4

HOW TO IMPLEMENT THE CORE-ENABLING PROCESSES

The OPM implementation core-enabling processes facilitate an organization's ability to realize its strategic objectives through portfolio, program, and project management. This practice guide focuses on four OPM implementation core-enabling processes: competency management, governance, OPM methodology, and strategic alignment. These key components of OPM are depicted in Figure 4-1. Competency management ensures that skills are developed and available when needed to implement a portfolio, program, or project. Governance describes the decision-making framework and oversees the work done for each process. Organizational project management methodology provides the structure (people and processes) necessary to implement portfolios, programs, and projects. Strategic alignment aligns portfolios, programs, and projects with business strategy. Each core-enabling process is essential for delivering an organization's strategic objectives utilizing OPM. However, all organizations are unique and should consider what level of implementation is appropriate given their current and desired state of maturity. Maturing organizations can also use OPM3 as a comprehensive maturity model based upon an expanded list of 18 enablers, which includes the four OPM implementation core-enabling processes discussed herein.

Methodologies and processes for each core-enabling process should be tailored to fit each organization's needs using the OPM implementation framework discussed in Section 3. Specific guidance and an example of how to develop a tailored organizational project management methodology is further explained in Section 5.

This section describes the organization's requirements when it is operating at a foundational or improved level. Organizations at the foundational level are just beginning to implement OPM; therefore, do not have a defined approach for managing portfolios, programs, or projects. The foundational level outlines the basic steps for an OPM implementation. The improved level expands on the foundational level to provide a more robust or mature OPM implementation. Organizations should consider all four core-enabling processes when implementing OPM. The processes presented in this section are as follows:

Section 4.1 Strategic Alignment

Section 4.2 Organizational Project Management Methodology

Section 4.3 Governance

Section 4.4 Competency Management

4.1 Strategic Alignment

Aligning projects, programs, and portfolios with the organization's strategic objectives and goals is the purpose of strategic alignment. To simplify the explanation in the following discussion, reference to the term portfolio is inclusive of programs and projects in the context of this core-enabling process.

Strategic alignment, supported by governance, enables organizations to consistently manage and align portfolios with business strategy to maximize the value of portfolio outcomes. As an organization develops its strategy, there is typically an evaluation and selection process that helps the organization to determine which portfolios to approve, deny, or defer.

Whether formally or informally, an organization selects and authorizes the initiatives it wishes to implement. The more capable an organization is in terms of OPM, the more likely it is to have a formalized selection process and governance body to define the strategic objectives and benefits a particular portfolio is expected to deliver. In addition, an OPM-enabled organization is more likely to utilize an enterprise risk and opportunity management process to enhance strategic alignment.

Strategic alignment includes the processes used to couple the organizational strategy to the inventory of portfolios, along with the organizational structure, resources (e.g., human, financial, material, equipment), and organizational process assets in order to establish a balanced, workable plan. Key performance indicators are monitored against the organizational strategy, goals, and objectives. Performance feedback provides input to recommend improvements to strategy and goals or changes to portfolios.

4.1.1 How to Plan and Implement Strategic Alignment

The following topics provide a general discussion of how to plan for and implement strategic alignment:

The inputs for planning and implementing strategic alignment include

• Organizational strategy and objectives,
• Inventory of portfolios and/or associated roadmaps,
• Organizational structure,
• Organizational resources (e.g., human, financial, material, and equipment),
• Organizational process assets (e.g., policies, procedures, and lessons learned), and
• Benchmark data for market and regulatory expectations, industry, and competitors.

Outputs, some of which may already exist, from planning and implementing strategic alignment include:

• Strategic plan alignment, validation, and recommendations for improvement;
• Prioritized and optimized inventory of portfolios;
• Portfolio charters;
• Resource investment plans; and
• Key performance indicators and measures of portfolio success, traceable back to organizational strategy.

For a more in-depth discussion of managing portfolios, programs, and projects in a strategic alignment context, refer to The Standard for Portfolio Management – Third Edition [7], The Standard for Program Management – Third Edition, A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition, and the Organizational Project Management Maturity Model (OPM3®) – Third Edition.

4.1.2 Foundational Strategic Alignment

An organization that is at an early maturity level of implementing OPM should focus initially on identifying basic business objective(s), existing portfolios, and a list of responsible positions or functions within the organization. It is recommended that a team be assigned to implement strategic alignment. The organization may also want to consider using expert guidance during the first phases of this process. For an organization that is beginning to implement OPM, the following foundational activities are needed to initiate strategic alignment planning:

• Identify strategic objectives and goals.
• Take inventory of the active portfolios.
• Identify responsible organizational positions or functions for achieving business goals and objectives.
• Identify responsible organizational positions or functions and available resources (e.g., human, financial, material, and equipment) for the current inventory of portfolios.

Using these foundational strategic alignment planning elements, the organization should conduct the following foundational actions:

• Study the strategic plan and the high-level organizational investment decisions that could affect implementation of the objectives. Note the organizational positions or functions responsible for achieving business goals and objectives.
• Develop an inventory of portfolios aligned to the strategic plans, goals, and objectives. Base this inventory on the existing portfolios, programs, and projects that support attainment of the organizational strategy. Be aware that it may take more than one pass at developing the inventory to collect sufficient facts to determine whether the portfolio is fully, partially, or not aligned. Portfolios that do not align with organizational strategy may need to be modified to align with the organization's goals and objectives.
• Develop and formalize portfolio charters that align with the strategic plan and are authorized to continue. The charters should identify the organizational positions or functions responsible for the approved inventory of portfolios.

