The importance of Organizational Structures in Portfolio Management - Revision history

Anne at 19:27, 4 March 2019

2019-03-04T19:27:04Z

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			''Developed by Anne Kiesbye Dittmann (s144038)''

	== Abstract ==		== Abstract ==
	The success of any organization – being a commercial company, public or non-profit organization – is highly dependent on the level of alignment the organization is able to execute on. The mission and vision statements of an organization express the end goal – the North Star. In order to achieve these goals, a strategy – the game plan of how to get there – is formulated. In order to execute on the strategy, a carefully selected collection of capabilities that suits and enables the strategy must be established - the organizational setup and design is critical. The success criteria, and the ability, of the organization to execute the right projects are closely linked to their capability to design and structure the organization<ref name="KatesKesler"/><ref name="Kates"/>.		The success of any organization – being a commercial company, public or non-profit organization – is highly dependent on the level of alignment the organization is able to execute on. The mission and vision statements of an organization express the end goal – the North Star. In order to achieve these goals, a strategy – the game plan of how to get there – is formulated. In order to execute on the strategy, a carefully selected collection of capabilities that suits and enables the strategy must be established - the organizational setup and design is critical. The success criteria, and the ability, of the organization to execute the right projects are closely linked to their capability to design and structure the organization<ref name="KatesKesler"/><ref name="Kates"/>.

Anne: /* References */

2019-02-28T21:01:09Z

References

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	<ref name="KatesKesler"> Kates, A. & Kesler, G. (2011). ''Leading Organization Design: HOW TO MAKE ORGANIZATION DESIGN DECISIONS TO DRIVE THE RESULTS YOU WANT'' (1st edit.). San Francisco: Jossey-Bass. </ref>		<ref name="KatesKesler"> Kates, A. & Kesler, G. (2011). ''Leading Organization Design: HOW TO MAKE ORGANIZATION DESIGN DECISIONS TO DRIVE THE RESULTS YOU WANT'' (1st edit.). San Francisco: Jossey-Bass. </ref>
	<ref name="Leaduser"> Lüthje, C. & Herstatt, C. (2004) ''The Lead User method: an outline of empirical findings and issues for future research''. R&D Management 34, 5. Blackwell Publishing Ltd. </ref>		<ref name="Leaduser"> Lüthje, C. & Herstatt, C. (2004) ''The Lead User method: an outline of empirical findings and issues for future research''. R&D Management 34, 5. Blackwell Publishing Ltd. </ref>
			<ref name="MoP"> Office Of Government Commerce (2011). ''Management of Portfolios''. TSO. </ref>
	</references>		</references>

Anne: /* Applicability – In Summary */

2019-02-28T21:00:13Z

Applicability – In Summary

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	The change management process requires strong managers with earned respect along with “ready for change” ambassadors who can establish “buy-in” at the rest of the organization. Initially this change might require external facilitation assistance.		The change management process requires strong managers with earned respect along with “ready for change” ambassadors who can establish “buy-in” at the rest of the organization. Initially this change might require external facilitation assistance.

	The literature <ref name="PPM"/> provides great insight, compelling arguments and a step-by-step guideline for implementing a PPM organization.		The literature <ref name="PPM"/> provides great insight, compelling arguments and a step-by-step guideline for implementing a PPM organization. However, the standards provided as readings in class only very briefly address the PPM (Management of Portfolios <ref name="MoP"/>) and the “real” challenges associated with applying PPM could be elaborated more. PPM is a supplement to the current project management standards, but not a replacement.

	== Annotated Bibliography ==		== Annotated Bibliography ==

Anne at 20:55, 28 February 2019

2019-02-28T20:55:01Z

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	The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.		The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.

