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Ver Date Status Page

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Title
Guideline – Project Portfolio Management
Source : PEM-9900.00.00-90x00-001-0-0-V0.1en

Guideline – Project Portfolio Management

Business area Global

Location Global

CKN 100 - CKN Project Management

Management of this Document

Role Name Signature
Responsibility Title Date
Abgelaufenes Zertifikat

Author Bernd Schneider

X Bernd Schneider
Technical HoD Strategic Projects CoE IVS Bernd Schneider

Signiert von: schnbede

Abgelaufenes Zertifikat

Anja Hagemann-Schmidt
Reviewed X Anja Hagemann-Schmidt
Vice President Strategic Projects /
SME Anja Hagemann-Schmidt
Global Marketing & Sales / Basic Care
Signiert von: hageande
Abgelaufenes Zertifikat

Sandra Fürmeier
Reviewed X Sandra Fürmeier
Director Project- / Portfolio & Alliance
SME Sandra Fürmeier
Management CoE Pharma
Signiert von: fuersade

Abgelaufenes Zertifikat

Abram Ziegelaar
Reviewed X Abram Ziegelaar
Vice President – Technical Services
SME Abram Ziegelaar
BMI
Signiert von: ZIEGABMY

19.06.2018

Reviewed Uta Giordano X Uta Giordano

SME Senior Project Manager Aesculap AG Uta Giordano

Signiert von: SCHMUTDE

Abgelaufenes Zertifikat

CKN Workgroup Bernd Schneider X Bernd Schneider

Lead HoD Strategic Projects CoE IVS Bernd Schneider

Signiert von: schnbede

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Table of Contents

Page

1.1 DOCUMENT OWNERSHIP & AUTHORITY.............................................................................................. 3

1.2 PURPOSE & SCOPE .......................................................................................................................... 3
1.3 RELATIONSHIP TO OTHER DOCUMENTS ............................................................................................. 3
4.1 PROJECT PORTFOLIOS ..................................................................................................................... 4
4.2 THE RELATIONSHIP BETWEEN PROJECT, PROGRAM & PORTFOLIO MANAGEMENT ............................... 5
4.3 TYPES OF PROJECT PORTFOLIOS ...................................................................................................... 6
4.4 PROJECT PORTFOLIO IDENTIFICATION ............................................................................................... 7
4.5 CRITERIA FOR DEFINING MANAGED PORTFOLIOS ............................................................................... 7
4.6 CRITERIA FOR DEFINING EXECUTION PORTFOLIOS ............................................................................. 8
4.7 PORTFOLIO MANAGEMENT PLAN ....................................................................................................... 8
4.7.1 Project Portfolio Map ................................................................................................................. 9
4.8 PORTFOLIO MANAGEMENT TASKS ................................................................................................... 10
4.9 PORTFOLIO MANAGEMENT RESPONSIBILITIES .................................................................................. 10
4.9.1 Portfolio Management Team Members ................................................................................... 12
4.9.2 Project Execution Committee Members .................................................................................. 12
4.10 PROJECT DEFINITION, SELECTION & APPROVAL ............................................................................... 12
4.11 PROJECT REQUESTS ...................................................................................................................... 13
4.12 PROJECT PRIORITIZATION ............................................................................................................... 14
4.12.1 Examples for Project Prioritization .......................................................................................... 14
4.13 PROJECT EXECUTION CAPACITY FEEDBACK - FOCUS, ACTIVE & BACKLOG PROJECTS ....................... 16
4.14 IDENTIFYING & COMMUNICATING PERSONNEL RESOURCE CONSTRAINTS .......................................... 17
4.15 MANAGING PERSONNEL RESOURCE CONSTRAINTS .......................................................................... 17
4.16 POSSIBILITIES FOR VISUALISATION OF PROJECT PORTFOLIOS........................................................... 19
4.17 REQUIREMENTS ............................................................................................................................. 20

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1 INTRODUCTION

1.1 DOCUMENT OWNERSHIP & AUTHORITY

This document is part of the B. Braun Project Execution & Management (PEM) System. It is
produced and managed by;
Corporate Knowledge Network 100- CKN Project Management

1.2 PURPOSE & SCOPE

This document defines:
 Process and Responsibilities for Project Portfolio Management
 Process and Responsibilities for Project Prioritization

