In the "Decide" area of Lean PPM™, the inputs from the "Strategize", "Collect" and "Execute" areas converge and make it possible to decide on the future portfolio.
- Lean PPM™ Context and Roles Involved
- Implementation with Meisterplan
- Second Review of New Project Initiatives and Mutual Prioritization
- Create a Proposal for the Future Portfolio
- Decision Regarding the Future Portfolio
- Part 1: Reviewing the Current Portfolio
- Part 2: Decision Regarding the Future Portfolio
- Follow-Up on the Decision
- Communication of the Decision for the Future Portfolio
Lean PPM™ Context and Roles Involved
The path to deciding on the future portfolio begins with the members of the Pipeline Review Committee, who re-examine and rank the project initiatives proposed in the "Collect" area. Using this prioritized list as well as the active projects, the Portfolio coordinator will design his proposal for the future portfolio that he will submit to the members of the Portfolio board. They will discuss the proposal, and at the end of the discussion, they will decide on the future portfolio. The portfolio coordinator then, in turn, communicates the future portfolio to other portfolio managers and project managers responsible for executing it.
Implementation with Meisterplan
For maximum transparency and efficiency, all involved use Meisterplan: The Pipeline Review Committee instantly sees the initiatives, the coordinator designs his proposal directly in the tool, and the Portfolio Board sees at a glance how the projects are doing. Meisterplan supports every step with its extensive reporting functionality and list views.
Second Review of New Project Initiatives and Mutual Prioritization
So far, Proposal Coaching has generated a list of projects that have been proposed for inclusion in the portfolio. However, future planning is easier if the proposed projects are already prioritized relative to each other. ("If only one of these five proposals fits into the portfolio, we would most like to have this one there."). Depending on the nature of the projects and the structure of the organization, a second validation (e.g., by technical experts or individuals with different perspectives) is necessary.
In the Pipeline Review Meeting, participants will review all projects up for review and make the decision on each project as to whether to continue scheduling, request further specification, or to reject. All approved projects are then prioritized relative to each other.
Step 1: Open the "Pipeline: Review" Portfolio in Meisterplan.
Step 2: Open the Board View and choose Stage Gate as the project field value, so that the columns show the Stage Gates of the projects. In the column “Seeking Review”, you can see the projects that the Pipeline Review Committee should review on in the first part of the meeting.
Figure: For the first part of the Pipeline Review meeting, only projects with the Stage Gate “Seeking Review” will be considered.
Step 3: The Portfolio Coordinator presents each initiative to the Pipeline Review Committee for consideration: What is the project? What are the benefits and costs associated with it? What is the resource requirement?
Step 4: A clear decision is made regarding how to proceed with each project:
- If an initiative is not defined clearly enough, it will be moved to the column “In Definition”. The initiative must then be reworked in Proposal Coaching. You can use the Note field to record what improvements are needed.
- If there is no corporate interest in implementing a specific project (and the Pipeline Review Committee has the authority to decide this), the initiative can be immediately rejected and the project moved to the column “Rejected”.
- If the initiative is properly defined, and there is a need for implementation, then the comittee will move the initiative to the next step in the process which is represented by moving the project to the column “Seeking Approval”.
Step 5: In the second part of the meeting, you will prioritize the projects in the column “Seeking Approval” relative to each other. The displayed projects scores derived from your criteria will help with this prioritization
Figure: In the second part of the Pipeline Review Meeting, the reviewed projects are prioritized relative to each other.
Optional: If you want to sort your projects automatically by their project score, switch to the Portfolio Designer and sort the projects via the More Actions menu in the toolbar. Select ALL PROJECTS and confirm to sort all projects in the active portfolio by their project scores.
By sorting according to strategy contribution, the order of the already-approved projects now best reflects the strategy of the company. However, depending on the situation and when needing to decide between several projects with the same high strategic contribution, further evaluation criteria and priorities may be necessary. Meisterplan supports this with additional features, such as:
- Gantt chart color schemes where project bars are colored depending on their attributes, for example, by business area or strategic project criteria
- integrated pivot reports that, for example, use diagrams to show the projected net value of the project proposals (see following Figure)
Figure: Meisterplan reports and other helpful features support prioritization.
Step 7: If necessary, use the analysis options described above as support during the prioritization.
Step 8: If the committee decides to deviate from strict sorting according to strategic contribution, simply change the rank of the respective project via drag-and-drop.
