Introduction to a project portfolio management maturity model
Scheduling is often seen as the beginning, and almost the finest deliverable, of project management practices within an organization. But scheduling is not, and definitely should not be, a finite practice. As organizations begin to mature and develop deeper and broader project management practices into a more Enterprise Project Management (EPM) framework, scheduling must mature as well. This paper will address the growth of scheduling within a maturing organization through alignment within a Project Portfolio Management (PPM) maturity model. The history of EPM is reviewed, as well as the current EPM application within an organization, and the scalability of the PPM maturity model and its effects on organizational growth and expansion of project management practices.
Most organizations begin their project management practices through satisfying an immediate need to keep projects on track. The most obvious vehicle to accomplishing this is the creation and management of a schedule. Scheduling is an essential building block and foundational effort to creating an efficient project management practice within an organization.
The current business needs have now driven project management practice into more diverse areas, such as Demand Management, Business Intelligence, Capacity Planning, and Resource Management. The climate of late has been a “doing more with less” environment, which places scheduling in the forefront. Not only are well developed and well managed schedules a requirement for effective project management, businesses have also expanded their needs for visibility of resource utilization that is tightly tied to scheduling. This more holistic approach to enterprise-wide project management is known as EPM.
The need for a robust EPM practice has an enormous effect on practitioners, as well as organizational culture change. Laying a PPM Maturity Model over existing project management practice will create an opportunity to see the relationship between the Business Process Life Cycle with the maturing project management practice. Careful analysis between the gap of where an organization is, compared with where the organization needs to be in order to take better advantage of capacity planning is the first step in successful adoption of EPM.
A Historical Perspective of Enterprise Project Management (EPM)
To begin to understand EPM, and how a PPM Maturity Model effects the practitioner, let us review the evolution of EPM through key historical milestones and events.
Although there are many different definitions and opinions on what EPM is, and isn’t, we will use the following definition for the purpose of this paper: “In broad terms, [EPM] is the field of organizational development that supports organizations in managing integrally and adapting themselves to the changes of a transformation” (Enterprise Project Management, 2011, ¶1).
It may seem striking that this definition speaks to the broader implications of EPM. This is not just managing projects, one project at a time. This is enveloping project management practice with organizational development and growth with the end goal being the management of this transformation.
Over the last century or so, tools have been developing that have factored heavily in the management of project effort. These tools have also simultaneously further developed the skill area of scheduling.
Gantt Chart (>100 years) – reportedly originally developed in 1896 by Karol Adamiecki, Henry Gantt developed the Gantt Chart in the 1910s. Gantt charts were first used on large construction projects, including the Hoover Dam, which started in 1931 and the interstate highway network, which started in 1956. Accepted as a commonplace project management tool today, Gantt charts are common in scheduling tools, textbooks on project management, and white boards in organizations throughout the world.
Critical Path Method (CPM) (>50 years old) – CPM is a project modeling technique developed in the late 1950s. CPM was originally developed and put into practice by DuPont, between 1940 and 1943 and contributed to the success of the Manhattan Project. This method is “a schedule network analysis technique used to determine the amount of scheduling flexibility (the amount of float) on various logical network paths in the project schedule network, and to determine the minimum total project duration.” (PMI, 2008, p 423). Although the Performance Evaluation and Review Technique (PERT) Chart is still used, it has generally been superseded by the activity-on-node diagram, where each activity (task) is shown as a box, and arrows represent the logical relationships going from predecessor to successor (commonly used in scheduling tools and referred to as the Activity Network or Network diagram).
Project Management Institute (PMI) (>40 years old) – Since its founding in 1969, this world premier project management organization has grown to be the professional association of choice for project management professionals. Growth over the past couple of decades has been exponential, largely fueled by the demand for competent and certified project managers in the public and private sectors. PMI is the world’s leading not-for-profit membership association for the project management profession, with more than half a million members and credential holders in more than 185 countries, and offers the most widely recognized and sought after industry credentials.
- Project Management Tools (< 30 years) – In 1982, Primavera Systems, Inc. was launched by Joel M. Koppelman and Richard K. Faris, fellow engineers and colleagues for a dozen years. A decade later, Ludovic Hauduc was making his way from France to America to work on the development of something called Microsoft Project. Over the past 30 years, these tools have led the industry in defining how individuals and large corporations manage projects. More recently, portfolios have become a common topic for discussion as organizations grow in complexity and size, resulting in the need for a richer set of tools, methods, and skilled practitioners.
