P3M3 – Portfolio, Programme and Project Management Maturity Model

P3M3 Structure

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P3M3 is an overarching model which containing three individual models:
1. Portfolio Management Maturity Model (PfM3)
2. Programme Management Maturity Model (PgM3)
3. Project Management Maturity Model (PjM3)

P3M3 focuses on the following seven Process Perspectives, which exist in all three models and can be assessed at all five Maturity Levels.
1. Management Control
2. Benefits Management
3. Financial Management
4. Stakeholder Engagement
5. Risk Management
6. Organizational Governance
7. Resource Management

P3M3 uses a five-level maturity framework and the five Maturity Levels are:
Level 1 – awareness of process
Level 2 – repeatable process
Level 3 – defined process
Level 4 – managed process
Level 5 – optimized process

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Benefits of using P3M3
It is important for organizations to understand the optimal level of performance in their quest to maximize value for money from investment, and to have a realistic view of what they can achieve. Not all organizations will be able to reach the highest level and, for many, the middle levels may be adequate to meet their business needs and aspirations. To gain the maximum benefit from using P3M3, performance improvement should be seen as a
long-term process (Figure 3), although it is possible to achieve short-term performance gains by using P3M3
to identify and correct performance weaknesses. There are a number of reasons why organizations
might choose to use a maturity model to assess their current performance, such as:

1. justifying investment in portfolio, programme or project management improvements
2. gaining recognition of service quality in order to support proposals
3. gaining a better understanding of their strengths and weaknesses in order to enable 
    improvement to happen.

Organizations that have focused only on training, specific methods or tools, or a governance framework, often wonder why they have not seen the promised improvements. P3M3 offers a more holistic view of an organization’s performance, using a broad spread of attributes.

E.g.  Long Term performance improvement planning
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Maturity Level Explanation

Level 1 – awareness of process

Processes are not usually documented. There are no, or only a few, process descriptions. They will generally be acknowledged, in that managers may have some recognition of the necessary activities, but actual practice is determined by events or individual preferences, and is highly subjective and variable. Processes are therefore undeveloped, although there may be a general commitment to process development in the future.

Undeveloped or incomplete processes mean that the necessary activities for better practice are either not performed at all or are only partially performed. There will be little, if any, guidance or supporting documentation, and even terminology may not be standardized across the organization – e.g. business case, risk, issues, etc. may not be interpreted in the same way by all managers and team members.

Level 1 organizations may have achieved a number of successful initiatives, but these are often based on key
individuals’ competencies rather than organizationwide knowledge and capability. In addition, such “successes” are often achieved with budget and/or schedule overruns and, due to the lack of formality, Level 1 organizations often over-commit themselves, abandon processes during a crisis, and are unable to repeat past successes consistently. There is very little planning and executive buy-in, and process acceptance is limited.

Level 2 – repeatable process

The organization will be able to demonstrate, by reference to particular initiatives, that basic management practices have been established – e.g. tracking expenditure and scheduling resources – and that processes are developing. There are key individuals who can demonstrate a successful track record and that, through them, the organization is capable of repeating earlier successes in the future.

Process discipline is unlikely to be rigorous, but where it does exist, initiatives are performed and managed
according to their documented plans, e.g. project status and delivery will be visible to management at defined points, such as on reaching major milestones.

Top management will be taking the lead on a number of the initiatives but there may be inconsistency in the
levels of engagement and performance.

Basic generic training is likely to have been delivered to key staff. There is still a significant risk of exceeding cost
and time estimates. Key factors that may have preconditioned the organization to experience difficulties or failure include: inadequate measures of success; unclear responsibilities for achievement; ambiguity and inconsistency in business objectives; lack of fully integrated risk management; limited experience in change management; and inadequacies in communications strategy.

Level 3 – defined process

The management and technical processes necessary to achieve the organizational purpose will be documented, standardized and integrated to some extent with other business processes. There is likely to be process ownership and an established process group with responsibility for maintaining consistency and process improvements across the organization. Such improvements will be planned and controlled, perhaps based on assessments, with planned development and suitable resources being committed to ensure that they are coordinated across the organization.

Top management are engaged consistently and provide active and informed support. There is likely to be an established training programme to develop the skills and knowledge of individuals so they can more readily perform their designated roles. A key aspect of quality management will be the widespread use of peer reviews of identified products, to better understand how processes can be improved and thereby eliminate possible weaknesses.

A key distinction between Level 2 and Level 3 is the scope of standards, process descriptions and procedures – i.e. stated purposes, inputs, activities, roles, verification steps, outputs and acceptance criteria. This enables processes to be managed more proactively using an understanding of the interrelationships and measures of the process and products. These standard processes can be tailored to suit specific circumstances, in accordance
with guidelines.

Level 4 – managed process

Level 4 is characterized by mature behaviour and processes that are quantitatively managed – i.e. controlled using metrics and quantitative techniques. There will be evidence of quantitative objectives for quality and process performance, and these will be used as criteria in managing processes. The measurement data collected will contribute towards the organization’s overall performance measurement framework and will be imperative in analyzing the portfolio and ascertaining the current capacity and capability constraints.

Top management will be committed, engaged and proactively seeking out innovative ways to achieve goals.
Using process metrics, management can effectively control processes and identify ways to adjust and
adapt them to particular initiatives without loss of quality. Organizations will also benefit through improved predictability of process performance.

Level 5 – optimized process

The organization will focus on optimization of its quantitatively managed processes to take into account
changing business needs and external factors. It will anticipate future capacity demands and capability
requirements to meet delivery challenges – e.g. through portfolio analysis.

Top managers are seen as exemplars, reinforcing the need and potential for capability and performance
improvement.

