TRANSFORMING DUTCH GOVERNMENT PORTFOLIO MANAGEMENT WITH P3M3

24-05-2024

CASE STUDY

Transforming the governance of strategic and operational portfolio management in the Dutch Government’s Ministry of the Interior and Kingdom Relations improving its portfolio benefits realization using PeopleCert’s Portfolio, Programme and Project Management Maturity Model (P3M3)

Introduction

The Ministry of the Interior and Kingdom Relations (BZK) is one of twelve ministries within the Dutch government. It is responsible for formulating policy, preparing legislation and regulations along with coordinating policy implementation.

Its overarching purpose is safeguarding democracy and effective public administration, with specific responsibilities including the quality of personnel and management in central government, public housing and government buildings.

There are nine Directorates General within the ministry, covering areas such as Digitalisation Public Sector and Society, Spatial Planning and Shared Services. 

ICT activities – making access to government services better, faster, cheaper – are a significant part of the ministry’s portfolio. Major initiatives have total costs ranging from €5 million to €178 million, and durations from 2.5 to 11 years.

In 2020 the organisation introduced Management of Portfolios (MoP) as a standard management method for the development of its portfolio management frameworks. PeopleCert’s Portfolio, Programme and Project Management Maturity Model (P3M3) and associated accredited consulting services were adopted to inform and plan improvement opportunities and measure achievements progressively.

In 2023, the CIO of the Ministry of the Interior and Kingdom Relations commissioned a formal P3M3-assessment to assess progress made in the development of both strategic and operational portfolio management governance, confirm achievements and inform further improvements. This initiative was conducted by Global Project Performance (a PeopleCert Accredited Consulting Partner - ACP).

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Goals and challenges

The overall goal for the ministry is to ensure that its portfolio management capabilities enable the organisation to invest its scarce resources in change initiatives (projects and programmes) that are expected to deliver best value for money; taking into account risk exposure and appetite, and to deliver these initiatives effectively and efficiently in line with its associated business case objectives. In other words: doing the right things and doing the things right. As the government must be able to respond adequately to changing political priorities and circumstances it is of vital importance that the portfolio management maturity of the organisation is sufficiently defined, embedded and assured to enable adequate organisational agility.

As in many other organisations, the ministry has been carrying out projects and programmes to deliver change. However, portfolio management aims to manage the inititiatives collectively and enable the organisation to direct scarce resources to where they add most value to society and achieve social return on investment (SROI).

A ministry with nine Directorates General and multiple entities and organisations is inherently complex. The challenge to professionalise portfolio management is augmented by the fact that (as in most organisations) the ministry must achieve this transformation in times of constrained resources and organisational energy.

Bottom up implementation strategy

At the start of its improvement initiative in 2020, the organisation decided to use a bottom up and incremental change strategy. Each of the nine organisational entities within the scope of the initiative were mandated to define, introduce, embed and integrate portfolio management within their own organisation first. Once established, this formed a foundation to further integrate portfolio management across the organisational entities in scope.

The P3M3 assessment in 2023 was aimed at assessing portfolio management maturity within nine organisational entities of the Ministry of the Interior and Kingdom Relations.

Magchiel van Meeteren, CIO for BZK, said: “We had built a community of portfolio managers from each entity in the ministry and provided them with a policy framework to comply with. While we had also conducted some self-assessments, I felt we needed a more objective view of our performance and maturity level.”

Within the Real Estate organisation of BZK, CIO Hans Loonen was already focused on improving portfolio management: “When I joined the department, we had only a list of projects, which is very different from thinking in portfolio terms. “I’m used to setting goals and prioritising what to achieve, so for me it was a no-brainer to find a mechanism to do this better.”

Solution

Global Project Performance conducted PeopleCert’s P3M3 assessment across nine organisational entities of the ministry to identify their portfolio management maturity. The P3M3-assessment covered all seven P3M3 Process Perspectives: Organisational Governance, Management Control, Benefits Management, Stakeholder Management, Resource Management, Risk Management and Financial Management. For each process perspective the 13 P3M3-threads were reviewed: process, standards, planning, behaviours, assurance, organisation, techniques, information and knowledge, infrastructure and tools, asset management, commercial-buy, commercial-sell and model integration.

Peter Postema, Director at Global Project Performance, explained: “P3M3 is a useful aid to assess the quality of portfolio management. In other words: do the processes and behaviours enable and result in useful, reliable decision-making-information for the organisational governance boards. P3M3 takes into account the entire business change lifecycle, from strategic intent to confirming benefits realisation (SROI).”

“In hectic organisations with increasing performance pressures, people tend to focus on ‘getting things done’. That is a good thing but not at the expense of quality of management. P3M3 assessments are engaging initiatives that provide an often-rare opportunity to organisational leadership and communities of practice to reflect on the quality of management and associated improvement opportunities”.

The introduction of portfolio, programme and project management is often not supported with a formalised change initiative, resulting in insufficient priority and leadership. P3M3 assessments help to engage organisational leadership and the community of practice to build well-informed and objective, committed improvement plans. Evidence has shown that these approaches have a much higher success rate as opposed to informal approaches that deny the complexity associated with the transformation of portfolio management.

