Next, I visited the chief air-traffic controller at a large airport and asked a similar set of questions, including the following: How many airplanes are taxiing to take off? How many are on approach? Are any in-flight airplanes having problems, and what is the airport's capacity? If the answers had paralleled those of the 51 CIOs, would you fly from that airport? Just as the pilot of a commercial flight cannot function in isolation, project managers fly blind when they work without up-to-date knowledge of all projects in progress. Absence of a well-balanced portfolio invariably results in duplicated efforts, unnecessary delays of mission-critical projects and internal conflict.
When you wing it without a project portfolio, management will overcommit resources, show poor resource prediction capability and end up with piecemeal information about projects. In addition, your managers will be incapable of making informed decisions to approve the "right" projects or shut down projects with no hope of success. They will also lack the ability to define specific alerts, such as misalignment with business strategy.
"We have been working over the last three years streamlining our global organization from over a dozen entities to effectively just one. Without a portfolio, our capability to make this happen would be nonexistent," says Steve Winstead, CIO of Kenwood USA Corp., a consumer audio electronics firm in Long Beach, Calif.
A well-designed portfolio includes these subportfolios:
Ideas/proposals: Shows proposals that are in the process of due diligence. The purpose is to record all project proposals so management and customers can see what is being investigated. This avoids duplicate and overlapping ideas.
Prelaunch (charters): Tells management about project requests that have progressed to an approved project charter. From this portfolio, management can see the total approved budget amount as well as the demand on IT.
Launch (plans and estimates): Provides management with information about projects that are in the process of detailed planning and estimating, or have progressed to approved project status.
Execution: Delivers an opus of data on active projects, including the total number of projects and the status of each project -- green, yellow or red. For schedule-driven and fixed-price projects, this subportfolio provides the differential between the client's requirements and the project manager's estimated schedule and budget at completion.
Implementation: Depicts projects that have transitioned from the development team to customer site(s). Some key items that the portfolio displays are customer and operations readiness assessment and project deployment status.
Operations: Depicts projects in the operations stage. This is where the operations group begins to collect and report performance metrics, such as the value to the business, customer satisfaction, security and operations efficiency.
A well-designed portfolio not only shows how to evaluate, select and track individual projects but also offers a control-tower view of all projects. Ideally, the creation of the project portfolio should be a joint venture, undertaken by the CIO and business executives.
And by the way, here are the responses from the air-traffic controller: 14, 12, 0 and 65.
Gopal K. Kapur is president of the Center for Project Management in San Ramon, Calif., and author of Project Management for Information, Technology, Business and Certification. To comment on this story, email ProjectExpert@ciodecisions.com.
This was first published in August 2005