It will be a learning organization, propagating the lessons learned from past reviews. The organization’s
ability to rapidly respond to changes and opportunities will be enhanced by identifying ways to accelerate
and share learning.

The knowledge gained by the organization from its process and product metrics will enable it to understand causes of variation and therefore optimize its performance. The organization will be able to show that continuous process improvement is being enabled by quantitative feedback from its embedded processes and from validating innovative ideas and technologies. There will be a robust framework addressing issues of governance, organizational controls and performance management. The organization will be able to demonstrate strong alignment of organizational objectives with business plans, and this will be cascaded down through scoping, sponsorship, commitment, planning, resource allocation, risk management and benefits realization.

Process Perspective Explanation

1. Management Control

This covers the internal controls of the initiative and how its direction of travel is maintained throughout its life cycle, with appropriate break points to enable it to be stopped or redirected by a controlling body
if necessary.

Management control is characterized by clear evidence of leadership and direction, scope, stages, tranches and review processes during the course of the initiative. There will be regular checkpoints and clearly defined decision-making processes. There will be full and clear objectives and descriptions of what the initiative will deliver. Initiatives should have clearly described outputs, a programme may have a blueprint (or target operating model) with defined outcomes, and a portfolio may have an organizational blueprint (or target operating model).

Internal structures will be aligned to achieve these characteristics and the focus of control will be on achieving them within the tolerance and boundaries set by the controlling body and based on the broader organizational requirements. Issues will be identified and evaluated, and decisions on how to deal with them will be made using a structured process with appropriate impact assessments.

2. Benefits Management

Benefits management is the process that ensures that the desired business change outcomes have been
clearly defined, are measurable and are ultimately realized through a structured approach and with full
organizational ownership.

Benefits should be assessed and approved by the organizational areas that will deliver them. Benefit
dependencies and other requirements will be clearly defined and understanding gained on how the
outputs of the initiative will meet those requirements. There should be evidence of suitable classification
of benefits and a holistic view of the implications being considered. All benefits should be owned, have realization plans and be actively managed to ensure that they are achieved. There will be a focus on operational transition, coupled with follow-up activities to ensure that benefits are being owned and realized by the organization.

There will be evidence of continual improvement being embedded in the way the organization functions. This process will identify opportunities that can be delivered by initiatives and also take ownership of the exploitation of capabilities delivered by programmes and projects. Change management, and the complexities this brings, will also be built into the organization’s approach.

3. Financial Management

Finance is an essential resource that should be a key focus for initiating and controlling initiatives. Financial
management ensures that the likely costs of the initiative are captured and evaluated within a formal business case and that costs are categorized and managed over the investment life cycle.

There should be evidence of the appropriate involvement of the organization’s financial functions, with approvals being embedded in the broader organizational hierarchy. The business case, or equivalent, should define the value of the initiative to the business and contain a financial appraisal of the possible options. The business case will be at the core of decision-making during the initiative’s life cycle, and may be linked to formal review stages and evaluation of the cost and benefits associated with alternative actions. Financial management will schedule the availability of funds to support the investment decisions.

4. Stakeholder Engagement

Stakeholders are key to the success of any initiative. Stakeholders at different levels, both within and outside the organization, will need to be analyzed and engaged with effectively in order to achieve objectives in terms of support and engagement. Stakeholder engagement includes communications planning, the effective identification and use of different communications channels, and techniques to enable objectives to be achieved. Stakeholder engagement should be seen as an ongoing process across all initiatives and one that is inherently linked to the
initiative’s life cycle and governance controls.

5. Risk Management

This views the way in which the organization manages threats to, and opportunities presented by, the initiative. Risk management maintains a balance of focus on threats and opportunities, with appropriate management actions to minimize or eliminate the likelihood of any identified threat occurring, or to minimize its impact if it does occur, and to maximize opportunities. It will look at a variety of risk types that affect the initiative, both internal and external, and
will focus on tracking the triggers that create risks.

Responses to risk will be innovative and proactive, using a number of options to minimize threats and maximise opportunities. The review of risk will be embedded within the initiative’s life cycle and have a supporting process and structures to ensure that the appropriate levels of rigour are being applied, with evidence of interventions and changes made to manage risks.

6. Organizational Governance

This looks at how the delivery of initiatives is aligned to the strategic direction of the organization. It
considers how start-up and closure controls are applied to initiatives and how alignment is maintained
during an initiative’s life cycle. This differs from management control, which views how control of
initiatives is maintained internally, as this perspective looks at how external factors that impact on initiatives
are controlled (where possible, or mitigated if not) and used to maximize the final result. Effective sponsorship should enable this.

Organizational governance also looks at how a range of other organizational controls are deployed and standards achieved, including legislative and regulatory frameworks. It also considers the levels of analysis of stakeholder engagement and how their requirements are factored into the design and delivery of outputs and outcomes.

7. Resource Management

Resource management covers management of all types of resources required for delivery. These include human
resources, buildings, equipment, supplies, information, tools and supporting teams. A key element of resource
management is the process for acquiring resources and how supply chains are utilized to maximize effective
use of resources. There will be evidence of capacity planning and prioritization to enable effective resource
management. This will also include performance management and exploitation of opportunities for greater utilization. Resource capacity considerations will be extended to the capacity of the operational groups
to resource the implications of change.

 

This structure of P3M3 allows organizations to see a snapshot of where they are now with respect to any of the Process Perspectives in all or any of their portfolio, programme and project management capabilities. This, along with knowledge of where the organization needs or wants to be in the future, provides the basis for an improvement plan to be devised and for progress towards the target to be tracked.

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