Leaders recognize the advantage of preparing for a future economic upturn by streamlining IT strategies now to lay the foundation for competitive agility as the economy rebounds. Optimal delivery of IT solutions through people, process, technology and culture enhances the ability to execute on strategic growth initiatives and accelerate business success.
Many organizations today are faced with a complex balancing act between the management of business goals, resource and financial constraints, and intricate project requirements. Management should choose a holistic approach to these topics over a siloed attack. This will provide a crucial link between executive vision and the work of the enterprise, and will bring realism to an organization's planning processes.
Project portfolio management promotes organized and repeatable processes by which organizations can link strategic plans to programs and investments. By definition, the fundamental objective of PPM is to determine the optimal mix and sequencing of current and proposed projects to best achieve the organization's overall goals while honoring constraints of internal or external real-world factors. A collective rather than singular approach to managing projects results in a significant improvement in project and resource efficiencies while aligning efforts to the business goals they are meant to address.
Senior IT leaders in public or private sectors are looking more and more toward creative utilization of PPM or project management to meet efficiency challenges and also to inspire their teams to higher performance results by embracing a culture of excellence.
The concept of IT project management grew roots in academia 20-plus years ago, but it more recently has become a go-to strategy for companies that recognize its significant benefit to the bottom line. As IT management has gained credibility as a critical partner in achieving business goals and earned access to the C-suite, more and more organizations are looking at PPM and PM as critical paths to reach business objectives.
Business Case Rationale for PPM
Several reasons exist to implement PPM. This list can help you identify pain points and gain the necessary support from the C-suite to begin a PPM program.
An ineffective match of project work to business goals. Project work should be undertaken only when it complies with standards set by the business for profitability, meeting strategic business goals, ROI and other quantifiable factors. Organizations need better guarantees that project efforts will result in the achievement of key business initiatives.
Project initiation is cumbersome and inconsistent. When projects are driven by a standard process and strategic long-term goals, they will immediately stabilize and flow more efficiently through their lifecycles. This is too often not the case in organizations today. In a shrinking economy, reducing waste may be vital to a company's survival.
Project measures and accountabilities are missing. Managers can be held accountable to project schedules and deliverables only when the proper measurement and reporting tools are present. Project performance expectations must be standardized and ingrained in the culture of the organization to be effective. Results will include better resource visibility and usage, cost efficiencies and a significant boost in IT's reputation.
Lack of quality, real-time data collection and reporting. Most organizations are unwilling to summon the effort required for performance measures to become meaningful. Managers can only be expected to make good judgments when they are afforded the benefit of clean and consistent data to measure their projects. Results will include not only quality, real-time management of projects, but a base of data for analysis and continual process improvement.
Components of a Successful PPM Deployment
A PPM plan should enhance the selection, delivery and communication of programs and projects across the enterprise within both the IT and business organizations. This can only be accomplished by implementing a best-practices approach to the processes of portfolio management. A holistic approach must be adopted using a refined list of proven portfolio toolkit components:
Project and business goal alignment. The fundamental goal of any suite of projects is to know what is to be accomplished in order to define what success means. An organization must spend the time to understand its business drivers so prospective projects can be culled to include only the meaningful ones that will accomplish legitimate goals.
Project selection and prioritization. Projects seldom stand alone - even if the effort does not affect other projects directly, it will affect the resource availability of other efforts. Therefore, the first step is to understand project dependencies. To do so, think of project suites (programs) rather than single projects. From there, program scenarios need to be selected and prioritized. Selection is typically based on factors of business alignment, ROI and obligation (regulatory, compliance, maintenance, etc.). Finally, programs must be reviewed on a regular basis to monitor changes in scope, dependencies and status.
Resource and capacity planning. Many organizations focus on project schedules and deliverables but fall short in their ability to manage resource capacity. A properly run PPM model must include resource planning and allocations. Otherwise, they stand the chance of picking the right projects but may run into resourcing conflicts. In those cases, issues are resolved by external resources that may spike costs out of line.
Project performance metrics. Now that programs are chosen wisely and staffed properly, an organization must still be diligent to run them effectively. The only way to manage this expectation is to define clear, standardized measures by which to compare performance. Typically, schedule and financial performance are measured on a regular basis, RAG (red/amber/green) statuses are visible, and flagged projects are reviewed in detail to uncover and solve the root issues.
Financial tracking and controls. It is not enough to manage projects from a schedule perspective. Many a project can be kept on track by adding resources and costs ... but this is not the goal of PPM. PPM's goal is to deliver projects on time and on budget. Complete PPM tracks a project work plan and likewise tracks the approved spend (budget), the expected spend (forecast) and the actual costs.
Dashboard data access. As much of the success of a PPM system relies on metrics and measurements, a key component becomes the ability to deliver this information in an accurate and timely manner. Dashboard data access is a term used to suggest that data is efficiently collected and then presented in a way that is concise and meaningful to the business community.
Culture of high performance. People, processes and technology are often used in tandem with PPM and PM initiatives. There is another word, however, that is equally important - culture. In the sense of organizational change management, culture plays a large role in making sure that people, process and technology are in sync and driving a philosophy of high performance. Without a high-performance culture, an investment loses momentum. Leadership training and development are integral to making sure that everyone can be successful on the other side of change.
While the economy has limited many companies' investment plans, most are still charged with cutting costs and doing more with less.
PPM will become an increasingly obvious choice for organizations faced with shrinking budgets and customers that demand more for their investments. PPM enables the process of aligning project portfolios with strategic objectives so that companies will be able to react more easily to rapidly changing competitive environments. At the same time, IT can be seen as an agent for positive change and not simply a cost center.
Industry studies show that portfolio management enablement can result in a 14 percent or greater cost savings on the annual budget by reducing management time spent on decision-making, avoiding nonstrategic projects, reducing budget overruns and lowering labor expense with smarter staffing. With creative approaches to shared risk and investment, you can embark on a PPM strategy and be prepared to grasp the opportunities offered when the economy takes an upturn.
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