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Introduction to Program Management. James J. Jiang University of Central Florida, U.S. Organizational Maturity in Project-based Organizations. Definition: “the extent to which an organization practices organizational project management (OPM)” Extent implies “levels”

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introduction to program management

Introduction to Program Management

James J. Jiang

University of Central Florida, U.S.

organizational maturity in project based organizations
Organizational Maturity in Project-based Organizations
  • Definition: “the extent to which an organization practices organizational project management (OPM)”
    • Extent implies “levels”
    • Lets consider questions regarding different levels of success
      • Was the project done right?
      • Was the right project done?
      • Were the right projects done right?
      • Were the right project done right, time after time?
  • Financial portfolio
  • Role of top management in creating purposeful project investments
  • Link projects to business policy and organizational strategy
    • Terms portfolio and program are often used interchangeably
why need programs
Why need Programs?
  • In order to allow for autonomous projects on the one hand side
  • But on the other hand side to assure the benefits of
    • organizational learning,
    • economies of scale, and
    • networking synergies in a program,
  • A specific program-organization is required.
program definition
Program Definition
  • A program is a temporary organization for the performance of processes of medium and high complexity, which are closely coupled by common overall objectives. (Gareis 2000)
program advantages
Program Advantages
  • The advantages cited by organizations using programs include:
    • greater visibility of projects to senior management and more comprehensive reporting of progress at higher levels
    • better prioritization of projects;
    • more efficient and appropriate use of resources;
    • projects driven by business needs;
    • better planning and coordination;
    • explicit recognition and understanding of dependencies
program examples
Program Examples
  • Typical programs examples:
    • the development of a “product family“ (and not of a single product),
    • the implementation of a comprehensive IT-solution (such as SAP),
    • the reorganization of a group of companies in a holding structure, and
    • large investments, such as an oil platform.
major perspectives of program management
Major Perspectives of Program Management
  • Program management (Pellegrinelli 1997)
    • The technical and planning aspects
    • Scarce resource management
    • Establishment of appropriate information systems
program configurations
Program configurations
  • Three archetypal configurations
    • Portfolio
    • Goal-oriented
    • Heartbeat
portfolio programs
Portfolio programs
  • Include relatively independent projects but have a common theme.
  • Emphasis is efficient resource utilization and leveraging existing knowledge or skills.
goal oriented programs
Goal-oriented programs
  • programs which enable the management of initiatives or developments outside the existing infrastructure or routine.
  • provide a means of dealing effectively with situations where uncertainty prevails and learning is a prerequisite to making progress.
heartbeat programs
Heartbeat programs
  • Enable the regular improvement of
    • existing systems,
    • infrastructure
    • or even business processes,

via increments to functionality or occasionally an overhaul of the system or facility itself.

  • Minimize disruption to operations,
  • Maximizing the amount of new functionality or capability delivered to the business.
  • E.g.: Projects related to core IT systems.
program management classification in it consulting firms
Program Management: Classification in IT Consulting firms
  • Programs by technology/ platform
  • Programs by client
  • Programs by business vertical
program roles and structure
Program Roles and Structure
  • Typical program roles include:
    • program owner,
    • program manager, and
    • a program coordination team,
    • project Manager
    • Upper Management
  • Typical program communication structures are program owner meetings and meetings of the program coordination team .
issues in program management
Issues in Program management

1. Project selection

2. Maximizing value of project portfolio

3. Balancing/prioritizing project portfolio for resource allocation

4. Best practices for managing project portfolios

project selection process
Project selection process
  • Criteria for project selection
    • Production factors
      • Time until ready to install
      • Impact on business processes
    • Marketing factors
      • Size of potential market for output
      • Consumer acceptance
    • Financial factors
    • Personnel factors
    • Administrative and misc factors
selection models
Selection models
  • Non-numeric models
    • Sacred cow, operating necessity, competitive necessity
  • Numeric models
    • Payback, NPV, ROI
  • Scoring models
    • Weighted factors models
  • Risk models
2 maximizing value
2. Maximizing value
  • Allocating resources for maximizing value of portfolio in terms of firm objective
  • Expected commercial value (ECV)

Function of (NPV, Strategic importance, probability of technical/commercial success, development costs, commercialization costs)

  • Productivity index (Similar to ECV but also considers R&D expenditure remaining)
  • Dynamic rank ordered list

Rank projects according to importance, NPV, internal rate of return and cal mean

  • Scoring models

scale 1-5 on reward, strategy fit, strategic leverage, prob of commercial success, technical success

balancing project portfolio
Balancing project portfolio
  • Balancing high-risk breakthrough R&D projects versus
  • Low-risk projects that produce near-term returns through incremental improvements to existing products
  • Perform high quality analysis of each project
    • Identify appropriate level of problem: technology, portfolio, strategy
    • Generate creative, achievable alternatives
    • Develop reliable information
    • Establish values and trade-offs: time and risk
    • Apply logical reasoning
    • Build commitment to action
3 balancing project portfolio
3.Balancing project portfolio
  • Plot projects on a portfolio grid according to technical difficulty and commercial potential
  • 4 quadrants
    • Bread and butter projects (low % and low value)
    • Oysters (low % of success but potential value)
    • Pearls (high success, high value)
    • White elephants (low potential value, long term)
4 best practices in ppm
4. Best practices in PPM
  • Senior management buy-in
  • Identify PPM focus areas and provide proof of concept
  • Develop governance process for projects
    • Makes PPM implementation easier
  • Use proven PPM tools
  • Develop a “common currency” to evaluate projects based on contribution to business objectives
  • Optimize portfolio against constraints
  • How does your organization select an project?
  • Is there a common goal among the selected projects?
  • Has the organizational goal been supported (i.e., aligned with) by those selected projects?
  • Do your employees understand the differences between “project management” vs. “program management”?
  • Do your organization implement the best “program management” practices?