10 years, 10 months ago

Project Portfolio Management: Why Now?

Post image for Project Portfolio Management: Why Now?

Guest post by Sanjay Sharma

Over the years as a consultant in the area of Project Portfolio Management (PPM), I’ve noticed that shifts in the economy prompt executives to consider adopting PPM. During a recession, thoughtful leaders understand that PPM is more important than ever to facilitate the gathering of key information needed to reduce costs without forfeiting revenue and value. On the flipside, when the economy is rebounding, savvy leaders turn to PPM to effectively mobilize investments. Certain economic indicators show signs that the economy is turning around, but there’s another reason why PPM should be at the forefront of C-Suite conversations right now: digital transformation.

Corporations are frantically digitizing their products and services. In doing so, technology spending is spreading across the enterprise and in some cases wreaking havoc. For example, rogue cloud rollouts are running rampant across business lines at most enterprises. More than ever, CIOs need an approach to measure and monitor myriad technology investments to align their organizations to strategic business objectives.

According to an industry analyst firm, “by 2016, 70% of the most profitable companies will manage their business processes using real-time predictive analytics or extreme collaboration.” I translate that to creating and sustaining a conversation that generates a single source of truth that steers the daily decisions of senior executives like a rudder. To drive the execution of the right investment initiatives at the right time, companies need an integrated relationship between the C-Suite, the CIO and business unit managers.

The results speak for themselves. In an environment without PPM, projects are typically not aligned with strategic imperatives and business objectives. The culprit is often insufficient communication, collaboration, and transparency. In these cases no one sits down and consistently discusses business cases or calculates returns on investments, probably because they aren’t held accountable for doing so. In the end real results fall short due to ineffective scope, issue and dependency management.

PPM can empower the executive suite with visibility into investments across the enterprise and to create consistent corporate governance. The business will experience increased resource synergies across portfolio, program, and projects and accurate assessment of revenue impacts, agile shifting of strategic allocations of funding across the organization. Businesses will be in a better position to proactively identify opportunities and detect failures. Business value is clearly expressed, widely known and effectively delivered.

Executives should choose their vendors carefully and close gaps in service offerings when necessary. Currently, the PPM solutions offered by most vendors are limited to portfolio monitoring and operations with out-of-the-box solutions. Organizations need an approach that entails the entire lifecycle of portfolio management, especially addressing current market gaps, including:

  • direction setting through guiding principles and a common vision.
  • establishing project investment governance and trade off scenarios analysis.
  • implementing and tracking portfolio benefits realization (Actual vs. Plan).
  • providing portfolio performance visibility to all levels.

If you’re not already putting PPM into practice, now is the time to consider it. In today’s high-paced business environment, you need to know faster than ever before what is working and what is not, so you can pivot on the fly and keep pace with the digital consumer. Organizations can use PPM to collect and coalesce around data about business goals, finances and people to make critical decisions about competing priorities at an unprecedented pace.

Image shared by Official US Navy Imagery