Purpose of this Guide
The purpose of Portfolio, Programme and Project Offices (P3O) is to provide universally applicable guidance, including processes and techniques, along with hints and tips, that will enable individuals and organizations to successfully establish, develop and maintain (or in some cases re-energize) appropriate support structures that will facilitate:
• Informing senior management’s decision-making on prioritization, dependencies, risk management, and deployment of resources across the organization to successfully deliver their business objectives (portfolio management).
• Delivery of programmes and projects within time, cost, quality, and other organizational constraints.
• Identification and realization of outcomes and benefits via programmes and projects.
P3O will provide a focal point for defining a prioritized and balanced portfolio of change and ensuring consistent delivery of programmes and projects across an organization, division, function or department. Three forms of P3O support structure are given as examples in this guidance:
• A single, all-encompassing physical office.
• An organization portfolio office supported by permanent hub portfolio offices or temporary programme/project offices.
• A decentralized office where P3O functions and services are provided by their functional role/ department and no physical P3O office exists.
In summary, the guidance seeks to answer the following questions:
• What is a P3O?
• Why have a P3O?
• How do we design a P3O?
• What functions and services can and should be offered?
• How do we implement or re-energize a P3O?
• How do we operate a P3O?
Please note:
• Throughout the guide PPM is used as the abbreviation for Portfolio, Programme and Project Management, and also includes value and risk management.
• PPM maturity is a reference to an organization’s capability to deliver a portfolio, projects and programmes. P3M3 maturity is an assessment of an organization’s PPM capabilities using the Portfolio, Programme and Project Management Maturity Model.
Organisational Context of PPM
Many organizations operate in a complex environment, with investment being made in many programmes and projects to deliver change at any one time. This guidance has been developed to enhance and build on the challenge, enablement and support structures referred to in existing AXELOS Best Management Practice guidance.
What is a portfolio and what is portfolio management?
Definition: portfolio
The totality of an organization’s investment (or segment thereof) in the changes required to achieve its strategic objectives.
The process of developing a portfolio will require decisions to be made on how the scarce resources can be deployed to best effect. Consideration will need to be given to both the operational and strategic priorities when determining where investment should be made.
Definition: portfolio management
A coordination collection of strategic processes and decisions that together enable the most effective balance of organizational change and business as usual.
The focus of portfolio management is delivery of the organization’s strategy. It achieves this by ensuring that:
• Changes to business as usual are agreed at the appropriate management level and contribute to at least one strategic objective.
• Strategic decisions are based on a clear understanding of cost, risk, impact on business as usual and the strategic benefit to be realized.
• Resources and changes are prioritized in line with the current environment, existing changes, resource capacity and capability.
• All changes are reviewed frequently in terms of progress, cost, risk priority, benefits and strategic alignment.
Portfolio management is an active and iterative process and requires the collection and analysis of timely, relevant information about the organization’s investment initiatives (programmes and projects) in one place.
Portfolio management should consider not just those programme and project commitments comprising the organization’s change agenda, in terms of resources, but should also consider the wider business picture, taking account of business as usual. Only by understanding and appreciating the organization’s full suite of commitments, i.e. corporate, programme, project and business as usual, can a fully balanced business portfolio be achieved.
Definition: business as usual (BAU)
The way the business normally achieves its objectives.
In the context of P3O, business as usual describes the things done to keep the business operating on a day-to-day basis.
Many organizations segment their portfolio by business unit, division, department or geography, allowing local portfolio management in line with the organization structured and governance framework.
What is a programme and what is programme management?
Definition: programme
A temporary, flexible organization structure created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the organization’s strategic objectives. A programme is likely to have a life that spans several years.
Definition: programme management
The coordinated organization, direction and implementation of a dossier of projects and transformation activities (i.e. the programme) to achieve outcomes and realize benefits of strategic importance.
The focus of programme management is the delivery of outcomes and benefits that contribute to achieving the organization’s strategy.
What is a project and what is project management?
Definition: project
A temporary organization that is created for the purpose of delivering one or more business products according to an agreed business case.
Definition: project management
The planning, delegating, monitoring and control of all aspects of the project, and the motivation of those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope, benefits and risks.
The focus of project management is the delivery of one or more products that can be used by the organization to deliver an outcome that contributes to achieving the organization’s strategy.