	The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure 5 illustrates an example of a Project Portfolio Management Organizational Structure. The figure is created by the author and inspired by <ref name="Temo"/><ref name="~~KatesKessler~~"/>]]		The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure 5 illustrates an example of a Project Portfolio Management Organizational Structure. The figure is created by the author and inspired by <ref name="Temo"/><ref name="KatesKesler"/>]]

	Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.		Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.
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	<ref name="Kates"> Kates, A. & Galbraith, J. (2007). ''Designing Your Organization: Using the Star Model to Solve Five Critical Design Challenges''.</ref>.		<ref name="Kates"> Kates, A. & Galbraith, J. (2007). ''Designing Your Organization: Using the Star Model to Solve Five Critical Design Challenges''.</ref>.
	~~<ref name="Cooper"> Cooper et al 2001 </ref>~~
	~~<ref name="MoP"> Office Of Government Commerce (2011). ''Management of Portfolios''. London: TSO.</ref>~~
	<ref name="Temo"> Jones, G. R. & George, J. M. (2015). ''Essentials of Contemporary Management''(5th edit.). New York: McGraw-Hill Education, Chapter 7.</ref>.		<ref name="Temo"> Jones, G. R. & George, J. M. (2015). ''Essentials of Contemporary Management''(5th edit.). New York: McGraw-Hill Education, Chapter 7.</ref>.
	<ref name="GrabbingLightning"> O'Connor, G. C., Leifer, R., Paulson, A. S., & Peters, L. S. (2008). ''Grabbing Lightning''. San Francisco: Jossey-Bass.</ref>		<ref name="GrabbingLightning"> O'Connor, G. C., Leifer, R., Paulson, A. S., & Peters, L. S. (2008). ''Grabbing Lightning''. San Francisco: Jossey-Bass.</ref>

Anne at 20:53, 28 February 2019

2019-02-28T20:53:55Z

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	The organizational structure will vary from enterprise to enterprise, but figure 4 indicates the typical elements of PPM organization structure.		The organizational structure will vary from enterprise to enterprise, but figure 4 indicates the typical elements of PPM organization structure.







	~~<ref name="PPM"/>~~
	~~<ref name="Cooper"/>~~
	~~<ref name="PMBok"/>~~
	~~<ref name="MoP"/>~~

	== Applicability – In Summary ==		== Applicability – In Summary ==
			[[File:HybridAKD.JPG\|left\|thumb\|300px\|Figure 6 illustrates a hybrid between classical functional and project oriented organization structure. The figure is created by the author of this article and inspired by <ref name="Temo"/>]]

	The introduction of Project Portfolio Management is to a great extend a cultural transformation. Culture is perceived to be the most difficult attribute of an organization to change and requires significant management attention over a very long period of time – often years <ref name="KatesKesler"/><ref name="Kates"/>.		The introduction of Project Portfolio Management is to a great extend a cultural transformation. Culture is perceived to be the most difficult attribute of an organization to change and requires significant management attention over a very long period of time – often years <ref name="KatesKesler"/><ref name="Kates"/>.
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	The literature <ref name="PPM"/> provides great insight, compelling arguments and a step-by-step guideline for implementing a PPM organization.		The literature <ref name="PPM"/> provides great insight, compelling arguments and a step-by-step guideline for implementing a PPM organization.