4.1.3 Improved Strategic Alignment

Improving strategic alignment ensures that an organization's planned portfolios align with its strategic objectives and requires organizational resources to be available prior to approval. The organization applies a process of continuous improvement using key performance indicators to reassess and recommend improvements to its strategic goals and objectives, the corresponding alignment of portfolios, and organizational resources to ensure maximization of value. Coupled with this, an OPM-capable organization may use enterprise risk management as a means for strategic alignment by assessing risks and opportunities and using mitigating actions to help address alignment gaps.

In addition to the foundational elements discussed in Section 4.1.2, the following additional elements are appropriate for an organization improving its strategic alignment:

• Take inventory of planned portfolios not yet approved.
• Identify organizational positions or functions responsible for planning portfolios and associated leadership responsible for approving the initiative.
• Identify organizational resources (e.g., human, financial, material, and equipment) that are available, required, and being used for portfolios that are planned and approved.
• Identify available organizational process assets that may be utilized for planning, chartering, and accomplishing portfolios.
• Identify the organization's policies and procedures for organizational enablers (e.g., purchasing, HR, capital, risk tolerance, and other applicable policies) that facilitate business process integration.
• Identify key performance indicators that are measured against recommended improvements to align to OPM and validate portfolio success, attainment of strategic goals and objectives, and optimal use and enhancement of resources.

Using these additional strategic alignment planning elements and the products identified in Section 4.1.2, the organization striving to improve OPM should implement the following additional actions:

• Update the inventory of aligned portfolios to include the inventory of planned portfolios that have been determined to be in alignment with organizational strategy.
• Utilize available organizational and portfolio process assets for planning and chartering proposed portfolios.
• Update or develop portfolio charters for the inventory of planned portfolios that align with the strategic plan and are authorized to continue. These charters should identify the organizational elements responsible for working these newly approved portfolios, and the organizational resources (e.g., human, financial, material, and equipment) available, required, and being used to plan and achieve the portfolio objectives. The responsible leadership approves these charters.
• Utilize available organizational process assets to take programs and projects to a successful conclusion.
• Develop KPIs to measure attainment of organizational goals and objectives, strategic alignment and performance of the portfolio, resource utilization, and effectiveness of organizational process assets.
• Analyze the KPIs in use and determine if they are adequate or if it is necessary to make any improvements.
• Perform a gap analysis to compare the portfolio inventory and organizational resources with the strategic direction and the organizational investment decisions. This is essential to properly manage strategic change.
• Develop and use a simple prioritization model with weighted criteria or ranking by quantifiable benefits to ensure alignment to organizational strategy and objectives, expected return on investment, risk, and dependencies.
• Using results from this gap analysis and prioritization model:
  • Identify recommendations for possible improvement in organizational strategy and objectives.
  • Prioritize, optimize, and update the inventory of portfolios aligned with changes in strategic plans, goals, and objectives.
  • Identify and implement corresponding enhancements to the organizational resources and organizational process assets.
• Integrate strategic alignment with the organization's risk management processes to identify, assess, and manage risks and opportunities, including mitigation measures, against strategic goals and objectives.

4.1.4 KPIs for Strategic Alignment

KPIs should be developed and used to assess an organization's strategic alignment, and to the extent practical, should look outward at risks and opportunities on the horizon which can impact an organization's performance. At the organizational level, a balance of financial and nonfinancial KPIs should be established which will be critical to assessing the health and performance of an organization.

KPIs are used to assess whether expectations are clearly defined and accountabilities are aligned with strategic priorities, and can be used to measure personnel commitment to or understanding of an organization's mission, vision, and objectives. Additional KPIs can be implemented to ensure that the organization's efforts and rewards are aligned and to assess management of the portfolios, programs, and projects. For example, establish a KPI to assess management by measuring the number of portfolios, programs, and projects reviewed using stage-gate analysis. Care should be taken to avoid too many KPIs, which may result in misalignment or incompatibility of KPIs within an organization.

4.2 Organizational Project Management Methodology

Organizational project management methodology describes a system of practices, techniques, procedures, and rules used in portfolio, program, and project work to meet requirements and deliver benefits to support the organization's strategy.

The methodology should be tailored and scaled to meet the needs of the organization. This varies organization-by-organization, or division-by-division, based on culture, size, and maturity. This methodology utilizes existing organizational process assets to provide an organization-specific structure and guidance that improves the success of portfolio, program, and project completion. An organization could have single or multiple methodologies in use.

Organizational project management methodology connects critical parts of the organization. A well-defined methodology makes appropriate and useful connections with the business model of the organization.

4.2.1 How to Plan and Implement an Organizational Project Management Methodology

Organizational project management methodology implementation consists of identifying existing organization-specific inputs and developing a set of plans and processes to achieve the desired project management methodology state.

The inputs of this activity include:

• Understanding the project types that the organization will manage, for example, global, technology, or construction projects. Understanding project types is important to designing a project management methodology that fits the organization's needs.
• Recognizing the relative size of projects that will be managed. Organizations that only manage small projects may need less sophisticated processes and methods.
• Understanding existing internal and external supporting organizational processes and procedures and other organizational attributes for use as references and call outs from the methodology.
• Compiling historical data on completed programs and projects within the organization that may be excellent sources for good practice templates and forms.
• Documenting project lessons learned to extract good practices to avoid pitfalls.
• Identifying an archive repository to save original versions of existing project management methodology collateral as appropriate.

The outputs of this activity include (and note that some elements of these may already exist):

• Project management methodology;
• Changes to current policies and procedures and proposed new policies and procedures;
• Project document templates;
• Project roles and responsibilities;
• Portfolio view of portfolios, programs, and projects;
• KPI visibility to drive corrective and continuous improvement actions; and
• Updated organizational change management plan, communications management plan, and training plan (refer to Section 4.4 on Competency Management).