1.3 RELATIONSHIP TO OTHER DOCUMENTS

Input Documents
 Process and Responsibilities for Project Categorization
This document shall be read in conjunction with;
 Project Governance
 Project Resource Management
 Roles and Responsibilities of PMO

2 OVERVIEW
Resources for projects are limited in all organizations (staff, funds, time).
To achieve the best possible outcome the resources have to be used in a way that
- the desired results fit best to the companies strategy
- they are used in an efficient way (avoid waste)
In other words: “do the right things” and then “do them right”.
This guideline will describe the process from a given initiation, via categorization, project definition
and approval process, prioritization, portfolio optimization to a comprehensive Project Portfolio
Management.

3 THE “THREE EGG MODEL” – PROJECT & PROJECT PORTFOLIO IN RELATION TO THE
BUSINESS
The following ‘3 Egg model’ visualizes how projects & project portfolios relate to the business:

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Figure 3-1 ‘3 Egg model’ – The project & project portfolio in relation to the business
Example …
DI4H
DI4S

Project
Portfolios Planning Processes

Initiating Closing
DI3 Processes
DI4 Processes
DI5

Executing Processes
Portfolio
DI2 Optimization
Rejected /
Stopped

DIA Processes Change & Project Project

Project Decision
Definition & Deliverables
DIR Management Business
Approval
Processes Planning & Review Operating, Sustaining
Processes Processes

New / Change Business

DI1 Requirements DI0 Idea Deliverables

Phase Out

Table 3-1 Degree of Implementation

DI Description
DI0 Idea
DI1 Requirements Definition
DI2 Evaluation
DI3 Initiation
DI4 Realization
DI5 Closed

DIA Archived (Ideas or projects that are archived for possible later use)
DIR Rejected

DIxH Put on HOLD (temporarily suspended) after reaching DIx

DIxS STOPPED after reaching Dix

The Degree of Implementation (DI) is a generic means of describing the progress through a
process or execution of a task.

4 PROJECT PORTFOLIO MANAGEMENT

4.1 PROJECT PORTFOLIOS

Project Portfolios are sets of Projects, Programs and sub-portfolios, known as the components of the
portfolio, that have been chosen to convert strategy & business need into new or changed
Capabilities and Capacities.

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Figure 4-1 Project Portfolio

Portfolio Name

Program Portfolio
Project Project
Project Project Components
of the portf olio

Project Project

Project Portfolios exist at Corporate, Division / COE, Corporate Function, Region, Site, Plant &
Department levels.

The purpose of defining Project Portfolios is to;

 Provide a structure to translate business strategy and business needs into projects and
assist in ensuring consistency of business strategy implementation
 Formally define responsibilities for deciding what projects to pursue
 Provide a structure to allocate and resolve issues concerning the use of scarce resources
(Personnel, Cash, Time)
 Provide a structure to identify & control the multitude of ongoing projects (the right hand
knows what the left hand is doing …)
 Provide a structure to assist in ensuring technical / solution strategy consistency across
projects (don’t re-invent any wheels, share expertise & knowledge, apply standards)

4.2 THE RELATIONSHIP BETWEEN PROJECT, PROGRAM & PORTFOLIO M ANAGEMENT

Portfolio, program and project management differ in the way they contribute towards the
achievement of strategic goals, as shown in the following table;

Table 4-1 The relationship between Project, Program & Portfolio Management

Project Program Portfolio

Objective Implementation of Management of a group of Definition, prioritization and
allocated scope related projects in a management of related sets
coordinated way to obtain of projects & programs to
benefits not available from implement strategic intent &
managing them individually meet business need
Scope Defined project The aggregate scope of the Defined portions of the
objectives component projects, business strategic &
allocated to individual operational needs
projects + associated
program level work

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Project Program Portfolio

Planning Detailed project High level program plan to Business planning
planning and guide detailed planning translated into program &
management of project within component projects, project objectives
interfaces and definition of project
(interdependencies) interdependencies.
Monitoring Control of the work & Progress of program Monitoring of strategic
risks associated with components to ensure the changes, aggregate
delivering the results overall goals, schedules, resource allocation,
the project was budget, and benefits of the performance results and
undertaken to produce program will be met risk of the portfolio
Success Product or service The degree to which the Aggregate investment
quality, timeliness, program satisfies the needs performance and benefit
budget compliance & and benefits for which it realization of the portfolio
degree of customer was undertaken
satisfaction

