Executing Programmes and Portfolios
Write an analysis of how an organisation about to embark on a number of major programmes for the first time can benefit from developing a generic model of the programme life cycle.
Executing p rogrammes and p ortfolios:
Programme life cycles:
In previous weeks’ sessions you focused on some of the complexities of the wider environment in which programmes are formulated. These included the issue of dealing with a wide variety of disparate stakeholders and the need to understand the organisational contexts and the appropriate structures to respond to the demands of these stakeholders and contexts. When establishing systems and processes to deal with the life cycle through which programmes are created, and ultimately terminated, it is crucial to ensure that consistency and integration with this wider environment is maintained. This need for consistency and integration is neatly summarised by Thiry (2010) in his introduction to a discussion of the programme life cycle, as follows:
‘The program management life cycle needs to reflect the rhetoric and concepts of strategic long-term management, rather than the product-centric short term view of project management in order to gain executive management support and truly be able to support strategic decision management’. (Thiry, 2010, p.97)
This statement stresses the importance of recognising that the programme life cycle is not the same as the cumulative project life cycles of all the individual projects that make up a programme. Yes, both programmes and projects go through life cycles; yet, if the two are taken in comparison, the perspective of the systems and processes established to manage a programme is on a longer time scale and at a more strategic level than those systems and processes set up to manage projects.
In the literature, you will find various different sources of programme life cycle models. Thiry introduces what he terms as five ‘generic stages or processes’ (Thiry, 2010, pp.99-100).
The focus of the stages/processes in Thiry’s model is summarised in the table below:
Stage/Process Focus
Formulation Defining the expected benefits (through
stakeholder analysis and [possibly] the
creation of a functional blueprint)
Organisation Developing the detailed business case,
technical blueprint and operational procedures
and structures
Deployment Delivering capabilities through individual
projects and related programme activities
Appraisal Assessing benefits realization and evaluating
p rogramme success
Dissolution Agreeing timing and grounds for dissolving the
programme and, hence, triggering the closure
process ( including the implementation of the
long – term benefits measurement process)
Table 1: Stages and process of the programme life cycle (from Thiry, 2010, p.100 )
Other sources provide models that are variations on that presented by Thiry. For example, the UK Office of Government Commerce (OGC), now provided through the auspices of the Department for Business Innovation and Skills (BIS), presents a number of high-level ‘transformational processes’ that a programme moves through from its initial inception, which is triggered through some form of programme ‘mandate ’ through to termination. These processes are ‘Identifying the Programme’ , ‘Defining the Programme’, ‘Managing the Tranches’ , and ‘Closing the Programme’ . Within ‘Managing the Tranches’ are two broad activities: ‘delivering the capability’ and ‘realising the benefits’ (Department for Business Innovation and Skills , 2010, pp.14 -15).
The Project Management Institute Standard for Program Management conflates the activities further into three broad phases, which are labelled as follows: ‘program definition’, ‘program benefits delivery’ and ‘program closure’ (Project Management Institute , 2013 c, p.9). The propensity for a three-phase life cycle is also evidenced in the academic literature. For example, Lycett , Rassau and Danson (2004) present such a model with the phases being: Stage 1 ‘Programme Identification’ (creating a vision, aims and objectives), Stage 2 ‘Programme Planning’ (formulating design, approach, resourcing and responsibilities) and Stage 3 ‘Programme Closure’ ( benefits
realisation)—see Figure 3 on page 297 of the authors’ conceptual paper.
A comparative analysis of the different models reveals some common principles or areas of agreement.
1. The ability to execute the programme—in terms of the project management of the constituent projects and associated project programme management (PPM) activities—is predicated upon the effectiveness of the stage(s) undertaken at the start of the programme life cycle. Depending upon the model used (see the examples above) these stages are labelled: ‘formulation’ and ‘organization’ (Thiry, 2010); ‘ definition’ (Project Management Institute , 2013 c); ‘ identifying ’ and ‘defining’ (Department for Business Innovation and Skills, 2010); and ‘identification’ and ‘planning ’ (Lycett, Rassau a nd Danson, 2004).
2. A fundamental task to be undertaken is that of benefits management/realisation. Reflecting its importance, some models have distinct phases solely focused on this topic, e.g. the PMI life cycle has ‘program benefits delivery’ (Project Management Institute, 2013 c). Some models regard the task as being undertaken as part of the programme execution. For example, it is undertaken as part of ‘managing the tranches’ in the BIS (2010) model. Other models place it in the post-execution phase(s); e.g . Lycett, Rassau and Danson (2004) have it as an integral part of ‘programme closure’. (The topic of benefits
management/realisation is the focus of next week’s Key Concept Overview.)
3. All models stress the importance of a formal process to be undertaken after all the projects in the programme have been finished. Hence the existence of such phases as: ‘dissolution’ (Thiry, 2010); ‘closing the programme’ (Department for Business Innovation and Skills, 2010); and ‘program/programme closure’ (Project Management Institute , 2013 c, Lycett, Rassau and Danson, 2004). Regardless of the name, this phase involves the formal closure and termination of the programme and the instigation of processes for ongoing long-term benefits measurement.
