ITScore Overview for Program and Portfolio Management

Key Findings

• Project, product, program and portfolio management, when functioning as well-integrated practices, are the key enablers that allow organizations to identify and execute strategic change.

• Any meaningful undertakings to enhance or evolve the program and portfolio management (PPM) function must pay more than lip service to organizational structures, business models and cultures to have any chance of success.

Recommendations

PPM leaders applying project portfolio management to optimize business value should:

• Improve the odds of success by focusing first on helping the organization make well-informed investment choices.

• Pursue Level 4 if the organization requires enterprisewide change and capabilities. It is worth the effort, since that's where enterprise PPM practices are built.

• Use enterprise goals and objectives as input to formulate and drive their PPM improvement plans.

The ITScore PPM Maturity Model

Gartner's ITScore PPM Maturity Model has five levels. These levels range from least mature, Level 1, to fully mature, Level 5 (see Figure 1).

Level 1: Reactive: It's a Mad Scramble to Stay on Top of Daily Demands

At this initial level, the organization is more reactive than proactive when dealing with projects. The enterprise often views IT as a necessity, but still a cost to be managed. The PPM role is nonexistent or just emerging, solely because someone on staff brought the knowledge into the organization. Personal relationships form the foundations of informal "adhocracies."

Consequently, processes and projects tend to revolve around specific individuals who are generally viewed as heroes or super achievers. Internal processes are centered on managing critical projects, so priority projects get staffing support, but all else is on the first-available schedule. Larger projects, when they are absolutely necessary, are contracted out to vendors. Projects may have budgetary estimates, but quite often, the project work is simply funded out of the IT or other departmental budget. Technology tools for projects are generally limited to spreadsheets and, occasionally, a project-scheduling tool used by an individual project manager.

Because of the need to respond to changing conditions, one of the hallmarks of this level is a mad scramble to get things done, often with too few resources and very little time. While there generally isn't an alternative at this level, without proper attention, it often lays the foundation for some of the bad habits that get dragged into Level 2.

Level 2: Emerging Discipline: Where Too Much or Too Little Control Always Leaves You Stuck

Level 2 is defined as an "emerging discipline," because this is the point where the organization decides that the plate spinning and ball juggling of Level 1 simply can't go on anymore, and that slowing down just long enough to get organized is a make-or-break situation. Depending on how long an organization stayed at Level 1, and depending on its culture, Level 2 can be a massive swing of the pendulum from an "anything goes, just get it done" environment to a process-driven, stagnating organization where rules get followed, and nothing gets done at the most extreme level.

The classic Level 2 approach to process, which is to "focus on repeatable process" (borrowing a term from Capability Maturity Model Integration [CMMI]), has been under fire with the progressive mainstreaming of agile approaches to software development. While the Level 2 capability requires only a core discipline in practice and process (hence, emerging discipline), the majority of clients have operated on the "more is better" principle models.

Most organizations at this level have invested in, or will soon invest in, a basic PPM tool. The concept of disciplined teams working on a project is developed, and project collaboration and team workspaces are supported. Nevertheless, "stovepiped" systems and inconsistent data still bedevil business processes. Tools with reliable data for value/financial management are generally still rudimentary, with little or no capacity to provide a detailed look into multiple projects or programs, or to handle chargeback or allocation systems.

Relationships at this level tend to break down, and the term "the business" as opposed to "IT" begins to be heard. How severe this breakdown becomes (if it happens) and how long it takes to repair are different for every organization and dependent on a significant number of variables. These include how much process IT chooses to adopt, how the rest of the company reacts to the process and, finally, how IT is perceived within the entire organization (as a service provider or as a trusted partner).

Level 3: Initial Integration: We're All in This Together

The most useful competency for a PPM function at Level 3 is the ability to think holistically — focusing on the whole, not the parts. This entails being able to understand how a change in one area will affect others, how changes should be made and in what order to achieve maximum results.