4.3 TYPES OF PROJECT PORTFOLIOS

Project Portfolios are created primarily to define and manage related sets of projects and programs
to implement strategic intent and meet business need. In a matrix organization, the personnel
resources that perform projects are provided by functional departments. These functional
departments may participate in projects belonging to a number of project portfolios such that the
functional department has it’s own ‘bucket’ or portfolio of ongoing projects. Similarly, management at
various levels in the organization have a need to see groups or portfolios of projects that affect their
interests. Each of these represents a particular ‘portfolio view’ of the set of projects in the
organization.

To distinguish these, types of project portfolios are defined as follows;

Table 4-2 Types of Project Portfolios

Portfolio Type Description

Managed Portfolio The business view
Locn-Bus-M-Sub  The project portfolio that is managed to meet business strategic &
operative needs
Friendly
 Project selection, approval & portfolio optimization are managed
Name within Managed Portfolios
 Each project / program belongs to only one Managed Portfolio
 Is managed by a Portfolio Management Team (PfMT)
Execution Portfolio The project execution team view
Locn-Bus-E-Sub  The portfolio of projects that a particular Functional Department or
other execution team are engaged in
Friendly
 Contains projects from Managed Portfolios
Name
 Project execution and resource constraint management is
performed by a Project Execution Committee (PxC)
Portfolio View The manager / user view

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Portfolio Type Description

Locn-Bus-V-Sub  A user defined ‘view only’ collection of projects that a user wishes
to monitor as a group
Friendly
 Contains projects from Managed Portfolios
Name

4.4 PROJECT PORTFOLIO IDENTIFICATION

Managed Portfolios serve as ‘letterboxes’ to which project requests can be sent. Managed and
Execution Portfolios are named and described in a way that allows projects to be assigned to the
correct Portfolio.

Table 4-3 Project Portfolio Identification

Locn-Bus-Type-Sub where;
Attribute Description
Locn Location : Global / Region / Site where portfolio operates
Bus Business area : e.g. IVA, PH, AE …
Type Portfolio type : Managed / Execution / View
(Managed
Execution
View)
Sub Subject : Description of the type of projects within the portfolio, based on
the criteria used to define the portfolio
Friendly Name Familiar name of the portfolio

4.5 CRITERIA FOR DEFINING MANAGED PORTFOLIOS

Managed Portfolios contain groups of projects that are related by some characteristics or focus area.
They may or may not be related to each other in terms of direct project dependencies. Possible
criteria defining Managed Portfolios are;

Table 4-4 Criteria for defining Managed Portfolios

Definition Criteria Description

Business Owner  Where the ‘Business Owner’ is the party responsible for defining /
approving the business need (high level project requirements), & who
is also likely to be principle ‘owner’ of the resulting asset
 Example : Head of HR is the Business Owner for HR related projects
Product Group  Based on a single or multiple Main Material Group
Project Scope /  For example : Construction Projects, R&D pure research projects,
Technology Production Machine development & build, Strategic Initiatives,
Maintenance Projects ….

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Definition Criteria Description

Project ‘Character’
Operative  Required to run the business
 Improve efficiency, repair, replace
 Increase capacity
 Develop new products & processes
 Modify products & processes
Strategic  Are transformative of the organization or business (e.g. Strategic
Initiatives)
 Develop or explore new technologies, concepts
Necessary  Are possibly not commercially attractive on their own, but are
necessary in the larger scheme of things (e.g. implement a product to
complete a product portfolio even though not commercially attractive
on its own)
Compliance  Are required to implement a new or changed regulatory requirement

4.6 CRITERIA FOR DEFINING EXECUTION PORTFOLIOS

Execution Portfolios are generally defined based on the location or ‘ownership’ (belonging to a
particular functional department) of resources. The main point is that the members of the Project
Execution Committee for an Execution Portfolio have the authority to commit resources and achieve
the required project deliverables.