4. Regardless of the number of phases identified, the processes that make up the phases are iterative and often cyclical and overlapping. The processes are also distinct from, though complementary to, the project management processes.
5. The processes are ‘transformational’ in the sense that they lead to and manage change. This change management involves some formal control over the move from one phase of the programme to the next, i.e. by establishing end-of -phase, phase gate, go/no-go decision points between the different phases. Gover nance of projects in portfolios
You will recall from the session on organisational context in Week 2 that an important responsibility of project portfolio management (PPM) during the execution of a programme/portfolio is that of governance. As articulated by the Enterprise Portfolio Management Council (EPMC), demonstrating good governance enables an organisation to answer the question: How well are we executing? (Enterprise Portfolio Management Council, 2009, p p.10 -12). In Chapter 5, the EPMC focuses in mo re detail on this question by developing a short scenario involving Chris, a lead for PPM, reporting to a c hief information officer (CIO), who in turn, reports to a CEO. The scenario involves Chris developing a PPM process map showing the steps to be taken through the PPM life cycle (see Figure 5.1. p.71). This map is developed in response to a number of questions asked by the CEO that, at first, could not be answered by the
CIO. These are paraphrased below:
Q1 Since we ask that the project come to the [project governance] council with a cost estimate accuracy of plus or minus 10%, how often do they finish within that range?
Q2 Do all of the technology projects support one of our current corporate priorities and, if so, what percentage of the total project spend is directed towards each priority?
Q3 What is the prioritisation for the entire portfolio and what do the business leaders agree are the top ten projects?
Q4 Since all of the projects are approved with a business case involving project benefits, how often do we achieve those benefits and to what level? (Enterprise Portfolio Management Council, 2009, p.70) Developing a process map enables these questions to be answered and governance to be undertaken as key steps are formalised and made transparent, such as: how projects are approved/not approved and prioritised, how they are tracked during their execution (including changing priorities) and how the projects are evaluated at their completion. Too and Weaver (2013) developed a framework for effective project governance to optimise the management of projects. The authors consider the widerorganisational context and present a petal diagram of governance, with each petal representing the broad areas in which an organisation needs to govern (see Figure 1, p.3). This diagram shows that as well as the traditional area of financial governance; there is a requirement for governance of people, change, relationships, viability and — sustainability . The core values that enable these disparate petals to be effectively governed are, according to the authors, having a strong commitment to ‘corporate social responsibility’, a ‘vision’ and high standards relating to ‘ethics’. Structures, such as project governance councils, ensure that these values are reflected in practice. On page 8, Too and Weaver present their project governance framework, which, in the authors’ own words, ‘… provides a mechanism not only for evaluating prospective projects but also for their continuous review in the context of their suitability to the current environment and relative to other projects in the portfolio’ (Too and Weaver, 2013, p.7).
On pages 6-10 they provide a narrative explaining the different elements of the framework. Their concluding remarks are noteworthy. They state that good governance is very much about finding the optimal balance between 1) portfolio management 2) [individual] project sponsorship 3) project management offices (PMOs) and 4) [individual] programmes and projects.
Thus, focusing on optimising one particular element, such as maximizing the performance of a specific project or programme at the expense of others, can lead to sub-optimisation at the higher organisational level.
Project portfolio control:
As well as demonstrating effective governance during the execution of PPM, there is a requirement to demonstrate adequate control. The relationship between portfolio control and success was the focus of research undertaken by Müller, Martinsuo and Blomquist
(2008). The authors operationalised these two constructs as follows:
1) portfolio ‘control’—selection , reporting and decision-making (p.30)
2) portfolio management ‘success ’ achieving results (the common measures of project success, i.e. delivering customer satisfaction, meeting cost, time and quality objectives, delivering financial results and user requirements) and achieving purpose (achieving project and programme-level purposes) . (p.34)
They also analysed the influence of a number of moderating variables on the relationship, such as type of governance mechanism, industry and project type. Müller, Martinsuo and Blomquist (2008) collected data from 242 respondents to a web-based survey sent out via various project management professional bodies. The respondents were managers working with programme and portfolio management. Firstly, the authors undertook factor analysis to confirm the elements of their portfolio control and project success constructs. Then ANOVA analysis and regression analysis were used to explore the influence of the moderating variables and, finally, the relationship between control and success was investigated using regression analysis. Key findings from the analysis are:
• Different portfolio practices are associated with different measures of portfolio management performance
• Strategic portfolio selection was positively associated with achieving results
• Portfolio reporting was positively associated with achieving purpose
Based on their research findings the authors make some useful recommendations for practice (see pages 39-40, ‘Managerial implications’), which encompass the topics of communication and reporting; measurement (metrics), review and comparison; decision-making and selection processes.
References:
(Note: The complete references used in the Key Concept Overview can be found in this week’s Learning Resources.)