For further guidance in preparing the organization's project management methodology, see Section 5 on Developing a Tailored Organizational Project Management Methodology.

4.2.2 Foundational Organizational Project Management Methodology

Foundational project management methodology is appropriate for organizations that are implementing procedures for their projects for the first time. The primary focus of foundational project management methodology is:

• Project level methodology, and
• Portfolio view of projects.

4.2.2.1 Project Management Implementation

The fundamentals at the project level are based upon the PMBOK® Guide Process Groups, which are typically performed in each project and are highly interactive.

In addition, the organization needs to add specific methodology steps or tasks that are directly aligned to the project types within the organization. These specific steps are used to tailor the methodology to fit the organization. The better the methodology aligns to the organization, the better the opportunities for project success and organizational adoption.

When planning and maintaining a project management methodology, it is important to consider the entire organization. Inclusion of cross-functional stakeholders who can contribute to the development of specific methodology steps is vital to ensure the integration of the business management framework into the project management methodology. These cross-functional stakeholders have knowledge of the requirements in their respective areas and offer detailed and unique perspectives, which are critical for tailoring a base methodology.

The following activities are useful for the development of a foundational project management methodology:

• Establish an organizational definition of project management. The definition should outline what project management is and what it is not. This definition will help to set expectations about project management results.
• Establish an organizational definition of a project. The definition should include minimum threshold characteristics such as cost, effort, risk, and/or duration. Initiatives that do not meet the minimum thresholds of the definition or are ongoing initiatives are not considered projects, and therefore, may be excluded from project management methodology requirements. However, it should be noted that these initiatives could benefit from the utilization of the project-level project management methodology, recognizing that tailoring for fit may be necessary.

  In concert with the organizational definition of a project, the organization should consider the creation of a full lexicon of project management terms that will have meaning organization-wide. A full lexicon can provide a solid foundation for consistent communications to drive organizational clarity. The PMI Lexicon of Project Management Terms [8] contains frequently used project management terms with clear and concise definitions and may be used as a reference source.

• Define and implement a project cataloging process to list all projects. This cataloging process maintains high-level project information. Recommended information may include: project title, project manager, project sponsor(s), owning organization, project type. Process steps define the information needed to register a project, the exact mechanism used for registration (e.g., form, website), and how to submit the registration. This list is useful for leadership reviews of all project work within the organization. This activity eventually evolves into the portfolio view where all programs and projects are included in a single database or document for review and action.
• Determine a set of project management processes that are appropriate for each project type. Existing processes or procedures and successful programs and projects are a good source for template identification and development. It is generally recognized as good practice to reference the PMBOK® Guide – Fifth Edition, which details the project management processes that are aligned to the Process Groups and Knowledge Areas.

  Additionally, add specific methodology steps or tasks that are directly aligned to the project types within the organization, solicit input from cross-organization stakeholders, leverage existing organizational processes and procedures, use good practices from successful programs and projects, consider other industry standards, and review lessons learned.

• Describe the selected project management processes using a consistent documentation structure and format. Consistent documentation structure and format provides an expected level of content detail for each methodology step. Consider including a brief overview of the methodology and expected benefits along with a location for documentation archiving. Also, provide details for the methodology action steps such as:
  • Description. Provide a narrative description of what the methodology action is.
  • Condition. Describe the conditions required to permit execution of the action. For example, a methodology step supporting third-party management could have a condition of “use when third-party engagement is within scope.” This is useful for methodology tailoring guidance.
  • Inputs/outputs. List the required and expected inputs and outputs by task.
  • Roles. Define the organizational roles that participate in an action. When several roles are involved, it is useful to describe the role engagement through consistent terms such as responsible, accountable, or informed. The roles and associated terms should also be defined within the organization's lexicon or glossary. Remember to include suppliers and other third-party groups as appropriate.
  • Supporting assets/tools and techniques. Identify supporting assets/tools and techniques, such as deliverable templates (blank templates created from best practice deliverables used on previous projects), reference materials (references to existing organizational processes/procedures), tools (existing organizational tools), training materials, or deliverable examples (populated best practice deliverables that provide an additional level of guidance by having a populated model to follow).
• Outline a project-specific tailoring process to allow scalability and flexibility of the project management methodology. Tailoring is designed to allow different types of projects to exclude processes that are not applicable. For example, if a project does not have any procurement requirements, the procurement processes are tailored out. The organization must also determine who will have the responsibility for tailoring. There are several approaches that can be taken to develop a tailoring process. Organizations may develop customized options or consider the following approaches:
  • Project type models. Pre-tailor standard methodology into project type packages. Select the appropriate methodology package for the project type; for example, global project, government project, internal project, or client contract project. This approach is useful for organizations that have project types that repeatedly execute in a similar fashion.
  • Project size, complexity, and risk. Pre-tailor standard methodology into project size/complexity/risk packages. Select the appropriate methodology package for the project size (e.g., small, intermediate, or large), or complexity and risk (e.g., internal or external, existing or new customer, known or new technology). This approach is useful for organizations that have differing methodology needs based on project size, complexity, and risk. An example of this is increased or decreased governance activities.
  • Mandatory/tailor with condition. Identify tasks that are mandatory or can be tailored. The tasks that can be tailored have a defined “condition.” Condition describes what should exist for the action to be needed. Follow the guidance provided by the condition statements and ignore process steps that have conditions that do not apply. This approach is useful for organizations that have a variety of project types and characteristics where the maintenance of individual pre-tailored packages is unreasonable. This approach provides practitioner-aligned tailoring. Note: The methodology should contain mandatory tasks that are applicable regardless of project type. This provides a level of consistency for all projects.
  • Tailoring questionnaire. Develop a questionnaire for use during planning to capture the project type, size, and other characteristic information for the purpose of providing recommendations on methodology adjustments. This approach is similar to the mandatory/tailor with condition option and is useful for organizations that have a variety of project types and characteristics.
• Establish project reporting models. Develop requirements for different levels of management reporting. Include the development of processes to capture the required data at each level.

