1.
THE POWER
OF BEING
UNDERSTOOD
AUDIT | TAX | CONSULTING

2.
ESTABLISHING PORTFOLIO
MANAGEMENT
Mike Ward – Consulting Director

3.
Background
Purpose and Experience
• Personal experience
– Business change portfolio office – utility
company
– Business change portfolio management
– new airline company (Abu Dhabi)
– Investment Bank portfolio approvals
and monitoring processes (Abu Dhabi)
– Royal Navy portfolio office evaluation
– Rail and Underground portfolio
management
– Enterprise Portfolio Office design,
development and implementation
• Purpose
– to describe an approach we took to
developing an enterprise portfolio office
within the “energy sector”

4.
Contents
3. Define
the
problem
4. Agree
the
Mandate
5.
Develop
the
Blueprint
6. Deliver
the
“solution”
7. Run
the
portfolio
1. What is an
“enterprise portfolio”?
2. What are
the benefits
in having
one?
8. Top ten tips
9. P3M3
Quiz
10
Summary

5.
What is a portfolio?
Some definitions
• Portfolio management is “a co-ordinated
collection of strategic processes and
decisions that together enable the most
effective balance of organisational
change and Business As Usual” MoP©
© MoPis a Registered Trademark of AXELOS Limited
• A portfolio is defined as “the totality of an
organisation’s investment in the changes
required to achieve its strategic
objectives” MoP©
– Question: what level of organisation
is this referring too?

6.
How do projects, programmes and portfolios differ?
Project Programme Portfolio
Governance Alignment of project products to strategy
Ensuring the set of products deliver the
project objectives
Alignment of programme blueprint with
strategy
Ensuring the set of projects deliver the
blueprint (capabilities)
Prioritisation of investments
Ensure set of investments deliver the
business strategy
Control Managed by stages
Dependencies: within project
Progress on time/cost/quality
Managed by tranches
Dependencies: between projects
Progress on benefit realisation
Managed by business plan horizon
Dependencies: across organisation
Progress on strategic goals
Finance Project cost management
Allocate work packages
Request contingency
Return on Investment
Allocate funds to projects
Allocate contingency
Best allocation of funds
Allocate funds to programmes
Set contingency
Benefits Deliver specification
Benefits mostly realised post project
Deliver benefits; define requirements
Benefits mostly realised during
programme lifetime
Deliver strategy; define benefits
Maximise contribution to strategic
objectives
Risk Threats to time/cost/quality
Risk treatment
Threats to realisation of benefits
Risk aggregation
Threats to delivery of strategy
Set risk appetite / risk strategy
Resources Consumer
Productivity of assigned resources
Provider/acquirer. Demand forecasting
Best use of delivery resources
Develop capability / capacity
Best use of organisational resources
Stakeholder Interface to product stakeholders and
users
Stakeholder engagement
Interface to benefit stakeholders and
funders
Stakeholder management
Interface to stakeholders and policy
makers
Stakeholder classification and
prioritisation

7.
1) What is an enterprise portfolio?
Key characteristics Processes and practices
Enterprise
Portfolio
• The totality of investments and business changes the organisation has in
order to deliver its plan
• Carries out prioritisation against agreed enterprise strategy
• Assigns budgets to business areas
• Provides oversight of linkage from the business plan to
delivery/operations area
• Strategy
• Balancing resources
• Prioritisation
• Contribution to strategic objectives
• Strategic oversight
• Value management
Business
Portfolio
• The totality of investments and business changes the business has
in order to deliver its plan
• Carries out prioritisation against agreed business strategy
• Focus is on monitoring of outcomes and benefit realisation
• Provides oversight of linkage from strategy to delivery organisation
• Portfolio planning and definition
• Prioritisation and balance
• Benefits realisation
• Capability development
• Benefits risk management
• Resourcing
Control
Portfolio
• Has responsibility for assuring delivery
• Comprises initiatives grouped for managerial purposes (e.g. specialism,
theme, span of control, supplier, etc.)
• Focussed on delivery performance metrics (e.g. SPI/CPI)
• Delivery Control / Assurance
• Risk Management
• Stakeholder Engagement
• Organisational Governance
• Resource Management
View • Special type of control portfolio specifically designed to provide key
stakeholders with the information they require
• Reporting

8.
2) What are the benefits of having one?
Defining the portfolio
• Clear and aligned
strategy
• Only doing things once
• Most cost effective
solution and use of
resources to deliver the
benefits
• Better co-ordination,
design and management
of interdependencies
across the portfolio
• Consistent prioritisation
and more informed
decision making about
where to invest to
maximise return on
investment
Delivering the portfolio
• Greater confidence in
delivery of
objectives/benefits
• Drives consistency
• Collaboration and sharing
of best practice
• Resource mobility and
mobilisation
• Allows better decision
making:
o make or buy
o renewals vs.
enhancements
o clear accountabilities
and priorities
o effective use of
resources
Realising the strategy
• Clear accountability for
monitoring contribution to
strategy
• Reports aligned to
outcomes and benefits
(rather than SPI/CPI)
• Delivers enhanced value
for money
• Improved learning and
recycling of what has
worked well

