PMI Bangalore Chapter

PM Article: Are you a homeopathic PMO?

Are you a homeopathic PMO?

Stuart Easton

Many people believe in homeopathy. It’s been used for thousands of years and is deeply rooted in certain parts of society. However, the unequivocal research by modern science practitioners proves that homeopathy doesn’t work – it’s just a placebo.


In much the same way there are methods for prioritizing projects that have been used for decades. At some point they were probably even deemed to be best practices, but like homeopathy they don’t really work.


In this article we will try to work out which methods are homeopathy and which are real science.


Spotting the fakes

So how can you tell fake remedies from the Real Deal? For me there are 3 or 4 absolutely vital components in a valid prioritization process. Missing any of these steps dramatically undermines the effectiveness of your selection process.


The first step and probably the most important is to define what value means. This means spending a little bit of time with the leadership team clearly and explicitly defining what the goals and drivers are. You also need to be clear about what trade-offs they’re willing to make between those goals and drivers. It ultimately takes the form of weighted criteria that you can use to assess your project request.


There is a hidden danger here however. The fact that you have a list of weighted criteria does not mean that you have an agreement over the definition of value. This is the critical mistake that most PPM vendors make and it brings us to our next must-have capability for any prioritization process… collaboration.


Your portfolio of projects, and the project prioritization process, is not owned by any one person. Your portfolio exists to support the business and within the business there are multiple key stakeholders. Unless you build amongst the stakeholders a common and explicit understanding of your goals you’re wasting your time.


There are several ways of doing this effectively. Generally they fall into the category of methodologies called multi-criteria decision making. My favourite is the analytic hierarchy process or AHP. I find it to be intuitive and simple and to be a very powerful way to build both understanding and consensus. AHP is built on over 40 years of decision-science research, leveraging discovering from psychology and neuroscience along the way. So there is, literally, some science behind it.


Without this kind of structured collaboration, it’s very unlikely that your definition of value will be something that everybody really buys in to, and if your stakeholders don’t buy in to the weighting, they won’t buy in to the portfolio. Dec 08


The third key process is scoring your projects against those criteria. Again collaboration is key. Ideally you want relevant experts to assess the different aspects of a project. You want a financial analyst to assess net present value while a senior Project Manager assesses risk. What you don’t want is a bunch of executives sitting in a room making random judgments.


Now you have your scoring against weighted criteria done, you should have a clear picture of which projects offer the most value. Finding a good portfolio however, is not as simple as just selecting the projects that deliver the highest value. Its value for money that matters. Optimizing a portfolio to deliver the most value for a given set of constraints (multiple budgets, people, resources) in an environment here you have dependencies between projects (e.g. if I want project B, I have to also do project A), is not straight forward.


Again there are tools to help. They range from a simple list of project requests ordered by value-for-money in which works for simple situations (not many constraints or dependencies) to highly effective algorithms that can do all the number crunching for you, balancing multiple constraints and dependencies, to deliver an optimized portfolio.


Where a simple method isn’t enough, our preferred methodology is linear programming. I know it sounds scary but there are tools out there (including ours) that can help you do it without knowing any of the theory. You just have to enter project dependencies and resource constraints and the tools can do the rest.


So to have the necessary capabilities for a good valid prioritization process you need;

•  to define value

•  a consensus building mechanism

•  to be able to leverage expert knowledge and then

• to optimize value delivery in the context of constraints and dependencies


This sounds complex but with the right tools it can be achieved very quickly and doesn’t cost very much to do. And the pay-off is potentially huge; we often see 20 to 40% increase in the value delivered from the portfolio.


Now that’s no placebo!



Are you a homeopathic PMO?