From an OPM perspective, organizational project management methodology is a tool used to engage and involve other parts of the business. Integrated business and project management processes and decisions are essential for effective OPM.

Table 4-1 provides guidance to help address alignment, fit, or project management methods when developing a methodology for a particular type of project. This list identifies topics that are covered by methodologies and provides important good practices to facilitate robust engagement across the organization. Organizations should tailor project management methodology that is consistent with the life cycle of a particular type of project. For further guidance in preparing the organization's project management methodology, see Section 5 (How to Develop a Tailored Organizational Project Management Methodology).

After the development of the methodology, consider the following to implement the methodology:

• Update the organizational change management plan focusing on the people side of the change in addition to the process side. Introducing new processes changes the way the work is done. Affected parties need to be coached on how to effectively adopt new practices. The benefits of new processes also need to be explained to gain buy-in from the users.
• Update the training plan that identifies specific training needs for the different roles involved in the methodology. Role-based training offers targeted training to the individual. Specific roles to be targeted are business leaders, project managers, PMO leaders, and project team members. Training topics include benefits of the methodology, how and when to use the methodology, tailoring guidance, tools training, and process compliance expectations. Refer to Section 4.4 (Competency Management).
• Update the communications management plan to describe how, when, and by whom the methodology will be communicated to appropriate organization audiences. The communications management plan is closely aligned to the change management plan and training plan, and should be executed with a full understanding of those components. The communications management plan may include: specific communication items (e.g., notice of decision, methodology announcement), communication media (e.g., newsletter, all employee meeting, email), targeted audience (e.g., project management community, organization-wide), communication requirements (e.g., mandatory, informational, storage guidelines), and frequency (e.g., one-time, monthly).

4.2.3 Improve Existing Organizational Project Management Methodology

Improved organizational project management methodology is appropriate for organizations that are successfully operating a project management methodology at the project level and are ready to advance their methodology into the project management disciplines of program management and/or portfolio management. Through the effective use of portfolio, program, and project management, organizations will possess the ability to employ reliable, established processes to meet their strategic objectives and obtain greater business value from project investments. All types of organizations should focus on attaining business value for their activities.

Using program management, organizations have the ability to align multiple projects for optimized or integrated costs, schedule, effort, and benefits. Program management focuses on project interdependencies and helps to determine the optimal approach for managing and realizing the desired benefits.

Portfolio management aligns multiple components (i.e., subportfolios, programs, projects, and related operations) to the organizational strategy, organized into portfolios or subportfolios, to optimize program or project objectives, dependencies, costs, timelines, benefits, resources, and risks. Using foundational project management methodology implementation at the project management level, a basic organizational portfolio is established. Additional subportfolios may be desired in the organization to more firmly position the program or project suite for success. For example, an organization may want to create subportfolios by functional area (e.g., finance, production, human resources) to more closely align programs and projects to the strategic objectives in those functions.

Program management and portfolio management are implemented into the project management methodology as needed by the organization (see Sections 4.2.3.1 and 4.2.3.2).

4.2.3.1 Program Management Implementation

Program management provides a framework for managing related efforts with consideration to key factors such as strategic benefits, coordinated planning, resourcing needs and availability, complex interdependencies, component integration, and optimized pacing. Essential program management responsibilities include planning the program, identifying and planning for benefits realization and sustainment, and identifying and controlling the interdependencies between projects. These responsibilities also include addressing escalated issues among the projects that comprise the program; and tracking the contribution of each project and the non-project work to the consolidated program benefits.

The integrative nature of program management processes involves coordinating the processes for each of the projects or program. This coordination applies across all program management activities and involves managing the processes at a level higher than that associated with individual projects. An example of this type of integration is the management of issues and risks needing resolution at the program level because they involve multiple projects or otherwise cross project boundaries, which cannot be addressed at the individual project level.

To plan and implement improved project management methodology with program management these activities should be completed:

• Establish an organizational definition of a program. The definition should include minimum threshold characteristics such as cost, effort, risk, and/or duration. Initiatives that do not meet the minimum thresholds of the definition may be excluded from methodology requirements.
• Define and implement a program cataloging process that includes programs for the existing project list. This cataloging process maintains high-level program information. Recommended information may include items such as program title, program manager, program sponsor(s), owning organization, and/or projects within the program. The process steps include the required information to register a program, the specific mechanism used to register information (e.g., form, website), and instructions on how to submit the registration.
• Determine a set of program management processes that are appropriate to incorporate for each program type. Refer to The Standard for Program Management – Third Edition, which details program-supporting processes aligned to the PMI program life cycle phases, generally recognized as good practice.
• Describe the determined program management supporting processes using a consistent documentation structure and format. Provide consistent documentation that describes the expected level of content and detail for each methodology step. Also, determine a central location for storing the documentation, for example, an existing website or shared directory for the organization's standards. Review the foundational project management methodology for suggested documentation of key elements.
• Outline a program-specific tailoring process to allow scalability and flexibility of the project management methodology. Tailoring allows different types of programs to tailor out processes that are not applicable. Review suggested foundational project management methodology for these approaches.
• Update the existing OPM change management plan, training plan, and communications management plan to understand the new program management components. Review suggested foundation project management methodology suggestions for these plans. Adjust for program management vs. project management.

