Bringing LOE Activity into Portfolio Management

MochalIn an article at [email protected], Tom Mochal discusses how enhancement work not directly related to a project should be added to the managed portfolio. This way, the business can ensure that the dollars are being spent in the most effective way on these non-project activities.

I agree with what Tom is saying. A point I’d like to add is that value judgment is in the eye of the beholder, and incentives are different for a portfolio manager than they are for a developer or department. The “enhancement” being worked on by a few individuals may take a lot of effort, but is the work being subjected to cost-benefit analysis beforehand? If it is not being managed with the rest of the portfolio, maybe not.

For instance, a developer may have a great idea about migrating an internal support application from one platform to another. There are many benefits of doing so, it will be faster and he can also make it look nicer while he’s at it.

But what if it works great just the way it is? What if the changes will create dissatisfaction for the users within the company? What if the business processes already have slack time for the application because the user is doing something else, and the increased speed will not result in overall improvement because it’s not the bottleneck in the first place?

These are questions a portfolio manager may want answered. A department head or manager may be more concerned about holding on to their budget than doing ROI analysis with all of these support activities. It’s all about incentives. The department head may be able to say we “doubled the application speed” and that looks great on a quarterly report.

Bringing some of these decisions into a portfolio with defined projects would certainly help ensure that the incentives of the decision-maker is more in line with the incentives of the business as a whole.

About the author


JoshNankivel Josh Nankivel is a Project Planning & Controls Control Account Manager and contractor for the ground system of the Landsat Data Continuity Mission, a joint project between the USGS and NASA. His academic background includes a BS in Project Management, summa cum laude.  He can be found writing and contributing in many places within the project management community, and his primary project management website is located at pmstudent.com.

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