think ideas conceptual design. light, tools, men, computer, experiences, clock, dollar, book, rocketManaging a portfolio of innovative projects incurs many difficulties, such as the establishment of a culture of continuous evaluation in order to validate the hypothesis, or the difficult collaboration of multidisciplinary teams with no prior experience to rely on. For those who lead the innovation strategy, the biggest challenge is to have a tool that allows distinguishing the relative importance of each project in order to prioritize its implementation.

As the ratio between innovative ideas and projects reaching the final stage is very low, it is especially important to ensure that the highest value projects are approved. It is worth noting: innovation projects are very inefficient. It is necessary to spend time and money on research until you get an idea that is really worth pursuing. But that does not mean that you do not have to control how much time and money you spend, or what activities.

That is why this type of portfolio usually follows a lean philosophy: it starts from a hypothesis or idea that must pass through successive phases of refinement and validation.

Thus, before the existence of a project in the execution phase, there is the proto-project: first the idea or hypothesis, then the MVP, which requires pivot points. When the starting hypothesis is not endorsed by actual experience, or only partially, the proto-project can be reoriented in the light of what has been learned.

As pivoting generates additional costs in the search for commercial and technical viability, innovative proposals must be constantly evaluated to consider which ones should have room to generate inefficiencies and additional costs until a sound foundation is found - and which are discarded so that the investment is sustainable.

Innovation and corporate values

Innovation projects in large corporations are usually characterized by responding to a vision that goes beyond the business, also pointing to values ​​such as Corporate Social Responsibility, environmental sustainability or the consolidation of one's own innovative culture.

For example, BBVA has an ambitious innovation strategy centered on Big Data. As the ultimate goal is to better understand the behavior of customers to provide better services, efforts are directed towards knowledge creation. With important ramifications: the key professional is no longer the traditional financier, but the data scientist, who "dominates statistics, knows how to program and also understands the business". The various initiatives that emerge from BBVA's Big Data strategy struggle for finite (though abundant) resources, which is why Marco Bressan has decided to concentrate on the centralization of information to begin with.

Start prioritizing your portfolio of innovative projects with ITM Platform

On the other hand, the means that any corporation has to materialize an innovation strategy is its portfolio of projects. In order for the portfolio of projects to have sufficient bearing, portfolio management must be the explicit responsibility of a corporate unit, often the management committee itself.

In the case of General Electric (GE), verticals include aviation and transportation, but they extend to materials as diverse as software, health services and water.

A sample of the diversity in GE's innovative portfolio, pictures

A sample of the diversity in GE's innovative portfolio

Unfortunately, as innovative projects are often completely unpublished and very different from each other, it is often difficult to know which projects are to be given preferential treatment. Is it more important that the project produces a social return or contributes to the modernization of the technological infrastructure?

Given the difficulty of comparing two innovative projects and knowing which will bring greater value to the company, it is crucial to have a criteria for making complex choices objectively.

Complex decisions are often subjective

A complex choice is one in which the alternatives are weighted based on more than one quality, so that there is no optimal alternative that surpasses the rest.

For example, several factors are taken into account when choosing an internet service provider: price, quality of customer service, the speed of the line and the reputation of the company. Usually the more economical services offer lower speeds, while more established brands often offer improved after-sales services. The decision is never obvious.

Complex choices are made daily. Often, as is the case with internet providers, the final decision is usually subjective, because whoever decides does not have the necessary time or tools to decide which option gives the maximum value. This hasty dimension of the decision allows competitors to appeal to the consumers' emotions and win with arguments less related to the service itself.

However, it is obvious that whoever leads the innovation program of a corporation can not be carried away with emotion. You will have to give reasons for your decisions, rely on data and get the push and commitment of many teams, who often work in remote locations.

Complex corporate decisions:

Portfolio prioritization with AHP

Without a technique or method to compare between the different value criteria, each choice between projects is difficult, equivalent to the choice between ethical values, such as freedom and equality.

Although there are dozens of prioritization methodologies for product requirements, there are not many alternatives in the world of project management.

The most convenient method for responding to complex choices representing the alternatives between innovative projects is AHP, an acronym for Analytical Hierarchy Process.