9.
• Workshop
• Brainstorming
• Views from Clients and
Suppliers
• Established a working
group
• Played back the
summary findings to get
agreement on the
problems/opportunities –
identified themes
Make sure everyone has contributed to defining the
problems/issues/ideas, including suppliers and clients.
3) Define the problem and the opportunity?
EPOPrioritisationResourcing BehavioursDecisionMakingContractualRelationship
PerformanceManagementStakeholderConfidenceSkills/CapabilityWeWorkInIsolation/Silos

10.
 Is there a shared
understanding within the
Sponsoring Group of what
the objectives of the
programme are?
 Is the Sponsoring Group fully
supportive of the SRO?
 Has the Sponsoring Group
demonstrated committed to
the programme?
 Is this programme aligned
with the strategic objectives?
 Is there conflict between this
programme and any others
already underway?
The Executive Team needed to agree the mandate. The
Mandate provided the SRO with clear direction and
authority to proceed.
4) Agree the mandate!
Enterprise
Integration &
prioritisation
Support and
Challenge
Capability for
portfolio and
programme
management

11.
• The Blueprint was
developed using
standard techniques
(POTI), with a series of
accompanying visuals
– Functional
breakdown
– Organisation charts
– Financial control
visual
– Benefit map
– Benefit measures
A core component of the model was to add “with
appropriate behaviours”.
5) Develop the Blueprint
Maintaining the
enterprise
baseline
Effective
Decision makingPrioritisation and
analysis
Assurance
programme delivery
performance
Develop
capability

12.
• Prioritisation Framework - inform
effective decision making
• Support to approval and sanction
• Assurance coordination to confirm
and enhance delivery
• Resource forecasting and
constraint management
• Managing the Enterprise Baseline
• Modelling and analysis
• Metrics and reports
• Building programme and portfolio
management capability
• Managing business relationships
A set of 9 services were developed using the model
defined above.
6) Deliver the solution

13.
• The contribution that each
initiative has made towards
achieving the strategic
objectives can be clearly
seen
• Initiatives can be compared
to allow prioritisation take
place
• Missing and/or duplicate
initiatives can be identified
• Resourcing profiles can be
made available
• The risk of not achieving
benefits can be clearly seen
Define the data and the measurement systems you
will need to demonstrate progress to executives
7) Run the portfolio
Outcome/Benefit Measure
Executive make informed
decisions
Reduced number of re-cycle/rejections
Speed of issue resolution
Reduced cost per unit of hazard reduction
More efficient Increased resource utilisation
Reduced costs of delivery – removing duplication of (a) reporting (b) assurance
Unit cost reduction of service resources e.g. electricity
On truth, one place & up-
to-date data/information
Time taken to update information
Access/usage statistics
Understand contribution
and coherence towards
achievement of strategic
objectives
Each programme tracks benefit and contribution
Seamless deployment of capability
% decrease of in-year vs. outturn in executive reporting
Trusted to deliver Count escalations raised in timely manner vs. “surprises”

14.
8) Top Ten Tips
1. What are you trying to resolve
– agree the issues, e.g. enterprise resourcing; managing requirements, etc.
2. Define terminology
– is it a programme or a portfolio?
3. Have a clear vision of what do you want it to do “Future State”
– do you want to change the business, or manage a capital delivery portfolio?
4. Manage the change as a change programme
– understand the current environment and the available data set
5. Architect the solution and get agreement prior to any implementation
– create the Blueprint

15.
8) Top Ten Tips
6. Use a services-based model – focus on decision-making, challenge, assurance and
support
– define operational constructs and key service-level metrics
6. Give the entity some authority
– e.g. accountable for decisions at process gates
7. Deliver the framework - now put it into practice!
– provide coaching and support to the the organisation
8. Monitor effectiveness
– show to the organisation that you are meeting the service-level agreements and
making a difference
9. Test performance
– make use of the P3M3 self assessment “performance” questions for self evaluation

16.
9) P3M3® quiz
Governance – which statement best reflects your position?
We don't have a list of initiatives in our portfolio 0
We have a list of the initiatives in our portfolio 1
We understand the initiatives in our portfolio and are beginning to identify duplicate and
contradictory initiatives
2
Our portfolio is free from duplicate and contradictory initiatives. It is rare for duplicate or
contradictory initiatives to get approval.
3
Our portfolio plan includes a pipeline of initiatives in anticipation of forecast performance
and organisational priorities.
4
Our portfolio is optimised to maximise the achievement of strategic objectives for the
least time, cost and risk.
5
P3M3® is a registered trade mark of AXELOS Limited

17.
10) Summary
One size does not fit all!
http://www.rsmuk.com/
https://www.linkedin.com/company/rsm-uk
https://twitter.com/RSMUK
We help organisations become more capable of delivering
their bids, projects, programmes and portfolios effectively
and efficiently. We help raise confidence among senior
executives, stakeholders, regulators and shareholders that
the time and effort invested will yield the desired results.
Where needed we also provide advice and assistance in
implementing the changes which are necessary to gain the
capability you seek.

18.
THANK YOU FOR
YOUR TIME AND
ATTENTION

19.
This presentation was delivered
at an APM event
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