Introduction:
Portfolio Management is comprised of principles, techniques, and practices that assist organisations to focus on change as a whole, rather than individual initiatives. It is designed to guide the selection of appropriate projects and programs to suit organisational strategic objectives, and to optimise delivery of value for stakeholders. Defining and delivering a portfolio can have its challenges, especially when emergent strategic priorities take precedence that require new investment and therefore the framework needs to have flexibility to adapt to changing conditions. Visibility across the portfolio’s composition and delivery status provides for this ongoing decision making and supports greater predictability of outcomes.
Problem:
A NSW local government entity’s newly created central PMO had a remit to establish a portfolio management function. This was to better assure that projects are those that are best placed to meet the Council’s strategic objectives and once in-flight, to provide comprehensive governance oversight and support for project delivery.
This had followed an independent review and recommendations that observed that Council had a wide scope of projects, however governance groups operated in a disjointed manner and projects were being prioritised, managed and delivered in a siloed manner. Additionally, there was no overarching view of the collection of projects, or the planning and optimising of resources and annual budget to deliver them.
The PMO engaged the market seeking a partner to assist with the establishment of a portfolio approach to deliver Council’s disparate initiatives.
Objective:
Once appointed, myP3’s main objective was to establish Project Portfolio Management at Council through development, implementation and advisory assistance of a set of several sub-objectives. These included:
- alignment with strategy
- prioritisation for both grant funded and unfunded initiatives
- resources planning and optimisation
- achievement of Capex expenditure annually
- integration with their Community Strategic Plan and Operational Plan
- managing Council/Councillor expectations
- enhancing transparency and accountability
- to foster a culture of learning.
Overview:
myP3 commenced the engagement with a full end-to-end review of organisational governance and business process integrations to identify the functions that the central PMO needed to perform and support.
Our next step was to establish an appropriate Portfolio Governance Structure and Board memberships. This required an overarching Enterprise Portfolio with several sub-Portfolios (environment, planning, etc) aligned with their Community Strategic Plan. A Board Terms of Reference with responsibilities catered for each were defined and agreed through consultation with the senior leadership teams.
The new Portfolio Management Framework closely followed, comprising of Portfolio Definition and Delivery cycles (aligned with MoP®) which were described in Portfolio Management Standard outlining principles, processes, responsibilities, and practices. This information served the business to systematically define and deliver the right change initiatives to support the ongoing achievement of its strategic and operational performance objectives.
The detail of the Framework was supported with an Artefact Catalogue comprising a wealth of usable references and materials including templates, tooling, run- sheets, factsheets, reporting dashboards, checklists, templates, user guides and a RACI.
A Portfolio Initiative Assessment Tool was developed to cater for each separate sub-Portfolio’s work types and criteria for strategic contribution, feasibility, and readiness definitions along with rankings to enable prioritisations. Comparative Value Plots were the output for each.
Using this approved Definition, myP3 facilitated the ‘triage’ of the portfolio and allocation of individual initiatives into their appropriate governance sub-Portfolios. Utilising this approach, the number of projects was consolidated by 60% providing greater clarity of the work planned, and full visibility of related projects.
With Portfolio Definition practices established, the next step was to adjust their existing Project Framework to address misaligned elements (resource and benefits management perspectives) needed for Portfolio Delivery.
Throughout development, myP3 provided advisory, mentoring, and training to all levels within the business and to Governance Boards to guide them in effective operation and management of the Portfolio Management Framework and to help embed the new practices. In true partnership, we continue to provide this service on an ad-hoc advisory basis.
Outcome:
Organisational uplift in knowledge, understanding and importance of Portfolio Management with strong Executive-level support for its practice within the Council due to the implementation’s success and adoption.
Evidence-based confidence that all approved projects are of strategic value to Council’s Community Strategic Plan and Operational Plan.
Increased accuracy of forecast expenditure from 60% to 90% of actual spend through a better understanding of the business’s overall capacity to deliver.