New Agile Management Methods (< 20 years) – Also referred to as Extreme Project Management or Agile Project Management, iterative methods of determining requirements and for delivering projects are now being utilized in a highly flexible and interactive manner (e.g., Scrum). These methods are primarily used with software development projects where the more traditional Waterfall Method is being criticized for not being able to cope with constant changes, and where scope and requirements are not well understood.
PMI Scheduling Community of Practice (SCoP – formerly known as the PMI College Of Scheduling) (< 10 years) – was originally established in 2002 by a number of PMI members who wished to provide access to a community of practitioners with shared interests in promoting best practices in project scheduling. The mission of the PMI SCoP today is to provide a forum for professionals to promote excellence in scheduling through virtual networking (via the SCoP portal) by sharing project experiences, providing and receiving training, along with providing support and encouragement for the ongoing development of the PMI Project Management Body of Knowledge (A Guide to the Project Management Body of Knowledge [PMBOK® Guide]) in the areas of scheduling and time management, and supporting project managers in their Project Management Professional (PMP)®, and PMI-Scheduling Professional (PMI-SP)® certification efforts.
New standards such as the PMI Scheduling Standard (< 5 years) – now in its second edition, this standard was developed as a complement to the PMBOK® Guide's Time Management Knowledge Area. This practice standard describes the methods related to scheduling that are generally recognized as good scheduling practice for most projects most of the time. The standard also includes common information from accepted project management practices from a number of industries.
Technology (ongoing) – Technology has continued to develop at a rising speed. We have moved from the computer mainframe, to the departmental mini, to the desktop, and are now moving to the cloud, all in less than a quarter of a century. As technology continues to develop to rise to marketplace demands (e.g., Business Intelligence, Work Management, etc.), methodology will need to keep pace with the capabilities of ever-evolving tools.
Project management as a practice, and a growing industry in and of itself, has significantly evolved over the last century with tools and methodologies to drive skill competencies, such as scheduling.
The Key Elements of EPM and Their Impact on Organizational Success
As project management practice has developed, business needs have evolved as well. While a common starting place for organizations new to project management, the end goal is no longer solely a schedule to represent tasks, work effort, and project progress. The business marketplace has new demands for higher visibility into project initiatives and resource management. In other words, project management has been taken out of just individual projects and has been introduced and applied across the enterprise.
EPM is a set of methods, processes, tools, and technical and specific knowledge area capabilities for managing all data regarding projects that an organization might seek to develop and complete. Although conventional project management focuses on processes regarding one project at a time, enterprise management is most effective by supporting all projects that an organization might pursue. Critical planning and oversight functions are performed by executives or managers who are responsible for making decisions regarding workflow and budget that drive the entire organization. Some of the significant components of EPM are development of a project portfolio model that aligns projects to the priorities of the business; a set of programs/projects that reflect the work, resources, and schedules that have been selected for detailed planning and subsequent execution, and Business Intelligence capability (e.g., dashboards, reports, etc.) that provide key milestone, financial, and other performance data to the various stakeholders within the enterprise.
The following key elements are critical components toward the overall success and adoption of EPM:
Business Requirements of the Organization – is a vital part of a successful project management practice. The Standish Group’s Chaos Report (and other publicly available research) has shown this. Without clear business direction and objectives there is no way to measure how the work effort and cost being spent on project initiatives are supporting the business. Furthermore, there is no measure for how projects are driving business forward. Lack of recognized business requirements will result in poor business returns and will lead to ad-hoc project decision making to meet low level immediate needs, rather than bigger picture goals.
Project Portfolio Methodology – includes a set of governance principles that provides a governance framework or structure. It also provides controls that enable and sustain an oversight capability, and outlines a definition of decision-making authority. Controls are put in place, which ensure the legitimate exercise of authority and decision-making, such as governing roles and responsibilities. This methodology, through a governance approach, supports the project to business objective alignment that is a central element in EPM. Furthermore, to facilitate governance, it has become essential to be able to manage, monitor, and assess the status of all projects in the enterprise, through a set of uniform EPM processes, methods, and tools. Organizations that adopt an EPM approach often set up a Project Management Office (PMO) to assist and support execution of the EPM strategy and may also select and adopt a project management methodology, such as PRINCE2® or the PMBOK® Guide.
