Choosing which projects to invest in is crucial for large organizations. For reasons of profitability, accountability and compliance, decision-makers are increasingly pressured to justify project investment expenses based on the returns to be generated, not only in terms of money, but also in terms of human resources, the environment, corporate citizenship, legal matters and other intangibles.
However, determining priorities among hundreds of projects awaiting election and approval is not an easy game, and when millions and billions of dollars are at stake, targeting projects that will deliver the best value is critical. In many cases, because decision-makers lack the support of a structured decisional process and a business intelligence tool to help them assess and sort projects on a comparable basis, they are forced into managing partially by guesswork.
How can decision-makers effectively compare, prioritize, and realign projects, or even decide to pull the plug before it is too late? To ensure project investments are well-suited, they should go through a thorough selection process, where data can be compiled and compared. To this end, the implementation of a project portfolio management software solution that connects to data for each and every project is a gold mine. Metrics must be aligned with the business strategy, and implementation must foster engagement from the community of project managers.
Project portfolio management solutions have been developed to create dashboards and ease analysis and decision-making in the allocation of project budgets among huge project portfolios. They enable high-level managers to compare quantitative and qualitative data from each project and select and prioritize projects that will generate the best returns in terms of meeting strategic business objectives. Budgets are tracked in real time for comparative cost control and reporting. Historic and present data are also compared, which allows for better risk management within the portfolio and timely project realignment or termination.
A PPM solution should be easily customizable to fit the organization’s strategic profile, without requiring intensive spending on software integration. Usually, it will dig information from various existing project management software files, ERP data or spreadsheets, no matter how many projects are in the pipeline or awaiting assessment and approval. However powerful, a PPM solution will head nowhere if no prior plan is made to ensure the relevance of metrics in the first place, and ultimately, to secure the adoption of the solution.
Here are some tips on how to support implementation, secure adoption within the organization’s community of project managers and unleash the power of a PPM solution through a process that leverages strategic planning upstream and a well-deployed training and support program for project managers downstream.
Align standard metrics with business strategy. PPM will only be truly valuable if a standard set of metrics is included within each and every project. These metrics will enable projects to be collectively compared, balanced, elected and prioritized. This step is crucial to getting a reliable overview of a project portfolio. To be relevant, such metrics should align with strategic orientations of the organization. What is the organizational focus for the upcoming one, three or five years? There may be many drivers, including business development, customer satisfaction, brand awareness, cost reductions, employee retention, environmental compliance, etc., notwithstanding asset maintenance. This alignment work should be done collegially with any leaders of core business functions involved in strategic planning.
Adopt the standard set of metrics. Once the alignment is done, the PPM implementation project should be introduced to managers, along with the new set of metrics to be included in their own project tracking tool. Make sure they are informed of how the metrics should be applied. Also, make sure they understand how significantly their input will make an impact, and the benefits that these metrics will trigger for them and for the business as a whole. Have them trained to adequately implement and use this additional set of metrics while providing them with steady support from an individual in charge of change management. Plan feedback sessions where project managers can comment and provide input. This will increase their engagement while helping to adjust the process along the way.
Publicize the benefits of an efficient PPM implementation process. Benefits of an efficient project portfolio management implementation process are many for the organization and project managers. Projects will be better focused and aligned with the strategies of the organization and should deliver increased ROI over the short and the long term. Project interrelationships will be highlighted, which will make the selection, prioritization and ranking cycle more efficient and eliminate the launch of projects that should never have started in the first place. The adoption of an efficient process should also contribute to materially decreasing change orders and shorten delivery time, while conveying the ability to leverage amounts that are traditionally attributed to contingencies.
Overall, a sound project portfolio management cycle supported by a well-planned implementation process and a PPM solution settled with the appropriate metrics should enable decision-makers to deliver value that truly meets strategic corporate performance targets.
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