DQ W2- ileana nitu
- Consider either your current organisation or a previous organisation. Explain the common types of resistance which an individual leading a project portfolio management initiative in your organisation (current or past) might face in trying to implement this management approach.
- Discuss the key steps your organisation (current or past) should take to implement project portfolio management. What significant benefits would your organisation receive from implementing project portfolio management? What are the principal barriers to implementing this within your organisation?
When portfolio project management is not a traditional practice in any organization, its implementation initiative will automatically represent the need of change management. And just like any other changes, this implies the buy in of the entire organization, in order for the implementation of such change to go smoothly. You cannot assume that only a top-down approach would give the expected results, when the directly involved personnel in making that change happen, are not fully convinced of its benefits and worthiness.
The example i am going to give relates to an initiative that has been started about 4 years ago in the company i work for, which even in todays dates is having some remaining hick-ups when it comes to its actual application.
Background:
Within our organization, notably matrix type in terms of reporting lines, there used to be to main separations: that of the equipment manufacturing ( more precisely Research, Engineering, Sustaining and Manufacturing) and that of the Oilfield Services. Because these two organizations were structurally so separated, not only referring to reporting lines, but also systems and support functions matters, but yet so interdependent when it comes to servicing the customer’s needs, clashes were inevitable. The manufacturing side was producing only enough tools to stay within their budget and a highly scrutinized overhead, and operations were struggling to get the services done as per the activity growth, due to lack of equipment availability.
The Oilfield services was and is still structured by the various Product/ Business Lines and the Manufacturing used to be separated only by the 4 departments mentioned earlier. What it has been envisioned and restructured around 4 years ago, was to implement within the manufacturing organization, the so called Product Groups, which would split the organization in accordance to the portfolio of the technologies and tools that services each Business line. Instead of looking at the cycle of development and commercialization of a tool, and splitting the organization by those departments, it was moved to a portfolio type of organization, where all the production life cycles have been combined under a Product group manager. Surely tools and technologies that are similar between the Business Lines, or are simply considered to present synergies, have been grouped as such under one Product Group.
The next step change was that the reporting lines of the Product Group Mgrs would be dual: direct line into the Business Line Mgr from the Oil Services part of the business, and functional reporting into the manager from the Manufacturing part of the business.
Kpi’s have then been established by each type of technology related to lead times throughout the life cycle , the total production needed, all of these in strict correlation to what the Business Line manager was projecting and reporting a s activity levels forecasts.
Then followed systems set in place that would monitor and provide accurate data and statistics over each phase of a product’s lifecycle and of course people have been trained to know how to best take advantage of such systems.
All these didn’t happen overnight and it sure came with skepticism from a great part of the organization of how this model will in fact be mo re effective.
Even currently, this organization, because it changed as to be seen more on the Operations Support side, is considered to have workflows and processes that a re too complicated, systems that a re no t easily understood by the Operations in the field.
Of course it begs the question as to what could have gone wrong, when the whole management at all senior levels was convinced that this should be the answer to the traditional clashes between Business lines and manufacturing, the solution to all the job delays coming from production delays/ unavailabilities and would be the answer to a far more efficient way of conducting business.
The answer is simple, if we look back it took in fact 1 year before e this new structure was publicly communicated to the field, via our internal network communications. There may have been support , and good level of support, at the upper management level, but when ti came down to the very operations in the field and communications, the was pure confusion and misunderstanding of who are those new roles and what are their responsibilities…..in effect where do they fit in in the grand scheme of things.
Nowadays, such a disrupted communication has expanded, due to the fact that the organization is acquiring new entities, having both operations and manufacturing structures within them. By not approaching adequately the technology centers part, basically to hand them over to the Manufacturing organization and have them adequately integrated, the confusion si even further amplified. The Operations part of integration team, does not know how to approach the manufacturing part, due to completely distinct workflows, systems, processes, and it creates, apart from confusion, demotivation. Functions within these new entities feel left aside, or simply not needed in the company, when in fact is the total opossite.
I wish there was a more academic explanation to why this synergy between Operations and manufacturing is still not functioning, but it all comes down to managerial egos.
Surely, if the communication strategy and been bit reviewed and the message conveyed from top to the bottom of organization had been timely and not leave that one year of test mode, that practically ate p the whole credibility of such organization, things had run smoother.
If we are to follow the Ideal the phases for the adequate implementation:
1. Portfolio inventory: centralized project administration; risk evaluation procedures; explicit incorporation of resource constraints; increasing business leaders accountability. – the resource constraints and leaders’ accountability parts were clearly implemented, as it was more in an inertia mode from Operations
2. Portfolio Administration: project categorization; evaluation of customer impact- ultimately was implemented, but after about half a year.
3. Portfolio Optimization:project portfolio committee, assessment of the financial worth of the portfolio, management of project interdependencies and tracking of project benefits- it’s a work in progress.
At a minimum the expectation was for :
– Clear roles and responsibilities of these Product Group Personnel,
– how the Product Groups can be reached and information accessed
– Segregation/ division of the products that make up these product lines
– Clear processes and procedures on how this new organization would function
One highlight though, was the fact that the Product Group managers were selected as ex- Operations Managers, that would have an operations sense and would know how to fit in the requirements from the operations and how to address them.
This new organization is barely now, after 4 years seeing it’s way through, which had it benefited of stronger and publicly communicated support from the top management , and all stakeholders buy-in, could have definitely saved two years of struggle to make its point in the organization.
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References:
Kerzner, H. (2010) Project management best practices: achieving global excellence. 2nd ed. Hoboken, NJ: John Wiley. Chapters 4 and 5.
Rothman, J. (2009) Manage your project portfolio: increase your capacity and finish more projects. Raleigh, NC: The Pragmatic Bookshelf. Chapters 3, 4, and 6.
Morris, P. & Pinto, J. (2007) The Wiley guide to project program and portfolio management.Hoboken, NJ: John Wiley. Chapters 2, 3, and 6.
De Reyck, B., Grushka-Cockayne, Y., Lockett, M., Calderini, S., Moura, M. & Sloper, A. (2005) ‘The impact of project portfolio management on information technology projects’, International Journal of Project Management, 23, pp. 524–537.
Da Silveira, G., Borenstein, D. & Fogliatto, F. (2001) ‘Mass customization: Literature review and research directions’, International Journal of Production Economics, 72, pp. 1–13.
Gilmore, J. & Pine, B. (1997) ‘The four faces of mass customization’, Harvard Business Review, 97, pp. 91–101.
Jeffery, M. & Leliveld, I. (2004) ‘Best practices in IT portfolio management’, MIT Sloan Management Review,45 (3), p. 41.
