7 Steps to Balance the Business Technology Project Portfolio

October 16, 2016

There is growing unease amongst the team members. Some of them are not happy at all. The task at hand is becoming highly complex. There's disagreement and over time some projects never get the attention it deserves. Others are held back by resources not being used optimally.

This causes most IT Managers to feel that they have hit the limit with their project coordination attempts.

Our goal here is to continue building on concepts that will help you take your IT management capacity even to a higher level.

Whilst addressing this goal, we'll be introducing a methodology to show you how to balance capacity through effective resource management.


What Have We Learned so Far?

You are probably not a professional project management specialist in a well-bureaucratised enterprise. A translation to normal English reads: You don’t have time to first obtain a qualification in project management. You need to be agile and empowered to implement best practices as fast and easily as possible.

This series of articles is all about harvesting the low hanging fruit to fast-track you (and your organisation) to a sustainable high throughput of BT Projects. Here’s a peek at the previous blog articles in this series:

How to take your IT Management Capacity to the Next Level

We start off this series with insights into core mindset changes needed to free you from common constraints and to optimise your IT Management Capacity. These insights will also enable you to drive change throughout your company.

4 Steps to Fearless Communication on Project Deliverables

Taking a stepped process, we show you a practical way to start a process to gain a bird’s eye view on the BT Projects in your company. We also show you how to expand this view to the right people in your organisation.

Coordinate Business Technology Projects across the Organisation

The bird’s eye view in the previous article will now become a useful “tool” to put the focus on the right BT Projects for business to firstly prioritise and then limit the number of running projects in relation to the capacity of your team. This in itself will put the necessary focus on projects and will drastically improve project completion rates.

This current read thus does not stand on its own and, like the previous ones incrementally builds on preceding articles. It is therefore highly recommended that you first read them (if you have not already done so) before you continue reading this one.

Increasing Numbers of Complaints by BT Stakeholders

You have made big inroads by implementing the suggestions in the previous blog articles. Now you are facing new frustrations and complaints. After running for a while, your BT Projects Team most probably will encounter some serious prioritisation challenges.

For example, whilst some types of projects always get slotted in at the top of the priority list, some work never gets attention until it is too late and causes disruptions. By this time a lot of high-end resources will be taken from your IT Team, diverted from other tasks. These situations typically could have been easily avoided with pro-active minimal attention.

Your biggest frustrations will definitely arise from projects that just never surface. HR will not understand why their installation of connected big screens in the recreational area constantly finds itself at the bottom of your shared list, even after explaining to them that critical operational tasks and higher priority projects always get preference.
And should this be the case? Who judges what is deemed important? Is it just the one shouting loudest who gets the most attention?

Whilst juggling between the unmanageable, the manageable, those projects that are often invisible to the rest of business usually get neglected. You know, the ones that are asking for big trouble if not attended to; security updates, database upgrades, hard drive bad sectors, memory leaks, server auto-reboots, intermittent IP address conflicts and the classic one: file system off-premises backups.

These are fine as long as a server reboot is a temporary workaround, but eventually, yes, eventually this will bite you hard. And you know it. One day, when you need it least, it will take all your high-end resources from other critical tasks resulting in grey hair and unrepairable reputation. And you will be left defenceless, as this is your responsibility. You should have addressed it when you had the opportunity.

What Causes These Complaints?

One big reason is that you do not have unlimited resources. Additionally, much of the time of many of those resources is tied up with day-to-day operations.

A second reason is that many BT Projects are cross-functional, driven by different business functions, but they all contend for a single pool of limited IT resources.
And yet another reason is that project types are often too incomparable to prioritise in one list. Some always stay at the top, typically when the value is easily definable in business terms whilst the more technical and foundational projects stay at the bottom.

We suggest the following 7-step process to tackle this problem. These seven steps are more on a conceptual level and should be built on and adapted to the routines that have been set up in your environment with the help of the previous blog articles.

1. Classify Projects According to Their Value Proposition to the Business

“To be beyond any existing classification has always pleased me.” - Boyd Rice

Why Should I Group Projects?

Apples can be compared with apples and comparable projects can be prioritised with relative ease. It therefore, makes perfect sense to try and group projects logically.
Traditionally BT Projects use IT teams as shared resources from one big pool and this is where the problem comes in.

When projects and as far as possible the corresponding resources are grouped into logical sub-lists, Resource Management becomes much simpler. This is a bit of an abuse of the saying "divide and conquer".

But how can we logically group them? There are many ways to skin that cat. The Relevant IT framework has a relatively elegant and, more importantly, repeatable answer for this.

Identify the Groups to Be Used

In any business, there are up to four logical layers of technology adoptions. In a very few select companies, all of them have been implemented, but the majority of small and midsized companies only focuses on the one or two foundation layers with some initial forays into higher ones. We call these layers the Value Propositions (VPs) of IT in the Business.