4.7 PORTFOLIO M ANAGEMENT PLAN

Each Managed and Execution Portfolio has a Portfolio Management Plan which describes the
responsibilities and rules for managing the portfolio. The plan defines;

Table 4-5 Portfolio Management Plan content

Subject Description
Portfolio  Definition of the members of the PfMT / PxC
Management
 Definition of decision authorities (for example, business / product /
technical / marketing decisions) for PfMT / PxC members
Coordination  Definition of any coordination or administrative roles & responsibilities
(for example PMOs)
Project Prioritization  Definition of responsibilities for project prioritization
 Definition of methods for project prioritization
Management  Definition of how the portfolio is managed (for example, information
Processes & Tools requirements, meeting / review cycle, tools to be applied, ...)

 PEM-0200.00.05-02L02-001-0-0 Portfolio Management Plan

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4.7.1 Project Portfolio Map

Project Portfolio Maps identify the Managed and Execution Portfolios existing within an
organization, and the relationships between them.

The Project Portfolio Map is an aid to defining management responsibilities, assigning projects to the
appropriate portfolio, and managing strategic and resource issues within and between portfolios.

An organization (DIV, CoE, Dept etc) may have any number of managed and execution portfolios.

Figure 4-1 Example Project Portfolio Map

HC-PH

G-PH-M-PVR G-PH-M-LP G-PH-M-LVP G-PH-M-SVP

487-PH-M-PVR 487-PH-M-TPV 493-PH-M-LVP 493-PH-M-SVP

Lipofundin /
Gelofusine /
Lipoplus/ LVP SVP
Gelaspan
Propofol

xxx-PH-M-PVR

Gelofusine /
Gelaspan

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4.8 PORTFOLIO M ANAGEMENT TASKS

The tasks associated with portfolio management, shared between Managed Portfolios and Execution
Portfolios, are summarized in the following diagram;

Figure 4-2 Portfolio Management Tasks

Project Definition Project Approval

• Project Data defined • Business Case Approved by Business
• Scope allocation between projects Owner
defined • Business Case Approved by Management
Rejected
• Project Categorized • Investment Approval
/ Stopped
• Project Prioritized • Project Charter defined
• Strategic Fit verified • Project Charter Approval (including
• Project Request Completed Project Definition & acquisition strategy)
Approval Processes
Project Initiating
DI1 Project Requests DI2 Processes
DI3
Portfolio
Optimization
Processes
Portfolio Optimization Performance Monitoring & Controlling
• Portfolio adjustments made to resolve • Periodic reviews to ensure strategic intent is
conflicts being achieved
• New & existing projects scored against
Project Portfolio
• Portfolio Risk reviews
agreed Prioritization criteria. Project Priorities Management • Resource Constraint identification
adjusted accordingly
• Available resources are applied in DI4
accordance with adjusted priorities (Focus,
Active, Backlog projects identified)
• Flexibilities in existing projects are used to Business Available Human
identify resources that could be reallocated to Timeline Budget Resources
respond to crises & constraints Key Resource Constraints
• Evaluate resource capacity to accommodate
future projects

4.9 PORTFOLIO M ANAGEMENT RESPONSIBILITIES

Portfolio Management Teams (PfMT’s) and Project Execution Committees (PxC’s) are responsible
for managing Managed & Execution portfolios respectively. In general;

PfMT is responsible for implementation of strategic intent of the organization through the selection,
prioritization and oversight of appropriate projects within a Managed Portfolio

PxC is responsible for responding to the project priorities set in Managed Portfolios by applying
resources & resolving resource constraints as effectively as possible within an Execution Portfolio

The split in scope of work is elaborated as follows;

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Table 4-6 Portfolio Management Responsibilities

Degree Task / Decision BO PfMT PM PMO PxC
of (1)
Implementation

DI1  Develop first issue of Project Request (DI A R

1), focusing on requirements definition

Requirements  Project Categorization (preliminary) A R

Definition  Check strategic fit of project within the A R
appropriate portfolio
 Decide Go / No Go to spend additional A R I
effort to fully develop Project Request

DI2  Assign resources to fully develop the A R C C

project request & supporting documents.
Assign PM if possible.
Project
Definition &  Develop the Project Request (DI 2) & A R
Approval supporting documents
 Perform Project Categorization (final) A R (C)
 Perform Project Prioritization A R
 Decide Project Go / No Go A R (C) I
 Obtain Budget / Investment Approval (for A R (R) I
next Phase: Project Initiation)

