Saji madapatu excelling in economic tsunami - project portfolio management as catalyst
1. Excelling in Economic Tsunami - Project Portfolio Management as catalyst Saji Madapat MBA, CSSMBB, PMP 21 November 2010
2. 11/20/2010 Presentation Outline Present Scenario Why PPM? What is in PPM for my organization? SO What is a Portfolio? Organizational Context of Portfolio Management Cross-COMPANY Portfolio Management Process Relationships Project & Portfolio Attributes Case Study
3. Economy in Past Century – DOW Jones Eyes SHORT walk in the Memory lane
4. “En”visioning Tomorrow “The corporation as we know it, which is now 120 years old, Is not likely to Survive the next 25 years. Legally & Financially, Yes, But not Structurally & Economically.” -Peter Drucker
5. Immediate Past-“Irrational Exuberance” In the era of economic boom: Exciting new investments and acquisitions! BIG PERKS! “Creative Accounting” (book cooking)
7. 11/20/2010 Consequences… Annual IT application development statistics: $250 Billion on 175,000 Projects 31% will be cancelled 53% will cost 189% of original estimates. only 52% of required features and functions. Time overruns 82% $55 Billion dollars total project waste Source: The Standish Group CHAOS Report 2003
8. Party’s Over. . . Automotive Industry Telecom Industry Banking Industry What to do?
10. “Only when the tide goes out do you discover who's been swimming naked” -Warren Buffett
11. The Corporate Ship: Busted! Cut projects Layoffs Sell strategic units Credit Strategic budget cuts Inefficiencies
12. DUMP??? Strategic Projects Core Assets Strategic initiatives (R&D) Vendors Knowledge Capital -Employees OR . . .
13. The Corporate Ship: High and Dry "This is not the time for tech companies to be cutting back… this is the time to be hitting the accelerator.” – Peter Thiel, Facebook board member A downturn is a terrible thing to waste. It's easier for everyone to understand the need for the change when things are tough and the risks are lower.” - Frank Blake, CEO HomeDepot Credit STRATEGIC INVESTMENTS Project Portfolio Management Inefficiencies
14. PMI conducted 5 Global studies: involving 30,000+ practitioners including C level executives In their business environment: Desired project results were seldom achieved Project evaluation often not linked to business value Despite selection criteria, & processes in place to align projects to strategy, projects still failed Why PPM?
15. 11/20/2010 Why PPM? Significant findings: Only 25% achieved well-balanced project portfolios. 75% do not believe their organizations are delivering the projects necessary to achieve organizational strategies!
16.
17. PPM Bridges the gap between Organizational Strategy & Successful Projects
18. The PMBOK® Guide enables you to successfully accomplish projects 11/20/2010
20. SO What is a Portfolio? A portfolio is a collection of Projects and/or programs (even sub portfolio’s) and other work (ex. maintenance) that are grouped together to facilitate the effective management of that work to meet strategic business objectives. 11/20/2010
25. 11/20/2010 Current state of PMO’s Most PMO’s are: Laboriously Built Painfully Maintained Almost NEVER used
26. What is in PPM for my organization? Bridges -organizational strategy and projects. Credibility and visibilityof PM profession. Understand organizational project management maturity. Analyze maturityof different parts of the organization PPM is a balancing act. Balancing resources against organizational needs - operations (on-going efforts to “keep the lights on), tactical and strategic needs. 11/20/2010
27. It’s not a dream!It’s a CHOICE through Project Portfolio Management
29. “Communications is human nature;Knowledge sharing is human nurture!”* Dedicated to Father of Knowledge Management (Robert (Bob) H. Buckman)
30. Who is. . . Buckman Laboratories? Provides specialty chemicals and solutions Employs 1300 loyal associates Global operations(90+ countries) Speaks morethan 15 languages!
31. Clouds in the horizon Recession in 2002 Paper Industry Consolidation Commoditization of Specialty Chemicals Raw Material Price hikes Transportation Costs hikes Global Competition Regulatory Requirements Inability to meet the existing Business System Platforms
32. State of Historic Systems and Projects Many Historic System’s were: Laboriously Built 48 Systems cannot talk each other Inadequately Equipped/Handicapped Painfully Maintained Almost NEVER used
33. Historic Projects: Run by a group of feudal Autonomous Managers. Each Organization sets its own objectives and business processes, using its own System. RESULT: Fragmented data, lack of visibility, impossible to co-ordinate Organization as a whole.
34. “Global Vision” – by Executive Leadership One Flexible Global Business System One Global Core Knowledge Project Team One Global Infrastructure Project Portfolio Management & Outsourcing non-core Business Processes.
35. 5.2 GAP Analysis Reality Want to be Enterprise Business System (BS) Islands One Global Project Team Islands One Global Enterprise BS Infrastructure Islands One Global BS Risk Management ??? One Global Integration andConsolidation Hell One BS
36. Global Business System One Business System for one organization! Global Buckman BS Model through ERP – BaaN In Sixteen nations around the globe Global Consolidation & Business Performance Reporting (Hyperion)
37. GlobalCore Knowledge Enterprise Team Based in Memphis Supports the worldwide Buckman organization. Responsible for: developing a Global Enterprise Business Model implementation, support and optimization
38. Global Enterprise Infrastructure Business System server based in Memphis & take the advantage of Time Zone differences by sharing: Concurrent Licenses Support Infrastructure Specialized Professionals.
