24 / Canadian Government Executive // SPRING 2024 PORTFOLIO MANAGEMENT Effective project organizations focus their limited resources on the best projects, declining to do projects that are good but not good enough. PPfM enables them to make and implement these tough project selection decisions. 2.Both assessments can be gamed to some extent. For example, the Department has input as to which projects are included in the OPMCA, and it is amazing how many projects fall just under the approval thresholds which the Department has been granted. Also, many of the questions in both assessments are qualitative or subjective in nature. For example, consider question 3.1.2 of the OPMCA – “To what extent is the portfolio of planned projects selected, prioritized, and resourced according to its contribution to the organization’s strategic objectives as outlined in the Program Alignment Architecture (PAA) in support of the Management Resources and Results Structure (MRRS) Policy?” Alignment is measured qualitatively, and it is not difficult to spin a narrative which supports the assertion that a given project is aligned with a particular strategic objective, especially if that objective itself is also qualitative. Having discussed the government approach to PPfM above, we will now describe an approach which is commonly used in the private sector and then conclude with suggestions on how the government process can be streamlined and made more effective. Investment/Project Portfolio Management Essentials The PPfM process consists of two steps and is intended to be applied organization-wide. Step 1 is to prepare a list of all candidate projects being considered for funding approval. Using a standardized, well-structured scoring instrument and a rigorous, repeatable process, each project is scored on a scale of 1 to 10 on two dimensions – value and risk. The result is that all projects are plotted on a grid as illustrated at right. Note that in the public sector, value is a combination of alignment with mission goals and quantifiable benefits which should be significantly based on the DRF/PIP. The risk score can be derived from elements of the PCRA (Figure 1). Once all projects have been situated on this value versus risk grid, Step 2 is to stack the projects from lowest priority to highest (based on business value and risk). A line is then drawn based on the organization’s budget and resource capacity – see the figure at right. Those which fall above the line (in green) are funded and moved into the active project portfolio, those just below the line (in yellow) are managed as the pipeline of “next in line” should additional resources become available, and those well below the line (in red) are shelved and reconsidered when the portfolio planning exercise is next repeated (Figure 2). The two-step process described above must be tightly integrated into the Departmental budgeting and project gating processes. Most departments have some flavor of project approval board. Typically, the project manager and project sponsor present to the board which then has the authority to approve or reject the project. The PPfM process requires that all new projects being considered for approval be assessed against the same risk and value criteria so that they can be compared against each other and prioritized. Improving Investment/ Project Portfolio Management in Government Comparing the Investment Portfolio Management process driven by the OPMCA and PCRA which the government uses to the PPfM essentials as described above, how can the government processes be streamlined and made more effective? 1.Complexity is in fact a significant element of risk, so the PCRA can be modified to produce a single, standardized Project Risk Assessment score. Elements of the DRF and PIP can be adapted to allow all projects to be scored on a standardized scale, thus becoming Project Value Assessment. The risk and value scores can then be used to plot all projects on a single grid as depicted above so they can be compared to each other and prioritized. ported by TBS called Callipers. Callipers is old and in need of being modernized, particularly as regards its user interface, rudimentary workflow, and its inability to store all of the supporting documents that need to be submitted. Accordingly, many departments use an Excel spreadsheet for working drafts of the PCRA and only enter information into Callipers when it is finalized. The PCRA process involves three levels of users - authors, reviewers and approvers, and can involve multiple iterations back and forth between these levels both within a Department and between the Department and TBS.
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