Analysis of P3M Performance
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Introduction to Organization and Project
Each organization needs to focus on different aspects for being successful at international level. P3M (Portfolio, Program and Project management) is one of the important aspects which plays an important role in each and every organization (Greasley, 2007). The current research report is based on P3M performance of AFM bank. It focuses on a case study which shows that bank is facing the problem of poor P3M performance. So, research will describe the major reasons for poor P3M performance of AFM. It will critically evaluate the different options of bank for improving the performance. Further, research will also include appropriate recommendations for improving the management of Portfolio, Program and Project of AFM bank (Kloppenborg, 2011).
AFM is a global bank which is operating its business in different countries but its main headquarter is in South Africa. It has a shared service centre (SSC) for finance and HR in South Africa. But, for reducing the cost of back office, CFO of the bank has decided to relocate its SSC to India or China. Along with this, organization has number of key projects which needs to be completed in order to comply with new banking regulations. Overall, AFM bank is facing the problem of poor P3M performance which is the major research issue of this study.
1. Reasons for poor P3M performance in AFM bank
Portfolio, Program and Project management P3M Framework:
P3M framework can be defined as a set of policies, procedures, tools and different models which are designed to support different functions of organization to attain strategic and tactical benefits from their investment in projects, program and portfolios (Kathy and Deborah, 2007).
As per the given case study, AFM bank is suffered from poor P3M performance. There are different reasons of poor performance which are described as under:
AFM Bank is operating a Shared Service Center for finance and HR in South Africa which supports its global operations. But, requirement of high cost and time is one of the major problems of SSC which has negative impact on portfolio of global operations of bank (Kumaraswamy, 2011).
Bank has an extensive portfolio of projects; however, performance is poor in terms of delivering projects on time and in budget.
As per the given case study, AFM bank has a very large project which poses particular serious risk to future revenue and profit. Therefore, it is also one of the major reasons behind poor P3M performance because it has the negative impact on future performance of organization in international market.
Worse relationship with business users is also one of the major reasons which can decline Portfolio, Program and Project management of AFM bank (Martin and Guerin, 2006).
CIO (Chief Information Officer) of bank has started to introduce Agile Methodology for improving the system development and performance of project. But, after implementation, this methodology has failed to gain necessary commitments from the system users. So, it is also one of the major reasons which affect entire performance of the organization (Zwikael, 2009).
Project manager of bank has left so; lack of standardized project management process across the organization is also one of the major reasons behind poor P3M performance.
Bank does not follow a consistent way to chose profitable investment for firm so; it increases unnecessary cost of company.
As per the case study, there is no appropriate way of monitoring and controlling the project performance (Minney, 2012).
It is an international bank, so differences among culture of each nation also lead to inappropriate management of organization’s culture which also affects the performance of company.
There are different factors of macro environment such as political, legal and ethical issues; environment and economic fluctuation as well as social inequalities are also considered as one of the major reasons of poor P3M performance.
Therefore, all these are the major reasons behind poor P3M performance of AFM bank.
Organization needs to pay specific attention towards projects, programs and portfolios for improving its overall performance (Dey, Clegg and Bennett, 2010).
2. Critical evaluation of bank’s options for improving P3M performance
As per the above discussion, AFM bank is facing the problem on poor P3M performance. There are some specific options of bank by which it can improve the PEM performance. Critical evaluation of these options can be done by P3M Framework Methodology which helps in developing a comprehensive view of the current state of Portfolio, Program and Project management of AFM bank (Levy, 2009). This methodology focuses on stakeholders, process, technology, performance and resources of bank. Identification and critical evaluation of available options are described as under:
Relocation of SSC: It is one of the best options for reducing the cost of back office support function of SSC department of AFM bank. As per this option, organization can relocate its SSC in India or China. In contrast, for adopting this option organization needs to higher new and experienced project manager from the local market of India or China which will increase the cost of bank (Knapp and et.al, 2010). Similarly, relocation increases the needs to terminate the project of SSC in South Africa which can harm the reputation of the bank in its home country. Therefore, relocation of the SSC is one of the best option for reducing the cost of back office department of the bank which will improve the overall performance project, process and portfolio management of the company. But, on the other hand it can harm the company’s image in South Africa (Minney, 2012).
Hiring experienced project manager: Project manager of SSC of AFM bank has left the job so, performance of the projects are become very poor. So, for improving the project’s performance, bank needs to hire experienced and skilled project manager. It will help in improving the project management of bank. It will also help in completing the whole project on time and cost. But, on the other hand hiring the new project manager will increase the cost of HR department of Support Service Center of the bank which have negative impact on performance. But, experienced and skilled project manager will determine the different sources for reducing the cost and improving the P3M performance of AFM bank. So, it also one of the best option for improving the overall performance of P3M framework of bank (Walker, 2007).
Project management methodology: CIO of AFM bank has started to introduce Agile methods for improving the system development project performance but implication of this methodology was not successful so, Agile methods has failed to gain the necessary commitments. So, appropriate implementation of the suitable project management methodology of also one of the major option for improving the performance of P3M framework of the company. Implementation of project management methodology will increase the investment cost of the bank but it will help in maintaining the performance standards (Hobbs, 2009). So, it is also one of the best options for improving the performance of P3M framework of bank.
Pleasant working environment: Inappropriate working environment is also one of the major problems of the poor performance of Portfolio, Program and Project management of bank. So, improvement in working environment is also important alternative to improve the performance of organization (Darren, 2012). It will be significant for the organization because it will help in managing conflicts and cultural differences among different team members.