Project Management Methodology – is the “application of knowledge, skills, tools, and techniques to project activities to meet project requirements.” (PMI, 2008, p. 435). Although there are a variety of project management methods (approach), project management’s primary focus is on how work/deliverables (scope) are to be completed, in accordance with an allocation of resources (cost), over a specified time (schedule), while weighing potential additional constraints (risk, quality, etc.). This is a core base for effective EPM. The requirement to run projects efficiently must be in place before work effort can be aggregated to an enterprise level.
Business Process Management (BPM) – a massive strength to EPM is that it folds in business processes and systems to ensure that the business aspects of project work are present. The ability to identify related processes, repetitive processes, and conflicting or competing processes allows for streamlining the approach to how an organization develops its project management approach. “Because BPM allows organizations to abstract business process from technology infrastructure, it goes far beyond automating business processes (software) or solving business problems. BPM enables business to respond to changing consumer, market, and regulatory demands faster than competitors creating competitive advantage” (Business Process Management, 2011, ¶7).
PPM Tools – are used to manage and measure the performance of all projects within the enterprise. PPM tools also help the organization determine alignment of the proposed projects to the organizational business priorities, and help determine overall achievement, or lack thereof, of the portfolio (“A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives”. (PMI, 2008, p. 433); whether the project’s performance will negatively impact other projects; which projects in the portfolio are inter-dependent, and whether the project will deliver the desired results and benefit to the organization.
Competencies of the Practitioners – such as planning and scheduling are critical competencies that are required by project managers in all disciplines. Scheduling is certainly one critical aspect of EPM; however, it is only one of many competencies required for successful project planning, execution, and control. Other critical competencies required for the successful adoption of EPM include: technology skills, domain expertise, business process aptitude, and communication skills and other related “soft” skills. To function at a highly competent level in the modern project management environment, there is significant need for competency development, beyond the baseline project management knowledge areas, of which much is gained through a PMI certification, such as the PMP or Scheduling and Risk competencies, and technical competencies. It is also imperative in EPM that practitioners continue to develop their competencies on an ongoing basis.
PMI, Industry, and de-facto standards – according to PMI, “standards are established by consensus and approved by a recognized body that provides for common and repeated use, rules, guidelines or characteristics, for activities or their results, aimed at the achievement of the optimum degree of order in a given context” (PMI, 2011, ¶3). Knowledge of industry standards is critical when creating an EPM framework to ensure the structure and approach are fitting to the organization and attainable by its people.
Industry Best Practices – are generally accepted, informally standardized techniques, methods or processes that have proven themselves over time to accomplish given tasks. Best practices are applied in conjunction with standards to create a firm foundation that can support business goals and growth.
Benefits Realization Management (BRM), Return on Investment (ROI) – according to Wikipedia, “Benefits Realization is the explicit planning, delivery and management of whole life benefits from an investment. An investment is only successful if intended benefits are realized and Benefits Realization Management supports key choices and actions to achieve this success” (Benefits Realization Management, 2011, ¶1). Working in concert, ROI “is the ratio of money gained or lost (whether realized or unrealized) on an investment relative to the amount of money invested” (Rate of Return, 2011, ¶1). Another way of looking at both of these is the ability to identify the value (positive or negative) that is produced by the effort/capital investment (that can be quantified and measured), which should be aligned to the business priorities of the enterprise.
EPM is designed to address the complexities of business. As an organization grows and multiplies its project efforts, a broader set of management principles needs to be put into place to handle the work. EPM involves many facets of an organization and development of an EPM approach reaches deep into the project management practice.
Organizations that do not develop an EPM approach will not be in a prime position to reap the successes from its project initiatives. As seen from the list above, EPM not only utilizes project management tools, it requires a thorough understanding of the organization’s cultural DNA to best reflect alignment of project work to business goals. By applying effective EPM methodology across the enterprise, organizations see a return on organizational development and work and process efficiencies aimed at supporting strategic business growth.
Introduction to a PPM Maturity Model
Keeping in mind the idea of organizations entering project management at its base level (to address immediate pains, or needs, usually resulting in applying scheduling techniques to project initiatives), the question bears to ask: What comes next?
Organizations cannot jump into high level EPM, as they have not executed the steps required to building a firm foundation to support more complex project management approaches, especially multiplied across the enterprise. They must first ensure they have put in place the essential building blocks to support their growth, such as effective scheduling practices and team competency development.