Over years of extensive research, we have defined the four VPs of IT and our Relevant IT methodology has been built around them.

Tip: Read the following table from the bottom up.

After years of thinking, scrutinising, refining and applying it to different contexts we are absolutely convinced that this is the methodology to be followed by Small and medium-sized enterprises (SMEs). You can use whatever grouping suits your business, but you might spare yourself a lot of effort and align your groups with the four VPs.

Assign a Home VP for Each Project

Please note that I will be using our freely downloadable Excel Template to convey some concepts in a practical way.

However, it’s best to implement the concepts in your own tool should you have one. If not, you can either use our tool to get started or look for a more advanced tool as recommended in our list of the most popular project management tools.

To start the classification of projects, go through each project in the list of projects and assign a home VP.

The Home VP is usually the highest VP it touches. E.g. a VP3 project will have VP1 and VP2 elements, but the home VP is VP3.

There is an option to divide the project up into specific VP components, but we would strongly advise against this for any logical project where the resulting parts depend on each other. Dividing them could lead to parts being independently scheduled and conflicts are virtually pre-programmed.

2. Business Strategy Should Drive Project Focus

Use the business strategy and current focus of your company to determine the amount of focus each VP should get, especially the amount of management attention.

What Is Management Attention?

According to  Eliyahu M. Goldratt, the father of Theory of Constraints, "Management attention is the organisation’s ultimate constraint” as it is "consumed by the efforts to achieve the desired results while dealing with three main challenges: uncertainty, conflicts, and complexity”.

Focus Management Attention on What Matters to the Business

Since the BT Projects Team, as introduced in the previous blog, is mostly comprised of senior management, it follows that we should allocate most of their time on what matters most to business.

We would suggest that you divide the time spent during the BT Projects Meeting in accordance with an agreed-on VP ratio. This automatically adds more focus on the business areas with more allocated time.
Map Business Strategy to VPs
We found it best to determine the ratio between the VP in your company is by allocating percentages of importance/focus to add up to 100%.

Map Business Strategy to Value Propositions of IT

We found it best to determine the ratio between the VP in your company is by allocating percentages of importance/focus to add up to 100%.

The priority VP is your current business drive; therefore, it should be allocated the highest allocation of percentage Management Attention.

The section “The essence of the 4 Value Propositions of IT” of our blog article "A Mid-sized business needs at least 4 strategic IT leaders” will guide you to help map your company’s current business drive to one of the four VPs.

Assign a Leader to Every Value Proposition of IT

The previous blog article in this series, Coordinate Business Technology Projects across the Organisation, helped you to identify the team members of the BT Projects Team according to the VPs. This BT Leader will now become the de-facto team lead during the VP time slot within the BT Projects Meeting.

3. Decide on Resource Availability

As already stated, resource constraints are a major root cause of a critical problem that has surfaced at this stage of your project coordination implementation. You, like many others, can view it as a big stumbling block or like a select few, as one great opportunity to tackle and unlock great efficiencies.

IT Resources Are Not Free!

Whatever your view on it, the fact is that bad multi-tasking is especially applicable to the IT Team as this team is traditionally considered by business as that of “free sourcing”. IT time is consumed by different business functions without proper management of the IT resources. As a result, whoever shouts the loudest, usually gets the attention.

Resource Management to the Rescue

To counter this problem, we should implement the concept of “Resource Management”. In a highly achievable and simplified structure, each VP should ideally have dedicated IT resources. In effect, this means that every VP should have its own IT Team dedicated to its own projects.

In reality, as you would know, IT Teams are not structured this way. Now we have to make another plan, and that is to assign resources in an extended BT Team to the VPs in a virtual way through Resource Pools; which basically means a grouping of people around a particular skill that are assigned to a particular Home VP.

Manage Your BT Projects Capacity

Here again, you should build on the concepts & processes from the previous blog. The idea is that the BT Projects Meeting can now fine-tune prioritisation of all BT Projects across different business functions and VPs.

The proposed Management Attention Ratio should serve as a guideline of where the meeting focus should be. According to this ratio, the meeting will systematically cover the following concepts.

Pro tip: Start with the lowest priority VP in order to make sure that it gets addressed. Then move up according to business priority, spending more time on the priority VP.

Decide How Often Resources Are (Re)Allocated to Bt Projects 

The BT Projects Team decides on a fixed period during which resources are allocated. This period should be aligned with the frequency of the BT Projects Meeting (e.g. once a month), although the team should over time ideally strive to meet on a weekly basis and think in so-called “sprints”, a term used in Agile.

