects are not linked to organizational goals.
? People can propose and execute projects as desired.
? Minor projects can escalate into major undertakings.
? Many projects are not officially closed.
? Many projects continue indefinitely and take on a life of their own.
? New requirements lead to new projects that are not officially authorized.
? Effort can be duplicated as similar projects can be under way elsewhere in the organization.
? Some people feel they are locked into the same project for years at a time without an end, and at times without recognition of the importance of the project, leading to poor morale.
? The organization does not have an inventory of all of its current projects.
? Basic information is not available concerning the organization’s projects.
? Project reviews are not held.
? A Project Management Office (PMO) has not been established.
? There is an unrealistic assessment of the capability to complete projects and to continue ongoing operations.
? Resource overloading is the norm, as the organization lacks a resource management information system.
? Project and program reporting requirements are inconsistent.
? Reporting requirements are mandated; however, there is limited understanding as to how data collected actually are used.
? There are few, if any, processes or procedures available concerning portfolio management.
? Few, if any, people have had training in the concepts of portfolio management.

The Organization is at Level 2
If Most of These Statements Describe Your Project Portfolio Management Environment
? The organization’s management reviews and approves new projects to become part of its portfolio.
? Interdependencies among projects are not known.
? Resource over-commitments are not known.
? The focus is on the project, rather than on what is needed to achieve it successfully.
? The budgeting process is managed separately for each project.
? The organization lacks a mission statement or vision statement, and at times the link between the project and the organization’s strategic plan is not known.
? Most of the projects that are selected are ones with a short-term (less than six month) payoff.
? The project review process is cursory and focuses primarily on completed and upcoming milestones.
? Project reporting is standardized.
? A project management information system is under development.
? Resources are negotiated on a project-by-project basis.
? A limited number of people in the organization have taken training in portfolio management.
? A PMO has been established at the division or equivalent level.
? There is some effort under way to establish a portfolio management process at a local level, but there is not a standard PPM approach in place in the organization.

The Organization is at Level 3
If Most of These Statements Describe Your Project Portfolio Management Environment
? There is a sponsor or champion for portfolio management in the enterprise.
? Portfolio management follows a defined process for decision making.
? Criteria have been established for use in making selection decisions among components in the portfolio (projects, programs, and ongoing operations).
? A list of the components in the portfolio is available and maintained.
? Analysis of the pursuit of different types of components in the portfolio is conducted.
? Each portfolio component is categorized with common criteria.
? Each portfolio component is focused on determining the needs of the business.
? A process has been established that enables costs, risks, and benefits of possible components to be evaluated.
? A system has been set up to schedule and balance resource requirements.
? A system is in place so that individual components in the portfolio can be either expanded or contracted.
? A system is in place so that resources can be reallocated to support the more important components.
? A process is in place to submit a proposal for consideration to the portfolio.
? There is an approach to rank or prioritize components in the portfolio.
? There is a standard approach to report component progress.
? There is a standard approach to prepare a business case for each proposed component and for continuing with ongoing operations in house, rather than using outsourcing.
? Common metrics are collected so that progress, performance, and dependencies are regularly monitored and tracked.
? Standard criteria are used to assess whether a proposed component should not be pursued.
? Executives view projects as groups of related initiatives, rather than as a series of isolated islands.
? Dependencies among components are identified and managed.
? An ongoing review is conducted of projects in the portfolio, with components being de-selected or terminated as appropriate.
? Non value-added components can be identified.
? Duplicate projects are identified; resources are concentrated on a few high-value projects, rather than on projects that may no longer be required or that should have been terminated.
? Each person understands the priority of the portfolio component he or she is assigned to work on in the organization.
? Project and program managers recognize how their work is measured and valued, as do functional managers; both can accept and receive changes based on changing business conditions.
? Portfolio components are scheduled and funded accordingly, and prioritization decisions communicated throughout the organization.
? At risk and/or under-performing portfolio components can be easily evaluated.
? Key metrics for monitoring and controlling components have been agreed upon and are used.
? The portfolio shares and allocates resources among components.
? A communications management plan has been prepared and is followed for PPM.

