IT Project Portfolio Management in Herning Kommune

Kim Nielsen Ranch Kim Nielsen Ranch Kim Nielsen Ranch Kim Nielsen Ranch Project Manager in Herning KommuneProject Manager in Herning KommuneProject Manager in Herning KommuneProject Manager in Herning Kommune

Developing maturity in IT PPM Developing maturity in IT PPM

(Project Portfolio Management) (Project Portfolio Management)

in Herning Kommunein Herning KommuneNovember 2012

Agenda

1. Why we work with IT PPM?

2. How mature is Herning Kommune in IT PPM

3. How to focus on development of IT PPM?

4. What is the status of IT PPM in Herning Kommune?

5. Discussion

Why we work with IT PPMWhy we work with IT PPMWhy we work with IT PPMWhy we work with IT PPM

Why we work with IT PPMWhy we work with IT PPMWhy we work with IT PPMWhy we work with IT PPM

Master Thesis in 2011/12 covered how IT and digitization projects are:

started, selected, prioritized and decided

in relation to ensuring consistency between strategies, goals and projects.

Why we work with IT PPMWhy we work with IT PPMWhy we work with IT PPMWhy we work with IT PPM

Master Thesis concluded:

• IT and digitization projects are started, selected, prioritized and selected decentralized and with high degree of decentralized project and financial anchoring

• IT Governance structure with 1 central and 5 decentralized IT steering committees are challanged by the decentralized project and financial anchoring

• The steering committees have small IT budgets (reduces the decision rights)compared to the total IT budget (most budgets placed in the departments and with managers).

• IT project and PPM model (Octoportal) is not used efficiently and is not supported

or used by the steering committees (process is unclear and not accepted)

• Aligment and coordination between IT and business strategies are found difficult

by the steering committees due to the decentralized project and economic anchoring and non updated and coordinated IT plans.

Why we work with IT PPMWhy we work with IT PPMWhy we work with IT PPMWhy we work with IT PPM

• Many projects in the organization (especially many small projects)

• Short-term projects are often prioritized instead of long-term projects

• Lack of coordination and clarity between strategies and projects

• High degree of individual influence on, which projects are implemented

• It is often difficult to find, prioritize and assign resources to projects

• It is often difficult to find finance to start and implement projects

• High degree of swithing and pending on resources between projects (projects loose momentum)

• Project implementation takes a loooong time and projects are often delayed.

Why we work with IT PPMWhy we work with IT PPMWhy we work with IT PPMWhy we work with IT PPM

Why IT PPM is interesting as a management tool to Herning Kommune:

• The common public digitization strategy (60 to 100 projects 2011-2015)

• The joint municipal digitization strategy (35 to 80 projects 2011-2015)

• Local Herning Kommune IT strategy and action plans cover development and maintenance of more than 350 different IT systems

• Tendering obligation gives pressure on new development and implementation of new IT systems

• National legislation triggers constantly changes in IT systems and create organizational changes, where IT will have to support business

• Project creativity is massive in Herning Kommune – but are money and resources spent on the “right” projects?

Will the decentralized organization be able to handle, prioritize, utilize the project potentials together with their own and IT resources?

Why we work with IT PPMWhy we work with IT PPMWhy we work with IT PPMWhy we work with IT PPM

Development of + 350 IT systems

35-80 Common Public digitization strategy projects

60-100 Joint municipal digitization projects

60 Tenders 2012-2015

How many IT and digitization projects have we started?

KOMBIT projects Legislation

Source: Inspiration from ”IT Engagement model”, Fonstad 2006.

Business IT

IT Governance

Corporate strategy

• Executive Board

Business Unit strategies

Project plans Project IT architecture

Business Unit architecture

Corporate architecture

Project Management

• Business Unit ManagementLinking Mechanisms

• KITA

• KITA

• DDS• ITS’er

Co

ord

inatio

nALIGNMENT

• Project Managers / Project Teams

Corporatelevel

Business Unitlevel

Projectlevel

How mature is Herning Kommune inHow mature is Herning Kommune inHow mature is Herning Kommune inHow mature is Herning Kommune in

IT PPM maturity?IT PPM maturity?IT PPM maturity?IT PPM maturity?

How mature is Herning Kommune in IT PPM maturity? How mature is Herning Kommune in IT PPM maturity? How mature is Herning Kommune in IT PPM maturity? How mature is Herning Kommune in IT PPM maturity?

Ad-hoc phase Definition phase Managed phase Synchronized phase

• Uncoordinated selection of and decision on projects

• No central project database to handle coordination

• No use of financial metrics and project goals in selecting and deciding on projects

•Correlation between projects and potentials are not assessed

• Correlation and limitations in resources are not assessed

• Risk assessment on and between projects are not done

• Top management is not involved in project selection and decisions

• No or limited use of tools to create an overview of projects

• Documented key components in portfolio management

• Structured project overview and overall prioritization of projects through annual action plans

• Project selection and management is typically decentralized

• Benefit realization is based on payback and ROI

• Occasionally assessment of project context and dependencies between projects

• Limited assessment of project risk and resource

• Top management is sometimes involved in project selection and decision

• Typical lack of attitude to coordination and aligment between strategies and projects as well as missing standards and prcesses

• Central overview of projects and budgets

•Project Management Office is often establised with dedicated resources to PPM

• Frequent assessment of projects in a portfolio perspective using af PPM tool

• Formal tools to assess benefits (Business Cases)

• Risks are assessed in-depth (project level and portfolio level)

• Project dependencies are assessed in relation to benefits and resources

• Projects often compete on finance and resources

•Processes such as screening, ranking and measuring benefits are more refined

• Great focus on linkage between strategies and investment in projects

• Focused on weeding out projects that underperfom in relation to strategies and benefits

• Far more focus on synergies across the enterprise

• Systematic project selection and decision processes (clear and accepted)

• Decentralized parts of the organization is held responsible for project results and benefit realization

• Business Cases are systematic collected centrally and compared frequently between projects and in the portfolio during all project phases

Source: Inspiration from ”Best Practices in IT Portfolio Management, Jeffery and Leliveld – 2004)

How to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPM

How to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPM

Source: Inspiration from ”IT Engagement model”, Fonstad 2006.

