IT portfolio management on the cheap: Manage projects without a PMO

Scott Lowe

It's a universal dilemma: Every IT department has a project list that contains more work than is humanly possible to complete. That's why IT portfolio management is so important. Many companies establish a project management office (PMO) to act as an oversight and coordinating agency. Obviously, a PMO is a goal for any organization that undertakes IT projects of any significance. While there is the potential for ROI in a PMO, initial funding to establish a formal PMO is not available for many midmarket companies. This is particularly true for smaller organizations.

Scott Lowe
Scott Lowe

If I were to gauge the project management maturity level of my employer's current IT portfolio management practices, I would rate us a very low level 2 (COBIT) -- we are aware of the need to manage projects well, and we're in the process of learning good, repeatable techniques that we can leverage across projects. We also retain many features of a Level 1 organization in that we don't currently have rigorous staff time and expense PPM tracking systems in place to determine the true cost of a project.

Further, we don't have a coordinated PMO agency within IT that retains responsibility for IT project management. Frankly, the resources necessary to stand up a full-time, appropriately staffed PMO aren't going to come our way soon, so we're focusing our efforts on project and portfolio management (PPM) and working to adopt some basic project management methods and PMO practices on a small scale in order to streamline and mature our project processes and create a higher level of success for managing projects.

Manage projects using ROI as your guide

For us, PPM is relatively new but is already paying dividends. Although we attempted to stand up more substantial governance processes a few years ago, those initiatives require deep support from the top of the organization. As that support was not forthcoming, we moved ahead with project delivery in a very ad hoc basis. However, as we became more successful with our delivery, we achieved project overload. We ran into issues with staffing, on-time delivery and setting simple expectations -- everyone was demanding that their project be moved to the top of the list. On top of that, the same staff that delivers all projects is also responsible for the ongoing operational support for the organization. In the midst of a key project, the database administrator might be unexpectedly called away to address an operational task. With a very small IT staff -- eight people, plus occasional consultants -- and with many positions in the IT organization being "one deep," it can be very difficult to fully meet the needs and expectations of the organization.

Here are a few key changes we've made with regard to IT project and portfolio management in order to deal with project onslaught:

  • Improved business justification for project inception. There was a day when the IT group was expected to simply handle project requests, without regard for ROI. Today, before we undertake projects of any significance, the business unit has to demonstrate clear ROI and business need. If there is a clear return and clear positive outcomes, we add it to the project list without priority. If the ROI is not there, the project is canceled or is added to the "would be nice" list -- requests that might see the light of day if someone has time someday.

  • Project request review. I work with each division vice president to review requests quarterly to ensure that there is clear need -- and clear ROI -- and to prioritize requests from within the division.

  • Estimation. With my staff, I take a first stab at estimating project resource needs, including personnel time and other expenditures. I also make a first-run effort at prioritizing projects across divisions based on the quarterly information gathering sessions I have with each division vice president. Obviously, prioritization is not based on project importance or ROI alone -- the same person can't work on six projects simultaneously. I also have to bear in mind that every one of my staffers has ongoing operational responsibility.

  • Chunking. Based on everything gathered to this point, I make an attempt to break large projects down into smaller pieces. I do this for three reasons: It's easier to schedule smaller chunks of a larger project; by completing a project in phases, we begin to enjoy benefits earlier; we gain the opportunity to apply lessons learned in each phase and course correct for later phases.

  • Resource assignment. Not all projects are handled internally. For some projects, we engage consulting services. In these cases, we measure the costs and I determine if the IT consulting budget line can support the project or if we need to secure additional resources. An IT point person is assigned to oversee the project. I also participate in the project management role when necessary. If we need additional resources, they are identified and requested.

  • Overall IT portfolio management review with executive team. On a monthly basis, I report progress toward goals and project challenges, and share with the rest of the executive team an updated portfolio that might include new projects. As a team, we review the requests and my initial prioritization recommendations and make necessary adjustments. At this phase, some projects are eliminated but most go on and stay in the portfolio until conclusion.

In addition to this renewed PPM method, I spend significant time managing the portfolio, reviewing new projects to ensure business alignment and the elimination of roadblocks for both ongoing operational goals as well as project success efforts. I've also begun asking my staff members to keep better track of their own time -- We don't do internal chargebacks or charge internal staff time to manage project budgets yet, but I do want to gain a better understanding of exactly how much time is spent on operational tasks so that I can provide better project timelines and create reasonable and achievable expectations.

I don't believe that we'll stand up a formal PMO in the near future, as there are simply too many other organizational priorities, but through more efficient PPM and improved time tracking, we can achieve better project success rates and continue our efforts to improve the organization as a whole.

Scott Lowe is CIO of Westminster College in Fulton, Mo. Write to him at editor@searchcio-midmarket.comor tt@slowe.com.

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