	~~== Challenges and Limitations ==~~


	== Annotated Bibliography ==		== Annotated Bibliography ==

Anne at 20:50, 28 February 2019

2019-02-28T20:50:03Z

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	==== Functional structure ====		==== Functional structure ====
	[[File:Functional_structureAKD.png\|right\|thumb\|300px\|Figure xx illustrates a visualization of the functional structure. The figure is created by the author of this article and based on information given/showed in <ref name="Temo"/>]]		[[File:Functional_structureAKD.png\|right\|thumb\|300px\|Figure 1 illustrates a visualization of the functional structure. The figure is created by the author of this article and based on information given/showed in <ref name="Temo"/>]]
	<ref name="Temo"/>The functional structure is the structure of an organization composed of departments, which are required to fulfill the services and/or manufacturing of an enterprise. In this context, the function is a grouping of employees, who hold the same knowledge or field of work. The functional organization structure is typically the first option, that the manager looks into and subsequently he/she groups jobs into departments. The individual department usually works independently and isolated from the other departments. The employees of a department report to a functional manager. The functional managers are the ones in control of project budgets and allocation of resources, which means that the project managers will have limited authority and they act as coordinators rather than ‘leaders’.		<ref name="Temo"/>The functional structure is the structure of an organization composed of departments, which are required to fulfill the services and/or manufacturing of an enterprise. In this context, the function is a grouping of employees, who hold the same knowledge or field of work. The functional organization structure is typically the first option, that the manager looks into and subsequently he/she groups jobs into departments. The individual department usually works independently and isolated from the other departments. The employees of a department report to a functional manager. The functional managers are the ones in control of project budgets and allocation of resources, which means that the project managers will have limited authority and they act as coordinators rather than ‘leaders’.

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	==== Matrix structure ====		==== Matrix structure ====
	[[File:Matrix_structureAKD.png\|right\|thumb\|300px\|Figure xx illustrates a visualization of the matrix structure. The figure is created by the author of this article and based on information given/showed in <ref name="Temo"/>]]		[[File:Matrix_structureAKD.png\|right\|thumb\|300px\|Figure 2 illustrates a visualization of the matrix structure. The figure is created by the author of this article and based on information given/showed in <ref name="Temo"/>]]
	<ref name="Temo"/>The matrix structure is a structure that groups people and resources by function and by product. This means that the employees of the organization are grouped by their function in order to become more skilled and learn from each other. Furthermore, they are also grouped in project or product teams in order to create a diverse group with different skill sets and functions that shall develop a specific product. This creates a higher complexity within the reporting network but gives the matrix structure flexibility.		<ref name="Temo"/>The matrix structure is a structure that groups people and resources by function and by product. This means that the employees of the organization are grouped by their function in order to become more skilled and learn from each other. Furthermore, they are also grouped in project or product teams in order to create a diverse group with different skill sets and functions that shall develop a specific product. This creates a higher complexity within the reporting network but gives the matrix structure flexibility.

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	==== Projectized structure ====		==== Projectized structure ====
	[[File:Projectized_organizational_structureAKD.png\|right\|thumb\|300px\|Figure xx illustrates a visualization of the projectized organizational structure. The figure is created by the author of this article and based on information given/showed in <ref name="Temo"/> and <ref name="PMBok"/>]]		[[File:Projectized_organizational_structureAKD.png\|right\|thumb\|300px\|Figure 3 illustrates a visualization of the projectized organizational structure. The figure is created by the author of this article and based on information given/showed in <ref name="Temo"/> and <ref name="PMBok"/>]]
	<ref name="Temo"/><ref name="PMBok"/>The projectized structure is a structure that groups people and resources by project or product teams. This gives the project manager complete authority of the project and the resources. The projectized organization rarely has a functional manager. This structure works by arranging the different projects into programs or portfolios and executing on them as projects. This structure is primarily found in consultancy companies.		<ref name="Temo"/><ref name="PMBok"/>The projectized structure is a structure that groups people and resources by project or product teams. This gives the project manager complete authority of the project and the resources. The projectized organization rarely has a functional manager. This structure works by arranging the different projects into programs or portfolios and executing on them as projects. This structure is primarily found in consultancy companies.

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	== Creating the optimal Project Portfolio Management organizational structure ==		== Creating the optimal Project Portfolio Management organizational structure ==
	[[File:Portfolio_Management_OfficeAKD.JPG\|left\|thumb\|300px\|Figure xx illustrates.~~.....~~]]		[[File:Portfolio_Management_OfficeAKD.JPG\|left\|thumb\|300px\|Figure 4 illustrates portfolio management elements. The figure is created by the author of this article and inspired by <ref name="GrabbingLightning"/><ref name="Pivot"/>]]


	The introduction of PPM is a cultural transformation that requires strong top-level management commitment – walks the talk – and a few highly skilled, respected, and committed “ambassadors”, who can drive this cultural transformation. However, culture and cultural changes are not a design parameter that can be demanded, it is the outcome of an organizational design<ref name="KatesKesler"/>		The introduction of PPM is a cultural transformation that requires strong top-level management commitment – walks the talk – and a few highly skilled, respected, and committed “ambassadors”, who can drive this cultural transformation. However, culture and cultural changes are not a design parameter that can be demanded, it is the outcome of an organizational design<ref name="KatesKesler"/>
	<ref name="Kates"/>.		<ref name="Kates"/>.
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	The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.		The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.

