Mining gold from your portfolio--analyzing your project portfolio to leverage best practices
Michael A. Thompson, PMP, MBA – Materials Manager, Intel Corporation
Have you ever wondered why certain projects in your portfolio were more successful than others? Have you been able to harvest the best practices from these “excellent” projects and apply them to your future projects? This paper reviews methods and tools used to analyze a portfolio of projects to seek out excellence based on two success metrics: return on investment and project duration. Output from the analysis includes a break out of best practices categorized using A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fourth Edition (Project Management Institute [PMI], 2008). Actual case study data is provided in order to provide a context for the use of these methods and tools.
The purpose of this paper is to share methods and practices to enable a program management office to:
• Analyze a portfolio of projects for best practices
• Develop surveys to determine common project success factors
• Set up focus group sessions to validate survey data and best practices
• Develop action items to leverage best practices on future projects
This paper contains five sections. In the first section we provide the background of the organization that conducted the analysis and the business environment that predicated the actions required. The next section provides the description of the objectives of the analysis. The third section describes the approach and methods used to complete the analysis. Results from the analysis are summarized in the following section, and in the closing section, a short lessons learned is provided to help readers execute better analysis in the future.
Intel Materials Organization
The portfolio analysis referred to in this paper was conducted within the Intel Materials (Materials) organization which is a part of Intel Corporation (Intel). The Mission of Materials is to “Deliver a competitive advantage by being a disciplined and innovative partner across the Materials ecosystem.” Its priorities are to:
• Deliver to budget and product cost commitments
• Reduce the number of Materials quality excursions
• Support product volumes within inventory and cycle time goals
• Mitigate “Materials” risks on new products and processes
The Materials organization includes approximately 1,500 employees dispersed globally (see Exhibit 1 below for geographical distribution).
Exhibit 1: Emplohyee Geographic Distribution
Materials employees manage the sourcing, procurement and inventory management of approximately US$13 billion in direct materials, indirect materials, and services annually.
Materials Business Solutions (MBS) is the organization within Intel Materials responsible for managing the Intel Materials Program Management Office (PMO). The mission of MBS is to:
• Deliver strategies and solutions that enable Materials employees' success
• Transform Materials ecosystem culturally, socially, and behaviorally
• Execute with velocity
MBS is responsible for facilitating the strategic process and systems road maps, supporting Intel's Corporate Information Technology (IT) programs and projects and executing all non-IT Materials process and systems projects (see Exhibit 2 below for portfolio information). MBS' business process focus (see Exhibit 2) is a core element of the Intel BDAT (Business, Data, Architecture, and Technology) process and systems strategy.
Exhibit 2: Portfolio Information (Hewlett, N., 2006)
At the time that the portfolio analysis was conducted, Materials was going through a great deal of internal assessments to increase efficiencies. They, as well as other divisions within Intel, were following a corporate initiative to streamline the company. Materials was faced with the requirement to reduce the MBS resources by approximately 30%. To support this reduction, MBS concluded that the current portfolio of projects had too many projects, was taking too long to complete them, and was realizing relatively little value. The PMO needed to focus and prioritize Materials' portfolio investments and resource allocations more effectively. In addition, MBS' employee development needed to focus on what would provide the greatest return on investment.
In order to create a more efficient organization and focus Materials on the best project portfolio investment strategy, MBS developed specific objectives. First, we wanted to drive performance of the portfolio to a common set of metrics in order to improve key success factors in support of Materials' strategic objectives. Second, we wanted to conduct a complete portfolio analysis to determine best practices for improving the return on assets of the organization to achieve higher return on investment and faster throughput time through better skilled employees. Third, we would execute a plan to incorporate the findings into all future Materials' projects and as a part of the MBS' employee development.
Align to Organizational Strategic Objectives: Define Value (the “Gold”)
The approach we took with the analysis was to intersect the annual and quarterly planning processes within the corporation. In order to do that, analysis activities started in Q4 of the previous fiscal year. The first task was to ensure the portfolio analysis was aligned to the organizational objectives and priorities that were set in Q4. In this case, two objectives of the Materials' organization were critical for alignment:
- Execute to return on investment (ROI) and productivity road map
- Deliver supply chain best in class cycle time reductions
Analyze Historical Portfolio Performance: Define Excellence (Where to find the Gold)
The second task was to complete the portfolio analysis. This analysis focused on understanding where to find best practices from our historical project base. In essence, we needed to find out where to “mine for gold”; by taking the best practices from projects considered “excellent” and applying these lessons to future projects, the future portfolio performance could be improved. An “excellent” project was defined as those projects having relatively high achieved ROI (> US$500k) and short project durations (<360 days). The analysis was completed in Q1 of the new fiscal year. The historical data was pulled from our Project Management Information System (proprietary web application) and exported into a spreadsheet for ease of analysis. Certain projects were excluded from the data set due to lack of critical data (e.g., no ROI documented) or considered random occurrences that would overly skew the data set. Once the list of projects was finalized, the respective achieved ROI and project durations were plotted along the y and x axis of a logarithmic graph (see Exhibit 3 below).
