Best Practice in Portfolio Management

and Corporate Governance

David Leaney
BEng, MSc, MBA, FAIM, CMC
Clear Lead

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Light bulbs, torches and lasers

Focus?

Coherence?

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 Presentation overview
1. Why talk about portfolio management and
corporate governance?
2. Portfolio, program and project management:
2.1. Portfolio management concepts
2.2. Select, deliver and assess
2.3. Corporate governance and insights
3. How to use this information
4. Next steps
5. Questions?
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1.1. Context and background
With multiple projects, who gets priority
for time/resources/money?
Are all of your projects heading in the
same direction?
How do you know?
Is it the right direction?
What happens when not everyone is
aligned to the corporate direction?

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1.1.1. Same aims/direction?

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1.2. How good could/should it be
Improved portfolio management means:
Planned and coordinated approach to
managing multiple projects
Consistency in selection, delivery and
assessment
Prioritisation, balance, and predictability
Satisfied customers and stakeholders
Less waste and fewer arguments
Improved efficiency and effectiveness
better bang for your buck
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1.3. Highlight potential issues
There will some technical jargon but Ill
try to keep it to a minimum
There will be some discussion about tools,
but technology is not the only answer
Not all of this will apply to every
organisation (public vs. private sector)
You may have already considered many of
these issues
Cynicism is OK
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1.4. Presentation approach
Ill try to keep this relevant and as
non-technical as I can (and finish in time for
plenty of discussion in the workshop)
Questions welcome, particularly at the end
Illustrate with examples and case studies Example

At least some of this applies to:

All government or not-for-profit organisations
All private sector firms
All stages of portfolio management maturity
and complexity
If you take away even only a few key concepts,
then our time will be well spent
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2. Portfolio/program/project mgmt

2.1. Portfolio management concepts

2.2. Select, deliver and assess
2.2.1. Selection phase
2.2.2. Delivery management/governance
2.2.3. Assessment
2.3. Clear Leads insights

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2.1. Portfolio management concepts

Working Definition: Portfolio management =

a logical grouping of initiatives/investments
to be compared and contrasted for selection
and monitoring purposes.
Examples of logical groupings include: by
time period, by organisational unit, by
strategy/goal type, by approval status.
Portfolio management has a twofold use:
(1) project selection
(2) performance monitoring

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 2.1.1. Aligning IT with business goals
Vision

Mission Business
Strategy
Goal Goal

Objective Objective Objective Objective

Strategy Strategy Strategy Strategy Strategy Strategy

IT Governance Ensuring Benefits are Realised

Project Activity Program Project

Management
Task Task Task Task Project Project

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2.1.2. Typical pain points
Deciding which projects to fund he who
shouts loudest? Whim of director/CEO?
Demonstrating ROI
Alignment of technology and strategy
Coping with rate of business change
IT credibility is low (poor track record)
Increased financial pressures
Wasted resources Case Study
Changing goalposts
Regulatory compliance challenges
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2.1.3. Common business needs
Optimise project value to organisation and
alignment with corporate strategy
True project cost visibility and management
Tie project spend directly to business benefit
Portfolio disposition analysis (i.e. decision
support for which projects to keep or stop)
Manage resource allocation and utilisation
Optimise allocation to high value projects
Compliance requirements (e.g. SOX)
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2.2. Select, deliver and assess

Portfolio Planning
for
Business Alignment

Evaluation and Best Practice

Benchmarking Execution
for for
Continuous Results
Improvement Achievement

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2.2.1. Selection phase
Define the portfolios
Inventory the opportunities
Establish investment criteria
e.g. Risk, cost, benefit, and alignment
Make hard decisions
What if? scenario planning
Visualise tradeoffs
Select optimal investments
Connect plans to delivery
Ensure plan viability
Obtain stakeholder buy-in
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2.2.1. One initiative selection model
Financial
(e.g. ROI)
Desirability: Value Qualitative value
Quantitative value Assessment Measures
Measures (Is it the right thing (Soft/Indirect/Intangible)
(Hard/Direct/Tangible) to do?)

Non-Financial
(e.g. fewer customer Initiative
complaints) Go/No-Go
(Should we do it?)

Feasibility: ability to
execute (can we do it?)

Resource Risk Profile Fit / Dependencies

Capacity/Skills (inc. Change Readiness) with other initiatives

Internal External
Risks/Hurdles Risks/Hurdles
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2.2.1. Considering four variables

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 2.2.2. Delivery management/governance
Alignment
Strategic Operational
Demand Management Process Management Portfolio Management Resource Planning Project Management

e.g. Request 15:

New budget
report

e.g. Request 21:

Security fix

e.g. Request 23:

Application
modification

Source: Clarity (CA)

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2.2.3. Assessment
Measure performance
Score investment results
Determine true
costs/benefits
Reporting
Decision Support
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Benchmark
Compare to industry leaders
Continuously improve
Institute feedback loops
Allocate costs, automate
charge backs
2.3. Clear Leads insights
Make the hard go/no-go decisions as early as
possible (i.e. use preliminary assessments
and phase gates)
Client
Ranking and drawing a funding Example
line is overly simplistic
Need to use a combination of text, numerical
and graphical tools to view all information
Need to consider integration of process and
information
Choose fewer projects and spread them
evenly on various criteria
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2.3.1. Balanced spread

Avoided hard decisions Balance portfolio of
early initiatives
Everyone is important Proper prioritisation
Resource clashes Resource smoothing
No balance or phasing Phased realisation of
Doomed to failure benefits
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2.3.2. Corporate Governance
Business plan and IT strategy
Structure, decision-making rules,
compliance with process
Lesson
Roles and responsibilities Learned

Standardised tools and processes

Steering committee/project board
Program Management Office (PMO)
Program management of multiple projects
Properly resourced and empowered
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2.3.3. Some final insights
You need core project management
fundamentals
Expectation management, change
management, and communications
Corporate knowledge capture
Education and training Example

Great juggling skills

Methodologies, processes and tools all
help, but
It all comes down to people
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3. How to use this information
Guide your strategic planning:
Business strategic plan
Information and Communication Technology
(ICT) strategic plan
Influence your operational projects:
Business cases, project management
Review and Quality Assurance
Discuss with your colleagues and
stakeholders:
Circulate within your organisation
Discuss with external stakeholders
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4. Summary
Portfolio management and corporate
governance:
Select, deliver and assess
Make the hard decisions early
Choose fewer projects and balance them
Use some tools to view & manage information
Get some expert advice
Can be rewarding if you manage it well
Can be costly, difficult and embarrassing if
you dont
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4.1. Next steps
Draw what practical advice you like
from this presentation
Ask around your own organisation and
review portfolio management and
corporate governance practices and
maturity
Invest appropriately in strategy, people,
process, and technology
Source the resources you need
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 5. Questions?

David Leaney
Clear Lead Pty Ltd
dleaney@clearlead.com.au
0402 411 888
www.clearlead.com.au
1300 CLEAR1

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