IT Week: Industry experts often advise organisations to consider a programme or portfolio management approach to running their IT projects. What would you say are the key differences between project, programme and portfolio
management?

David Groves: I think there are a number of different ways of looking at it. The simplest way is that a project is a defined unit of work or a stream of work that has a particular purpose. A program is generally a collection of projects which, when they are brought together, are all like-minded, all driving a common purpose. A portfolio is a much wider thing: it is a way of looking at a whole bunch of streams of work, which may or may not be related to one another but which fundamentally are all taking organisations in a positive direction, whether that is competitive or organisational development.

So each approach builds on the previous one?

I think of the difference in approaches ­ project, programme and portfolio ­ sometimes as a mosaic floor. A mosaic is made up of all those tiny, little discrete pieces of different colours; each one of those tiles is like a project. Within that mosaic, you will have individual pictures and scenes made up of groups of tiles; each one of those collections of small pieces is a programme. The whole piece, or floor if you like, is the portfolio. It is one discrete piece, which has a purpose for the organisation. And, of course, those designers of the floor, who are constantly thinking about how to make it perfect as they lay it down, are the portfolio managers.

So where would you say UK firms are at the moment in terms of their approach to project and portfolio management? Are most of them still at the level of managing projects on a very individual, one-to-one basis?

This has an “it depends” answer. Some organisations are very advanced and others are less so. Many people often think that if there is a project management office managing all the projects within an organisation, then they are moving in the right direction. In the UK that function is called many things: sometimes it is a project management office, sometimes it is a programme office, sometimes it is even a development office. Generally, though, the activities that those different functions perform are gradually bringing together a much bigger level of maturity in terms of not just how to run a project, but how you bring these things together and look in a holistic manner across the organisation.

What difference does the type of organisation make to the possible approaches that it could take towards realising the benefits of portfolio management?

In some cases, chief executives will have a dashboard where they can see exactly what is happening in their portfolios. In other cases, they are just gathering that information with the project management office on spreadsheets. But generally, the whole industry is moving in this direction. It is just that some organisations have gone further and faster than others.

For organisations that have not yet reached a mature portfolio or programme approach, what is the best way for them to advance their current project management processes?

This is one of those interesting questions that comes up for us all the time when we are implementing project and portfolio management technology for people. Some like to think of it as a top-down problem. Others like to think of it as bottom-up. A bit of insight into what the bottom-up approach means is, if you have all of your projects and you gather that information together and you put it into a project portfolio management system such as CA’s Clarity tool, then you can suddenly see at the very top level all the dependencies and all the risks.

How do you distinguish between this approach and a top-down approach to implementing the same technology?

There are other organisations that say, “Well, I sort of want to get a view of all my projects today before I have to go and get my arms around all of that data.” You have to remember that some organisations have a thousand projects. So the top-down view is to say, “All we will do to start with is to take a very broad-brush view of the big pieces. We know there is a lot of detail inside them to capture, but, to start with, we will just think about what they do, what the risks are, what the investment is, and what the return is.” They start at the portfolio level and then they build the data down over time.

Which of these approaches has the best end results?

Some organisations will start from both the top and bottom end at the same time in order to maximise the speed with which they can start to get the benefits. What we generally advise to people when they implement a tool like Clarity, for instance, is that if you start with the bottom-up approach, you must still always be thinking about that top-down view. Otherwise you will get all your projects into a good state but you will not have that chief executive dashboard that so many people want.

Often when we think about projects, we tend to focus on the issues around IT projects. But obviously, there is a much wider spectrum of project types across the business. When companies are thinking about project and portfolio management, should they be looking outside of the IT department?

Yes, I think they should. And often, the project and portfolio management discipline starts within IT and then grows outside of IT. Or, when it comes to getting sponsorship for it from the IT department, the rest of the organisation looks at it and realises that the issues do not just apply to IT, they actually apply to the rest of the business. Fundamentally having a portfolio of work that drives the organisation forward is not an IT issue, it is a board issue. It is a chief executive and chief financial officer situation that they have to manage, and one in which the chief information officer and IT department play a fundamental part. But IT is by no means the whole picture.

Can you give us any examples of these two different approaches that are being used in real organisations?

An organisation such as Scottish & Newcastle, one of the largest international breweries, actually started by looking at a need for project and portfolio management in IT. As it went for sponsorship for that, the rest of the business said that as other departments were always rolling out initiatives too, every initiative should go through this kind of discipline. And so Scottish & Newcastle has gone across the whole organisation with it. Then, take a company such as Capgemini, which has 20,000 users. What it is doing is not thinking about planning the portfolio of projects, but actually running its professional services projects for countless different companies. It uses project and portfolio management to make sure it keeps everything on track for its customers. So there are a huge number of different applications for this. Fundamentally, a portfolio, programme or project is an initiative to support the competitive advantage of the organisation. It does not matter if it is IT or not IT; the same rules apply.

What are the core business benefits of reaching the full portfolio management approach for UK organisations?

We have talked a lot about the theory of the portfolio approach, but why firms should be doing this is a very good question to answer. Most people thought originally it was about cost control and process excellence, as well as the sharing of resources to make sure that firms can always have the right expert in the right place. Fundamentally, those things are key. But that is not the core benefit as such. Firms know they will get cost control and efficiency from project and portfolio management. But the key benefit is competitive advantage to the organisation.

You say that the key advantage to organisations is around competitiveness. But how does this translate from the technology implementation and data analysis into true business agility that is capable of sustaining a competitive advantage?

A portfolio manager can look and decide: should the organisation accelerate this particular investment or slow it down? It is about getting products that are important to your organisation ­ and that could be a construction project, it could be an online shopping service, or it could be an investment product for people ­ to market at the right time, or getting them to market faster or with the right functionality in order to be successful. It is those sorts of decisions about where and when to spend the company’s money in driving profitability and revenue that portfolio management exists to help the business take control.