Exhibit 3: Portfolio Analysis
We chose a logarithmic graph in order to provide a better view of the data, given the vast range of ROI for the projects. Once the data was plotted, we focused on the highest-scoring projects on the graph and identified those projects to seek out best practices. These were considered “excellent” projects and the gold that we wanted to analyze to understand what made them so successful.
Conduct Surveys: Find Best Practices (“Mine the Gold”)
The next task included in our analysis was to have the project team members of the excellent projects complete a project self-assessment survey. This survey was constructed using the standard PMBOK® Guide sections and subelements to obtain information from the project teams regarding the use and effectiveness of standard project management practices (see Exhibit 4 below for sample portion of the survey).
Exhibit 4: Self-Assessmetn Siurvey
These surveys were completed in Q2, and the output of these surveys were rolled up into a plot of PMBOK® Guide sections data points based on their level of use and effectiveness using a three-point scale for each axis (see Exhibit 5 below).
Exhibit 5: Best Practices Survey Results
The top four rated PMBOK® Guide sections were chosen as the subject matter to facilitate focus group sessions with a subset of the project team members who completed the surveys. These sections included: Communications, Organizational Management, Quality Management, and Scope Management.
Conduct Focus Groups: Validate Best Practices (Determine the Purity of the Gold)
The focus group sessions were completed in Q2. We kicked off the focus groups by providing a small recognition to each of the participants. We wanted them to know how important it was for them to provide inputs into how our organization would use their excellent practices to improve all of our future projects. We reviewed the projects surveyed and why certain projects were considered excellent and what the output of the project self assessment surveys revealed. The heart of the focus group sessions was used to discuss their experience with the top four PMBOK® Guide sections. We probed for common areas of use and effectiveness of project management practices.
We then opened up the sessions for any other feedback or inputs and closed the sessions by providing the next steps regarding what would be done with the information we collected. We then consolidated the output from the focus group sessions into three common areas: goals and metrics, stakeholder management, and project leadership. This information was forwarded to the focus group participants for validation and feedback.
Review with the PMO
As with any portfolio improvement programs, reviewing the analysis and recommendations with the PMO is expected. This was completed in Q2. The review included an overview of the analysis methods, outputs from the focus groups, and recommended improvement plan.
Execute Improvement Plan – Create more Gold!
The PMO agreed to the recommended plan, which included the continuation of existing organizational initiatives supported by the analysis. We found that there was no need to introduce any new organizational initiatives, but that there was a need to leverage those initiatives in place that enabled excellent projects and to proliferate the use of best practices across the active portfolio. Some of these initiatives included: business process improvement; consistent use of project and process improvement tools (Project Charters, SIPOCs, Stakeholder Analysis, Process Maturity Assessment, TCM Assessment, and Control Plans); incorporating clear CAIRO Roles and Responsibilities for “Approvers” within projects; and continuing our workforce plan skills development in the area of project leadership skills.
Some new plans were determined to be beneficial for the organization to take on and they included: adding related metrics to the operational efficiency section of our balanced scorecard; setting a target for the percentage of “excellent” projects within our portfolio; ensuring that business process integration tools were used on every project; and adding a workforce plan success metric related to project leadership. The improvement plan was put in place in Q2.
The PMO conducted quarterly audits starting in Q3 to ensure that the best practices that were identified for proliferation were being followed. Projects were audited for “One Business Unit Sponsor” as part of the standard ongoing PMIS Quarterly Audit already in place. To close out the portfolio analysis activities, we communicated the best practices results and expectations to the organization, and updated MBS' balanced scorecard and project management maturity model based on the output.
What “gold” did we find within our portfolio? The excellent projects in our portfolio included common areas of best practices that leveraged the use of effective goals and metrics, stakeholder management, and project leadership skills.