This completes the mutual prioritization and second validation of the new project initiatives. You should now have a clear recommendation on which new projects should be included in the portfolio, and the new initiatives have been specified as realistically as possible.
Create a Proposal for the Future Portfolio
The strategy was formulated, new initiatives were collected and assembled into a qualified recommendation, and the ongoing projects were carried out in the "Execute" area. It is now up to the portfolio coordinator to consolidate all these aspects into a portfolio proposal that is as valuable as possible while still being feasible. The portfolio coordinator will then present this proposal to the decision-makers, and finally a decision on the new portfolio will be made.
Several properties of an organization, such as size, affect how often the future project portfolio is planned. In this guide, we use quarterly planning, which in our experience suits many organizations. If a longer or shorter cycle is more appropriate for your business, only the gaps between activities change - the principle remains the same.
For the proposal of the future portfolio, the portfolio coordinator initially focuses on one question: Which project is the most valuable? This question is also the main concern of the Pipeline Review Committee. However, the design of a portfolio is not just a simple sorting according to strategy and/or profit contribution. The feasibility of the portfolio, continuous resource utilization, dependencies on other projects and external factors such as legal frameworks must also be considered. The human factor in terms of feasibility must not be forgotten - a good proposal doesn’t come from the computer alone. The portfolio coordinator aims to achieve the highest possible acceptance of major changes compared to the active portfolio by getting into personal contact with those affected, even before a decision is made.
Why Not Freeze the Plan of Record?
In principle, during the planning phase, you could simply remove all users of write access to the plan of record. As a rule, this will only hide changes, but not prevent them. After all, the execution of the ongoing projects doesn’tstop while the portfolio managers work on their plan for the upcoming portfolio. It is more efficient to be clear about any problems and solve them immediately rather than hide them.
Step 1: Create a new scenario called "(Copy) PoR before Planning". You can use this scenario to check whether there have been changes to the plan of record since the beginning of the planning phase, by comparing the scenario to the Plan of Record.
Step 2: Inform (e.g., by email) all Meisterplan users who have write access to the plan of record about the beginning of the planning phase, and make it clear that they themselves are responsible for aligning any changes to the plan of record data with the decision of the Portfolio Board.
Step 3: Create a new scenario called "Proposed Scenario [Date]", replacing the “[Date]” with the date of the current planning). Make sure that you open a portfolio that contains all the projects before you create the scenario. Then open the new scenario.
Step 4: Open the planning portfolio "Planning: Active + Approved + Seeking Approval+ Measuring Impact", which contains only projects with the respective stage gates.
Step 5: Create a proposal for the most valuable strategy-compliant portfolio that is still feasible in terms of the capacity of available resources.
This can be done using the same helpful features already used in the Pipeline Review Meeting:
- Evaluate the Board View or Project List for an overview of projects in the organization, to compare projects, and find out which projects are the most valuable
- Sort projects in the Portfolio Designer by project score to help prioritize the projects with the highest contribution to the corporate strategy.
- Gantt chart color schemes, coloring project bars, for example, by business area or strategic project criteria (see following Figure)
Figure: To aid decision-making in planning, the projects are colored according to their profit contribution.
- integrated pivot reports on costs, net profit and other key figures of the projects
- external reporting and BI software such as Power BI
Step 6: In the scenario manager, call up a scenario comparison between your proposal scenario and the Plan of Record to see which projects have the greatest differences in terms of schedule.
For longer planning cycles, the portfolio coordinator should also check which changes have been made to the planning data since the beginning of planning. To do so, he can use the previously created copy scenario.
Step 7: Open a scenario comparison between the copy scenario "(Copy) PoR before Planning" and the Plan of Record. Make a note of relevant differences.
Step 8: Show portfolio managers and relevant project managers your plan, especially deviations from the current Plan of Record. Explain the background and get feedback to ensure that your plan is widely accepted before senior management makes the decisions. If problems arise from any changes in the Plan of Record made after planning has already begun, contact the person responsible for the change right away.
Since subsequent changes are not the responsibility of the portfolio coordinator, he should only adjust the plan after planning has begun if it is makes sense and is necessary.
Step 9: If applicable, adjust the plan based on the feedback.
Step 10: Create at least one copy of the proposed scenario as well as one copy of the Plan of Record using the scenario manager. Those will be used during the Portfolio Board Meeting.