Relationship between business as usual, change and PPM
The relationship between PPM and business as usual is represented in a simple concept – ‘Run the business, change the business.’
Portfolios, programmes and projects are undertaken to deliver change to an organization’s business operations environment and the correct level of engagement with the wider business is vital for success.
Any functions such as P3O that provides support to change portfolios, programmes and projects must therefore engage with business operations as effectively as it engages with the PPM community. Two key stakeholder groups within an organization are senior management and the operational delivery teams that will run the changed organization through and after transition.
Whilst change and business as usual may be regarded as separate activities, they cannot survive without each other; also, the transition from one state to the other must be actively managed.
Proposed changes should be assessed to ensure they contribute to the organization’s strategic objectives.
One of the key benefits of having a P3O is that it provides the mechanism to ensure decisions are made at the correct level in the context of business as usual and that the right mix of programmes and projects is delivered.
What are P3Os?
Definition: Portfolio, Programme and Project Offices (P3O)
The decision-enabling and support business model for all business change within an organization. This will include single or multiple physical or virtual structures, i.e. offices (permanent and/or temporary), providing a mix of central and localized functions and services, and integration with governance arrangements and the wider business such as other corporate support functions.
The P3O guidance provides a joined-up approach to the design, implementation and operation of these offices.
Programme and project offices have been in existence in some form since the introduction of project management as a disciplined approach to managing change.
PRINCE2 and MSP have contributed to increasing numbers of centre-of-excellence services, such as providing consistency of approach through standards, and temporary programme and project offices, established to support a specific change initiative.
More recently, MoP has contributed to the increase in organization portfolio offices. These ask the questions ‘Are we doing the right things?’ and ‘Are we getting the benefits from our investment?’
Without a structured approach to implementation, P3Os will often have an unclear vision and scope and be under-resourced or resourced with the incorrect skill sets.
The most effective P3Os have a vision and scope agreed with senior management within the organization and are led by experienced PPM or strategic/business-planning professionals that have the influence, experience and credibility to gain commitment from all levels in the organization.
P3Os evolve over many months and years.
There is no ‘one size fits all’ approach, and not every organization will have all the elements. The P3O model to be deployed in any organization will depend on many factors, including:
• The aims and goals of both the organization and the P3O sponsor
• The business needs
• The PPM maturity of the organization
• The capabilities and capacity of the resource pool
• The number of programmes and projects being undertaken
• The wider organizational, political and cultural environment
• The business divisional/departmental structure and the geographical location of staff
• The effectiveness of matrix management structures
Portfolio Office
The portfolio office advises on and enables decisions around defining and delivering the portfolio, asking questions such as ‘Are the right things being done?’ and ‘Are they achievable?’ If not, ‘What should be added, removed or changed?’ or ‘Can the time-to-decision cycle be speeded up?’ In some organizations the key question to ask may be ‘How can we stop doing the wrong thing?’ or ‘How can we stop doing things in the wrong way?’
The portfolio office will be responsible for advising senior management on the composition of the portfolio and its progress against plans. It should also provide information on decisions to be taken in respect of any conflicting priorities and risks and issues.
The portfolio office provides challenge and scrutiny of portfolio information and recommends options/decisions to support those choices.
Ideally an organization portfolio office would report directly to a main board director. If this is not the case, the portfolio office may have limited visibility of investment decisions and insufficient authority to undertake the required functions and services.
The portfolio office also provides services at programme set-up and close, such as initiating programmes as part of business planning/prioritization, and triggering post-programme reviews to assess return on investment/benefits for the portfolio and capture lessons for sharing.
Programme Office
The programme office provides scrutiny, challenge and support for the programme board. It should also be a valuable source of information in relation to the health of the constituent elements of the programme.
The programme office also provides services at project start-up and project closure.
Project Office
A project office provides services for the project board similar to those provides by the programme office for the programme board, but at a lower level.
Where the project is part of a programme, the scope and activities of the project office will be heavily influenced by the programme office to ensure alignment and consistency of the processes and systems, thereby enabling easy roll-up of information. Some project office services may be provided by resources from the programme office.
