PPM is about ‘doing the right things right’ where things refer to work efforts, projects and programs, doing the right things refer to prioritizing and selecting projects and programs in line with the strategy & objectives of the organization and doing things right refers to execution of projects and programs in such a way the benefits are realized.
Portfolios, programs and projects are all formal expressions of resource assignment decisions. Accordingly, a systematic approach to collecting, selecting, planning and managing them is key to a high-quality Governance process. Projects, programs and portfolios share a common life cycle formed around four key stage gates, which are Create, Select, Plan and Manage. In the context of portfolio, an important and first task is to determine the investment types or categories with which the project or program are categorized. The purpose of this blog is to examine the need and methods of project categorization.
Purpose of Categorization
Broadly, the following are the purposes for which organizations find categorization useful.
Strategic alignment: Certain projects share common characteristics that will mean a common approach with respect to prioritization, project tracking and monitoring, strategic visibility, etc. Appropriate categorization of projects would offer better visibility in terms of strategy execution and benefits realization.
Capability specialization: Another reason, organizations would be interested in categorizing projects is to identify and group similar projects, so that they all share common tools, technology and terminologies, which will help better management of resources and communication across projects.
Promote project approach: Though this purpose is of minor nature, it helps organization to promote the project culture and differentiate operations from projects and also to use a common methodology to manage such projects
The following table presents a mind map of organizational purposes around categorization:
Categorization Schemes
None of the standards or frameworks specify a particular scheme with which to categorize and it is left to the organizations to decide on the scheme that best suit their needs. It has been found that most of the organizations use a multi-dimensional composite attribute based categorization schemes.
Here again the following three broad approaches are in wide use:
Hierarchical scheme: In this scheme, projects are hierarchically grouped based on multiple attributes. For instance, at the top level, the projects may be categorized as small , medium and large, based on the estimated investments and then further categorized into the application areas like, Infrastructure, Enterprise Applications, Field Applications, etc. There could be further categorizations as well. Under this scheme, each project falls under one unique category under each level.
Parallel scheme: Unlike in the hierarchical scheme, in this case, projects are assigned several sets of attributes. For instance, the projects may be categorized by complexity, technology and strategic importance and a project may find a place in all three categories.
Composite scheme: In this scheme, the categories are determined based on the result of applying more than one attribute. For instance, the category project management complexity may be determined by combining multiple attributes like team size, number of units or modules to be delivered, development efforts, duration, etc. Similarly a category deployment complexity may be based on attributes like process impact, end user scope of impact, project profile, project motivation, etc.
Conclusion
There is no single scheme or approach that best suits an organization. It is for the people involved in the IT / Business Governance to carefully choose the categorization based on the organization’s Vision and Strategy and then create a process to consistently determine the appropriate category for a project so that the relevant strategic and tactical tools and methodologies can be applied to that project as well, which in turn will ensure realization of the intended benefits with a desired level of efficiency and effectiveness.
References:
Project Portfolio Management: Doing the Right Things Right
Portfolios, programs and projects are all formal expressions of resource assignment decisions. Accordingly, a systematic approach to collecting, selecting, planning and managing them is key to a high-quality Governance process. Projects, programs and portfolios share a common life cycle formed around four key stage gates, which are Create, Select, Plan and Manage. In the context of portfolio, an important and first task is to determine the investment types or categories with which the project or program are categorized. The purpose of this blog is to examine the need and methods of project categorization.
Purpose of Categorization
Broadly, the following are the purposes for which organizations find categorization useful.
Strategic alignment: Certain projects share common characteristics that will mean a common approach with respect to prioritization, project tracking and monitoring, strategic visibility, etc. Appropriate categorization of projects would offer better visibility in terms of strategy execution and benefits realization.
Capability specialization: Another reason, organizations would be interested in categorizing projects is to identify and group similar projects, so that they all share common tools, technology and terminologies, which will help better management of resources and communication across projects.
Promote project approach: Though this purpose is of minor nature, it helps organization to promote the project culture and differentiate operations from projects and also to use a common methodology to manage such projects
The following table presents a mind map of organizational purposes around categorization:
Primary
Purpose
|
Sub
Purpose
|
Benefits
|
Strategic
Alignment
|
Selecting
/ prioritizing or projects / programs
|
Alignment
commitments with capabilities
|
Managing
Risk / controlling exposure
|
||
Allocating
budget
|
||
Balancing
portfolio
|
||
Identifying
approval process
|
||
Planning,
Tracking adn Reporting of
|
Resource
usage
|
|
Performance,
Results, Value
|
||
Investments
|
||
Comparability
across projects, divisions, organizations
|
||
Creating
strategic visibility
|
Visibility
across projects, divisions, organizations
|
|
Capability
Specialization
|
Capability
Alignment
|
Choosing
Risk Mitigation Strategy
|
Choosing
Contract Type
|
||
Choosing
Project Organization Structure
|
||
Choosing
Methods and Tools
|
||
Matching
of Skill sets to Projects
|
||
Allocating
Project to Organizational unit
|
||
Setting
Price
|
||
Enhancing
Credibility with Clients
|
||
Capability
Development
|
Developing
Methods and Tools
|
|
Managing
Knowledge
|
||
Developing
Human Resources
|
||
Adapting
to Market / Customer / Client
|
||
Promoting
a Project Approach
|
Providing
a Common Language
|
Facilitate
better Communication
|
Distinguishing
Projects from Operations
|
To Better
Manage the Work Efforts
|
Categorization Schemes
None of the standards or frameworks specify a particular scheme with which to categorize and it is left to the organizations to decide on the scheme that best suit their needs. It has been found that most of the organizations use a multi-dimensional composite attribute based categorization schemes.
Here again the following three broad approaches are in wide use:
Hierarchical scheme: In this scheme, projects are hierarchically grouped based on multiple attributes. For instance, at the top level, the projects may be categorized as small , medium and large, based on the estimated investments and then further categorized into the application areas like, Infrastructure, Enterprise Applications, Field Applications, etc. There could be further categorizations as well. Under this scheme, each project falls under one unique category under each level.
Parallel scheme: Unlike in the hierarchical scheme, in this case, projects are assigned several sets of attributes. For instance, the projects may be categorized by complexity, technology and strategic importance and a project may find a place in all three categories.
Composite scheme: In this scheme, the categories are determined based on the result of applying more than one attribute. For instance, the category project management complexity may be determined by combining multiple attributes like team size, number of units or modules to be delivered, development efforts, duration, etc. Similarly a category deployment complexity may be based on attributes like process impact, end user scope of impact, project profile, project motivation, etc.
Conclusion
There is no single scheme or approach that best suits an organization. It is for the people involved in the IT / Business Governance to carefully choose the categorization based on the organization’s Vision and Strategy and then create a process to consistently determine the appropriate category for a project so that the relevant strategic and tactical tools and methodologies can be applied to that project as well, which in turn will ensure realization of the intended benefits with a desired level of efficiency and effectiveness.
References:
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