Kapcsolat
Fortunately, even at the national level, we see many good examples of high-level portfolio management, including several proven, well-functioning methods for proper prioritization and resource management. The guests of the new episode of the PMO Club podcast have been working in this field for a long time, and this time they share their views on the future of this sector, their experiences from recent years, and we can also gain insight into the current challenges. Zoltán Sándor, Managing Director of Profexec Services, interviewed Alice Sándor, Head of Portfolio Management at E.ON Hungária, and János László, Head of Portfolio and Data Management at E.ON Hungária. Listen to the episode if you’re curious about the opinions of these seasoned experts on this area, or read the post below, which is a brief summary of the new episode.
THEN AND NOW
About eight years ago, the organization decided to create a portfolio management framework based on lean-agile principles, deviating from the classic PMO operation. At that time, they had to face the fact that projects would not be purely waterfall-based; there would be many changes in the project environment to which they needed to adapt. This was a significant challenge then, but today it has become natural for them to plan only one year ahead, and not necessarily beyond that. This is a fundamentally different way of operating compared to the past. Additionally, huge projects have also come into play, and managing them at the portfolio level has been a major challenge. János’s team had to adapt the most to these.
In recent years, there has been a significant transformation in the energy market, which also led to a restructuring within E.ON a year ago. Part of the data management activities was assigned to the team dealing with project portfolio management at the E.ON group level, thus expanding János’s scope of work and turning the portfolio management department into a specialized area.
The E.ON project portfolio management team has already developed a mature and well-functioning operation. Alice, the head of the department, oversees a portfolio consisting of IT-related business projects and purely business projects. The department is responsible for assembling and planning the portfolio of IT-related business projects. Every project has both a business and an IT aspect, with the stronger line varying by project. Currently, there is one large common portfolio. Another interesting aspect is that this team belongs to the holding organization within the company, so they have so-called decentralized counterparts in several areas with whom they work on projects related to the respective segment. The team in question is currently responsible for ensuring the framework and continuously developing it, and they work with many colleagues from different areas (e.g., project managers, resource managers, middle and senior managers).
E.ON switched to an agile approach to portfolio management years ago. Projects are planned and executed in so-called portfolio cycles, currently lasting 4 months/third of a year. The entire organization has not become agile; rather, the mindset has shifted, and projects are run with this approach. So, agility within the company is not radical; it is slowly seeping into every area, but there are already quite a few employees who are experts in this way of thinking. The whole point is that the portfolio is replanned every four months. Of course, this does not mean that projects last four months. This instead provides flexibility in starting new projects and reviewing the importance of various topics. Naturally, there is a main strategy, but it is monitored on an annual basis.
In the future, their goal is to further integrate and promote agile topics within the organization. They plan to achieve this with small groups, which are likely to yield quick results. Additionally, there are plans to improve and fine-tune the mechanism.
HOW THEY PRIORITIZE NOW
A unique system has developed at E.ON, where essentially anyone can follow the projects. They do not prioritize according to the classic hierarchy. They have set up upper and middle management committees. According to the experts, one of the biggest advantages of this unique system is transparency, as everyone can see and contribute to the process, resulting in much less opposition than usual.
Of course, they do not claim that this operation is perfect. There are still some who disagree or question the final priorities. But based on Alice and János’s experiences, this is still a better way. Decisions about what will happen in the coming months are not made in a closed room. Moreover, internal tensions and dilemmas are also entirely open, and they share this with external parties as well.
As mentioned earlier, the committees meet every four months to determine priorities and evaluate new and ongoing projects through a scoring system.
For new projects, the criteria may include:
For ongoing projects, they examine the status and whether the promises have been kept. The middle managers conducting the evaluations score themselves, summarize project scores, and based on this, place the projects in the portfolio.
The committees are very diverse, with members coming from all relevant areas. During the senior management validation, it is also important that everyone can only intervene at one point. The key is that consensus must be reached through discussion every time. It is also crucial that these events are personal, which has been challenging recently due to COVID, so the team has switched to a hybrid solution for portfolio planning events (2 or 3 days). Their goal is to ensure as much space as possible for personal connections.
One might wonder if four months is too long, as it could take this long for a new project to start. In this system, this time flies by quickly, and even the preparation phase is dense with many activities. E.ON has already established this as a well-functioning prioritization system, having initially had quarterly planning cycles, which proved ineffective.
RESOURCE MANAGEMENT
Once the priority list is completed, project managers are asked to plan the resources. At E.ON, specific resource needs are assigned to task packages. This process typically takes 2-3 weeks, and project experts and relevant managers figure out exactly who they want to involve in the project and with what capacity. János’s team, together with IT, operates a system in which resource planning takes place, followed by resource demand reconciliation at the portfolio-level event.
If a colleague’s resource demand is too high, priority will naturally guide the allocation. The plan, as already explained, is detailed for four months (one cycle), but this can change if, for example, a resource drops out, or it becomes apparent during the process that additional colleagues need to be involved to ensure successful implementation.
Join us and learn more from our newest Podcast or visit our website for more information.