Centre of Excellence
The centre of excellence (COE) ensures consistency of delivery across the portfolio, programmes and projects. It provides standards, methods and processes, knowledge management, assurance and training across the full portfolio of change. There is a potential conflict of interest between the development and embedding of standards and the assurance of those standards, and care must be taken to ensure that the assurance undertaken remains objective.
Governance and the P3O
The structure of the P3O provides the framework for portfolio, programme and/or project governance and must be aligned with the other aspects of corporate governance. Formal decision enablement rules – who makes what decisions, when, and what information they require – should be developed, and the P3O is responsible for ensuring information is communicated appropriately through the different levels of the portfolio, programme and project management environment.
Overall, the intention is to ensure the right decision is taken by the right person or group, based on the right level of supporting information. There should be a single source for each piece of data, which is then consolidated and summarized appropriately through the layers of the governance structure.
The same rigour should be applied to authorization, ensuring stage gates are not passed through without the appropriate authority and sign-off, by giving management boards the correct information to decide on progress.
A COE provides a range of services to define the standards and provide appropriate tools across PPM functions. This will include defining the standards for information management and providing an appropriate tool to make it easier to consolidate and summarize information to deliver one version of the truth.
The P3O guidance is part of a suite of AXELOS best-practice publications aimed at helping organizations and individuals manage their projects, programmes and services consistently and effectively.
All Best Management Practice guidance are intended to be tailored for use by individual organizations.
• Management of Portfolios (MoP) Portfolio management concerns the twin issues of how to do the ‘right’ programmes and projects in the context of the organization’s strategic objectives, and how to do them ‘correctly’ in terms of achieving delivery and benefits at a collective level.
• Managing Successful Programmes (MSP) MSP represents good practice in programme management in successfully delivering transformational change, drawn from the experiences of both public- and private-sector organizations. MSP provides an adaptable route map for programme management, bringing together key principles, governance themes and a set of interrelated processes to facilitate the delivery of business transformation.
• Management of Risk (M_o_R) M_o_R offers an effective framework for taking informed decisions about the risks that affect performance objectives. The framework allows organisations to assess risk accurately and thereby improve service delivery.
• Management of Value (MoV) MoV provides a cross-sector and universally applicable guide to how to maximise value in a way that takes account of organisations’ priorities and differing stakeholders’ needs and, at the same time, uses resources as efficiently and effectively as possible.
• Managing Successful Projects with PRINCE2 PRINCE2 (Projects IN Controlled Environments, V2) is a structured method to help effective project management via clearly defined products.
• ITIL service management publications ITIL provides a systematic and professional approach to IT service management.
• Portfolio, Programme and Project Management Maturity Model (P3M3) P3M3 is a tool for assessing an organisation’s current capabilities for managing its portfolios, programmes and projects.
• PRINCE2 Maturity Model (P2MM) P2MM uses the same structure as P3M3 from which it is derived, but it applies specifically to project management under PRINCE2.
Management Roles
P3O Sponsor
The purpose of the P3O sponsor is to champion and direct the establishment and evolving operation of the P3O. The P3O sponsor will ideally be a member of the main board and may also take the role of portfolio director.
The role requires strong leadership and management skills, coupled with authority to champion the P3O set-up and continual improvement.
The individual will need to understand the wider objectives of the portfolio, have credibility within the environment and be able to influence others.
Head of P3O (permanent office)
The purpose of the head of P3O (also called head of portfolio office, centre of excellence (COE) or hub portfolio office) is to establish and run the permanent office. The head of P3O may also take the role of portfolio manager.
The role requires strong leadership and management skills, coupled with strong PPM or strategy/business-planning skills, to ensure the integrity of the portfolio or programmes and projects.
The individual will need to understand the wider objectives of the portfolio and programme, have credibility within the environment and be able to influence others. They must be able to develop and maintain effective working relationships with senior managers, the programme and project teams, and any third-party service providers.
The role will also provide strategic challenge, overview and scrutiny, ensuring alignment with wider policy and strategic initiatives.
Head of Programme or Project Office (temporary office)
The purpose of the head of programme or project office is to establish and run the temporary programme or project office.
The role requires strong leadership and management skills, coupled with strong PPM skills to ensure the integrity of the programme or project.
The individual will need to understand the wider objectives of the programme or project, have credibility within the environment and be able to influence others. They must be able to develop and maintain effective working relationships with senior managers, the programme and project teams and any third-party service providers.