For program management, when developing a methodology for a particular category or type of program, use Table 4-2 as a guide to help address alignment or fit within the organization. This is not an exhaustive list; however, it identifies important good practices to facilitate robust engagement across the organization. It is understood that organizations will tailor program management methodology to be consistent with the life cycle phases of a particular type of program. Refer to Section 5 (How to Develop a Tailored Project Management Methodology) for further guidance on tailoring.

4.2.3.2 Portfolio Management Implementation

Portfolio management is the centralized management of one or more portfolios that enables senior management to meet organizational goals and objectives through efficient decision making concerning one or more portfolios, programs, projects, and operations, as defined in The Standard for Portfolio Management – Third Edition.

Table 4-2. Tailoring Considerations for Program Management Methods to Better Support OPM

	Program Life Cycle Phases [5]
	Program Definition Phase	Program Benefits Delivery Phase	Program Closure Phase
	Establish a program authorization method consistent with the organization's broader governance and management roles and responsibilities. Link program charter to business case and current strategic objectives. Establish dependencies, relationships, and priorities within and external to the program. Identify and link to the portfolio in which the program and its components reside. Establish priority of program for decisions regarding resource assignment within the program and within the host portfolio. Establish participating internal stakeholders requirements and roles. Establish success factors, or KPIs, that apply to the program and its components. Engage primary owners of resources in reconciling priorities and commitments to support the program and its components. Establish governance/sponsor roles and responsibilities involved in monitoring conformance to business plan, charter, and program plan with attention to environmental changes and adherence to strategic alignment.	Establish service level agreements (SLAs) with enterprise risk management, financial, human resources, contracting, legal, internal audit, and other critical support services. Establish plan-driven stakeholder engagement appropriate to role. Ensure communications with all appropriate stakeholders. Establish decision events (stage gates) mapped to appropriate program and portfolio context. Establish the level of monitoring and controlling, including the type of change management process that best fits the type of program and organizational governance context.	Establish phase and final close points with associated activities and deliverables appropriate to type of program and its components. Establish method to capture results/success factors/KPIs, support of business case, and benefits realized. Establish method to capture and communicate valuable lessons to specific stakeholders across the organization. Establish method to integrate summary results into program-project performance database for program type.

Portfolio management ensures that interrelationships between programs and projects are identified and that resources (e.g., people, equipment, funding) are allocated, coordinated, and managed in accordance with organizational priorities. Portfolio management balances conflicting demands based on organizational priorities and capacity to achieve the benefits identified for successful performance of the portfolio.

Undertake the following activities when planning to implement improved project management methodology with portfolio management:

• Define and implement a portfolio cataloging process that will add portfolio to the existing program/project list. This cataloging process maintains high-level portfolio information. Recommended information may include items such as portfolio name, portfolio manager, owning organization, programs and projects within the portfolio, size, complexity, baseline budget, and milestones tailored to the organization's review preferences. The process steps include the information required to register a portfolio, the specific mechanism used to register information (e.g., form, website), and instructions on how to submit the registration.
• Determine a set of portfolio management processes that are appropriate for each portfolio type. Refer to The Standard for Portfolio Management – Third Edition, which details the portfolio processes that are generally recognized as good practice. This standard can be referenced for detailed information regarding each of these program-supporting processes.
• Describe the identified portfolio management supporting processes into a consistent documentation structure and format. Provide consistent documentation that describes the expected level of content and detail for each methodology step. Also, determine a central location for storing the documentation, for example, an existing website or shared directory for the organization's standards. Review the foundational project management methodology for suggested documentation of key elements.
• Outline a portfolio-specific tailoring process to allow scalability and flexibility of the project management methodology. Tailoring allows different types of portfolios to tailor out processes that are not applicable. Review foundational project management methodology suggestions for these approaches. Table 4-3 provides tailoring guidance for portfolio management methodology.
• Update the existing organizational change management plan, training plan, and communications management plan to understand the new portfolio management components. Review suggested foundation project management methodology for these plans. Adjust for portfolio management vs. project management.

For portfolio management, when developing a methodology for a particular portfolio, use Table 4-3 as a guide to help address alignment or fit within the organization. Table 4-3 identifies good practices to facilitate robust engagement across the organization. It is understood that organizations will tailor portfolio management methodology to be consistent with the Portfolio Management Process Groups.

4.2.4 Project Management Methodology KPIs

KPIs may be comprised of a varied set of metrics to be used to assess the effectiveness, influence, and maturity of the project management methodology and project performance. These are measurement objectives that are derived from identified information needs and objectives and should be reviewed with leadership on a regular basis. Consider a KPI dashboard as a way to present KPI data to stakeholders. Examples of KPIs include:

Table 4-3. Tailoring Considerations for Portfolio Management Methods to Better Support OPM