Stage-Gate modela typical way of managing projects

Business IT

IT Governance

Corporate strategy

• Executive Board

Business Unit strategies

Project plans Project IT architecture

Business Unit architecture

Corporate architecture

Project Management

• Business Unit ManagementLinking Mechanisms

• KITA

• KITA

• DDS• ITS’er

Co

ord

inatio

nALIGNMENT

• Project Managers / Project Teams

Corporatelevel

Business Unitlevel

Projectlevel

Business IT

IT Governance

Corporate strategy

• Executive Board

Business Unit strategies

Project plans Project IT architecture

Business Unit architecture

Corporate architecture

Project Management

• Business Unit ManagementLinking Mechanisms

• KITA

• KITA

• DDS• ITS’er

Co

ord

inatio

n

ALIGNMENT

• Project Managers / Project Teams

Corporatelevel

Business Unitlevel

Projectlevel

How to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPM

Archer og Ghasemzadeh’s PPM model – one way to handle projects in a

portfolio

Source: Inspiration from ”IT Engagement model”, Fonstad 2006.

How to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPM

Basics in successful IT PPM:

1. How are decisions on IT and digitization projects made in the organization (gut feeling / rationel / garbage way etc.)?

2. Top management involvement- will they support and use IT PPM as management tool?

3. Set up IT Goverance structure around IT PPM (i.e. Excecutive board, Steering Committees central and more decentralized – decide on level of PPM)

4. IT development budgets should be gathered around IT PPM Governance structure

5. Type of projects the IT PPM Governance structure should decide on must be determined and decided (i.e. financial levels, infrastructure projects etc. o.l.)

6. Create overview on existing projects running and the finance connected to these

- What projects? Who are the project owners? Who has the money to drive them through?

7. Focus on standardized overview over existing IT and digitization systems

- What systems do we have? Who are the system owners? (reduce risk of redundant systems and processes) - What financial obligation is connected to each system (contract, operating costs etc.)?

8. Communicate IT PPM (all over the organization)

How to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPM

Processes and requirements for projects and portfolio managementare necessary:

9. Collecting and handling projects in a project portfolio requires accepted IT Governance structure, designed and approved processes

10 Budgets placed with the IT Governance structure will make it possible to require projects to document benefits and support the best projects in the decided portfolio

Kilde: (”Portfolio model”, Archer og Ghasemzadeh 1999)

How to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPMHow to focus on development of IT PPM

Strategic focus can be established:

11. Project portfolio can be divided into strategic buckets, strategic assessment criteria's can be created if Business and IT strategies are well-defined

12. Project portfolio can be assessed in relation to short-term and long-term projects (strategies, goals, benefit realization, resources and risk)

13. Increase requirements to the organizations documentation (business cases with financial BUT ALSO qualitative benefit perspectives)

What is the status of IT PPM What is the status of IT PPM What is the status of IT PPM What is the status of IT PPM

in Herning Kommune?in Herning Kommune?in Herning Kommune?in Herning Kommune?

What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?

Which approach have we chosen – and why?

• We do as usual – RISK THAT WE WILL CONTINUE AS NOW

• All projects covered by IT PPM (Corporate downwards)

• Define PPM for all projects – not only IT.

• Define PPM from a customer or project type angle

• Corporate IT PPM (only focus on cross-cutting projects)

• IT PPM on Business Unit Level (portfolio in each Unit)

What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?

• We focus on making a project overview (project ownership, finance and benefit realization

responsibility and the challenge in not being able to prioritize the “right” projects

What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?What is the status of IT PPM in Herning Kommune?

• Management backup and understanding of IT PPM is a challenge in a

decentralized culture !!!!

• We creative project overview from several angles

1. IT steering committee in Child and Youth Business Unit

2. IT steering committee in Social, Health and Employment Business Unit

3. The overall digitization steering committee

4. Corporate IT’s department project overview

5. External projects

• Dialogue about IT Governance started in the two Business Units in relation to decision and process support for IT PPM

• Dialogue about going from agendas in the steering committees to dialogue about projects as a portfolio.

We only do small steps in the development of IT PPM

DiscussionDiscussionDiscussionDiscussion

1. How do you see IT PPM can be established in a company with a very decentralized culture, where budgets and decisions on IT are decentralized placed – what is important to do?

2. Is maturity in project management a prerequisite for creating IT PPM or is IT PPM a prerequisite for project management?

Thank you for your timeThank you for your timeThank you for your timeThank you for your timeThank you for your timeThank you for your timeThank you for your timeThank you for your time

Kim Nielsen RanchProject Manger

E-mail: [email protected] / [email protected]

LinkedIn: http://dk.linkedin.com/in/kimnielsenranch

Twitter: @kimnranch

Phone: 9628 2609Mobile: 2960 7034

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