Realistic Project Portfolio Planning
Realistic Project Portfolio Planning

Detailed Planning for the Perfect Project Portfolio – Let’s Get Real!

6 min read

The Machine Approach to Project Management

Do it right, please do it right this time! Talk to all the stakeholders, collect all the requirements, do your risk management homework, communicate up and down the chain, get thorough estimates from your IT guys and subject matter experts, determine the costs (don’t forget to include a contingency fund), agree on milestones, get some sleep, and then submit it to the portfolio board. You know the drill. Worst case: your project gets rejected. Not because of bad planning, but because the company has changed its strategy and this project is no longer aligned with the new strategy. If you would have only known…

Plans Aren’t Perfect and Humans Aren’t Machines

Does it help to know that we’ve all been there? A little? Probably not. But don’t worry – good news is on the way. There are two good developments lately that have been changing the way people, especially upper management, think about projects.

  • Agile Methods: The advent of agile methods taught people that not everything can be foreseen and that it is better to react to change than to follow a plan – no matter how perfect we think it is. Or how our good man Helmuth Karl Bernhard von Moltke put it two hundred years ago: “No plan survives [the first] contact with the enemy.”
  • Humans Are not Machines: This means that the human planner may forget something, the human stakeholder may misjudge the value of a requirement, the human estimator can completely forget the most important factor – oh, and people get sick from time to time. In essence, management understands that a project is not just a mechanical problem. It doesn’t run like a perfectly “Taylored” automobile factory. A project is a highly complex systematic interaction of people whose results can’t be predicted.
    (There is an excellent article about the complex nature of projects by Cooke-Davies, T., Cicmil, S., Crawford, L. and Richardson, K., 2007. We’re not in Kansas anymore, Toto: mapping the strange landscape of complexity theory, and its relationship to project management. Project Management Journal, 38(2), p.50.)
The Perfect Project Portfolio vs. Agile Teams

Stay Strong: It Gets Worse

Even if most know that detailed project plans can’t be accurate and therefore hold little value, people are still expected to come up with them when they apply for budgets or resources. The reason is simple. Only projects with a high value get funded and are allocated resources. It is the portfolio manager’s job to ensure that funds and resources are available for the chosen projects. So he needs to know which resources are needed, when.

This basically leads to project plans that are inaccurate for three reasons:

  • They simply can’t be accurate (see above).
  • Project managers know that they can’t be accurate and do a sloppy job with them. The further they are in the future, the worse this can be.
  • Portfolio managers know the plans are inaccurate and request changes that sometimes make even less sense.

So what then? Invest more time and money in better project planning? Well, I’m not saying that should never happen. I just maintain that the benefits to be gained will never equal the effort a company would have to invest in personnel, time, quality assurance and tools. It is precisely the attempt to reach that final 20% of planning quality that causes costs to soar.

Oh, and on a side note, a word about the “Super Algorithm”. In many companies, I’ve run across that special person that wants to find the solution to everything. They try to collect all possible data and then want to press that magic button. You know, the one that starts the algorithm that puts important projects first, makes excellent use of the bottleneck resources, and uses remaining capacities for the other not-so-important projects. Does that sound realistic? No, it doesn’t – and you know why: even the smartest algorithm in the world can only work with the input it receives. Having already read my comments about the value of project plans in general, you know what I’m getting at: garbage in…garbage out.

Plan on Different Levels

Then what do you do? No planning at all? Don’t get me wrong – I’m not saying there’s no value in project planning. What I’m suggesting is to look at project planning from two different angles:

The Project Manager Angle

People who are in charge of functions, requirements, contents, deadlines, etc. need to have a detailed plan. They need to know who does what and when this should happen. This is a task for the project manager. No matter how the planning is done – traditional or agile, in Excel, on Post-it notes, in Microsoft Project or on plain paper – the job of the project manager is to be on top of things. However, this is not a task that has to be done for the entire project before it even begins. It has a much shorter planning horizon.

The Portfolio Manager Angle

Portfolio Managers are not as interested in the nitty gritty details of every work package or who does what on which weekday. Portfolio managers look at the value of projects, rank them, and then allocate valuable resources to these projects.

And this is exactly where it happens: between these two. The discussion between the project manager and the portfolio manager focuses on the need for resources. Not on a day to day level, but on a much higher level.

  • It is about “FTE” for “weeks” or “months”.
  • It is about people.
  • It is about delivery deadlines.
  • It is about pushing or even stopping a project for a month or two.
  • It is about planning around a temporary resource shortage that the portfolio manager can’t currently fill.

Let People Do What They Do Best

How the PM comes up with those rough numbers is up to him. The important thing to note is that there has to be an agreed level of interaction. Why? Because the worlds of both the PM and the PPM have enough challenges. Why would you want to make the life of both of them harder by either (1) pushing the PM to come up with a detailed plan or (2) requesting “hard” bookings from the PPM for a specific resource at a specific time, way before the resource is even needed?

Enter the PMO

This is exactly where the Project Management Office (PMO) comes into play. The PMO can be the tool that facilitates this discussion. The effective PMO collects information from project managers and organizes it. The portfolio managers then decide which things are done, when they are done, and how they are done.

The idea of a perfect, detailed project portfolio plan sounds wonderful, but it is simply not realistic. Things never go exactly as planned, so a perfect plan is impossible. Instead, having a PMO that uses a Lean PPM™ method for realistic portfolio plans that actually work will make better use of your time and money.

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