Achievements

The assessment in 2023 confirmed achievements in each of the nine participating organisational entities such as establishment of:

  • Foundational portfolio management frameworks.
  • A governance board at senior management level for portfolio investment decision-making.
  • Portfolio Management Offices.
  • A live and engaged community of practice in pursuit of benefits realisation.
  • Increased formality and oversight over projects and programmes and their status.

Improvement opportunities

However, it also became apparent that there was room for improvement in:

  • Completing the scope of portfolio management frameworks covering all P3M3 process perspectives and threads, enabling portfolio management to be operated more effectively and efficiently.
  • Focusing more on the management of the collective portfolio rather than monitoring individual projects and programmes.
  • Enhancing the practices associated with strategic portfolio management or portfolio definition.
  • Consistent application of organisational standards and associated behaviours.
  • Improvement of the organisational portfolio management learning cycle to ensure lessons from experience are shared and implemented going forward.
  • Establishing common portfolio management standards across each of the nine organisational entities to enable integration at the central organisation level.

Recommendations

It was recommended that each of the nine organisational entities would address the previous findings and, in a formalised change initiative, ensure that improvements would be appropriately resourced and supported by the organisational leadership.

To enable a cost-efficient realisation of the improvements and to enhance standardisation, it was recommended that a central portfolio management framework would be developed and used for implementation in each of the nine organisational entities, while tailoring it to local circumstances and specific requirements. The requirement for the framework was to achieve P3M3 level 3: when an organisation tailors it appropriately and implements it consistently.

Magchiel van Meeteren said: “What I found most important following the assessment was the discussion of the results at board level in each and the conclusion that every organisation needed a fully-equipped portfolio management process.”

Hans Loonen added: “Many of my views on portfolio management were substantiated by the P3M3 assessment and this helped us set up a portfolio roadmap to look at projects, resources and goals; giving us a way of prioritising initiatives that we didn’t have before.”

Results

Magchiel van Meeteren, CIO – BZK: “As a result of the assessment, we have taken steps to agree how each organisation should develop its portfolio process with more concrete actions and definitions as a starting point. People are now taking action to grow the professionalism of portfolio management to a higher maturity level.”

Hans Loonen, CIO – Real Estate: “We have projects to achieve in five to seven years and we are now able to prioritise these initiatives while fine-tuning resources and focusing on real business demands.”

Ton van Schie, senior project portfolio management advisor at CIO BZK: “Portfolio management now has more focus: people are using the central manual and adjusting it to the needs of their department.

“Each department has a different emphasis, but the manual gives them all the necessary guidance to – for example – strengthen processes and create reports, including dashboards. And, at project manager level, it means that better quality data is generated to support decision making at the portfolio management level. Also, portfolio management has achieved more influence – including the creation of a director-led portfolio board – and in that:

  • All nine assessed organisations have produced an improvement plan and a goal to reach P3M3 level 2 or 3 by Q3 2025.
  • Portfolio management milestones and planning are discussed in monthly meetings.

“With an established framework created and tailored with P3M3 , a portfolio board and better processes, this has created a clearer cycle of portfolio management, which reduces the risk to if there is a change in management personnel. In this instance, either an interim or permanent portfolio manager can quickly take over and run the processes.”

Martijn Blok, Portfolio Manager – Real Estate

“The most important thing is to be able to follow a repeatable process. With that in place, I can be sure that work is happening. We now have an action plan based on every aspect of P3M3 and Management of Portfolios (MoP) best practice to help us move to a higher level of portfolio management maturity. 

Peter Postema, Director – Global Project Performance

“The evolution of portfolio programme and project management in BZK, with many people engaged in the daily processes, is a good thing and the assessment helped to confirm these achievements. And by following our advice to integrate the achievements at all levels in the organisation, this will significantly increase portfolio and portfolio management performance. Also, a customised Project Portfolio Management Tool is there to provide consistent, reliable and current decision making information about change initiatives and within change initiatives.”

 Magchiel van Meeteren, CIO – BZK

“Portfolio management is very important to the ministry. When we have a new Prime Minister and Government in the Netherlands, there is likely to be many new policies to translate into programmes and projects in addition to what is currently running. So, having insight into doing the right things and doing things right is only becoming more important. For example, how many change activities can be run effectively, in what order and are there enough people to run them?

Hans Loonen, CIO, Real Estate

“The conversation with stakeholders – about the problem to solve, the solution they need, what the results should be and what it will cost – is getting better and better and we can prioritise any new projects against the existing backlog of initiatives. Having a method that brings structure to this process is helping us.

Ton Van Schie, CIO & senior project portfolio management advisor

“The policymaking and portfolio management worlds may be very different. But, if a government wants to deliver benefits to the public on time and justify how it spends public money, the ways of working need to be effective and efficient. And with policy makers looking five years ahead, more effective and efficient portfolio management can help align projects and programmes better with future policies and deliver benefits.”

Martijn Blok, Portfolio Manager – Real Estate

“P3M3 gives an independent perspective about whether we are doing the right things and in the right way. Together with Management of Portfolios (MoP) best practice, it provides a very structured way to define what is needed in a complex environment such as government and break down the work needed to improve and step up to a higher level of portfolio management maturity.”

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