	The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates.~~.....~~]]		The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure 5 illustrates an example of a Project Portfolio Management Organizational Structure. The figure is created by the author and inspired by <ref name="Temo"/><ref name="KatesKessler"/>]]

	Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.		Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.
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	In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.		In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.

	The organizational structure will vary from enterprise to enterprise, but figure ~~xxx~~ indicates the typical elements of PPM organization structure.		The organizational structure will vary from enterprise to enterprise, but figure 4 indicates the typical elements of PPM organization structure.



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	~~<ref name="GrabbingLightning"/>~~
	~~<ref name="Pivot"/>~~
	<ref name="PPM"/>		<ref name="PPM"/>
	<ref name="Cooper"/>		<ref name="Cooper"/>

Anne at 20:36, 28 February 2019

2019-02-28T20:36:27Z

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	<ref name="PMBok"/>		<ref name="PMBok"/>
	<ref name="MoP"/>		<ref name="MoP"/>




	== Applicability – In Summary ==		== Applicability – In Summary ==

Anne at 20:33, 28 February 2019

2019-02-28T20:33:40Z

← Older revision		Revision as of 20:33, 28 February 2019
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	The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.		The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.

	The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated.		The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates......]]

	Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board. ~~[[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates......]]~~		Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.

	In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.		In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.

Anne at 20:33, 28 February 2019

2019-02-28T20:33:20Z

← Older revision		Revision as of 20:33, 28 February 2019
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	The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated.		The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated.

	Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.		Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates......]]

	In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.		In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.

	The organizational structure will vary from enterprise to enterprise, but figure xxx indicates the typical elements of PPM organization structure. ~~[[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates......]]~~		The organizational structure will vary from enterprise to enterprise, but figure xxx indicates the typical elements of PPM organization structure.

Anne at 20:32, 28 February 2019

2019-02-28T20:32:48Z

← Older revision		Revision as of 20:32, 28 February 2019
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	== Creating the optimal Project Portfolio Management organizational structure ==		== Creating the optimal Project Portfolio Management organizational structure ==
	[[File:Portfolio_Management_OfficeAKD.JPG\|left\|thumb\|300px\|Figure xx illustrates......]] The introduction of ~~Project Portfolio Management~~ is a cultural transformation that strong top-level management commitment – walks the talk – and a few highly skilled, respected and committed “ambassadors” ~~that~~ can drive this cultural transformation. However, culture and cultural changes are not a design parameter that can be demanded, it is the outcome of an organizational design <ref name="KatesKesler"/>		[[File:Portfolio_Management_OfficeAKD.JPG\|left\|thumb\|300px\|Figure xx illustrates......]]
	<ref name="Kates"/>.

			The introduction of PPM is a cultural transformation that requires strong top-level management commitment – walks the talk – and a few highly skilled, respected, and committed “ambassadors”, who can drive this cultural transformation. However, culture and cultural changes are not a design parameter that can be demanded, it is the outcome of an organizational design<ref name="KatesKesler"/>
			<ref name="Kates"/>.
			The scope of PPM begins with preparing the proposed projects (options) against a set of well-defined selection criteria and making sure that only relevant project are ranked and presented. It is of significant importance that the PPM organization has the right information to be able to determine which projects that will enter the next stage and which ones that will be trashed. The PPM organization must liaise and connect the project with the business. The evaluation is determined based on strategic fit, risks/uncertainties, and benefits for the corporation; it is essential for optimal utilization of the financial and human resources of the enterprise. When a project is approved and it moves to the active stage, the project enters performance monitoring where the task of the PPM is to evaluate the project against the selection criteria and the project goal. This phase will clarify project uncertainty that along with performance deficiencies could result in postponement, re-shaping, or even termination of the project. The “tail” of the project tends to be underestimated, but this is where the project spend is transformed into business opportunities – the product enters the finalization and maintenance phase (project excellence). Depending on the type of enterprise/organization, e.g. pharmaceuticals, software, or public service, the steps and procedures are often governed by a stage gate control model adapted to the nature of the projects being executed.

