UMD Project Management Symposium May 5-6, 2022 Slide

UMD Project Management Symposium May 5-6, 2022 Slide 1 STRATEGIC PORTFOLIO MANAGEMENT John D Driessnack, PMP, PfPM, CSM 2022 Project Management Symposium

Outline Review 2017 update to ANSI/PMI Standards – Expand differentiation between Portfolio, Program, and Project Management – 4th Edition of ANSI/PMI Portfolio Management Standard Move beyond prioritization process to performance domains Addition of Capacity and Capability Management Performance Domain Application within US Federal Government – Section 809 Panel – congressionally directed study Department of Defense notable the largest professionally managed set of portfolios – Federal Retirement Thrift Investment Board - runs Thrift Savings Plan (TSP) Largest 401K/IRA like system – retirement for all federal employee and adding military Understand how Structure impacts Conduct, which influences Performance (SCP) UMD Project Management Symposium May 5-6, 2022 Slide 2

Strategic View UMD Project Management Symposium May 5-6, 2022 Slide 3 PMI Portfolio Standard links to Strategic Planning . A key linkage Portfolio’s take “system” lifecycle view what are the “systems” “Systems” view is often important within Federal Government

3rd Edition (2012) Portfolio Standard very different than Program/Project from the start – Do have Knowledge Areas and Process Groups Portfolio Strategic Plan and Roadmap would be derived from Enterprise level similar documents – Focus is on Alignment with Optimization Portfolio Risk should be directly linked to Enterprise Risk – Beyond the roll up of component risks Note the three process groups focused on components (programs, projects and operations) – Focus is optimization this is project portfolio management – Strategic plan and Roadmaps start STRATEGIC PORTFOLIO Management UMD Project Management Symposium May 5-6, 2022 Slide 4

Standards update (2017) 4th 4th Capacity & Capability Value Stakeholder Strategy Governance Life Cycle (support activities) Benefits Stakeholder Change Information UMD Project Management Symposium May 5-6, 2022 Slide 5 6th Schedule Below Projects is a structure Control Accounts TEAMs (lowest level of management) Packages (Work/Planning) (can be measured, block of work in future) Activities (critical for schedule networking) Knowledge areas tasks change with level (yellow are latest Domains/ updates) PMBoK 7 change in July 2021 moves Project Standard to Principles and PMBoK Guide to Performance Domains.

Portfolio Domains Six Performance Domains Strategy aligned with organizational strategic objectives Transparent governance structure Active Stakeholder engagement Establishment and monitoring of value Management of risks and Capacity and Capability roadmap for opportunities implementation of strategy OMB Circular A-11 Capital Programming Guide notes, “Portfolio management theory and standards are readily available from commercial sources and academic literature.” UMD Project Management Symposium May 5-6, 2022 Slide 6

Portfolio Domains UMD Project Management Symposium May 5-6, 2022 Slide 7 Capacity what type and demand for resource Capability what is needed today, near future, far future How does organization need to change (capacity and capability) to meet needs to strategy - Portfolio needs become programs/projects How are you managing performance across the portfolio Session ID: 303-BR Session Title: Enhancing Agility & Effectiveness for the World’s Largest Project Management Execution Enterprise Speaker & Title: John Driessnack (facilitator) and Ross Thompson & Dave Ahern (809 Commissioners) PMI PMO Symposium Nov 2018

US Defense Portfolios RDT&E Development Procurement Build Portfolio by Service or 4th Estate Service align with Program Executive Officers (PEOs) PEOs are mostly by functions ships, fighters, etc PEOs break into Programs (Army has Project) Baselines (major efforts) at Program level Basic Research separate from PEOs Thousands of non-major https://comptroller.defense.gov/Budget-Materials/ efforts (programs/projects) UMD Project Management Symposium May 5-6, 2022 Slide 8

Section 809 Panel UMD Project Management Symposium May 5-6, 2022 Slide 9 Program Executive Officer(PEO) change to Portfolio Acquisition Executive (PAE) Concept outlined in Section 809 Panel Vol III, Section 2 Portfolio Management (available on the web)

Defense Portfolios UMD Project Management Symposium May 5-6, 2022 Slide 10 Section 809, Volume 3, Section 2 Portfolio Management Framework Recommendations align with standard’s six Portfolio Performance Domains Call for 20 years aligned strategic plan: aligns with Strategy Management Creation of Portfolio Acquisition Executives (PAE) : aligns with transparent Governance Leveraging Data: aligns with Stakeholder Engagement Creating Critical Questions on Portfolio Value: aligns with Value Management Creation of portfolio level analytical modeling: aligns with Value Management Empowered Workforce: aligns with Capacity and Capability Management

GAO notes on Portfolios Source: GAO Report to Congressional Committees dated August 2015. “Weapons System Acquisition, Opportunities Exist to Improve the DoD’s Portfolio Management” UMD Project Management Symposium May 5-6, 2022 Slide 11

Capital Asset Lifecycle Capital Programming Guide outlines a capital asset lifecycle Can be referred to as Total Lifecycle Systems Management (TLCSM) Need to define System or capital asset Life expected How does the life-cycle fit into a portfolio structure UMD Project Management Symposium May 5-6, 2022 Slide 12

Federal Strategic Planning UMD Project Management Symposium May 5-6, 2022 Slide 13

UMD Project Management Symposium May 5-6, 2022 Slide 14 OMB guidance on Strategic Planning (OMB Circular A-11) Plans updated every four years align with Presidential terms Defines Performance Goals and Performance and Outcome Indicators How do you measure, how do you model

UMD Project Management Symposium May 5-6, 2022 Slide 15 Organizational Project Management Maturity Model (OPM3) Structure changes drive Conduct changes which drive Performance changes “New Institutional Economics (NIE), which has seen four Nobel laureates awarded in the past 30 years and provides a theoretical basis for the need of changing both the institutional rules of the game and the organizational structures to change conduct. NIE theories reinforce our recommendation that to improve performance, conduct must change, and to change conduct, the institutions and the organizations need to change.” https://www.pmi.org/learning/library/winning-21st-century-point-paper-section-809-panel-11314

Multi-layered Systems UMD Project Management Symposium May 5-6, 2022 Slide 16 Multiple systems (not just the physical systems, but process and people) – Product (Federal PROGRAM) – system of systems – Processes - Management, Engineering, Logistics, etc – People – Program Managers, Financial, System Engineers, etc Multiple phases yesterday, today, near and far future systems Multiple organizational layers – System Program Office (Program) to Air Force (Service) to OSD/A&S (Department) to OMB (Executive Branch) Multiple Decision Support Systems – Financial (OMB A-11, CFO) – Legal (Federal Acquisition Regulations (FAR), Procurement) – Requirements (OMB A-11, Strategy to Task) Change structure to were you want to be, not where you are

Use ANSI Framework UMD Project Management Symposium May 5-6, 2022 Slide 17 Align organizational strategy with portfolios which align with your future, not past/present – Decide your portfolio structure – capabilities, systems, services a mix – It might need to be multitiered structure matters Do a Work Breakdown Structure of your “systems” . All of them, including processes – What needs to change to get to tomorrow what changes 5 years out? Are they projects? – Adopt a portfolio approach across ALL of the organization. Make it the culture – Build the appropriate Programs and Projects to reach the end state – Focus just as much on Capacity and Capability how is it changing? Projects can get you there and allow for measurement and tracking in roadmap. What portfolio are they in? Improve your Project breakout into Control Account Management this is team level – These are the lowest level of management it matters, and it helps you empower teams – Does the strategy get reflected in the overall structure down to the CA level .the teams Empower leadership/management to implement the change