This completes the proposal for the future portfolio. It is now time to present both the current portfolio and the proposal to senior management and make a decision regarding the future portfolio.
Decision Regarding the Future Portfolio
So far, a lot of energy and manpower have gone into project portfolio management. To make sure that all efforts are not in vain, it is essential that a comprehensive decision is made about the future portfolio based on the portfolio coordinator's consolidated plan.
In our experience, decision-makers, regardless of the size of the organization, usually have the same needs in such a meeting. Before planning, they first want to know what is currently being done and what the current projects’ status is. Therefore we recommend splitting the Portfolio Board meeting into two parts. Take stock of the current situation at the beginning, and then make the decision regarding the future portfolio.
Meisterplan in the Portfolio Board Meeting
We recommend working directly in Meisterplan during the Portfolio Board Meeting. In doing so, you will have the opportunity to simulate suggestions and objections from the other participants, such as "But couldn’t we tackle this one project earlier?", directly in the scenario and visually demonstrate if the option is feasible.
However, we have also seen that some companies find it easier to decide on the future portfolio by working with a PowerPoint presentation prepared by the portfolio coordinator, where he or she uses screenshots from Meisterplan instead of using the application during the meeting.
Before the start of the meeting, let’s quickly review all the scenarios that the Portfolio Coordinator should have prepared in Meisterplan:
Proposed Scenario [Date]
shows the proposal of the portfolio coordinator, to be presented during the Portfolio Board Meeting
Approved Plan [Date]
shows the last portfolio decision, to be compared to the current Plan of Record
(Copy) PoR before Board Meeting
shows the current Plan of Record, to be compared to the last portfolio decision
(Copy X) Proposed Scenario [Date]
Backups of the original proposal so that it can be quickly returned to, if required, when the simulation of change requests during the Board Meeting has rendered the actual planning scenario unusable
Table: These scenarios should be provided by the portfolio coordinator for the Portfolio Board Meeting. Replace “[Date]” with the date of the respective scenario or plan.
Part 1: Reviewing the Current Portfolio
In this part of the meeting, the portfolio coordinator ensures that all participants get an overview of the current portfolio, in particular the differences compared to the last decision and the opportunity to dive deeper into critical projects. If you already used Meisterplan during the last planning cycle, you should have a scenario called "Approved Plan [Date]" which you then use to visualize the difference between the current Plan of Record and the last decision. If you did not use Meisterplan before, the portfolio coordinator explains key differences without the scenario comparison as visual aid.
Step 1: If you have a scenario showing the last decision, open the scenario "(Copy) PoR before Board Meeting". In order to focus first on the projects, collapse the resource view and initially color the Gantt chart neutrally, e.g., by workload.
Step 2: In the scenario manager, open a scenario comparison between this scenario and the "Approved Plan [Date]" scenario. This visualizes changes, such as changes to a project’s duration, in the Gantt chart in Meisterplan (see following Figure).
Figure: At the beginning of the Portfolio Board Meeting, differences between the last decision and the current status are highlighted.
Step 3: For the other participants, highlight relevant differences between the last plan and the current situation. Where have projects shifted significantly? Where did new dependencies arise? Use the notes for the projects in the corresponding project field, if applicable. Use the actual time worked in the project details to get a closer look at the deviation between the plan and actuals.
Step 4: Close the comparison and the scenario so that the Plan of Record is displayed again. Now, color the projects in the Gantt area according to their status. This allows you to quickly identify critical projects (see following Figure).
Figure: With help from the Gantt color scheme, you can quickly identify critical projects during the Portfolio Board Meeting.
Step 5: Show the other participants the critical projects. If required, deep dives can be made using the Project Link project field.
Step 6: Depending on the interests of the other participants, additional overview functions such as pivot reports, project list or external BI software can be used. Those can show at a glance the cost changes, budget status or resource utilization.
If all meeting participants are informed and have a clear understanding of the current portfolio, then the portfolio proposal for the coming quarter can be presented and a decision can be made.
Part 2: Decision Regarding the Future Portfolio
The portfolio coordinator presents his proposal in Meisterplan. To emphasize the highlights, he again uses the visual support functions and evaluations that are integrated in the tool. Depending on the context, he can also use external reporting software as needed.
