Manage Resource Risk With Project Portfolio Management (PPM)
Resource Risk and Identifying Solutions for Success
Organizations that practice formal project management are more likely to find success. With a formal process in place, there is increased communication and transparency around each project. With so much visibility, projects are more likely to stay on track and within budget. There are a number of reasons why organizations find it to be crucial to engage in a formal project management process, with three of the most common being that it helps to fulfill:
- The need to plan, prioritize and approve work.
- The need to track and report on progress.
- The need to encourage collaboration.
Utilizing different project approaches and support tools for different parts of an organization, and having these elements all work together, is essential. We want to explore how that can be achieved, and how it can help an organization mature its overall project management capabilities while addressing resource risk.
Project Definitions – One Size DOES NOT Fit All
Too often, when any organizational activities are officially labeled “projects” they are automatically expected to be managed using one-set of common “official” project management methods, processes, tools, reporting, etc. In some cases, the internal project management office is even deployed to ensure compliance with the organization’s single project management standard. However, too often the one approved project management standard is way too much for many small project efforts. You wouldn’t find the same resource risk in building a house compared to building a high-rise building, would you? It is difficult to get comprehensive resource risk information until you get the buy-in to label all appropriate organizational activities “projects.” Most organizations can better categorize their projects and then “size” the appropriate project management standards for each class of project, to help identify more – official projects.
Project Portfolios – One Size DOES Fit All
Too often, projects are included (or not) in project portfolios based on budget size and category alone, while omitting a resource risk. Small, non-capital, non-strategic projects are often overlooked when it comes to the project portfolio, even if they use some of the same key resources that major projects do. Regardless, they should still be included in the portfolio, in some form, if possible. It is important to recognize that this does not suggest the use of the same project management methods for both small and major projects. Rather, an important resource risk forecasted and used in small projects should be “accounted for” in the project portfolio if they are shared. By putting all project efforts, large and small, in the project portfolio in some form, project managers can better see, and hopefully manage, all risks across the organization’s important project resources.
Dedicated Project Resources Manage Resource Risk – Too Often On-Call
A classic dilemma for project managers and their “dedicated” project resource risk is that these project resources are also frequently “on-call” for reassignment to other organizational activities that are not actually projects – but occur very regularly. Dedicated project resources can be diverted for a variety of reasons that are deemed more important, like unplanned resource risk, organizational “fires,” maintenance, critical tasks, etc. This might include something like a customer or system support crisis or maintenance updates or budget changes.
One good way to help manage project resources that are actually on-call is to add some fixed annual operating category names to project portfolios. This can be as simple as estimating and posting actual resources against some fixed annual “operating buckets” like System Support Maintenance. At the end of each fiscal year, these various “support task groups” in the portfolio can then be reviewed to help analyze how they’re forecasted versus actual manpower use, cost, trends, impact on other projects, etc. Again, if on-call activities impact important project resources, it is helpful to try to forecast and track a project resource risk in your project portfolio and keep your project managers updated.
How Have You Managed a Resource Risk?
In any environment, structure conveys a sense of stability and permanence. For projects, a formal project management approach leads to greater adoption rates among individuals and business areas.
When the defined approach has been invested in by leadership, there is a broader and more rapid acceptance that project management is a discipline supported by the organization. A formal approach also allows individuals throughout the organization to recognize their roles and understand their accountabilities. This leads to a better comprehension of the value they add and contributions they make to a given project, further supporting adoption. However, while a common set of project management fundamentals is important, there is also a need to support significant differences. Specifically, intake and prioritization are two areas that shouldn’t follow a one-size-fits-all approach and are key to pinpointing your resource risk.
Size is not the only difference organizations must anticipate when developing a formal project approach or assessing resource risk. They must also recognize that different organizational areas will be at different levels of maturity and will, therefore, need to have different degrees of structure. In some cases that may be a simpler set of processes to support greater adoption and accessibility, and in other areas there may be a need for more rigorous processes to reduce flexibility and help ensure compliance on specific resource risks. This is especially for projects that have a high degree of external monitoring, impact regulatory requirements, etc. There is also a balancing act between the “best” approach for the organization, while still encouraging adoption and compliance.
The best approach in the world will fail if no one believes in it or supports it. On the other hand, if the organization can balance the need for a robust project delivery approach with the need to develop sustainable adoption of that approach, the long-term benefits will be significant. Choosing the right approach that minimizes risk and cost is an act of balancing methodology, formality, structure and governance.
This post was originally published in March 2020 and has been updated with new information.