Level 3 concentrates on just enough of everything to get things working. To that end, comes the identification and formalization of specialized PPM leader roles, such as product, program, portfolio and other PPM leader roles, to create focus and space for the evolving skill set needed.

One of the most significant changes that happens at Level 3 is the creation of true joint decision making about projects, programs and products by the organization as a whole. We hesitate to call this "transparent governance," because it's a term often used by Level 2 organizations to set up something that is neither true governance nor transparent. The goal at this level is to provide a portfolio perspective so that the entire management structure of the organization can understand what investments are being made, what the outcomes and benefits are, and what the probability of success is. Beyond this, a portfolio approach will also help the understanding of how product or project work is, or may be, split between Mode 1 and Mode 2, or what proportion of the portfolio that is classified as agile versus waterfall or iterative.

The desire for transparent decision making creates a situation where there is a need for tools to provide visibility and support analysis. There is also a need for a reliable delivery mechanism and for some level of financial accountability.

The realization that PPM is a team sport also sets in, and cross-functional groups and teams are formed. The reason this level is known as "initial integration" is that, while there is a need for everything to begin to work in harmony, Level 3 tends to lack sophistication, and as we said earlier, the practices need to be conscious, as opposed to the conscious competence that is obtained at Level 4.

Level 4: Effective Integration: The Emergence of Enterprise Adaptability and Resilience

Linear progression stops at Level 3. Hard work and more process will not get an organization to Level 4. The process maturity approach of other models has led to the belief that process is the sole measure of excellence and maturity, and when it comes to PPM, we can say definitively that it isn't true. At Level 4, the enterprise begins to focus on being project-capable. This is not due to some mistaken belief that project management processes are appropriate for all organizational problems. It's because there is an expectation that projects, programs and products contribute business value.

There is a realization that the fastest, least-expensive way to accomplish anything new and different of significance is through the mechanism of setting up a project or program. Additionally, the work that was started on the portfolio at Level 3 comes up a notch, and it's now possible to begin to talk about real strategy execution.

In line with this expanded integration, a network of PPM leaders exists companywide. Centers of competency (most of them virtual) help improve workload management, and capacity planning is in place and operating. Practices, such as lean, in the process area help shift the focus from the internal organizational workings to a more customer-centric perspective. The portfolio is modeled and appropriately optimized, factoring in risk. Value and benefit realization are being tracked. Because program management skills are being developed internally, most project managers are now being chosen from internal candidates, rather than from among outside consultants.

Very few companies have successfully reached Level 4, but we anticipate this number to begin to grow, because digital is changing everything. While siloed organizations have always lacked the integration that defines Level 4, there has been little external pressure forcing organizations to change. The new digital economy, where competition can emerge from the dark corners of possibility, forces organizations to begin to work together as a matter of course, which supports PPM in attaining the level of initial integration.

Level 5: Effective Innovation: Constant Innovation Helps Us Stay on Top of Our Operations and Our Markets

The hallmarks of Level 5 from a PPM perspective have to do with a complete change in how organizations function. Innovation is no longer an afterthought. Innovation becomes a continuous process in the organization.

To accomplish this, the organization begins to split into two conjoined halves. Like the brain, the operational side of the organization begins to embrace fully the concept of "change operations" (for example, DevOps), while the experimental side of the organization turns to more exploratory and classically innovative initiatives similar to what our research is showing for IT with the evolution of bimodal IT. At Level 5, there is an expectation that IT has both strategic and tactical value and can potentially be used to redefine markets and industries.

At Level 5, program management will exist in much the same sense that it does at Level 4. There will always be large things that need to get done and that take talented leadership. Portfolios exist for all project work throughout the enterprise.

An enterprise PMO (EPMO) oversees strategy execution and value delivery. Other PMOs exist as necessary throughout the organization. Technology supports a robust knowledge management system, and resource management is enabled for all project resources. Team compositions change and adapt to each initiative, and work is structured and executed in a way that maximizes the odds of getting things done right.