Identify All BT Resource Pool

As said earlier, the notion of a BT Resource Pool is critical to Resource Management as a transitional mechanism. BT Resource Pools are determined by skills within the extended BT Team, e.g. Server Engineer, Desktop Engineer, Business Analyst, BI Developer, Software Developer.

Ideally, each person should only belong to one resource pool and each resource pool should have a clear “home VP”. We are, however, aware that this is not a given in smaller companies and you might need to share resources over pools and VPs (as with Resource Pool 2 earlier).

This should be prevented as far as possible. However, as a situation demands it, we have another “virtual” entity called a Full-time Equivalent (FTE). We have from research and experience found that for project management an FTE is about 120 effective hours per month – the rest is taken up by admin and other tasks.

The following example might shed some light on how available hours are allocated per VP for a resource pool:

Number of resources/persons allocated to this Resource Pool (#Resources): 5
Effective project hours per person per month (Time constant): 120
FTE = %Allocated × #Resources
Hours = FTE × Time constant

The thinking in FTEs does allow us to allocate parts of a person’s effective time to a resource pool. BUT beware: try as far as possible to stick to “one person, one resource pool” as it otherwise becomes extremely complex in no time.

Voila! The foundation is done and you will now be well positioned for proper Resource Management.

Estimate the Availability of BT Resource Pools

The magic building block now for the BT Projects Team is to estimate the availability of the BT Resource Pools.

a.       Ongoing Operations

This is the heartbeat of your business and should not be tampered with. The vulnerability of your business venture will increase if it has no solid base. Therefore, the allocated time to Ongoing Operations should be as fixed as possible.

b.       "Home VP" BT Projects

We introduced the Home VP earlier. A percentage of available hours should be assigned to home VP projects.

c.       Other BT Projects

You have reached a point where estimated time is allocated to the Ongoing Operations as well as the “Home VP” BT Projects. The remaining time is the time available for the BT Projects in other VPs. Total allocated time will now add up to 100%. All projects outside the “Home VP” of each BT Resource Pool now get allocated from this allotment of time.

This base time division per resource pool in principle has to be agreed on by the BT Projects Team and they need to give the green light before we can allocate actual projects.

4. Understand Resources Required for Each Project

Keeping in mind that the VP Leader is still leading the conversation and that you have already classified each project by assigning it a home VP, we need to go to the next phase of understanding the resources required for each project.

Estimate the Resource Requirements for Every BT Project

A list of BT Projects per VP (called a VP Project List, based on the Home VP allocation) is now separated from the rest.

For each project on this list, the VP Leader now needs to assign time per resource pool.

Resource pools in the “Home VP” use the respective time available; all other time is taken from “Other BT Projects” for other teams (at this time without checking that this time has not been requested / allocated by other VP leaders).

Here it becomes obvious that there might be conflicts as at this “Other BT Projects” time it is a "free for all" to request resource time from all required pools. It is easily evident that we will have to revisit this in a later step.

Prioritise Projects Within Each Value Proposition of IT

The VP Leader now does an initial prioritisation of all the BT Projects inside the VP Project List based on his/her particular needs and the projected availability of resources.

This is a critical step towards addressing the core problem we set out to solve – we now have lists of comparable projects that get prioritised individually

Note: You may reuse the rudimentary “Priority” field for this purpose. However, for more advanced prioritisation and ranking, you should rather consider a professional tool.

5. Agree on How to Balance the BT Project Portfolio

The American Heritage Dictionary of the English Language defines balance as “A harmonious or satisfying arrangement or proportion of parts or elements”. Balance is a core concept that triggers associations from Eastern Philosophy to the Theory of Evolution and Astrophysics.

Ample unknown factors and influences are constantly weighed up to reach an equilibrium that we call “balance”.

To have individuals in a business meeting with their own needs covering diverse projects, each with diverse goals, dependencies, and stakeholders, demands prime awareness, patience and determination. And a lot of gut feeling!

Welcome to the art of balancing!

It is not any more about project coordination. It’s now about a deeper level of coordination we will now call “Portfolio Balancing”. The ultimate outcome is to have the maximum amount of the right work done as painless as possible in the shortest amount of time. And following steps are absolutely key in accomplishing this.

Note: The tool can be used to display information to help balancing the portfolio. It allows you to change resource allocated time and activate or deactivate projects, but it does not provide for further integrated balancing functionality.

Determine Capacity for Current BT Projects

Now that you have an understanding of the resources and criticality for each project, it will become evident that there will be some BT Resource Pools that are over-allocated. Feel good about it as this was previously not transparent. It now becomes workable.

A “problem” that you will even be quite ecstatic about, is that in in less likely scenarios, some spare capacity will surface. Now that is something that you definitely would not, without any doubt, previously have been aware of, right?

Balance the List of BT Projects

Now that you have gained some workable insights, it is time for the work to be done!