Goals & Metrics (Communications, Quality, Scope)
We found those projects that created precise metrics with clear accountability to the success of those metrics delivered higher value in a shorter amount of time. It was very important for the project teams to focus on the “right” key or critical process metrics that were important to the stakeholders. There was a sense of mutual ownership and responsibility between the project team and the stakeholders. There was also agreement and support from key stakeholders to use the metrics to drive key decisions throughout the project. In addition, it was important for the project teams to contain scope by using consistent revalidation of the key metrics throughout the project.
An important element in the credibility of the goals and metrics for the project was to ensure that there was good baseline data. Sound structure and discipline were put in place in order to execute against the key metrics. Successful project teams also used various tools and methods to obtain the right data needed without wasting a lot of people's time. These tools included: Project Charter, SIPOC (Supplier, Inputs, Process, Outputs, Customer) Modelling, on-line surveys, 7-step problem solving.
Stakeholder Management (Communications, Org Management, Scope)
As with any project, communications came through as a key element for success. Having the right level, right data, and right decision maker and/or owner for critical issues were good best practices. Reconfirming the purpose and value of the project throughout the project's duration, especially with regard to scope, created a consistent, focused, and unified approach by the project team. It was important when scope management decisions were made, for the project teams to revalidate expectations to keep the team focused.
With respect to accountability, projects that had one business unit stakeholder accountability and decision making capability showed the ability to deliver higher value faster. Where there was clear ownership and boundary conditions, projects did not waste time justifying actions or obtaining several approvals and/or reviews. Project teams leveraged several tools to support this agility including: project review templates, CAIRO (Consultant, Approver, Informed, Responsible, Out of the loop) roles and responsibility matrix, Project Charter, SIPOC, and VOC (Voice of the Customer).
Project Leadership Skills (Organizational Management)
The final common area of excellence and best practices were projects that included people who had great project leadership skills. These leaders were influential and used data, communications, and relationships to break down barriers upstream and downstream for the team. Their ability to effectively manage their projects across silos was critical to their success. They provided the big picture perspective necessary to keep all elements aligned throughout the project. Providing a disciplined approach also rang true in the excellent projects. The leaders expected their teams to follow well-structured methodologies (i.e., DMAIC, LEAN, 7-Step, PLC, etc.) and to leverage the toolsets available. They focused their projects to deliver the critical output necessary for success, controlled scope, and provided consistent and meaningful communications.
In closing, we would like to leave you with the following as key lessons learned from this exercise:
- Ensure your portfolio analysis is aligned with your organization's strategic objectives and balanced scorecard updates
- Get the right senior management support necessary for success
- Be mutually accountable to the success of the improvement plans
- Prioritize and leverage visibility of output to the organization
- Provide clear survey purpose, background, and instructions to the participants
- Leverage your PMIS for project history and data
- Recognize participants in the survey and focus groups
- Leverage existing organizational initiatives instead of creating new busy work
This presentation is for informational purposes only. INTEL MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
BunnyPeople, Celeron, Celeron Inside, Centrino, Centrino logo, Core Inside, FlashFile, i960, InstantIP, Intel, Intel logo, Intel386, Intel486, Intel740, IntelDX2, IntelDX4, IntelSX2, Intel Core, Intel Inside, Intel Inside logo, Intel. Leap ahead., Intel. Leap ahead. logo, Intel NetBurst, Intel NetMerge, Intel NetStructure, Intel SingleDriver, Intel SpeedStep, Intel StrataFlash, Intel Viiv, Intel vPro, Intel XScale, IPLink, Itanium, Itanium Inside, MCS, MMX, Oplus, OverDrive, PDCharm, Pentium, Pentium Inside, skoool, Sound Mark, The Journey Inside, VTune, Xeon, and Xeon Inside are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries.
*Other names and brands may be claimed as the property of others.
Copyright © 2007, Intel Corporation. All rights reserved.
Crawford, J. K. (2002), Project management maturity model. New York: Marcel Dekker
Hewlett, Niles E, The USDA Enterprise Architecture Program, URL:
http://www.ocio.usda.gov/p_mgnt/doc/PM_Class_EA_NEH_012506_Final.ppt, January 25th, 2006
Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: Translating strategy into action. Boston: Harvard Business School Press
Peters, T. J., & Waterman, R. H. (1982). In search of excellence: Lessons from America's best-run companies. New York: Harper & Row
Project Management Institute. (2008). A guide to the project management body of knowledge (PMBOK® guide)—Fourth edition. Newtown Square, PA: Project Management Institute.
© 2009, Frank R. Manella & Michael A. Thompson
Published as a part of 2009 PMI Global Congress Proceedings – Orlando, Florida