HealthCo: 60 Projects, Three PMOs, One List
HealthCo is a private hospital group with a five-year strategy to shift 40% of outpatient activity to community sites. Following a regulator's report on capital spending, the group has adopted MoP and appointed a portfolio director. There are 60 live projects spread across three business units, each with its own PMO and methodology, all of which claim to be reporting 'into the portfolio'. At the first consolidation the portfolio director found total committed spend 22% above the approved capital plan, two business units separately procuring a patient-record product within four months of each other, the same £4m of annual cost savings claimed in three separate business cases, and no single view of which projects mattered to the strategy. Executives describe the portfolio as 'a list, not a portfolio'. A recent engagement survey showed change staff scoring 'I am consulted about changes affecting my work' at 31% agreement. The CEO is supportive but has attended none of the three portfolio meetings held so far.
1. Which MoP principles are weakest at HealthCo, and in what order should the portfolio director address them?
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All five principles are weak, but they are not equally weak and they are not independent. Senior management commitment is the weakest in substance: the CEO is described as supportive but has attended none of three portfolio meetings. Support without visible participation gives the portfolio office information but no authority, and the 22% overspend is exactly what happens when nobody can enforce a stop. Strategy alignment is absent - no view exists of which of the 60 projects serve the 40% community shift, so prioritisation has no criteria and any ranking is arbitrary. Portfolio office is fragmented: three PMOs each 'reporting in' means three versions of the truth, which is why duplication went undetected. Energised change culture is measured at 31% consultation. Governance alignment is unstated but the overspend suggests tolerances are either absent or unenforced.
The sequence should be commitment first, not strategy first, because the director needs a mandate to make strategies stick. Concretely: bring the CEO a two-page decision paper - three choices about what the portfolio will stop, with consequences - rather than a methodology presentation, and ask for chairing of a single portfolio board. Then do strategy alignment, mapping the 60 initiatives to the community-shift objectives and to BAU obligations, which produces the first credible stop list. Only then consolidate the three PMOs into one portfolio office with one reporting standard. Starting with a tool or a template would fail, because a template issued without authority is a form, not a control.
2. Two business units are procuring a similar patient-record product four months apart. Which MoP practices should have prevented this, and what controls would you now put in place?
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Two practices, one from each cycle. Within definition, Understand requires an appreciation of the full set of current and proposed change, including where initiatives overlap or duplicate; HealthCo never had that view because three PMOs reported separately. Within delivery, dependency management and resource management should have surfaced the shared need, and benefits management should have flagged that two procurements for one capability deliver less benefit at more cost than one.
But the control that matters is not analytical, it is transactional. By the time a duplication reaches a monthly portfolio board, both purchase orders are raised and the saving is gone. So the fix has three parts, in order of effect:
- A portfolio-wide register of proposed commitments above a threshold (say £50k), completed before any purchase order or contract signature, not before the next governance report.
- A gate at the point of commitment, owned by the portfolio office, with a single question on the form: does an existing or planned initiative already meet this need? Procurement cannot proceed without the clearance reference.
- A dependency and duplication log reviewed monthly, plus a categorisation review each quarter that groups initiatives by capability delivered rather than by business unit - business-unit categorisation is what allowed this to happen.
The organisational point: the two units were behaving rationally within their own boundaries. The portfolio's job is to make the boundary-crossing cost visible before money is committed.
3. The same £4m of annual cost savings appears in three business cases. Explain the cause and the cure.
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The cause is not dishonesty, it is the absence of benefits management at the portfolio level. Each business case was written in isolation by a team with an incentive to show a strong case, and nothing in the process asked whether the benefit had already been claimed, whether it was cashable, or which operational owner would deliver it. With no portfolio benefits register and no valuation rules agreed with finance, the same headcount reduction can be claimed three times in good faith.
The cure has four components, all from the benefits management practice:
- A portfolio benefits register in which every claimed benefit is recorded against one initiative only, classified by type (cashable, non-cashable, enabling), with a single named benefits owner at business level who is not the project manager.
- Benefits profiles in each business case, with baseline, target, timing and measurement method, and a benefits dependency network showing what organisational change must happen for the benefit to appear.
- Valuation rules agreed with finance, so that the portfolio's benefits forecast reconciles to the finance function's forecast. Double counting disappears when one number has one owner; the portfolio owns accountability, finance owns the figure.
- Benefits realisation reviews after closure, reported to the portfolio board, with over-optimistic cases treated as a performance issue rather than an accounting quirk.
The deeper point: £4m claimed three times is a symptom of business cases being treated as funding applications that end at approval. If nothing ever checks whether the £4m arrived, there is no feedback loop, and optimism is costless.