39. Buckman’s Global Business System Global BS Enterprise Team, Solution & Infrastructure 5.4 Scope BaaN & Hyperion Buckman Laboratories, Inc. Cadet, Missouri, U.S.A. Buckman Laboratories Gmbh Bad Homburg v.d.H.,Germany Buckman Laboratories, S.A. Ghent, Belgium Buckman Laboratories,Gesellschaft Vienna, Austria Buckman Laboratories, Inc. Memphis, Tennessee, U.S.A. Buckman Laboratories,K.K. Tokyo, Japan Buckman Laboratories Italiana,S.r.l., LTD. Milano, Italy Buckman Laboratories Quimica, LDA Parede, Portugal Buckman Laboratories,. Shanghai, China Buckman Laboratories, S.A.M. Principaute de Monaco Buckman Laboratories, Iberica Barcelona, Spain Buckman Laboratories, S.A. DE C.V. Cuernavaca, Mexico Buckman Laboratories PTE LTD Singapore Buckman Laboratories LTDA Campinas, Brazil Buckman Laboratories (PTY.) LTD. Hammarsdale, South Africa Buckman Laboratories PTY. LTD. Wagga Wagga, Australia Laboratories Buckman S.A. Buenos Aires, Argentina Buckman Laboratories,LTD. Auckland, New Zealand
40. 5.5 Business Case - Business System Project Scenario Scenario Pre PPM(USA - 1999) Post PPM Cost of Capital (Fed Rt) Consultancy Expenses Hardware/software Project Duration Support, Maint., Optimization Implementation Team Customization Percent of Business Practices in Business System post-impl Bonus Systems Business Continuity Plans Probability of Success pre-impl Global Business System Global Consolidation & Reporting 7-8% +$3 M +$0.5 M 1.5 Years Consultants Heaven Inexperienced Heavy 70% Nil Nil 20-40% 48 systems* No >1-3% Nil Nil 4 months Internal resources Experts Minimal 95% Hyperion etc.* Fully equipped 99% One system* Yes
41.
42. Revenue Doubled in its 60 year history - from about $300 Million to $550Million between 1999 to 2008
43. Cost of IT expenditure reduced from over 8% to ~2%
44.
45. 11/20/2010 Saji K. MadapatCPIM, CIPPM, PMP, CSSMBBhttp://www.linkedin.com/in/goodtogreat - Saji@Madapat.com Mobile: 001-214-454-7254 At Ernst & Young, Saji is responsible for the Enterprise Performance Improvement projects for its various clients. As an Advisor- Project Portfolio Management Office, Saji played a key role in the Project Portfolio Management Office initiative of $5.5B FedEx Freight for its IT & Business Projects. Earlier he had the techno-functional and project portfolio responsibility for Global Business Performance Systems (PPM & Hyperion BI) in 20 countries of Buckman Labs (a globally Most Admired Knowledge EntPPMrise -6 time MAKE award winner). He also worked with leading consulting firms including Bearing Point (KPMG), Ernst & Young (Cap Gemini), Arthur Anderson, BaaN (Vanenburg) Business System and CroweChizek on various high-profile PPM and Business Performance Management projects in the US. Saji is a graduate of Executive Global leadership Masters Program from PMI’s Leadership Institute. He served three terms as VP, Finance & nominated for President (2006) of the award-winning Project Management Institute (PMI) Memphis TN Chapter. Currently he is serving as a member of PMI Code of Ethics Implementation Advisory Committee (CIAC) and earlier as PMI ambassador (Component Mentor – 2006 & 2007) to its most crucial region - Asia. Saji Authored and presented over 30 papers at various Global Leadership Conferences. He is also active in PMI committees and global activities, which includes judge of PMI's 2004, 2005 & 2007 Project of the Year (POY) Award applications, mentoring initiatives and contribution to PMI’s strategic initiative on OPM3 (Organizational Project Management Maturity Model), PPMS (Program Portfolio Management Standards) and PMCD (Project Manager Competency) Standard Framework.
Editor's Notes
I believe I am part of generation "L" - Lucky generation. I was born in 72 and since then the world has seen UNPRECEDENTED growth. I came to this country with a few $'s in my pocket & 2 suitcase full of books. Since that time I've seen 15 countries that my father only used to read about in books.BUT now I am afraid that there are going to be significant challenges unless I act strategically. I believe this is not only the case for me as an individual - but for the general business environment in today's market.Today I am facing unprecedented challenges, which were not by my own choice- I believe I will overcome it by looking at it strategically and turn it as another opportunity.
Chrysler – BenzCEO’s are paid over 400 times of an average employee salaryEnron, World com, Satyam
GM, Chrysler, ForrdGECITY BANK, Bank of AmericaSprint, Nortel
Bad times like this environment will reveal the skeletons in the closet