ITIL V3 and the PMBOK® - Distinct but Complimentary

Author: Larry Cooper

Abstract

Project management, in a general sense, is the discipline of defining and achieving targets while managing and optimizing the use of resources (time, money, people, materials, energy, space, etc). ITIL as embodied in ITIL Version 3, which when implemented becomes IT Service Management, is roughly the same for IT Operations; it is the set of good practices needed to define achievable IT service targets while optimizing the use of IT Assets (information, knowledge, applications, infrastructure, management, organization, processes, people), This white paper examines both of these important disciplines primarily in the context of their similarities, especially as it relates to an important topic to both; that of portfolio management.

The Project Management Body of Knowledge (PMBOK®) is the quintessential project management methodology in the North American marketplace - the PMBOK®, from the Project management Institute (PMI). The IT Infrastructure Library (ITIL), from the Office of Government Commerce in the UK, has quietly become the quintessential IT Service Management methodology across the globe used in organizations of all sizes, verticals, and industries in both the public and private sectors.

Introduction

This white paper examines the IT Infrastructure Library Version 3® (ITIL v3®) and the Project Management Body of Knowledge (PMBOK). A previous white paper on ITIL v2 and the PMBOK (see our web site) focused on how to use the PMBOK to implement ITIL after reviewing their respective bodies of knowledge (BOK). This time around, besides the BOK comparison, to paraphrase my favorite TV chef, Emeril Lagasse, we are going to kick it up a notch as we look at Portfolio Management and the Service Portfolio and how both help ensure that IT investments in projects and services help with Business IT Integration (BITI).

Project Management Body of Knowledge (PMBOK®)

The Essentials

While there are numerous project management methodologies around the world, the quintessential project management methodology in the North American marketplace is the PMBOK®, from the Project Management Institute (PMI).

Project management, in a general sense, is the discipline of defining and achieving targets while managing and optimizing the use of resources (time, money, people, materials, energy, space, etc). The utilization of project management practices has become essential for a business to deliver value and services. The PMBOK® defines project management as "the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations." The emphasis is on projects as a "temporary endeavor undertaken to create a unique product or service."

Within the PMBOK® there are nine knowledge areas and 44 processes (see Figure 1: PMBOK® Knowledge and Process Areas). These knowledge areas provide a set of best practices in project management that are industry and project agnostic. The PMBOK® project management processes are divided into five process groups or phases.

• Initiating
• Planning
• Executing
• Monitoring and Controlling
• Closing

A key characteristic of projects is that they are focused on creating deliverables. The definition of the work to be done in creating deliverables is achieved by creating a Work Breakdown Structure (WBS), followed by a schedule with timing and resources necessary to achieve the work, and lastly, execution of the schedule.

As noted, each PMBOK® Guide knowledge area includes several processes, each of which is designed to provide guidance on how to apply it to a real project. For example, Project Scope Management (5 in Figure 1) provides guidance on how to define the scope of your project, how to translate that scope into identified deliverables, how to define the work needed to create those deliverables (the WBS), and how to verify that your scope is being met (neither under- nor over-scope) through control and verification.

Project Portfolio Management

Portfolio Management is not a new term in the world of project management; indeed this has been recognized by the PMI in their creation of the OPM3 framework for portfolio management.

As the name implies, project portfolio management (PPM) groups projects so they can be managed as a portfolio, in much the same way your financial investor manages your financial portfolio on your behalf. Financial portfolio management was first discussed in the 1950s by University of Chicago economist Harry Markowitz, who described a portfolio as a diverse set of investments as a means to reduce or mitigate your financial risk exposure and produce a higher rate of return than could be possible by holding an individual investment vehicle.

This concept started to make its way into IT in the 1990s and gained momentum in the early part of this decade. The primary benefit from PPM is that it gives IT and business executives a birds-eye view of projects so they can spot redundancies, spread resources appropriately, and keep a close watch on progress. PPM provides insights not only into how much a particular project will cost, but also about its anticipated risks and returns in relation to other projects in the portfolio, thereby enabling projects to be evaluated against each other.

As a process, PPM is designed to help an organization acquire and view information about all of its projects, then sort and prioritize each project according to defined criteria, such as strategic value, resources requirements, cost, etc. Other primary objectives of PPM are:

• To capture all of the individual projects in the portfolio
• To develop a "big picture" view of each project and, by so doing, gain additional insight into the portfolio as a whole
• To facilitate portfolio and individual project assessments to see which new ones need to be added or whether any existing projects need to be changed, as well as which ones should be canceled, based on changing business or market conditions
• To provide efficient and effective utilization of an organization's finite resources and capabilities

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