In short, AHP is advisable because:

  • It helps build consensus around how to implement the innovative portfolio strategy
  • It is linked by definition to the criteria, values and business objectives
  • Shorten the political discussions
  • Increase the commitment with the decisions taken, since all the criteria of the corporation are represented in the right measure.

This technique allows for comparing, in a table format, the relative importance of each criterion or objective.

Business goals prioritization for "Optimist - 110% sales" Scenario. Table

The resulting table does not hierarchize in absolute terms. That is to say: it does not classify the objectives from more to less important, since that is an oversimplification. On the contrary, it allows us to attend to fundamental nuances when it comes to assessing the diversity of value propositions delivered by innovative projects.

For example, in the case of an innovative portfolio one could compare the importance of the following objectives:

  • Improving innovative culture
  • Increase market share in digital services
  • Modernize the technological infrastructure

Let us now imagine that the management committee of a corporation devotes a meeting to compare these objectives and discuss which is more important for the strategy comparing them in pairs. The conclusion would be something like the following table:

Table, innovative culture, digital services, modernization

Although matrices can be done by hand or in Excel, it is convenient to have software that allows calculation and is integrated with the project management itself, such as ITM Platform.

Thus, not only is there a system that helps to perform the analysis, but its results are registered and connected with the evaluation of the projects themselves.

By linking each project to the objectives and criteria it supports, ITM Platform indicates which projects contribute the most value and should start sooner.

Of course, the work of evaluating the proposals will remain a difficult art, as well as the elaboration of innovative proposals, with all the market prospecting exercises, identification of tendencies and uncertainty for the future.

But there is a basis in the management of the information that must be demandable. The facilitated prioritization that we have explained in this article has the great advantage of generating consensus and supporting informed, renegotiable and easy to communicate decisions.

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graphs and charts. premium quality, flat design image isolated on white background.

The most common project indicators: time and budget

Traditionally the measures of cost and time have been worked with, commonly known as 'On Time and On Budget'  (OTOB). This means that the project is delivered on time and within budget.

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It's normal for any project manager to consider that the most important project indicators are the elements included in OTOB, such as time compliance and the synergy between the budget and the original plan , in order to determine the profitability of the project.

However, there are many more metrics to consider when measuring management effectiveness, project profitability, and even the contribution to the long-term objectives of the organization. Cost and time measures are a start, but it is important to complement them. There are now multiple measures that monitor the project during its development and allow for a more accurate analysis.

Key Performance Indicators or KPIs  serve as a execution guide to examine and evaluate the performance of a project over time, beginning to end. Their effectiveness lies in the evaluation and monitoring, whether they are normal or special projects.

An indicator is not the same as a metric. To evaluate the data captured as a KPI it is necessary to be able to look at the progression. For example, the number of projects not completed in time becomes a KPI when transformed into a percentage and when placed in the context of the total of projects; or when comparing the change from previous years.

How does distance evolve with estimation?

This starting point allows us to understand the complexity that behind the seemingly simple notion of time. Time can lead to a very high number of project indicators, so it is imperative to be able to select the most important and clear ones.

One of the most valuable indicators related to the measurement of time is the deviation from the initial estimates of deadlines. This indicator evolves throughout the execution of the project. For example, by default ITM Platform offers the following graph, in this case on a software development project.

graph on a software development project

It can be seen that on January 1, 2018 the deviation between expected percentage and percentage completed is 26%, although the situation was even more serious in mid-December, when the gap reached 30%.

From there, it is easy to extrapolate valuable indicators. Let's look at the following table, which compares the actual data with the nearest estimated points.

1 2 3 4 5 6 7 8 9 10
Estimate 9% 20% 26% 46% 54% 62% 70% 78% 88% 100%
Real 6% 9% 17% 26% 31% 32% 34% 40% 62% 74%
Difference 3 11 9 20 23 30 36 38 26 26
Increase in difference +3 +8 -2 +11 +3 +7 +6 +2 -12 0

Although the difference between estimated and actual completed percentage is an interesting value, the variation of the difference is the most important KPI because it identifies the critical points throughout the project execution, such as the inflection at point 4, from which the difference remains above 20 points.

From such a simple indicator, it is possible to examine the causes of deviations in detail, to identify the problems and to put in place measures so that this will not be repeated in the future:

  • If the estimates of the time needed to complete certain requirements were unrealistic, one must delve into the actual work that was necessary to complete them
  • If there were unforeseen delays due to avoidable reasons, these motives can be outlined as risks in future projects in order to generate contingency and mitigation plans that allow both isolation and treatment.