DI3  Selection of qualified PM and PM A C R C

Appointment (also applicable for Program
Manager)
Project
Initiation  Develop Project Charter with Scope A C R
Statement & other supporting documents
 Review Project Categorization (confirm) A C R
 Define Project Governance Structures & A C R
develop Project Governance Plan
 Approve Project A C R I I

DI4  Update Project Categorization for decision A I R I

support at each Phase Gate
Project
Realization  Update Project in response to any A I R I
significant change in project scope, risk or
the project environment
 Periodic Reporting I I R I I
 Portfolio Risk reviews A R I
 Resource constraint identification I I C R
 Portfolio adjustments made to resolve A R I I I
conflicts

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 Available resources are applied in I I I R

accordance with adjusted priorities
(FOCUS, ACTIVE, BACKLOG projects are
identified)
 Flexibilities in existing projects are used to I C C R
identify resources that could be reallocated
to respond to crises & constraints
 Evaluate resource capacity to I R C
accommodate future projects
Legend (R)esponsible (A)ccountable (C)onsulted / Contribute (I)nformed
BO Business Owner PfMT Portfolio Management Team PM Project Manager
PMO Project Management Office PxC Project Execution Committee
Notes (1) PfMT may delegate a PM or Taskforce to be Responsible

4.9.1 Portfolio Management Team Members

The PfMT is responsible for implementation of strategic intent of the organization through the
selection, prioritization and oversight of appropriate projects within a Managed Portfolio. As such, the
PfMT is comprised of members who;
 Have appropriate knowledge of the project scope and business intent relevant to the
respective Managed Portfolio
 Have authority to make decisions directly, or to provide recommendations to Business
Owners / Management concerning selection of appropriate projects
 May be heads of departments, CoE’s or business areas
 Provide administrative support for the Managed Portfolio
Note that the PfMT is a role which can be fulfilled by an established committee of some other name
that has appropriate membership and authority to perform the PfMT tasks.

4.9.2 Project Execution Committee Members

The PxC is responsible for responding to the project priorities set in Managed Portfolios by applying
resources & resolving resource constraints as effectively as possible within an Execution Portfolio.
As such, the PxC is comprised of members who;
 Are Resource Owners (functional line management) responsible for execution of portions of
the work
 Have authority to make decisions concerning commitment of resources
 May be heads of departments, CoE’s or business areas
 Provide administrative support for the Execution Portfolio
Note that the PxC is a role which can be fulfilled by an established committee of some other name
that has appropriate membership and authority to perform the PxC tasks. It may also be the case
that the PfMT and PxC roles are preformed by the same group of people.

4.10 PROJECT DEFINITION, SELECTION & APPROVAL

A primary objective of portfolio management is ensuring that we ‘do the right projects’, meaning that
ideas are evaluated, and subsequently suitable projects are defined, approved and initiated to

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elaborate on or implement those ideas. This is shown in terms of the Acquisition Cycle in the
following diagram;

Figure 4-3 Project Definition, Selection and Approval

4.11 PROJECT REQUESTS

 PEM-0200.00.09-02L10-001-0-0 Project Request
Ideas and requirements can arise from any part of the organization. There is therefore a wide
diversity of possible Business Owners, Subject Owners and other stakeholders who may be involved
in evaluating ideas. The development & evaluation of ideas is primarily managed through business
processes. Once agreed that an idea or requirement should be pursued, it must be decided if a
project is required to progress it. A project should be defined if there is a reasonable amount of effort,
expense or risk to elaborate or implement an idea or requirement.

Project Requests are the means by which potential projects are documented. Project Requests are
completed in as much detail as possible (with at least ‘what, why, when & for who’) at DI1 to allow
evaluation by the respective Business Owner / Subject Owner and Portfolio Management Team.

Clearly defined Managed Portfolios allow Project Requests to be addressed to an appropriate

Portfolio Management Team.

Project Requests at DI1 frequently require additional effort to fully elaborate them in order to approve
a project. The Portfolio Management Team may recommend the appointment of a Project Manager
and / or task force to develop further information.