Step 1: Open your proposed scenario. Again, it makes sense to color the projects in the Gantt chart neutrally, for example, according to workload, and collapse the resource view.
Step 2: Open the scenario comparison between the proposed scenario and the Plan of Record to visualize the differences. Explain the strategy behind your proposal and the changes to the current portfolio.
Step 3: Use the evaluation functions of Meisterplan to emphasize your strategy and to illustrate the advantages of your proposal compared to the previous portfolio.
- Using the scenario comparison between your proposal and the current Plan of Record can make it clear that your proposal enables, for example, the two most important projects to be implemented more quickly than in previous planning.
- You can show the members of the Portfolio Board at a glance how much net profit the projects included in your portfolio proposal would achieve, for example, with the integrated pivot reports.
- Improved resource utilization is visualized via the histograms in the resource view.
- With external reporting and BI software you can expand the evaluation options of Meisterplan in order to get to the heart of your planning.
Step 4: Initiatives and alternative suggestions from other participants can be simulated directly in the scenario. You can answer questions such as: "Can we handle another project?" or "Couldn’t we start this project earlier?" Thanks to the graphical indicators in the project and resource section of the Portfolio Designer view, all participants can directly see the answer to such questions.
Quickly Return to the Original Plan
If you want to quickly restore the Portfolio Coordinator’s original proposal while simulating change requests, simply open one of the copies of the proposal scenario.
Step 5: After all questions from other participants have been answered and all feasible requests for changes have been implemented, the binding decision is made. In order to make this explicit, you should directly change the stage gates of the individual projects – newly approved projects which will start right away get the Stage Gate "Active", approved projects which will start later get the Stage Gate "Approved".
Deciding on the portfolio is the key decision for project portfolio management, and thanks to Meisterplan, it is based on facts, not on gut feelings. The Portfolio Coordinator can now complete the Portfolio Board Meeting in an organized fashion.
Follow-Up on the Decision
Change the stage gates of the individual projects in the Board View – newly approved projects, which will start right away, are moved to the column “Active”, approved projects, which will start later, are moved to the column “Approved”.
To prevent the scenario manager in Meisterplan from becoming too crowded, it is advisable not to permanently keep all planning and approved scenarios. As a rule, after the decision for the following quarter is made, the current quarter’s approved plan is no longer needed in Meisterplan.
Therefore, rename the scenario "Approved Plan [Date]" to "Archived Plan [Date]", archive it to hide archived scenarios in the scenario manager. Finally, in the closing meeting, rename the “Proposed Scenario [Date]" to "Approved Plan [Date]".
Next, the approved portfolio will be communicated to those who implement and control it.
Communication of the Decision for the Future Portfolio
First, the current last agreed decision will be shown to the relevant portfolio managers and project managers. Then the projects from this approved scenario are transferred to the Plan of Record, where all users can then, as the planning cycle comes to an end, go back to regularly making changes just as they did before planning started. This Plan of Record will be communicated to the organization.
Optional: In Meisterplan, make a scenario comparison between the approved scenario and one of the copies of your original proposal. This will allow you to directly show portfolio managers and project managers how much the approved plan deviates from your original plan, which you had previously agreed upon with the portfolio managers and project managers.
Step 1: Open the approved scenario and perform a scenario comparison with the Plan of Record. What are the priorities of the plan? What new initiatives have been scheduled? You can also open a Scenario Comparison Report to highlight changes in resource allocations.
Step 2: Make the decision clear by going through the projects individually with the respective project managers and applying them (by clicking the three dots after the project name and selecting the corresponding option in the context menu) from the approved scenario to the Plan of Record. For projects where changes are introduced after the planning had started, the portfolio coordinator leaves it up to the project managers whether to reconcile the changes and the new decision themselves, or whether the coordinator simply moves the project from the approved scenario to the Plan of Record.
Step 3: If necessary, export the new data to connected systems (project management software, etc.).
Step 4: Inform all Meisterplan users with write access to the Plan of Record that the planning is now complete and changes to the Plan of Record can be carried out normally.
Step 5: Inform your organization about the decisions made in the Portfolio Board Meeting. Use the roadmap to show which business goal is supported by the projects (see following Figure). Export the respective roadmap view as an image file for your communication.
Figure: To see the individual projects in the roadmap you can expand the respective value.
In this way, you have ensured that all parties are immediately informed about the new decision and can start with the implementation.