Situations where the use of programme management may be appropriate
Programmes typically combine new deployment with some elements of business-as-usual.
They utilise capital expenditure to acquire assets, services, products and capability, alongside operating expense incurred as a result of performing normal business operations.
Programmes are defined as delivering change, and would typically incorporate the full utilisation of benefits to satisfy the business case.
The overall measure of success will be determined by the actual realisation of the expected benefits, which frequently involves the use of capabilities or facilities created by the programme in an ongoing, business-as-usual manner.
Programme management may be appropriate if the organisation wishes to achieve the following:
More effective delivery of change – project interdependencies are managed to best effect so they have the greatest chance of delivering their benefits without adverse effect on business-as-usual.
It is likely that projects within the programme will have a complex set of dependencies and outputs, which would be more difficult to deliver as individual projects.
Increased responsiveness to strategic initiatives – filling the gaps between strategies, business cases, and projects. The programme level view will look for synergies between individual project business cases in order to yield a greater return from the projects as a programme rather than if each project had delivered independently.
More effective management of resources – through prioritization and project integration allowing for resource conflicts, within individual projects, to be managed at a programme level. This ensures priority projects get the first allocation on resources to maximise benefits realisation within business-as-usual.
Better management of risk in a wider business context – contingencies that are applied to projects on an individual basis may lack economies of scale.
If these risk contingencies are applied at a programme level, the overall contingency amount may be reduced as common responses made at this level may influence several projects simultaneously.
This will typically benefit the organizations where there were a number of higher risk projects being delivered.
More efficient coordination and control – by defining roles and responsibilities for managing the programme and application of a uniform process to initiate, accelerate/de-accelerate, and terminate projects within the programme.
Bringing together common processes for delivering scope will result in a greater likelihood of those projects being more fully utilized by the organization, once they are delivered.
Increased focus on obtaining strategic benefits – by having an insight into the strategic goals and needs of the organization, projects can be directed into business-as-usual in a combined way giving the best chance of obtaining benefit synergies that may not be apparent if projects were delivered on their own.
If an organisation is under challenge in attempting to deliver a range of projects in different areas of its business, effective programme management becomes a critical success factor.
Situations where the use of portfolio management may be appropriate
Portfolio management is used to select, prioritize, and control an organization’s programmes and projects, in line with its strategic objectives and capacity to deliver.
Their goal is to balance the implementation of change initiatives and the maintenance of business-as-usual while optimizing return on investment.
Portfolios are used to structure investment decisions.
They can be managed at an organizational or functional level to optimize strategic benefits or operational efficiency and address a number of major questions:
What are the projects and programmes needed to deliver the strategic objectives, taking account of risk, resource constraints, and affordability?
Is the organisation capable of delivering them effectively and efficiently?
Are the full potential benefits from the organization’s investment capable of being realized?
For organisations implementing portfolio management, the following situations would be where the use of such a process would be most appropriate:
Where there is a need for the organization’s projects and programmes to be more aligned with its key business objectives, including those of profitability, customer service, reputation, sustainability, and growth.
When the organization’s financial controls, financial planning and expenditure review processes need to be applied to both individual projects and the portfolio as a whole.
When assurance is required of how the mix of projects continues to support strategy and take account of changes to external factors.
Where the need exists for the organization to effectively discriminate correctly between activities that should be managed as projects and other activities that should be managed as non-project operations.
A need for assessment and addressing of risks associated with the project portfolio, including the risk of corporate failure needs to be highlighted and monitored.
Provide verification that projects and programmes are consistent with the organization’s existing capacity and capability.
To allow the organization’s engagement with project suppliers to encourage a more sustainable portfolio by ensuring their early involvement and by a shared understanding of the risks and potential rewards.
Provide more evidence that the organization’s engagement with its customers and engagement with the sources of finance for its projects encourages a sustainable portfolio.
Assurance that the impact of implementing a project portfolio is acceptable to its ongoing operations.
Applying portfolio management allows organizations to:
Drive priorities for change by adopting a high level ‘whole picture’ view of their business and how it must react to change;
Make the best decisions using information that is clear and representative of the true potential effect of key business drivers;
Use the most appropriate resources to achieve the best results with the least amount of wasted effort.
Corporate leaders are accountable for demonstrating profitability and return on investment, and therefore view project work as a critical part of delivering that investment and contributing to the overall benefit of the organization.
Portfolios play an important part in maintaining the alignment between project work and strategic objectives and in enabling the realization of the benefits that underpin the successful capture of the intended value and securing the return on investment.
The Projex Academy
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