Decision making processes within the portfolio are defined in the Portfolio Management Plan.

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4.12 PROJECT PRIORITIZATION

Project Prioritization is the process of defining the relative importance to the business of each project
within a Managed Portfolio.
Project Prioritization facilitates;
 Management & Business Owner decision making and alignment of strategic priorities
 Communication of priorities to project execution teams
 Decision making concerning allocation of resources to ongoing projects / to place projects on
hold / cancel projects as part of the Portfolio Management process

Project Prioritization results in a simple ranking of projects from 1 to ‘n’ where ‘n’ is the number of
projects within the portfolio.
The responsibility for performing and method of determining project priority is defined in the
respective Portfolio Management Plan.

4.12.1 Examples for Project Prioritization

There can be different approaches or methods to come to a prioritization of a portfolio.

The range can be from

“Gut feeling” (Circle of Competence) -> Handful of Criteria -> Sophisticated Score Card

 Gut feeling (Circle of Competence): If a PfMT is deeply involved in all contents of the
projects and intrinsically knows the business impact and risks involved, it is o.k. to just give
the projects a sequence in the priority list, as long as they can convince the business
owner(s) to approve it.
This can apply if the portfolio is relative small, the PfMTs have senior experience and/or one
project is in a magnitude more important than others.

 Handful of Criteria: examples for criteria could be

A. Compliance / Securing Business
B. Increase of Business (new business, e.g. from new products, or capacity increase of
existing products)
C. Cost Saving / Increase of Productivity

All could be just qualitatively selected -> projects that fulfil all criteria A/B/C are top ranked,
after that from A to B to C

Or they are quantitatively evaluated in money-value, either in absolute value or KPIs like ROI
(payback since cash-inflow), NPV (net present value), NPV devaluated by technical risk
factor, NPV devaluated by business risk factor…

 Criteria with weighted Scores:

1 relevant criteria are selected
2 weighting of each criteria is defined for the overall portfolio.
3 scale for rating the projects if predefined (1-x, or “T-shirt size”, or money value…)
4 the rating is agreed for each project by the PfMT
5a/5b weighted results per criteria are automatically calculated and summarized.
(Comment: to make different portfolios equally prioritized, all criteria and weightings would
need to be the same, as well as total number of Score points over all projects in each

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portfolio. Still there would be unequalness due to different size of projects and thus different
resource requirements)

 Comprehensive Score-Card:
Of course it is possible to consider all different types of project relevant criteria, sub-group
them, weight them and come to a comprehensive Score-Card.

Aggregated Single Criteria

Congruence Product

6% 3% Congruence Market
3%
Impact
3%
10% Business Strategy Fit 6%
3%
Proprietary Position
Platform for Growth

3% Lifecycle Market
6% Lifecycle Product

13% Strategic Leverage 3% Technical "Gap"

Clinical improvement
3% Program Complexity
45% 6% Technology Skill Base
Probability of Technical 3% Availability of People and Facilities

Success Market Need

3% Medical Need

16% Probability of Commercial 6% Market Maturity

Competitive Intensity
3%
Success Marketing and Sales skills and resources
3% ROI

Reward 6%
3%
NPV
Estimated Start up costs

16% 6%
3% Project expenses except MS

3% Additional MS expenses annual

3% 3% 3% Relative Gross Profit 3rd year after launch
Time to Commercial Start-Up

However there is a risk that the business owners perceive this as a “black box” and results will
also vary by the composition/experience of the team to evaluate it.

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Guideline – Project Portfolio Management
Source : PEM-9900.00.00-90x00-001-0-0-V0.1en

Figure 4-4 Project Prioritization and Resource Allocation Loop

 PEM-0200.10.10-02L10-001-0-0 Project Prioritization Worksheet / Priority List

 PEM-0200.10.11-02L10-001-0-0 Resource Planning Sheet

4.13 PROJECT EXECUTION CAPACITY FEEDBACK - FOCUS, ACTIVE & BACKLOG PROJECTS
Project execution teams use the Project Priority to focus resources on the highest priority projects,
starting from the top of the priority list.
Depending on the balance between the effort required for each project and the available resources,
projects within an Execution Portfolio are classified by the PxC as Focus, Active or Backlog with
staffing and commitment to project delivery defined in accordance with the following diagram;
Figure 4-2 Focus, Active, Backlog & Cancelled Projects

