Many organisations are now transforming their businesses to save costs, create more client-centricity, restore stakeholder confidence and embed new digital business models.
Doing this successfully requires executing numerous, increasingly complex transformation programmes and projects in parallel, while at the same time keeping the business functioning. The complexity involved causes many organisations to struggle with both “doing the right things” as well as “doing things right”.
As a result, organisations lacking decision making systems targeted towards this challenge continue to receive a poor return from their investment in projects/programmes, and are failing to unlock the full value of their capital investments.
Furthermore, organisational culture can remain a major stumbling block when pursuing portfolio management. The entire team needs both the tools and the willingness to unite around a single plan with clear outcomes.
Key to effectively manage a portfolio of transformation initiatives, is establishing the relationships between strategy development and strategy implementation. This allows businesses to select and prioritise the right projects, balance project demand with their supply of project resources, and deliver and control projects more effectively.
A fully aligned project, programme and portfolio management strategy encompasses the entire organisation, dictating project execution at every level and aiming to deliver value at each step along the way. It does more than help organisations succeed; it allows them to deal with uncertainty and select the best option when confronted with most strategic decisions.
One of the biggest challenges in portfolio management is organisational adoption. A crucial step to achieving this is ensuring each strategic initiative is sponsored at the senior leadership level in the organisation. Investment priorititsation and stop/start/steer decisions need to be business-led, and responsive to the changing business situation and overarching strategic direction.
It’s then critical that this is well understood and ‘joined up’ to the rest of the organisation – multiple teams driving towards a common plan.
It is imperative to not be overly aggressive in defining the initial scope of investment decision making, while still keeping this simple and narrow. The initial scope should be based on your organisation’s capabilities, be as uncomplicated as possible and focused on the worst pain points first. The initial implementation will almost certainly not be perfect. Some process steps, configuration decisions, and data points will just not fit the needs or the business models of some stakeholder somewhere. This can be modified using an iterative and agile design and deployment methodology.
A successful implementation will also rely on the business investing in tools that offer a holistic view of the entire company – in too many organisations, silos mean that projects overlap or render each other ineffective. Gaining a true picture of the organisation enhances the return on investment and the effectiveness of a transformation programme.
Once senior people are engaged and the groundwork has been laid for an agile approach, businesses must focus on their top priorities. We’ve seen organisations characterize their needs into three broad “domains” of:
By characterising the priorities according to their needs, it will be easier to engage all stakeholders. This will help to build and drive initial consensus, particularly around the configuration, and ensure the portfolio can evolve as the organisation matures.
Reaching portfolio management maturity is a stepwise journey. Having implemented all three domains, portfolio management goes beyond prioritisation and alignment of individual projects and instead becomes one of the major operational processes in the organisation, aligning all investments to strategic goals.
As a result, portfolio management represents the difference between good strategic intentions and initiatives that truly realise strategic aims and transform businesses for the better.