	Portfolio Management Process Groups - The Standard for Portfolio Management - Third Edition
	Defining Process Group	Aligning Process Group	Authorizing and Controlling Process Group
	Establish the relationship of the portfolio plan to strategic activities within the organization and to current strategic objectives. Establish the relationship of portfolio operations and activities to existing business processes, structures, and operations. Establish participating internal stakeholder requirements and roles. Establish executive-approved success factors, or KPIs, to the aggregate portfolio and its components to ensure integration and consistency. Establish decision and communication flows with PMIS, financial, human resources, contracting, and other critical information systems appropriately. Establish working relationships with enterprise risk management and strategy management units. Engage primary owners of resources in reconciling priorities and commitments to support the portfolio and its components. Establish authority of portfolio manager to invoke decisions regarding components and priorities.	Ensure planned decision events (stage gates) are mapped to appropriate context and involve key stakeholders. Establish the level of monitoring and controlling, including the type of portfolio content change management process that best fits the portfolio and organizational governance context. Establish a strategic change management process appropriate for portfolio context. Establish a system for aggregating resource center information and activity throughout the organization	Establish an authorization method within and external to management of the portfolio consistent with the organization's broader governance and management roles, responsibilities, and delegation of authority. Establish governance/sponsor roles and responsibilities involved in monitoring conformance to charter and plan with attention to environmental changes and adherence to strategic alignment. Establish phase end/start requirements with key stakeholders for deliverables appropriate to type of program and its components. Establish method to capture results/success factors/KPIs, support of business case, and benefits realized. Establish method to capture and communicate valuable lessons to specific stakeholders across the organization. Establish method to integrate summary results into program-project performance database for program type.

• Business Value and Benefits realization. Business value and benefits realization planning drills down on the expected benefits for a given portfolio, program, or project, and details how each will be measured, who will measure them, and when they are measured. Planning accomplishes the following:
  • Helps to ensure that the business value and benefits of a given portfolio, program, or project are clearly defined for the stakeholders;
  • Documents benefits in such a way that they can be easily measured and evaluated during the course of the life cycle;
  • Allows the governing bodies to evaluate the expected net benefits to prioritize efforts;
  • Provides a strong reason to keep stakeholders and sponsors interested in supporting OPM; and
  • Develops business value and benefits realization KPIs (e.g., business process productivity increase percent, the actual increase in business productivity after the project management methodology has been tailored, expressed as a percentage; and cycle time reduction percent, the decrease in cycle time of a project that occurred after the project management methodology has been tailored, expressed as a percentage.)
• On-time and on-budget delivery. Examples include evaluation of expected and actual due dates for milestones and deliverables; expected and actual budget attainment; earned value indicators such as schedule performance index (SPI), cost performance index (CPI); deviation of planned hours of work; cost of managing processes; percentage of milestones missed; and percentage of overdue project tasks. Corresponding target performance levels are useful for analyzing the results, for example, a performance target of “90% of milestones are attained on-time.”
• Formal and informal quality audit results. Examples include evaluation of deliverable defects and test results; percentage of rework attributable to ambiguous, inaccurate, or missing requirements; project team satisfaction index; project stakeholder satisfaction index; and percentage of requirements tested.
• Lessons learned. Capturing specific lessons learned helps management to make informed decisions when prioritizing future similar components.
• Methodology compliance. Assessment of methodology compliance covers the portfolio, program, or project.
• Organizational Business Goals. Assessment of organizational business goals.

4.3 Governance

OPM governance enables organizations to consistently manage projects and maximize the value of project outcomes. It provides a framework in which organizations can make decisions that satisfy business needs and expectations. OPM governance is achieved through the actions of a review and decision-making body that is charged with endorsing or approving recommendations for the organizational project management components under its authority, to include existing portfolio review boards. Consistent with organizational governance, OPM governance practices promote adherence to OPM policy throughout the organization. OPM governance varies based on the business needs of the organization.

Governance includes all levels of the organization and may transcend business lines. Governance is not limited to project management leadership, but includes representation from any business unit that has impact, influence, or involvement in portfolios, programs, and projects. It provides leadership involvement and support to the performing organization.

Effective OPM governance supports organizational success by:

• Establishing clear, well-understood agreements as to how the sponsoring organization will oversee, contribute, and support or align portfolios, programs, and projects; and conversely, the degree of autonomy that each will be given in the pursuit of its goals;
• Ensuring that the goals of the portfolios, programs, and projects remain aligned with the strategic vision, operational capabilities, and resource commitments of the organization;
• Establishing a set of robust KPIs that provides the ability to monitor and review the performance of the organization so as to base sound decisions upon; and
• Establishing regular performance reviews using a centralized venue to ensure alignment of the organizational strategy and to ensure that the organization is delivering the expected benefits, which includes a maturity assessment using a model such as OPM3®.

OPM governance supports the strategic alignment process that ensures that the portfolios, programs, and projects are appropriately aligned to the organizational goals and strategies. Then, business and project functions need to focus on the same goals to crystallize OPM benefits.

Other core-enabling processes implemented by the organization are integrated with governance through the review and monitoring of process-specific key performance indicators. Recommendations and initiatives are reviewed and accepted using the governance processes, which enhance current processes and methodologies identified during routine assessment and reviews.

4.3.1 How to Plan and Implement Governance

Planning and implementing OPM governance consists of identifying organizational-specific inputs based on an initial assessment of the organization's readiness for OPM.

The inputs of this activity include:

• Prior organizational assessments, including work culture assessments;
• Strategic alignment process details;
• Organizational risk tolerance;
• Understanding of existing management teams or governance boards within the organization; and
• Key performance indicators.

The outputs of this activity include (and note that some elements of these may already exist):

• OPM governance charter;
• OPM governance process and owner;
• Strategic alignment through portfolio, program, and project approval processes;
• Communications management plan; and
• Key performance indicators revised.