The Organization is at Level 4
If Most of These Statements Describe Your Project Portfolio Management Environment
? The organization’s executives recognize the value of PPM.
? The organization’s executives recognize the value of each component in the portfolio.
? Categories of portfolio components are established.
? Portfolio components are aligned with strategic objectives.
? The portfolio management information system is set up to contain information on the business initiatives.
? Metrics are available to measure the ongoing value of portfolio components.
? Systems are available to support PPM with accurate and timely data to show performance across projects as well as

infrastructure investments; a digital dashboard is set up and maintained regularly.
? Trend analyses of the value of portfolio components are conducted.
? Analyses are conducted regularly to determine the complexity of the portfolio, to address unique challenges, and to ensure that there is a balance among projects in the categories established for alignment.
? Prioritization is done in order that only the most valuable work is authorized.
? Projects in progress are scrutinized according to similar criteria/rigor.
? Progress on portfolio components is tracked across the entire organization.
? Critical activities to be monitored are known with standard definitions.
? A rigorous risk assessment is performed of each component in the portfolio.
? The portfolio is continually reviewed and changed as needed to produce the highest returns; focus has shifted from the cost of the project to one that examines its significance strategically to the organization and its value.
? The impact of resources and skills limitations and their effect on the portfolio is known.
? All work is scrutinized so that people cannot, on their own, implement their own pet projects and personally approve them.
? People have an organizational focus, rather than a departmental or sector focus, so that projects can be prioritized for the enterprise.
? People throughout the organization understand the portfolio management process that is followed and why it is being used.
? Decisions are communicated throughout the organization, with open communication the norm.
? People in the organization recognize that change is inevitable and can easily embrace it.
? Interdependencies of benefits among the various portfolio components are recognized and known.
? A portfolio governance process is in place through a Portfolio Review Board or similar group.
? Actions proposed are routinely implemented and followed up on to assess impact.
? PPM is a separate process from the annual planning and budgeting process so that it is done on a continual basis, rather than on an annual basis.
? Initiatives are interdependent even though there are different payoffs, risks, and opportunities.
? Trends and problem areas can be easily addressed so there is insight into the existing portfolio.
? There is a balance among the various categories in the portfolio, and the balancing process is known throughout the organization.
? The PPM process enables the identification of problem areas quickly to focus management attention and potential resource allocation decisions.
? Established decision-making processes to select components are followed.
? The portfolio information system provides an easy-to-use, interactive filtering system.
? A Portfolio Manager reports to the Chief Projects Officer or equivalent of the organization.
? Key stakeholders receive regular assessments of the health of the portfolio.

The Organization is at Level 5
If Most of These Statements Describe Your Project Portfolio Management Environment
? The Portfolio Manager actively manages the portfolio to meet changing business needs.
? The Portfolio Manager has prepared and issued a process improvement plan for PPM.
? PPM is recognized as the key to provide a faster and more effective response to changing conditions.
? PPM optimizes investment decisions by prioritizing and balancing the work to be done within the portfolio.
? Investments, organizational capability, and capacity are optimized with projects and programs.
? Resources are prioritized and allocated for maximum benefit.
? The portfolio encompasses all the work under way in the organization.
? Continual re-planning is the norm.
? The portfolio management process itself is routinely analyzed for continuous improvement.
? Portfolio management decisions are made within the context of enterprise strategy and goals.
? Prioritization is done across the entire enterprise; all subordinate organizations collaborate on an ongoing basis.
? The organization’s culture is both collaborative and communicative.
? People are encouraged at all levels to submit ideas and suggestions to foster continuous improvement to the PPM process.
? The value of project outcomes and alignment with business strategy is actively managed.
? PPM ensures that each project’s contribution to the organization is known, including how to recognize whether the project is a success.
? The PPM process can be easily adapted to changing circumstances.
? Environmental constraints that may affect the portfolio are known.
? Continuous improvement to the PPM process is the norm.
? Portfolio metrics are related to other metrics in the organization.
? The PPM process is integrated with the strategic planning process.
? The portfolio information system interfaces with other systems in the organization.
? Key performance indicators are refined as required.
? Criteria are used to evaluate the effectiveness of PPM.
? The Portfolio Manager is a member of the organization’s executive management team.
? The portfolio management system is continually reviewed to ensure that it is aligned with corporate strategy.
? Realignment of existing portfolio components is expected and is an ongoing process.