Exclusive Interview: President of Project Management Institute of Luxembourg
Unlocking Project Portfolio Management Success in Financial Services
To find out more about how software tools are used to help with project portfolio management in the financial services sector in Luxembourg, Independent Journalist Pat Brans and the team at Ignite Technology caught up with Richard Woodham, President of the Project Management Institute (PMI) of Luxembourg.
Please tell us about the importance of financial services in Luxembourg:
The financial services sector in Luxembourg makes up about 25% of the economy, bringing in around 36% of the country’s tax revenue and employing around 64,000 people.
We’re around the 10th most competitive financial market in the world, with significant effort in fintech innovation coming from start-ups. We are very strongly regulated and very tightly integrated into the European financial sector.
Projects in the financial sector in Luxembourg tend to be around operational improvements, technology enhancements, and regulatory compliance.
I’m currently working for the second biggest employer in financial services in Luxembourg, which is a joint venture between a major French bank and a Spanish bank. They recently completed a major acquisition; and I’m embedded in a large-scale program that’s preparing for the migration of client data onto the financial services platform of the acquiring bank.
As project manager, much of my job involves managing those projects. Because we are heavily integrated into the European financial services sector, I interact daily with teams in Paris, Lisbon, and Dublin.
Tell me about the job of project portfolio manager:
The role of the project portfolio manager covers five broad areas. There’s strategic portfolio management, where the portfolio manager oversees a whole portfolio of a projects and ensures that those projects align with the organisation’s strategic objectives.
For example, I was portfolio manager at a bank that realised they had a lot of data that wasn’t very clean—and that had a negative impact on operational processes. At the same time, they knew they could sell that data, so they made it part of their strategy to make that possible. Consequently, the portfolio I managed was all about data—cleaning up data and selling data products.
The second area is about managing programmes and projects within a portfolio, allocating resources across the different projects to fulfil the organisational priorities and meet the timelines to maximise overall impact.
The third area, which is very important in a highly regulated environment like the financial services sector, is risk management—making sure risks are mitigated in a way that complies with regulations.
The fourth and the fifth areas, which go hand to hand, are stakeholder engagement and stakeholder communication—maintaining communications with the key stakeholders. At the portfolio level, the stakeholders tend to be senior managers—business unit heads and CEOs.
You need to track the performance not only of individual projects, but also of the overall portfolio. You track these against the defined metrics and KPIs and communicate that to the key stakeholders.
Regulation has a very strong impact on the financial services sector, so you put a lot of time and effort into implementing IT systems to ensure compliance. Europe has been very, very focused on regulation and there is still a log of legacy technology, which makes compliance more difficult.
Consequently, compliance plays a big role in how projects are defined and executed.
How do software tools help with PPM in financial services:
There are four key benefits. The first is that you get a single view of data, which makes the data more reliable. PPM products provide you with a global view of all your projects across all your different programmes and they allow you to produce structured reports.
In one major financial services organisation I was working with, they were using Clarity to get consistent reporting starting from the project and going to the programme and portfolio. That gives you a single source of governance reporting—a single source of truth.
The second is when you introduce PPM software, the teams are encouraged to adopt more efficient ways of working, and the processes become more efficient, which is felt throughout the organisation. Your way of managing projects, programmes, and portfolios matures.
The third area is that is you get process improvement. If you link up your PPM software with your accounting system, you speed up monthly project reconciliation and closure, because you do better project accounting.
And the fourth benefit is that PPM puts information at your fingertips. Managers and CEOs can be more responsive. They can make more informed decisions about fixing project issues and allocating resources. In the future, you will see an evolution, as the tools become better at data usage and learning, allowing you to draw better inferences, which will help senior management make better decisions.
What is the importance of integrating PPM software, integrating with other systems, and what are some of the challenges in doing that:
Surprisingly, the challenge is not around the technical integration, because technically, a lot of these tools now are set up to easily plug into your accounting and ERP systems. And when you’re delivering projects, programmes and portfolios, you have to integrate with your accounting system.
It’s quite straightforward to do that technically. We used Clarity to assign resources—and then it picked up timesheet information from SAP.
But what tends to be the real challenge is data consistency and persuading people to trust the systems as the single source of truth. I’ve seen the case where the PMOs [project management offices] would spend 10 to 15 days manually extracting data and comparing it with reports.
You need to train the people who do the crunching and validation that the data is consistent and that they can then be taken forward to be reported to the management level. When you bring in these tools, you’re changing their ways of working.
Any technology change creates fear. So you have to motivate people to use tools which will do a lot of the number crunching and save them time and money. They need to trust the tools to look for anomalies and trends and help analyse projects, programmes, and portfolios.
What advice would you give a financial organisation looking to invest in PPM tools:
One thing I would advise them not to do is build their own PPM software. You’ll never get the same depth and coverage as you get from a supplier that specialises in developing and selling PPM tools.
But most financial services organisations are already using PPM tools. A key thing they do to get more benefits from the tools is to work with the software vendor—the people who really know the tools—to optimise how they use them and get the best usage from all the different features.
Finally, I would advise any organisation to fully use PPM to improve the way they think about project portfolio management and to adopt new and better processes.
What part of an organisation comes to rely on PPM tools the most and why:
Obviously, the project delivery, PMOs and portfolio management offices rely on it the most. If they adopt and buy in to the principles behind the PPM tools, they get really a lot of operational efficiencies, and it allows them to focus their efforts on adding value.
If you work in a PMO or do project delivery, adding value is having insights and detecting where there are problems or where there are benefits. When PPM tools are implemented properly and where those PMOs, portfolio managers and project managers can use data to help senior managers make decisions, the business leaders and CEOs will also benefit.