4.3.2 Foundational OPM Governance

Foundational OPM governance is appropriate for organizations who wish to expand or initiate project management methodologies across all organizational units involved in projects to ensure alignment with the strategic goals. Foundational OPM governance leverages an existing management team or governance board within the organization to assume the additional scope of OPM governance. Additional staff can be added as needed. This approach maintains an appropriate alignment of governance leadership with the core-enabling processes. OPM governance responsibilities include the following:

• Determine the most closely aligned manager, management team, or existing governance board. Make contact with the board leadership and secure agreement on additional OPM responsibilities.
• Establish roles and responsibilities for the governance board and its members.
• Develop a communications management plan that describes the governance board function, including its purpose, objectives, attendance, frequency, and meeting content.
• Document and finalize the charter, scope, and membership of the governance board, including how they will be integrated with the portfolio, program, or project approval process.
• Review and implement the strategic alignment process.
• Establish and approve the appropriate KPIs.

4.3.3 Improved OPM Governance

Improved OPM governance is appropriate for organizations that have an established OPM governance function, similar to what is described in Section 4.3.2. As the OPM function expands, improved governance is required to support the ultimate goal of being enterprise wide as follows:

• Incorporate additional members to the governance board to represent all of the OPM-enabled business units within the enterprise that work in concert to accomplish the organizational strategy.
• Determine whether a budget is needed for the governance function. Pursue budget approval as appropriate.
• Institutionalize the OPM governance process by updating the charter to include applicable changes in scope and membership.
• Transform the performance of the organization through regular KPI reviews and assessments.
• Identify, prioritize, and execute continuous improvement initiatives.

4.3.4 Key Performance Indicators for OPM Governance

Various key performance indicators are used to assess the OPM governance function. Examples of KPIs include number of program or project approvals, percentage of programs or projects that complete project tollgates or project phases in a timely manner, number of continuous improvement or corrective action initiatives identified, and annual volume of project delays outside acceptable thresholds.

4.4 Competency Management

OPM competency management facilitates the timely and appropriate assessment of the skills and development of the experience necessary to implement portfolios, programs, and projects within an organization. Competency management transcends the organization and is not limited to those competencies necessary to manage a project. For this reason, the OPM processes for competency management should be conducted in concert with the human resources organization. Competency management ensures that all levels, including process owners, functional managers, and executives, have the competencies necessary to successfully deliver the portfolio, programs, and projects and understand their roles in the process.

Competency management encompasses assessing the skills and capabilities needed for managing projects and programs within a portfolio; assessing the organization's available resources necessary to meet those needs; providing the training to develop the required skills and capabilities, along with informing all parties of their respective roles; forecasting long-term competency needs and developing a strategy to meet them; and ensuring continuous learning and improvement. As with all OPM processes, competency management should be tailored for the organization and take into consideration the organization's structure including roles and responsibilities as well as the organization's strategy and purpose. PMI's Project Manager Competency Development Framework (PMCDF) [9] can be used as a resource.

OPM competency management supports the strategic alignment, governance, and project management methodology processes by: (a) ensuring near-term and long-term planning for competency needs; (b) ensuring everyone in the organization understands their roles and responsibilities relative to delivering portfolios, programs, and projects; (c) ensuring everyone in the organization has the associated skills and knowledge, and has an opportunity to expand that knowledge; and (d) providing mechanisms for continuous improvement and learning.

While the focus of this section is on specific competencies supporting program and project delivery within an OPM context, organizations should understand the need to foster improvement of the soft skills, particularly communication and leadership. This is especially important when integrating dissimilar project management and business management units within an organization into an OPM framework.

4.4.1 How to Plan and Implement OPM Competency Management

When an organization understands OPM maturity and has identified their target organizational maturity, they can make informed choices to ensure a robust competency management infrastructure.

The inputs for OPM competency management include:

• List of portfolios, programs, and projects;
• Project skills assessment (to identify skills needed to deliver a specific project);
• Skills and experience assessment of existing portfolio, program, and project managers;
• Organizational skills assessment (to understand whether the skills needed can be provided for within an organization or not); and
• Organizational structure (to identify sources for the skills within the organization).

The outputs for OPM competency management include (some elements may already exist):

• Updated skills assessments,
• Understanding of which organization will provide the needed skills,
• Identification of external sources for skills that are not available within the organization,
• Competency model (for improved implementation),
• Career development framework (for improved implementation),
• Training curriculum (for improved implementation),
• Knowledge management system (for improved implementation), and
• KPIs.

4.4.2 Foundational OPM Competency Management

At a minimum, an organization needs to understand the portfolio structure (e.g., the projects and programs that support the organization's strategic plan or business case), the organizational structure, and the skills and abilities of the workforce (including where to acquire resources if not available within the organization). In a foundational organization, the skills and capabilities needed to deliver the portfolio, programs, and projects may be sourced from various locations (e.g., project team, technical team, information technology office, human resources, procurement, financial resources, external suppliers, etc.). The goal for competency management within a basic OPM implementation is to ensure that the required skills and capabilities are available in order to deliver the project. The steps for a basic implementation are as follows:

• Review the list of programs and projects that are necessary to deliver the organization's strategy. If the organization does not have a list, consult PMI standards to assist the organization with organizing their work into programs and projects [5, 6].
• Assess skills necessary to deliver the projects. The PMBOK® Guide – Fifth Edition, the PMI Project Manager Competency Development Framework (PMCDF) and other project management standards provide an overview of the processes that should be performed when managing a project. PMI's PathPro® for Organizations is an available assessment tool. These functions include but are not limited to: project management, resource management (i.e., financial, human, materials, and facilities, etc.), contract management, schedule management, risk management, and quality management.
• Perform a skills gap analysis. Review the organizational structure to determine whether the needed skills are available within the organization or whether they will need to be procured.
• Identify sources for developing needed skills. This may include the use of existing experts within the organization to mentor and train others, and the development or procurement of training to build the needed skills. Organizations should be prepared to acquire skilled resources from other sources when they are not available internally.
• Reassess the skills and competency requirements needed to deliver the business case for OPM, as needed. Consider changes in organizational structure, as well as changes in the organization's strategy and portfolio, including additions and deletions to the program and project structure. Periodically assess and align the skill set of the organization's workforce. As an organization evolves, it is expected that the cadre of experienced workforce will grow, but this growth is not always proportional to the evolution of programs and projects.
• Understand how hiring and attrition impact the organization's capabilities, keeping in mind that skills can be developed, transferred from experienced personnel, or procured from outside of the organization.