Of course, this isolated KPI can not tell the whole story, or may show a very different version of events. For example, the critical path could have been affected from the beginning by an external factor that, when unblocked, would generate the enormous advance between points 8 and 9; but it could also happen that the accumulated delays were due to a little integrated project team and the final advance to the commitment of the team to save the project before the imminence of the delivery.

That is why it is necessary to use this is conjunction with other indicators and with the practical information that can be gathered from conversations with the team members.

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ITM Platform has just launched a self-assessment tool aimed at any organization that may have doubts about their project governance.

Under the title "Do you have what it takes to run your PMO?", this self-assessment tool is aimed at companies that are considering starting a new Project Management Office, as well as companies that already have one, but they perceive difficulties in the definition of their functions.

The test analyzes the current situation of the organization in three axes: organization, talent and environmental conditions. By crossing maturity into these three factors, we identify the moment the organization is in and we can provide recommendations on how to move forward.

The origin of the project stems from the good reception of the e-book "PMO: Roadmap to define your own Project Management Office". Building on the comments received, the ITM Platform team identified the most critical areas that can block or accelerate project governance.

Sharing and improving knowledge of the sector

The test is launched with the intention of encouraging reflection within the organizations of the sector. For this reason, we encourage all participants to share the test with the rest of their organization so they can compare their results, discuss discrepancies, and delve into the motivations and challenges of project governance.

Participants' responses will be used in aggregate form to study the status of the project manager community and to continue our mission of democratizing project management.

[et_success_form_inline optin_id="optin_4"]

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businessman change light bulb. changed the ideaLike all sciences and disciplines, project management and change management have a particular language. Hence, a better understanding of professionals in this field is achieved, which can be communicated without creating ambiguities. However, for newcomers in these areas, the terminology can be complex and confusing. We will define some of the main terms and concepts related to project management and change management to facilitate their understanding.

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Change management

In a dynamic world and market, it is assumed that any company or business must be constantly changing to adapt to the specific needs that customers can present at any given time.

This constant change is what makes it necessary to have an active policy of change management within the company.

Traditionally, change management has been understood as the transition from an original state, in which the company is before the change, to a definitive state, in which the company finds itself after the change. The aim of change management is to make the change with agility, adapting to the needs of the market, and at the same time in the most gentle and simple way for the workers, to avoid altering their attitude towards their work and optimizing their adaptation.

At present, there is a new, more dynamic concept of change management, which involves a gradual, transitional change from one working system to another on an ongoing basis. It is assumed that there will never be a perfect match between work methodologies and market needs, so it becomes necessary to be in permanent change.

According to this second, more modern concept, the change management of the company aims to detect the directions of the market and direct the methodologies of work towards them.

Communication strategy

Communication is the vehicle that allows people and companies to be contacted. Good communication is necessary to successfully implement any work strategy.

In the case of change management, ensuring efficient communication channels between the different services, departments and personnel involved is an essential condition for the change to take place effectively.

Therefore, in addition to adequately clarifying the change management, it is necessary to decide the communication systems that will allow it to be applied properly.

Company culture

A company is like a living being formed from the sum of all the people who constitute it. Therefore, it has its own personality, its own internal culture, and is formed by the employees' attitudes, values, behavioural norms and the illusion and hope for the future that they all have.

It is desirable to develop a company culture because it contributes to generate a sense of belonging and involvement and, therefore, to improve productivity and interaction between workers.

ROI (Return On Investment)

It is probably the most useful indicator to measure how successful a change is in a business. In practice, it means how much of a result is being drawn from the effort and capital that is being invested initially. Therefore, it is a direct measure of the performance of the effort and the work of the company. More efficient work management systems and methodologies will allow for a higher return on a smaller investment, that is, increase the ROI.

Therefore, quantifying the ROI before and after implementing a new work methodology allows us to study the real impact that this has had on the company and its productivity.

Stakeholder analysis

It means exactly what the word says, to analyze all the people in the company who can be affected by a change initiative, whether they are the ones who have to implement it or who are the beneficiaries or recipients of this change.