All conflicts / over-allocations of resources need to be resolved by taking an overarching view. This means that the BT Projects Team now need to have the total list of BT Projects across all the VPs in front of them.

Taking the following into consideration, this list will now undergo an iterative shifting-around process until all are happy:

What Is the Goal of Balancing?

Some of your BT Leaders might question this extensive process. Everybody in your team should fully understand that this process is all about to

  • ensure that all critical projects are getting attention;
  • ensure that the maximum number of projects get done;
  • complete them in the shortest amount of time with the least amount of multi-tasking by individual resources;
  • charge it with the highest utilisation of resources without overstretching them.

Where Should You Fine-Tune?

During each iteration you can make alterations on project level to the following dimensions:

a.       Prioritisation

Assign a different priority to shift a project up or down the list.

b.       Active Status

The active status indicates whether the project will be stopped or to be worked on during the next period.

c.       Resource Availability

BT Projects that share the same resource pools might be balanced by a “give and take” action. E.g. Project A seems to be more urgent than Project B but need more time of a shared resource Pool 1. Available time from Pool 1 is then “taken” from Project B and “given” to Project A.

When all available time from a shared resource is exhausted, the project needs to borrow time from the Ongoing Operations or the Home VP time allocation. We call this “Project Goodwill” that the resource pool in question builds up and that needs to be recouped in future periods as to not compromise other parts of the business.

Great care should be taken here as this has the potential of shifting availability from an ideal division of time to some skewed allocation of time. The “Goodwill” of each team also needs to be recorded and an unhealthy build-up over time indicates an area of concern.

6. Record Resource Time for BT Projects

The process of allocating resources should be refined for the sake of continuous improvement. This needs the buy in of all VP leaders and the entire BT Projects Team.

In order to do proper Resource Management to effectively refine the balancing of your organisation’s BT Projects, it is imperative that the necessary data is recorded.

How Should You Collect the Data?

All efforts from the BT Resources per project should be recorded. This means that time should be logged per project. Ideally the time for Ongoing Operations should also be logged, but time logged per project should be significant enough for now.

7. Embed Learning into the Process

How Can You Optimise Learning?

The better the quality of data, the more frequent you interpret it and the sooner you use those insights in a new iteration, the faster you will learn. This will even be improved by doing it collaboratively with others.

How Frequent Should the Learning Cycle Be?

The faster the learning cycles, the better the calibration of resources and project portfolio balancing. Do this as frequent as possible. This should actually be aligned with the previously mentioned resource allocation period. Once more it is better to go for frequent minor adjustments rather than big ones every now and then.

What Measurements Should You Observe?

Estimated vs. Actual Available Resource Time

Comparing the Estimated Available Resource Time with the Actual Available Resource Time spent on projects from the captured data will direct you to the relevant adjustments to be made.

VP Projects Queue Growth

Another critical measurement is your VP Projects queue growth. The comparison can be done by screen shots over periods. For instance, if the number of projects grows constantly in one VP compared to the others, it will indicate disturbance in balance or a resource shortage in that VP.

Project Goodwill

Yet another measurement is Project Goodwill. As previously addressed, Project Goodwill can be derived from the accumulation of month-to-month hours from "lending" resources that exceeds the agreed availability.

If this keeps on growing, it’s an indicator of wrong resource availability allocation. Then we might need to recalculate and restate this balance.

Make Adjustments to Improve BT Project Delivery

On this level of balancing your BT Project Portfolio, there can be only one of two possible adjustments, and that is:

  • to review your Resource Availability assignment and if that does not help,
  • then you can use this as a solid motivation for additional resources. It will clearly show where / in which pool resources are needed, which is a huge benefit as this is no thumb-suck. 

Wrapping It Up

Congratulations! You have harvested the low hanging fruit by building capacity to fast-track your organisation on the journey of becoming a digitally advanced company.

Throughout the series of blog articles, we have taken you systematically from a mere “doer” to a “thinker”, from a person on the receiving end to an influencer taking people along a journey of real business improvement.

In each step of this journey new challenges have been introduced and in this blog article you have specifically learned how to advance on the challenges that have surfaced from coordinating diverse projects across multiple business functions.

Now your company has reached its limits in the normal way of handling projects.
A further step-up can be made by building on the concepts that you have learned thus far, challenging yourself and take it to the next level: the yearly budgeting cycle as addressed in the blog article “How to best prepare for your next IT Budget”.

Don’t forget to subscribe to our blog in order to get the next steps. 

If you have any stories about project management mishaps or successes for your business, please share them in the comments! 

Happy balancing!

About the author

André was a member of the Xuviate team until June 2019. He has more than 20 years of experience in Information Technology with a primary focus on designing and developing software solutions on all application tiers. Also, he has a solid theoretical background in curriculum studies and a thinker on the topic of new education.

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