4.4.3 Improved OPM Competency Management

For an improved OPM implementation, competency management will enhance capabilities incrementally, with a desired end goal of having a comprehensive infrastructure for competency management. An organization that is improving their competency management process should incrementally expand their processes until the desired state is reached. The implementation process should take into consideration constraints such as funding and existing career path structures. It is common for the competency management system to evolve as an organization becomes more mature and when OPM is embedded into the organizational culture.

In a fully enhanced or mature OPM implementation, program and project management is integral to the business model, an infrastructure is in place, the roles and responsibilities are well understood, and the need for OPM is no longer debated. The attributes of competency management within an advanced OPM organization include: (a) a competency model; (b) a career development framework; (c) a training curriculum; (d) developmental opportunities (including mentoring and internships as well as on-the-job training); (e) knowledge-sharing services; and (f) organizational support. Although not appropriate for all organizations, a mature organization will also consider the value of implementing certification programs to ensure the workforce has achieved a certain quality standard: project management, acquisition, financial, and quality certifications etc. The activities for implementing improved OPM competency management include the following:

• Develop and implement a competency model that is newly created or adapted from another organization. This model typically includes multiple levels such as novice, mid-career, and expert.
• Develop and implement a career development framework that provides a path for an individual to progressively develop necessary skills. Learning strategies for each level include a combination of training classes and developmental opportunities.
• Develop and implement a training curriculum benchmarked against similar organizations at an advanced OPM level to determine the best solution for the organization. Training should be developed to address the entire skill set and also should be provided to the leadership and support functions.
• Identify experiential learning and developmental opportunities that are targeted and more structured than classroom and on-the-job development experiences, for example, formal mentoring processes, pilot projects, and formal development programs.
• Implement an infrastructure of knowledge sharing, communities of practice, and lessons learned to propagate good practices across the organization and with the organization's stakeholders and partners.
• Provide organizational support to responsible groups in addition to all supporting organizational elements and staff to convey how they are expected to contribute to the delivery of strategy through OPM and to ensure they have the skills and capabilities necessary to do so.
• Assess alignment of the organization's competency needs and infrastructure, strategy, organizational structure, existing skill set, and programmatic demographics, all of which evolve over time, to ensure that the needed skills are available to support the organization's long-term objectives.
• Reevaluate the assessment questionnaire referred to in Appendix X3 along with the KPIs and metrics to determine whether the organization is performing at its desired level.
• Benchmark against other organizations with similar business models to identify good practices.

4.4.4 KPIs for OPM Competency Management

A variety of KPIs are used to assess an organization's competency management implementation within the OPM framework. At the organizational level, establish KPIs to ensure that program and project teams have the skills necessary to deliver the program or project and that long-range competency needs are met. Sample KPIs include: number of courses offered, number of people trained, resources available vs. project and program needs, the number of certified project managers (for example, Project Management Professional (PMP)®, Certified Associate in Project Management (CAPM)®, Program Management Professional (PgMP)®), the number of communities of practice coupled with level of activity within a community of practice, and the measurement of project management performance for different levels of skills, knowledge, and experience.

4.5 Summary

Highlights from each section describing the four core-enabling processes, which are essential to the delivery of an organization's strategic objectives, are as follows:

4.5.1 Strategic Alignment

• Strategic alignment, when supported by governance, enables an organization to consistently manage and align portfolios with business strategy to maximize value of outcomes.
• Organizations should align portfolios, along with responsible organizational elements and available capital resources, to a documented strategic plan.
• Preferably, the alignment of portfolios, responsible organizational elements, and available capital resources are accomplished prior to formal initiation.
• Alignment of portfolios, responsible organizational elements, and available capital resources are managed and updated with changes to the organization's strategic plan.

4.5.2 Organizational Project Management Methodology

• Project management methodology is a critical component of OPM because of the organizational integration with an effective project management methodology.
• Project management methodology encompasses portfolios, programs, and projects.
• Project management methodology tailoring is based upon the requirements and needs of organizational stakeholders and should accommodate different types of portfolios, programs, and projects.
• Organizations that use standardized project management practices have significantly more projects that meet their original goals and business intent, and finish within budget and on time.

4.5.3 Governance

• The OPM governance function needs to be owned by a defined body that has clear roles and responsibilities.
• An OPM governance charter that defines the OPM scope, membership, and process should be documented and approved.
• As OPM function expands, the governance board should represent all relevant business units within the enterprise.
• OPM governance implies adherence to OPM policy and continuous improvement.

4.5.4 Competency Management

• Systematic forecasting and planning is essential for the development and retention of current and future competencies that are necessary to deliver the organization's strategy through OPM.
• Sound competency management typically includes a competency model, a career development framework, formal and informal training programs, and mechanisms to promote continuous improvement.
• Competencies should be developed and nurtured within all groups responsible for delivering programs and projects so that everyone understands how they contribute to delivery of the strategy through OPM.
• Organization should have a tailored approach to developing and maintaining necessary competencies to reflect the unique aspects of the organization.