In order to analyze the personnel involved, the first step is to ask the correct questions to identify each one, to understand their specific needs, what they expect from the changes that will be introduced and where is the most correct place for each one of them In the company, taking into account the tasks they perform, their training, their place in the hierarchy and their attitude towards change.

Risk Mitigation

The introduction of any change in the company implies the introduction of a risk. One of the functions of project management is risk management.

Prior to the execution of any project, it is necessary to carry out a unified analysis of the risks that can appear and the attitudes that must be taken to avoid them or at least to diminish the impact they have on the project as a whole.

In the case of change management, its very essence implies a risk, since it has an impact on the company and its operation, although in principle it is expected to be positive.

However, risk must be constantly monitored to enhance the positive impact that change can have and avoid or minimize possible negative impacts.

Resistance to change and training

All changes involve some sort of apprehension from the workers, who are accustomed to the working methodologies. To reduce these resistances and facilitate the adoption of changes, the best tool is training. A conscientious, motivated and trained worker, who knows the contributions and advantages of the new work systems, is an employee willing to change and improve progressively.

Conclusion

Project management and change management have their own glossary. Knowing the terminology will help to understand the concepts and, therefore, to apply them properly.

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software development design development implement analyzeA project management office (PMO) can fulfill multiple functions related to the supervision of an organization's project portfolio, often with managerial functions and with a strategic orientation that is added to the simple control and monitoring layer.

However, it is not clear what an agile PMO is or how it is structured. It is becoming increasingly urgent to clarify this aspect, since many teams and even entire organizations, especially in the field of software and application development, rely entirely on agile methodologies such as SCRUM.

Before entering into the matter, it is necessary to clarify three different senses of what can be understood by agile PMO.

Disambiguation: What do we mean by agile?

An agile PMO can refer to several situations, such as:

1. The agile implementation of a PMO

As the start-up process is long, complex and may have difficulties in demonstrating its benefits to stakeholders with a high capacity for influence, some experts advise that the start-up approach be agile and be protected from criticism towards a structure that it is not working 100% yet. In addition, it is possible that the difference stakeholders do not agree on what should be the role of the PMO in the organization, in which case their scrutiny on the development of the implementation will necessarily be uneven.

Reference: https://www.pmi.org/learning/library/agile-project-management-office-expectations-7069

To combat this disadvantage, a PMO whose implementation is conceived as an agile project must deliver processes and functions useful for the operation of the PMO in a continuous and early manner.

The measure of the progress of the project, as is logical, is given by the functionality of the PMO itself.

An agile implementation is usually characterized by an initial diagnostic phase, followed by phases of planning, execution and closure that can be iterated several times until the PMO has the desired maturity.

However, in the first iteration of the execution, the PMO already assumes characteristics that allow it to operate in one or more of its functions.

2. The role of a PMO whose objectives is to manage the project portfolio following agile principles

It is not essential to have adopted SCRUM throughout the organization so that we are interested in benefiting from some of the advantages of agile principles at the corporate level.

For example, the agility applied to the entire portfolio of projects allows for early decisions and rectifies the initial planning of projects when the context that justifies them is modified.

3. The role of a PMO in an organization that has exclusively adopted agile project management methodologies

What happens when an organization that worked with classical methodologies or waterfall becomes guided by SCRUM or other agile methodologies?

What is the role of the PMO in this new situation? Is the mission aborted and the office deleted, or is it given a new meaning?

The cultural and change management role of the PMO can be fully maintained. In the new context, the PMO facilitates the deployment of the agile culture in the different areas of the organization.

The predominant areas are the following:

  • Training: includes training new people in agile methodologies, preparing meetings and workshops, deepening for key embers, as well as coaching services.
  • Work monitoring: although the agile philosophy is very horizontal and does not require so much external control, a PMO can support the performance of the teams helping them to manage the backlog, offering clarity in the performance of the teams through an impartial external vision, and helping to that the documentation that works in the organization is productive and does not produce unnecessary work.
  • Interlocution with the business: One of the fundamental aspects of the manifest agile is the constant efforts to understand the need of the client and guide the work to the delivery of utility. In internal projects, it is essential that there is a well-oiled transmission chain with those who administer the corporate strategy so that they know that the engineering teams are working on the most critical aspects and that they deliver the most value to the business.

Next, we detail better what the work of an agile PMO consists of in this last case.