			The portfolio management office hosts and provides infrastructure for the portfolio management teams, i.e. providing standard operating procedures for the tracking, reporting, and managing activities in a unified and comparable way. In contrast to the functional organization structure applied in many companies, the portfolio management office, including the portfolio and project managers, has a fairly small number of permanent staff members. It relies on the ability to set up projects and manage the project team composition as the projects move through the different stages. The different stages are industry dependent in terms of complexity and timeline – e.g. significant differences can be observed between consumer electronics and pharmaceuticals. In the ideation phase, it is all about managing uncertainty – potentially having limited knowledge about the market, the technology, the resources required, and the organization. The composition of the project team will change as the project progresses towards hand over to the company’s delivery organization and the uncertainty is transformed into risk management, i.e. time and expenditures.

			The governance board/council is the gatekeeper; it secures the alignment and applies near “real time” priority of all active projects. The governance board is composed of senior representatives of the business function - the receiving business - which owns the project result. It is ultimately responsible for the business fit and project results. The success of introducing PPM is highly dependent on transparent and “fair” criteria, i.e. the criteria are predefined and decisions are based on comparing metrics/KPI’s against those criteria. Thus, strong sponsors, territorial protectionism, and gut feelings must be avoided and should not be tolerated.

			Schedule, cash flow, financial outcome, and related metrics/KPI’s are all determined by the governance board/council and changes to the metrics must be approved by the governance board. Active projects that progress within the boundaries determined by the governance board will report “progressing as planned”. However, if the project is deviating from the schedule, budget or other significant metrics – the project management office must be notified or detect the deviation and report it to the governance board.

			In case the organization does not have employees/managers who possess the required knowledge and expertise, an advisory board to the governance board can be a good and flexible solution. If the market insight is insufficient or product features are deemed unknown, a panel of lead users could be established <ref name="Leaduser"/>. Input from academia might be of great value in case new technology is essential for the development of a product or service. In situations where new materials are considered, suppliers of components and manufacturing facilities will be able to contribute with valuable knowledge. The primary contribution of the members of an advisory board is to reduce the uncertainty in the ideation phase and reduce risk in the project execution phase.

			The organizational structure will vary from enterprise to enterprise, but figure xxx indicates the typical elements of PPM organization structure. [[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates......]]


	The scope of PPM begins with prepared the proposed project (options) against a set of well-defined selection criteria making sure that only relevant project are ranked and presented. It is significant importance that the PPM organization is having the right information and can determine the witch project that will enter the next stage and witch that will be trashed. The PPM organization must liaise and connects the project with the business. The evaluation is determined based on strategic fit, risks/uncertainty and benefits for the corporation; it is essential for the optimal utilization of the financial and human resources of the enterprise. When project is approved and moves to the active stage, the project enters the performance monitoring where the task of the PPM is to evaluate the project against the selection criteria and the project goal. This phase will clarify project uncertainty that along with performance deficiencies could result in postponement, re-shaping and even termination of the project. The tail of the project tend to be under estimated, but is where the project spend is transformed into business opportunities – the product enters the finalization and maintenance phase (project excellence). Depending on the type enterprise/organization, e.g. pharma, software or public service, the steps and procedures are often governed by a stage gate model adapted to the nature of the projects being executed.


	~~[[File:PPM_structureAKD.png\|right\|thumb\|400px\|Figure xx illustrates......]]~~