Time management: According to the given can P3m performance of Bank is poor in terms of delivery of the project on time. So. By managing time in effective manner bank can improve its project performance. PERT (Project evaluation and Review Techniques) and Gantt chart are most appropriate method for managing time of different activities of various projects. It will be appropriate for managing time but implementation of these techniques increases the requirements of operational and statistical skills among project team members (Chiu-Chi and et.al, 2013). It will lead the training cost of the firm. But, from besides all these requirements will improve the management of time which will resolve the problem of poor performance of AFM bank.
Budgetary control: As per the case bank is unable to deliver the project to specified budget. It increases the cost of the project which can harm the company’s reputation in front of clients. Further, it shows inappropriate financial management of the company. So, appropriate process of budgetary control process is one of the best methods for completing projects in specified budget (Cervone, 2006). It will be also beneficial for improving the financial management of SSC of AFM bank.
Outsourcing of projects: After the failure of the Agile method, outsourcing of the IT services is also a better option for improving the delivery of the project. Along with this, it will also help in reducing the cost of the IT services. But, for outsourcing company needs to maintain effective communication with other countries which will increase the cost of the organization. But, outsourcing will increase the speed of the project completion as well as improve the performance of AFM bank (Andersen, Dysvik and Vaagaasar, 2009).
Future risk management: According to the case study, AFM bank is facing the problem related to the inappropriate risk management. One of the important projects poses a serious risk in terms of future revenue and profit. So, appropriate management of future risk is also one of the options for improving the performance of P3M framework. Regarding this company can follow a specific process of risk management. It will reduce the future risk of revenue and profit of the project (Simmons, Bland and Wojciechowski, 2012). But, it will require regular monitoring of different activities of the project.
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Improvement in professional relationships: As per the given information AFM bank has worse relationship with the business users of systems. So, company should focus on improving the relationship with the system users it will help in maintaining effective reputation of bank in the market.
3. Recommendations to the bank’s Chief Operating Officer (COO)
Critical evaluation of the available options for improving the performance, AFM should adopt most appropriate alternative. As per the case study there are different options which are best fit for improving P3M framework of the bank.
For improving capabilities of P3M framework, AFM bank should focus on Portfolio management because it is the totality of organization’s investment (Portfolio, Program and Project management capabilities in government, 2011). Bank should manage its portfolio in effective manner because it includes large numbers of processes and programs. For managing portfolio AFM bank should invest in only right programs and projects. Along with this, bank should remove redundant and duplicate projects. In addition, COO of the bank should assure about the appropriate implementation of all programs and projects it will reduce the probability of failure of projects. Bank should focus on optimum utilization of resources at international level. Along with this, management of the bank should improve transparency, accountability and organizational governance it will improve the reputation of the bank in international market. All these strategies will help AFM bank in improving the performance management of the firm which will increase the overall performance of P3M framework (Organizational project management, 2011).
Including this, poor relationship with external stakeholders shows that AFM bank is facing the problem of lack of awareness which affect the performance of P3M framework. So, for improving the performance COO of the bank should focus on maintaining corporate governance in different functions of the organization. Bank should hire right candidate for the post of project management of Support Service Centre of bank. Along with this, COO should also assure about the selected candidate must have appropriate skills, experience and knowledge about managing projects (P3M maturity model, 2015). In addition, AFM bank is operating its business in different countries so; COO of the bank should assure about the appropriate following of all rules and regulations of the country’s government. It will help in maintaining corporate governance at workplace.
For improving the performance of different projects, manager of the bank should assure about the appropriate quality management. For improving quality, project manager should use appropriate methods for managing quality. Further, manager should focus on optimum utilization of the resources. Regarding this, bank should use six sigma analysis, lean methodology, and total quality management (Levy, 2009). All these tools will reduce the defects, unnecessary wastage and extra cost of the bank. Therefore, implication of all these tools will help in improving quality of the AFM bank.
As per the case study future risk of revenue and profit in projects is also one of the major reasons of poor P3M performance. So, bank should use quantitative risk analysis it will help in identifying the future risk of any project. Along with this, it will also help in managing these risks in effective manner.
For improving relationship with the business users COO of the bank should improve the communication. Along with this, effective and pleasant working environment will also help in improving the external relationship of bank (Hobbs, 2009). In contrast, IT department of the bank has suffered from the high cost so, COO of the bank should outsource the IT services which will help in reducing the unnecessary cost of investment in IT projects. Therefore, it will help in reducing thr total cost of AFM bank.
AFM bank should also focus on time and cost management of the different projects of the bank. Regarding this, bank should use Activity Based Costing because it will help in allocating cost and financial resources on each activity in optimum manner (Darren, 2012). Similarly, Gantt chart will be best method for managing time and cost because it will helps in developing preceding relationship between different activities of the project. Further, it will also help in deciding schedule for each activity. Along with this, Gantt chart will also help in regular monitoring of each and every project which will provide assurance of completion of project on specific time and cost. Therefore, all these are the major strategies for COO of AFM bank which will help in improving the performance of portfolio, project and program management of bank (Cervone, 2006).
The current research report has concluded that AFM bank is facing the problem of poor P3M performance. Major reason behind it include high cost in IT projects, poor delivery of the project in terms of time and cost, worse relationship with business users and failure of Agile software methodology of CIO, etc. there are different options by which AFM bank could improve its PEM performance. These options comprise Relocation of SSC, recruitment of experienced project manager, use of appropriate project management methodology, maintaining pleasant working environment, future risk management and outsourcing of IT services, etc. Project has also provided some recommendations to the COO of AFM bank. As per these suggestions, bank should focus on portfolio management, quality assurance, maintenance of corporate governance, etc. Further; bank should also use different tools of project management such as Six Sigma analysis, Lean methodology, Activity Based Costing and Gantt chart. These techniques will improve the quality, cost and time management of the organization. All these recommendations will play importance role in improving P3M performance of AFM bank.
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