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The nuance is important, as our readers are well aware that managing agile projects involves ongoing guidance to customer requirements and very frequent evaluation cycles. The question is how the responsibilities of methodological guidance, centralization, control and direction of the PMO can be connected in these cyclical structures, maintaining customer orientation and business perspective.

The fundamental risk, let's face it, is to create a small bureaucratic monster that coagulates methodological demands without adding value.

Failures in the conception of a PMO

The main problem arises when, in order to achieve agile projects, an attempt has been made to establish rules of action that have merely pigeonholed and limited decision-making.

Despite falling under the range of agility, SCRUM requires the production of a lot of documentation with a very high frequency, including the requirements of user stories.

A recurring error when creating PMO in agile environments is utilizing them as centralized offices that impose internal policies and norms. Keep in mind that circumscription to certain standards at work can marry poorly with the completion of certain complex projects. There is the risk of restricting the freedom of action and the margin of manoeuvre that are fundamental to produce value in all sprints.

A PMO cannot be confused with merely a controlling body that seeks to fit agile projects into tactics, methodologies and master projects of the manager that have been preconceived without special attention to the changing nature of agile projects.

First correct interpretation of the agile PMO

In contrast to the centralized and bureaucratic PMO, the most attractive in an agile environment is the performance of a facilitation function.

This can be done by establishing recommendations to help manage the workload, distinguishing between priority and ancillary tasks, helping project managers determine how much they can rely on experts, and even set basic standards of performance and work ethics that are in line with the values and mission of the organization. So that all projects, besides providing value to the client, are oriented to the common benefit and growth and consolidation of the organization.

One difficulty of any multi-project organization is the barrier to sharing knowledge, both within the same project team and between different projects. In the first case, the difficulty is that the experience and specialization accumulated by the veterans is not limited to the tasks they perform - which would create bottlenecks; In the second, the difficult thing is that the experience in the development of a project is not forgotten with its completion, but rather to increase the experience accumulated by the organization.

An agile PMO, among other things, faces the specific knowledge challenges that hinder operational improvement in agile performance.

And one of the main goals of an agile PMO is to make all parts of the organization that take part in a project as a unit, as a team, and even as a team of teams. In this sense, it is important that whoever is going to coordinate the work of the PMO accredits the following virtues:

- Relationships. Good contact with leaders of other departments as well as people integrated into other projects.

- Trust. Openness in dealing with those who are going to influence the project is key to its success.

- Experience. Undoubtedly, having previously faced similar projects provides sufficient evidence to address future projects.

The goals of an PMO agile

Once we have analyzed some guidelines of an agile PMO , we are going to offer you the primordial purposes of these organs. Take note.

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1. Manage new project entries

It makes no sense to approve projects above the delivery capacity of development teams. The PMO can function as the housekeeper to resist the temptation to start projects too soon. You have to wait to finish projects to start others of equal size.

2. Validation of the planning rules

The probability of unexpected and unnecessary changes must be reduced to the maximum, due to the overall understanding of the program.

3. Creation of training programs

Training is fundamental so that the knowledge of the equipment is truly complementary and there are no empty areas. The detection of gaps should be the basis for proposing training to members.

4. Limit waste

Only the PMO will have aggregated information on where time and effort is wasted. It is possible that different projects have similar patterns that point to the inefficiency of the processes. Drawing attention to them is the first step to rectifying them.

5. Delivery report

Reporting to consolidate an accredited view of the status of part of a project or its overall vision will facilitate the interpretation as to whether the affairs of the organization are being carried out in the most functional way. Without going further, conclusions that can be drawn from these reports may become important in the allocation of personnel for certain tasks or working schedules.

6. Business rules related to the benefits of the project

When making a commitment on a project, it is imperative to keep in mind that there are minimum results that have to be fulfilled. This duty also facilitates the adjustment to content that is compatible with existing quality projects. A uniformity that you do not have to understand as negative, but as an orientation towards excellence.

7. Validation of a resource plan

Every project requires a realistic allocation of resources. You have to keep in mind that the amount of resources of an organization will always be insufficient to delivering all the projects that can be generated, hence it is necessary to select, analyze conscientiously and not to precipitate. The allocation must be reasonable (it is fundamental to minimize the risks) and must be based on the fact that, in a final global calculation, the investment and achievement are compensated.

In short, we hope this text has helped you understand how an agile PMO has to works.

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