There are levels of PPM maturity that are easily identified. Being able to know where the organization is on this scale will allow the application of EPM to best fit their needs and support the organization’s success. Jump too high too soon and the effort will crumble from the holes in the foundation that resulted from lack of preparedness for EPM.
Effective EPM results in bringing together the relationships between the Business Process Life Cycle and the PPM maturity levels. A PPM maturity model can minimize negative effects of poorly executed projects in an organization with little or no formal project management and provide a roadmap to scale with the organization as they begin to move to more sophisticated methods of project execution. PPM also assists an organization to maximize the positive organizational and cultural changes innate in the maturity growth pattern to sustain adoption and tolerate the new processes and methodology being put in place.
Levels of PPM Maturity
The five levels of this PPM Maturity Model cover the spectrum of how organizations and the project management community can view EPM and outline a roadmap for how they can progress from simple ad-hoc task management, to complete end-to-end Portfolio Management, Knowledge Management, and eventually Strategic Execution.
1. Low PPM Maturity – no organization consciously chooses to be at a basic level of maturity. Managing projects and initiatives is usually an organic process that begins with “what works” and quickly becomes inadequate as the organization begins to grow beyond its original parameters. As organizations gain in their understanding of how to get things done, an effective set of processes, tools, and technologies are implemented, usually resulting in improved organizational efficiency.
2. Growth of PPM Project Management – at this level the introduction of project management tools and methodology provide a better means of managing projects by assisting users in the management of work, analyzing the added information regarding the time and resources allocated to the tasks, allocating costs and budgets, and creating schedules to aid the team with the planning of deliverables for their projects.
3. Progressing Level of PPM Program Management – as the complexity of business interactions increase, the need for a higher level of consolidation (creation of programs) also occurs. The integration of business intelligence metadata needs to be threaded within the project management structure. Stand-alone tools make it difficult to consolidate or “roll-up” data to support the needs of Demand Management, Capacity Planning, Prioritization of Work, and Business Value Planning.
4. Progressing Level of PPM Portfolio Management – portfolios of projects or programs, and other work that are grouped together, can now be initiated to facilitate effective management of that work to meet the strategic business objectives of the business. Additionally, Business Intelligence and Reporting provide senior executives with portfolio, program, and project data, presenting current and accurate information to assist in making informed executive and managerial decisions. PPM is now enabling organizations to begin taking advantage of visibility of bottom up analysis (a rolling up of task work/efforts/results) as well as top down analysis (ensuring the alignment of project initiatives to strategic business goals).
5. High Level of PPM Strategic Execution – at this level of PPM maturity it becomes clear how Portfolio Strategy is influenced by the vision and long-range intentions of an organization. Moving along the Strategy and Vision segment of the model, we can also see how Business Goals and Priorities, which are established and overseen at the Executive Level, can incorporate the key metrics to help direct and measure the delivery of work by program and project teams.
In this PPM Maturity Model, business needs and growth are addressed alongside project execution maturity. As adressed earlier, an organization will ensure success by matching its current maturity level to the appropriate metrics. If an organization jumps to using large server level technology tools, and has never touched the basic program, they inevitably fail at implementing the tool to take advantage of its fullest capability and the organization will also fail to adopt the implemented change. Conversely, by pacing its growth via the PPM Maturity Model, organizations have an easily visible roadmap laid out before them, ensuring cultural adoption and successful implementation and organizational change.
In understanding the relationships between the Business Process Life Cycle and PPM maturity, it is important to keep in mind that the Business Process Life Cycle includes (although is not limited to) the following key elements:
Strategic Planning – simply stated, is an organization’s process of defining its long-range intent, goal setting, key perfmormance metrics, and strategy, and making plans/decisions on how to allocate its resources to pursue the strategy, including its financial and personnel resources.
Strategic Execution/Executive Oversight – “Vision without execution is hallucination” is a lesson we learned from Thomas Edison. Throughout most organizations there exists a serious disconnect between the Strategy of the Enterprise and the Execution of Work by its practitioners. There is a lack of cohesive oversight of a broad organizational basis due to disparate, non-integrated (disconnected) portfolio, program, and project metadata.
Subsidiaries, Products and Departments – enterprises and their programs and projects are typically divided into geographic subsidiaries, and thus programs and products result in the responsbilities being divided into departments, and other organizational units. This spreading out of initiative focus and work effort requires diligent PPM oversight to ensure the alignment with business strategy remains intact.