Fully staffed • Target >90% resource demands met

Focus
• Schedule slip due to resource constraints not
Projects High degree of schedule predictability acceptable

Active Staffed with some resource constraints • Target not more than 2 consecutive months
below 75% resource demand fulfillment
Projects Increased schedule risk but still viable • Schedule slip < 1Q

Inadequate staffing to be viable • Projects are executed with remaining

Backlog resources without commitment to schedule
Projects Executed depending on availability • Some projects may be placed on HOLD, or
of resources considered for CANCELLATION

• Projects remaining at the bottom of the

Cancelled priority list are likely no longer relevant &
should be cancelled

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Note that projects which remain in the Backlog for an extended period of time are not of high priority
and should be considered for cancellation by the PfMT.

4.14 IDENTIFYING & COMMUNICATING PERSONNEL RESOURCE CONSTRAINTS

Project execution teams provide feedback concerning their capacity to deliver the projects requested
from them by classifying projects as Focus, Active, or Backlog.

Projects, PfMT’s and Project Business Owners see the resulting Execution Capacity reported as
Focus, Active or Backlog. This feedback provides a ‘heat map’ of projects which may not have
sufficient resources to meet business needs which the organization can then work to resolve.

4.15 M ANAGING PERSONNEL RESOURCE CONSTRAINTS

PxC’s meet periodically to review ongoing projects to identify resource constraints, and to identify
and implement mitigation measures.
Mitigation measures may involve;
 Using schedule slack in projects within the execution portfolio to allow allocating resources to
projects with more immediate needs
 Re-allocating resources from other project portfolios
 Procuring additional resources
 Allocating resources to higher priority projects and re-classifying others as Active or Backlog
thereby reporting that the schedule for the Active & Backlog projects cannot be maintained
with the available resources

 PEM-1040.00.00-10B00-001-0-0 Guideline - Human Resource Management

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The overall process is shown in the following diagram:

Figure 4-7 Identifying & Communicating Personnel Resource Constraints

Portfolio Definition 1 Projects are allocated to a Managed Portfolio.

ined by PfMT
Managed Portfolio A
Program Project Project Execution
Projects are grouped to a program if helpful.
folio
Name Priority Portfolio 1 Sub-Projects are consolidated to one project.
A1 A1.1 Activities that do not have project character are not to be considered.
A1 A1.2
A1 A1.3
A1 A1.4
B
C
D
acklog projects E
Cancellation F

Priorities 2 Project priorities are defined by PfMTs within their Managed Portfolio.
Managed Portfolio A
Effort) is defined Program Project Project Execution
Name Priority Portfolio 1
nagement
A1 A1.1 1
A1 A1.2 2
D 3
A1 A1.4 4
raints are B 5 3 Ressource Planning:
Project Mangagers specifiy “what to do” + “when to do”.
F 6
A1 A1.3 7
E 8
C 9
Ressource Owners estimate "effort in h/month".
Effort vs. Capacity
ce owners to Execution Portfolio 1 4 Ressource Owners come back with a suggestion of classification into
part of Managed Portfolio A
hest priority Program Project Project Execution FOCUS, ACTIVE and BACKLOG, based on their available ressources
Name Priority Capacity
and top down from priority. Identification of ressource conflicts.
cts as F / A / B A1 A1.1 1 F
A1 A1.2 2 F Info goes to PM, PfMTs, PMOs.
cklog D 3 F
A1 A1.4 4 A 5 PxC:
B 5 A
F 6 B Reallocation of ressources between projects to optimzed ressource
A1 A1.3
E
7
8
B
B
conflicts.
C 9 B Confirmation of F/A/B. Fixed allocation of ressources.

