P3M3: behind the acronym is an important tool

Project Management is full of acronyms. PID, WBS, ROI… there are hundreds. Some of them help us, some of them confuse us.

P3M3 is a troublesome acronym that’s been around for a few years. Some people like it, some hate it, some don’t understand it. P3M3 is certainly not a good acronym, but don’t be put off. Take the time to understand it, and you will discover a useful tool-set that can help any organisation to measure its progress in Project Management and related areas.

Firstly, let’s decode the troublesome acronym. It’s a confusing acronym, because the acronym is not the sum of P3 + M3, as you might expect. No, P3M3 is the fusion of two other concepts, MM + P3M (but neither concept actually exists as a stand-alone acronym)

    1.    MM is about Maturity Models
    2.    P3M is  Project Management, Programme Management and Portfolio Management

So P3M3 is about measuring your team’s maturity to manage projects, programmes and portfolios. 

P3M3 comes from the UK, and belongs to same family as Prince2, MSP, MoP and P3O. If you are using one or more of these methods, then it will directly help your team to measure your progress; if you are not, then don’t worry, they are designed to be general purpose models, and you can still use these tools.

Let’s deal with the two parts separately

1) MM = Maturity models.

P3M3 is based on models, which help us to measure maturity. Each model tries to express one aspect of maturity. 

A maturity model attempts to measure your team’s maturity, on a scale from 1 to 5, based on defined best practice. It’s not just an arbitrary measurement, it’s a well designed model based on a set of criteria founded in proven best practice.

For example, P3M3 contains a maturity model for project management (called PjM3). This is based on a 360° set of measurements of project management maturity, using 7 dimensions such as financial management, risk management and resource management. This can be used by any team, whether it is using Prince2 or not. For the Prince2 community, there is dedicated model to measure the team’s ability to run better projects using Prince2. (This version is called P2MM).

2) P3M = the management of change initiatives (projects, programmes and portfolios)

P3 is a useful little acronym. It stands for Projects, Programmes and Portfolios. These are increasingly called “Change Initiatives”. They are three different ways of managing change.

Project Management has been around for years, and many organisations have reasonable maturity in project management. Programme Management is more recent, and Portfolio Management is the new arrival. All three are tools for change, to help the organisation to manage change efficiently and effectively.

So P3M is about management of change, and P3M3 is about measuring your organisation maturity to manage change.

Some organisations manage change well. They implement a strategy which changes the organisation. They innovate, adapt and survive. Their change management is effective.  When they invest in a project (or a programme or a portfolio), they can expect a good return on that investment.

So that is why P3M3 is so important. It measures your organisation’s ability to change. To innovate. To adapt. To survive.

Concretely, P3M3 drives improvement. It helps you to assess your maturity, objectively and with a structured 360° view. When you know your strengths and weaknesses, you can improve. If you know that, for example, your project financial management is fairly strong (say, level 3), but your project risk management is weak (level 1), you can launch some targeted improvements in risk management.

That’s a fast track to improvement. A fast track to better management of your projects, programmes and portfolios. Which means more efficient and more effective change management for your organisation.

That’s why P3M3 is so useful.

Four ways to build value in Portfolio Management

Getting started with Portfolio Management is typically quite easy. Essentially it’s all about reporting. But once this is in place, what next? It’s easy to lose momentum and get trapped in a weekly cycle of reporting.

To make sustainable progress on Portfolio Management you need identify how to add additional value from Portfolio Management. This way, you can make sustainable progress. You won’t lose momentum.

The first step in Portfolio Management is reporting. You gather all the various project, programmes and change initiatives together. This may take time, but it’s reasonably easy. If you are working at the enterprise level, your enterprise portfolio is the sum of all the approved, active change initiatives in your company. If there are a lot of initiatives,  focus on the bigger ones. If you are working in a department such as I.T., your I.T. portfolio is the sum of all your approved, active I.T. initiatives, including those which support other departments.

This first step is typically fruitful, as it invites answers to several pertinent questions:
- what projects and programmes have been approved? 
- are project and programmes well defined (are there overlapping projects? are some projects part of bigger programmes?)
- do you have wildcat projects?(unofficial, i.e. active but not actually approved)
- do you have zombie projects? (dormant, i.e. approved but not active)
- do you have straggler projects? (the project should have closed, but instead has drifted into maintenance or support work)

Reporting is the first step. What comes next? How to sustain momentum and avoid the trap of low-value repetitive reporting?

The way forward is to identify where your company needs to add value with Portfolio Management.

There are basically four ways to add extra value

1) Target the right projects, to generate value
    ❑    You choose to focus on the project approval process. You start to build a project prioritisation model, which is a decision support tool for choosing which projects to run. The model will help to build a balanced, achievable portfolio, aligned to your strategy
2) Help projects to deliver, to protect the value-adding process
    ❑    You choose to focus on tracking and monitoring projects. You ensure project inter-dependencies are managed. You work on resource bottlenecks. You highlight problems and push forward issue resolution.
3) Push for better performance, so more projects deliver well
    ❑    You choose to focus on project performance. You monitor actual performance against plan (on time? on budget? how good are the estimates?); and whether projects following your expected ways of working. Then you feed back lessons and drive improvements.
4) Follow up on business cases, to ensure real long-term value-for-money
    ❑    You focus on delivering value. You ensure all projects have a solid business case, which is reviewed before work starts, at key milestones, at closure - and most importantly in the weeks and months after closure, to ensure benefits are really sustained.

When you can identify where to add value, you have a goal. A destination. Once you understand your destination, you can plot the journey: your next next steps become clear.

An invaluable next step is to benefit from other people’s experience to guide your journey. For Portfolio Management, you now have guidance in the form of the MoP framework (Management of Portfolios) and the P3O guide (Portfolio, Programme and Project Offices). For example, the MoP guidance explains how to build a portfolio prioritisation model, while the P3O guidance explains how to to build a value proposition.They are interlinked - MoP helps you to define your destination, while P3O helps plan out the journey.

When you know your destination, when you have a plan for the journey, taking the next steps is easier…