Mastering Portfolio Management with Project

Online

Jakub MarciniakSolution Consultant, DeltaBahn, LLC

Part 1/5: Define Business Drivers

Define Business Drivers

Create Driver Prioritizations

Create Portfolio Analysis

Perform Scenario Portfolio Analysis

Adjust Project Portfolio

Portfolio Management with Project Online FrameworkWhat are business drivers, how to derive them from the strategy and how to define and prioritize them in Project Online

How to prioritize business drivers to achieve the desired portfolio allocation; how to create sets of business driver prioritizations for different organizational entities of portfolio analyses

How to associate projects with business drivers; how to create a portfolio analysis based on resources and cost

How to analyze cost and resources based on multiple scenarios of portfolio analyses in Project Online

How to improve the project portfolio continuously to achieve the desired results for project resource allocations and to control portfolio performance and cost with Project Online

Define Business Drivers

Create Driver Prioritizations

Create Portfolio Analysis

Perform Scenario Portfolio Analysis

Adjust Project Portfolio

Mastering Portfolio Management with Project Online: Define Business Drivers

A “Business Driver” is a brief statement that defines clearly and specifically the desired business outcomes of the organization along with the necessary activities to reach them.

For example:Improve Product Quality of Luxury Brands

Corporate Strategy Organizational

Structure / Integration

Business Strategy and Short-term

Operating Objectives Business

Structure Integration

Incentives and Controls

Executing Strategy: Key Decisions and Actions

Structure follows strategy

Business Drivers are short-term objectives defined for business units and downwards

Incentives must reinforce strategic and short-term objectives

Controls provide feedback

Source: Executing Strategy: Key Decisions and Actions, adapted from: Hrebiniak, Lawrence G. "Overview and Model: Making Strategy Work." Making Strategy Work. First ed. New Jersey: Pearson Education, 2013. 42. Print.

Questions to support identifying current business drivers or creating new ones

Corporate Strategy What is our corporate strategy? What are the major strategic initiatives and what stage

are they in? (in progress, succeeded, failed, on hold, …) How do we measure the extent to which we achieve our

strategic goals for the years defined? (for example five, three, one year)

Why did our strategy change? How did it change?

My organizational entity What is the strategy of my organizational entity? What are the major strategic projects in my immediate

environment? How do we measure the extent to which we achieve the

desired benefits from those projects?

Vision Strategy

Business Drivers

Portfolio KPIs

Corporate Level

Business Unit

Department

KPIsProjects

Levels of Business Driver Definitions, Portfolios and Projects

Projects Projects

Clarify and communicate the strategic direction

Explicitly align projects to strategic objectives

Establish strategic priorities

Measure outputs and outcomes

Purpose and goals of Business Drivers

Balanced Scorecard

With a balanced scorecard approach, business drivers are

Grouped logically Quantifiable Precise

A balanced scorecard diversifies the portfolio design

Balanced Scorecard Framing, adapted from: Emett, Scott A., and William B. Tayler. "Is Your Strategy Evaluation Biased?" Strategic Finance November (2013): 27-34. Print. (Diagram: 28)

Design Allocation Actual Allocation: Previous Year Actual Allocation: This Year

60%50%

60%

15%

20%

20%

10%

5%

5%

10%

5%

10%

5%

20%

5%

Financial Customer Internal Process Employee Learning / Growth Other

Balanced Scorecard percent allocations

Portfolio Performance over multiple periods can be compared based on the allocations of the design

Adapted from: Kodukula, Prasad. Organizational Project Portfolio Management: A Practitioner's Guide. Plantation, FL: J. Ross, 2014. Print. (Page 96, Figure 8-1: Percent allocations and project categories base on balanced scorecard domains)

Element to

measure

Focus or area of

emphasis+Verb

Maintain Conserve Align Assure

Reduce Eliminate Diminish Avoid

Improve Increase Augment Accelerate

The verbs used to define the Business

Driver should promote an action…

Suggested verbs are

Examples: Increase sales in the metropolitan areas Reduce the annual cost of operations

Good Practice for Naming Business Drivers

+

Leading questions to define the impact levels of the business driver

How many organizational elements (business units, departments, functions) are affected?

What is the range of percentage that is appropriate according to our goals?

Is efficiency involved? (measures from the ITIL service portfolio catalogue or six sigma)

Can the business driver levels be defined by an index that consists of different qualitative elements based on a scoring model (1-5, 1-10, 1-100, stepwise, …)?

90%

High-maturity

organizations

47%

Low-maturity organizations

Strong C-Level support for Project Portfolio Management (PPM)

Project Portfolio Management enjoys strong C-Level support in high-maturity organizations.

Adapted from: "The Practitioner's Perspective: Winning through Project Portfolio Management." PMI Thought Leadership Series (2015): 1-16. Project Management Institute (PMI). Project Management Institute (PMI), Inc., Nov. 2015. Web. 19Dec.2016.(Page 11)

How to define Business Drivers in Project

Online

Navigate to Driver Library

Driver Library

Create a new Business Driver

Summary

Business drivers are specific for each organizational entity and derive from its strategy.

By using a balanced scorecard approach, business drivers can be defined precisely.

A Business driver needs to be broken down into various levels that measure the expected impact of individual projects.

Q & A

Q: I don’t see the “Driver Library” on the left side. What can I do?A: Edit Links in the Quick Launch navigation

A: Set up departments Assign user to departments Assign Business Drivers to Departments

Q: How do I show/hide specific business drivers from Project Online roles?

A: Set up departments Assign user to departments Assign Business Drivers to Departments

Q: How do I show/hide specific business drivers from Project Online roles?

A: Set up departments Assign user to departments Assign Business Drivers to Departments

Q: How do I show/hide specific business drivers from Project Online roles?

A: Set up departments Assign user to departments Assign Business Drivers to Departments

Q: How do I show/hide specific business drivers from Project Online roles?

A: Set up departments Assign user to departments Assign Business Drivers to Departments

Q: How do I show/hide specific business drivers from Project Online roles?

A: Set up departments Assign user to departments Assign Business Drivers to Departments

Q: How do I show/hide specific business drivers from Project Online roles?

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