They must have the ability to deputise for the programme manager.
Generic Roles
Portfolio Analyst
The purpose of the portfolio analyst is to facilitate the development and ongoing management of an optimised portfolio, ensuring senior management decisions lead to the fulfilment of strategic objectives through the delivery of programmes and projects (aligned with business-as-usual objectives).
Programme or Project Specialist
The purpose of the programme or project specialist is to provide specialist hands-on support for programme and project managers. They play a proactive role in knowledge management to promote programme and project management methods and standards, and the implementation of best programme and project management practice.
Post holders provide a consultancy service to programme and project managers across the organisation or department. This consultancy may take the form of advice and guidance or may be of a specific nature in the form of facilitated workshops.
Programme or Project Officer
The purpose of the programme or project officer (who may also be known as the coordinator or administrator) is to improve the planning and delivery process by collecting and maintaining data in a consistent form.
Functional Roles
Benefits & Value
The purpose of the benefits and value role is to ensure that a consistent ‘fit for purpose’ approach to benefits and value management is applied across the portfolio or programme and that benefits realisation is optimised from the organisation’s investment in change.
Commercial
The purpose of the commercial role is to ensure that the organisation carries out the role of ‘informed customer’ and that all commercial/procurement practices and decisions meet designated standards and offer the organisation value for money. It may also take on the role of supplier relationship manager, developing efficient and effective relationships with suppliers, outsourcers and partners.
The role may be a P3O role, but it is more likely to be embedded in the P3O, with formal line management from the commercial, procurement or purchasing function. It may also exist within a virtual P3O.
Communications & Stakeholder Engagement
The purpose of the communications and stakeholder engagement role is to ensure the effective management of the portfolio, programme or project’s stakeholders.
Information Management
The purpose of the information management role (also known as configuration librarian) is to act as the custodian and guardian of all master copies of the portfolio, programme or project’s information. The role may also take on asset management.
The role should work closely with the security function or department in an organisation in order to ensure full information and physical security is considered within a portfolio, programme or project.
Consultancy & Performance Management
The purpose of the consultancy and performance management role is to provide internal consultancy and expertise in PPM and organisation processes, and the monitoring of certain programmes and projects. The services provided are focused on maintaining minimum standards and achieving target performance.
Post holders seek to continually improve the performance of the portfolio, programme and projects within an organisation. They create, maintain and disseminate good practice.
Finance
The purpose of the finance role is to establish a professional finance function within the portfolio, programme or project to ensure the timely provision of portfolio, programme or project funding and effective financial control.
The role may be a P3O role, but it is more likely to be embedded in the P3O, with formal line management from the finance function. Post holders may also assist the portfolio, programme or project manager with budget control.
Issue
The purpose of the issue role is to take the lead in ensuring that the portfolio, programme or project has effective processes in place to identify, monitor and resolve issues.
Change Control
The purpose of the change control role is to take the lead in ensuring that the portfolio, programme or project has effective processes in place to identify, monitor and resolve changes.
Planning & Estimating
The purpose of the planning and estimating role is to take responsibility for facilitating the development and maintenance of the portfolio, programme or project plan and dependency logs.
Quality Assurance
The purpose of the quality assurance role is to lead the work to ensure that any new products or services delivered by the portfolio, programme or project are fit for purpose and are capable of delivering the benefits required by the organisation board.
Resource Management
The purpose of the resource management role is to ensure that current and future programmes and projects are equipped with enough human resources of the right skills, at the time they are needed, and that those human resources are used as efficiently as possible.
Risk
The purpose of the risk role is to take the lead in ensuring that the portfolio, programme or project has effective processes in place to identify and monitor risks, has access to reliable and up-to-date information about risks, and uses the appropriate controls and actions to deal with risks. This role should also ensure that these processes are aligned with corporate risk management policy.
Reporting
The purpose of the reporting role is to provide a reporting service to the portfolio, programme or project. It also collates base data and generates reports to multiple audiences through aggregated data.
Secretariat/Administrator
The purpose of the secretariat/administrator role is to provide portfolio, programme or project administrative support and a secretariat function for the relevant boards.
Tools Expert
The purpose of the tools expert role is to provide expertise in software tools to support the change environment. The role may also provide support to the PPM community to configure software, or to provide training and coaching in its use.