Figure 4-8: Example of a non-optimized “heat-map” and an optimized one:

Managed Portfolio A Managed Portfolio A
Program Project Portfolio Execution Execution Execution Execution Execution … Program Project Portfolio Executio Executio Executio Executio Executio …
Name Rank Portfolio Portfolio Portfolio Portfolio Portfolio Name Rank n n n n n
1 2 3 4 5 Portfolio Portfolio Portfolio Portfolio Portfolio
1 2 3 4 5
A1 A1.1 1 F F * B * A1 A1.1 1 F F * F *
A1 A1.2 2 F A * * * A1 A1.2 2 F F * * *
A1 A1.3 3 F F * * * A1 A1.3 3 F F * * *
A1 A1.4 4 A A * * F A1 A1.4 4 A A * * F
n1 5 A A * * * n1 5 A A * * *
n2 6 B B F * * n2 6 B B F * *
n3 7 B B F * * n3 7 B B F * *
n4 8 B B A * F n4 8 B B A * F
n5 9 * * A * * n5 9 * * A * *
n6 10 * F B * * n6 10 * A A * *
n7 11 * * A F F n7 11 * * B B F
n8 .. * * * B * n8 .. * * * B *
n9 20 * * * A * n9 20 * * * A *
n10 21 * * * A A n10 21 * * * A A
n11 … * * * B A n11 … * * * B A
n12 30 * * * B * n12 30 * * * B *
n13 31 * * * * B n13 31 * * * * B
n14 … * * * * B n14 … * * * * B

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Figure 4-9: Example of Meeting Sequence and Frequency:

4.16 POSSIBILITIES FOR VISUALISATION OF PROJECT PORTFOLIOS

To perform portfolio steering in an efficient way with the involved Business Owners and other
Stakeholders, it could be visualized in a standing project portfolio room. In this room all information
about the portfolio as well as about singular projects can be displayed in a transparent way. Picture
4-9 shows an example of such a possible layout to include the Degree of Implementation as
described in chapter 4.6.67 of the P.E.M. Guide “Degree of Implementation”.

Figure 4-9: Layout of a dedicated Project Portfolio Room

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Best practice:
For each project a project card has been prepared containing all available information. The maturity
of the project is represented by its position in the room:

4.17 REQUIREMENTS

 03.01 Portfolio Management

Project Categories A B C D
Requirements 1. Project Portfolio Management is implemented for all types of projects
2. Managed Portfolios are defined with accompanying Portfolio
Management Plan
3. Execution Portfolios are defined with accompanying Portfolio
Management Plan
4. Project Portfolio Maps are defined to describe the relationships between
portfolios
5. Portfolio Management Teams (PfMT’s) are defined for each Managed
Portfolio
6. Project Execution Committees (PxC’s) are defined to manage each
Execution Portfolio
7. PfMT’s & PxC’s exercise the responsibilities for Portfolio Management
8. Project Portfolios are defined in a global on-line Project Management &
Reporting System

 03.02 Project Prioritization & Execution Capacity Management

Project Categories A B C D
Requirements 9. Portfolio Management Teams perform project Prioritization for projects
within a Managed Portfolio by simple ranking
10. Project Priorities are communicated to project teams and Project
Execution Committees
11. Focus, Active & Backlog (F/A/B) projects are defined in terms of
commitment to resourcing needs & maintaining schedule

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12. Project Execution Committees work to optimize resource allocation to

maximize the number of Focus projects
13. Project Execution Committees report project execution capacity
constraints by classifying projects as Active or Backlog
14. Projects which are consistently of low priority and Backlog execution
class should be considered for cancellation
15. Project Priorities and F/A/B classification are reported in a global on-line
Project Management & Reporting System

 03.03 Project definition, selection & approval

Project Categories A B C D
Requirements 16. Project definition, selection and approval processes include;
 Evaluation of Idea at DI0
 Development & evaluation of preliminary Project Request at DI1
 Completion of Project Request, Project Prioritization & Categorization,
and evaluation / approval of Business Case and Investment Approval at
DI2
 Completion & approval of the Project Charter with supporting
documents at DI3

5 GLOSSARY & ACRONYMS

Acronym Description
PfMT Portfolio Management Team
PxC Project Execution Committee
DI Degree of Implementation
F/A/B FOCUS/ACTIVE/BACKLOG
RO Resource Owner
BO Business Owner

M1 VERSION HISTORY

Ver Date Description Author

0.1 2017-10-31 Draft Bernd Schneider
1.0 2018-06-12 Effective Bernd Schneider

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M2 CHANGE SUMMARY

Ver Section Description

1.0 First Issue

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