Work Delivery/Project Team – enterprises often employ matrix organizational structures where individuals from internal organizations with specific skills are utilized for projects/work delivery. It is imperitive to understand the organizational structure prior to attempting to deploy an EPM approach. Organizational change factors can be addressed within the PPM maturity model at the right level for the organization facilitating the necessary cultural change. This is definitely not something to overlook. It is important to remember that although we are speaking of business objectives in this section, the work is completed by the project team. If the project teams are not in line with the EPM strategy project results will vary, and usually in a negative way.
The above illustration (Exhibit 2) outlines the business operation typically in motion with the project management environment. As the organization grows in its tool usage and project management methodology application, the more advanced EPM techniques can be applied, such as Demand Management, Capacity Planning, and Business Value Planning.
The Future of PPM
So, in light of the evolution of EPM via the PPM Maturity Model, where does scheduling fit in?
Historically, “work” has always been identified and managed naturally, as part of the process of humans realizing progress. Project management standardized and formalized segmenting one type of work element over others –calling them “tasks” or “work packages.” There were still other activity pieces and informational metadata not formally categorized. The gaps and business pains that have been developing over time as companies grow across the globe is that unidentified work elements are becoming more critical. More importantly, time and effort being applied to those non-captured work elements deprecates the resource capacity without visibility to project stakeholders — similar to the old phrase “where did the time go?”
As the work force continues to evolve, the use of technology and penetration of innovative business ideas also evolves. Demand for information from a status perspective is equally in demand as information of work that needs to be completed. Business practices and related competencies such as six-sigma, lean management, value stream mapping, and agile were ways to identify those demand “constraints” that were increasing the load on resources. So, the business stakeholders were influencing the development of approaches, initiatives, and practices to capture work-related demand and drive to completion based on capacity. More recently, capacity planning and management have adopted multiple dimensions by considering many variables against the same named resources (e.g., skills, location, availability, cost, etc.). With current technology options and the ability to apply many practices, organizations are able to schedule and complete work at an enterprise level from program scheduling to task scheduling to forecasting at a strategic level.
As mentioned before, scheduling is an essential building block to any project management approach. It is only through documented task definition, resource allocation, and project progress tracking that organizations gain any visibility into the results of their project efforts.
If we take into account the wealth of information available, both scientifically via research firms or organically via social channels, the industry forecast is shaping up to support that the evolution of scheduling work and resources to address the required work needed to completing a project is scaling with EPM capabilities. Scheduling is no longer relegated to creating a Gantt chart. Scheduling is an integral part of mature project management application enterprise-wide. For example, effective and detailed scheduling creates the data for executives to conduct Demand Management to balance the ability to execute on a project given the resource availability now visible through EPM.
Companies are starting to embrace enterprise-level scheduling. Project management practices weren’t the first to identify specific work components that needed to be identified and segmented for resource assignment to efficiently attain completion of work, but it is the project management practice that is catapulting organizations into robust project and resource visibility to develop business goals and strategy execution, and scheduling is the gateway to the data.
This white paper introduced the concept of using a PPM Maturity Model to help organizations realize the full potential of an EPM solution – a proposed framework that facilitates communication with everyone involved; minimizing the impacts of change when organizations move from a basic way of managing work to more sophisticated levels of project management best practices, methods, tools, and technologies. Matching an organizations growth pattern to the PPM Maturity Model empowers that organization to take full advantage of tried and true process management in its current level of project management application, while growing into more advanced EPM techniques. This growth is supported by sound scheduling practice.
If the industry trends continue in the same direction they are going in, the future of scheduling will inevitably force practitioners to cultivate their skills and competencies through multiple sources, such as PMI certifications (e.g., PMP, PMI-SP) and technological certifications. As business needs continue to grow in complexity, the tools with which scheduling is done will continue to match the needs of that complexity. This also means that practitioners will need to grow their business savvy as well to meet the demand of pairing task-oriented project management with business and strategy foresight.
More changes will inevitably come. Some are facing us right now, such as mobile device access to project data across multiple operating system platforms, the rise of collaboration technologies, especially for global teams, and ideology innovation such as Work Management. The future is bright for EPM. Demand continues to grow. This is the time to hear the call for scheduling practitioners and meet the challenge of bringing EPM into the 21st century business marketplace, leading organizations by delivering data-driven results.
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©2011, Tim Cermak, Doc Dochtermann, A. Lynn Jesus-Olhausen
Originally published as a part of 2011 PMI Global Congress Proceedings –Dallas, TX