The combination of technological progression and exponential growth in digitization in the last decade has changed the way businesses operate. These shifts coupled with other unpredictable global events like COVID-19 have created the perfect storm—accelerating transformations that were already under way for some, and forcing the hand of others who had not yet begun.
In fact, the need to accelerate, transform, and modernize business models is now table stakes for many to remain competitive. So how do businesses respond? How do they react efficiently? How can they successfully redesign business processes to stay competitive? How can they retain existing or capture new customers? How can they answer all of these questions while “keeping the lights on” to enable the business to run? The answers to these questions often reside in the businesses themselves. However, the rapid reaction and action cycle has led many organizations’ project portfolios to balloon in size, some with many hundreds of projects.
Without a foundational framework, this reaction and action cycle will at some point become unsustainable. The number of projects outstrip an organization’s ability to efficiently deploy its resources on projects that are of the highest value. The risk is that companies spend critical resources on projects that no longer align to an organization’s enterprise strategy and business objectives. Organizations that try to do too much at once risk spreading their resources thin - leading to failed projects through missed deadlines and key objectives being unmet. To future proof these critical resource decisions, organizations need to re-evaluate how they review their portfolio of projects and build a new model that allows them to do the right project at the right time while achieving key organizational objectives and goals. This is the essence of project portfolio management.
Project portfolio management, when done successfully, leads to appropriately funded projects that get completed on time, on budget and that align to enterprise strategy and business objectives. Organizations that re-engineer their project portfolio management process establish new ways of working. In a future-proofed decision making organization, projects are not funded based on relationships with senior decision makers. Modernizing project portfolio management means a holistic approach to identify, prioritize and execute projects across the enterprise.
So where should businesses start? The first step is to have a clearly communicated enterprise strategy, including business objectives, goals and vision. A clear strategy enables your organization to define the decision criteria against which all projects are measured. If a company’s strategy needs updating then start there. Next, managers must make project selection criteria that is transparent and adhere to those selection criteria. The project portfolio management process must be trusted by all and add value, therefore consistency is key. Managers must set and model the tone for everyone to follow. Lastly, managers must regularly monitor and measure projects and validate that they align with organizational objectives and goals. Organizations that master the ability to consistently select the right projects, adjust and course correct and even cancel in-flight projects because they no longer align, will outperform their peers. By using these three steps, your organization will be on its way to efficiently using the critical resources and effectively execute its enterprise strategy and business objectives.
In today’s rapidly changing business environment, organizations that successfully do the right projects at the right time capture greater market share and enjoy long term success. Organizations must re-engineer their project portfolio management process; how they identify, prioritize and execute projects. It begins with establishing a clear enterprise strategy, creating transparency in the decision process and regularly measuring project alignment.