PPM Requires Strong Group Dynamics
I have helped several companies establish their first steering committees, as well as rebuild existing committees because they were deemed ineffective. A large percentage of executives asked to sit on these committees believe their role is to fight for money that supports their business unit's IT projects.
Their assumption could not be more wrong.
As weve discussed in previous articles, the primary purpose of a steering committee (or the IT investment council as I like to call it) is to ensure three things:
Possibly, the most important role the committee is responsible for is for communicating both IT investment policy and plans to all stakeholders and enforcing policy.
Scrutinize the New
The first responsibility of the committee is to ensure requested projects are the correct project in which to invest. A project proposal summary must be submitted to the committee. This proposal should be the culmination of a structured project screening and evaluation process that is part of the overall project portfolio management (PPM) practice.
Not all project requests should make it to the committee, but the significant ones should.
Typical project requirements that justify a review by the IT steering committee include those that result in total expenditures over $100,000 (adjust to your environment); consume 500+ hours of internal IT labor (adjust to your environment); and an executive-mandated, strategic project, regardless of cost.
Control the Current
The second major function of the steering committee is ensuring projects are managed effectively and efficiently. Adherence IT project management policy and requirements will enhance project successes and deliver quality systems on time and within budget.
The steering committee should review project health and overall performance as part of a regularly scheduled monthly project review meeting.
Rein in the Changes
The steering committee is also responsible for reviewing and approving major change requests involving scope, schedule, or delivery commitment. This authority is critical to prevent scope creep and project delays and ensures projects meet established goals.
When a major project continually indicates slippage, the steering committee should request a project assessment. The assessment will be assigned by the committee to an independent party to analyze the inefficiencies, determine the source, and make recommendations.
Licensed to Kill
Sometimes a project that looked good on paper becomes a money pit or an impossible exercise in technology. So the question arises, What do you do when a project clearly will not deliver its promised value?
Effective portfolio management means being willing and able to kill projects that have fallen off the tracks, grown to unmanageable proportions, are not delivering promised value, or no longer fit the company's strategic direction.
The IT steering committee should consider a project for termination if it exceeds predefined tolerances.
For example, has the project budget grown to more than 50% of the original budget? Has the project delivery date been extended beyond a 90 day window? Has the projects defined ROI gone negative? Has the business landscape changed that caused a major change in direction of the companys strategic plan that is counter to the projects goals?
By giving the order to terminate projects, the committee allows resources and funding to be applied to other value producing initiatives.
Measure the Value
The investment evaluation phase of your PPM practice could be considered the most difficult and probably the least implemented by organizations. It is the practice of measuring the business value that was actually realized from an implemented IT project and it answers questions like Was this the right investment to make?
The benefits realization process determines the degree of progress made towards the quantifiable business benefits and stated performance goals of IT projects. Critical elements of this process include consistent realized value examinations, project scorecards, as well as the monitoring and measurement of business value over time.
Jeff Monteforte is president of Exential, a Cleveland, OH.-based information strategy consulting firm, which specializes in IT governance, information security and business intelligence solutions. He can be reached at firstname.lastname@example.org.