A more agile approach to project portfolio management (PPM) has become vital to many organizations as they try to meet market demands and customer needs and ensure that projects and the portfolio stay in line with strategic objectives.
In order to achieve agility, organizations are learning as they go, and they recognize that traditional methods for projects and the portfolio are no longer enough. So let’s talk more about taking the first steps towards a more agile portfolio.
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A technology or business project might be completed on time and on budget, but does that mean it was successful? Not always. Success factors are no longer defined by these criteria alone. For example, a completed project might not have met the expectations of stakeholders, or it might have lost sight of tracking and delivering toward the organization’s overall goals.
PPM enables an organization to identify, prioritize, organize, and manage projects and products. Agility – moving moving toward a more agile portfolio – is about doing all of these things in a more efficient, simplified, streamlined manner to maximize value for the organization. It’s about maintaining flexibility without sacrificing speed. Executives and portfolio managers are able to make decisions more quickly and can easily pivot in the face of changes such as:
- Market shifts
- Emergence of new government regulations
- Other impacts on the organization’s business
Whereas traditional methods of project portfolio management were highly governed, strictly run by the project management office (PMO), often only with annual planning (typically an extended process performed with spreadsheets and PowerPoint), agility means that companies should now be able to quickly make shifts in planning as the need arises. That’s a far more effective strategy in light of the fast pace of change brought on by digital transformation.
Even in industries where companies face strict regulatory controls, such as financial services, healthcare, and government, more than ever there is now a need to balance agility and compliance. Furthermore, PMOs as a group within all sectors are changing, becoming more agile in the way they oversee projects, programs, and portfolios, and loosening the governance grip to a degree.
Not surprisingly, due to these and other factors, there is rising demand for technology platforms that support agile and more collaborative ways of work along with project portfolio management. This reflects an overall increase in focus on agile transformations occurring within business.
More executives are depending on agility and agile ways of working to make their organizations more innovative and dynamic and deliver products and services to market faster.
The Forbes Insights/Project Management Institute (PMI) report, “Achieving Greater Agility: The Essential Influence of the C-Suite,” notes that 84% of executives think organizational agility is necessary to succeed in digital transformation.
Adopting PPM and related technology can lead to a number of business benefits to make agility easier. Here are a few examples of what companies can expect to see.
Strategic alignment of initiatives and work
Teams, people, and resources are able to focus on the most valuable work for the organization rather than on the next projects in the pipeline.
Companies ensure that the most strategically important work is receiving top priority and is staffed accordingly, and with the right technology, utilizing a scoring system for value-driven decision making.
Companies should move toward a more continuous approach with strategic investment planning by prioritizing work based on close alignment with enterprise-wide initiatives. That gives stakeholders the assurance that the portfolio will be set up to help achieve goals.
Enhanced demand management, capacity planning, and resource management
Change is the only constant, and over time, priorities, resources (including people and funding), market conditions, and other factors shift.
An accurate, up-to-date inventory of resources, a plan for how those resources will be used, and an allocation path can help ensure that a company’s projects run efficiently and without interruption.
Capacity and demand management lets managers know:
- As new requests and demand for work is created
- The resources working on particular projects
- The resources available for other work
- Which projects need to be staffed with specific expertise
Agility allows managers to assign the best available resources for a given project based on skill and to quickly and easily backfill projects from which resources must be drawn so they can deliver higher priority work. Capabilities such as what-if scenario planning provides the data needed to adapt to shifting demands, project dependencies, and cross team management.
Enhanced portfolio- and program-level reporting
A benefit of agility across the enterprise is portfolio-level visibility and reporting into all of an organization’s project and work delivery, which can result in better performance, results, and return on investment (ROI) for projects and resources.
Companies can gain portfolio-level visibility for insights into:
- How well projects are progressing
- What the scope of the project is
- What expectations exist for the outcome of the project
Project portfolio management solutions allow managers to:
- See real-time progress on projects
- Keep stakeholders updated on progress
- Get a clear understanding of objectives teams are working toward
They can build and execute program roadmaps, gaining visibility across the portfolio and across the teams working on particular projects. Companies can also simplify the measurement of the true costs of agile projects and collaborative work going on in other parts of the business.
With the right technology platforms, companies can have the ability to automatically roll up data into intuitive dashboards, so they can align work to their strategic objectives, maximize the value of what is delivered, and control costs.
Gathering data from agile and collaborative work from disparate systems can be challenging within an organization and difficult without a formal process for reporting. By integrating work execution tools into a portfolio management platform, stakeholders can access the valuable information in one place while allowing end users to continue leveraging the system with which they are comfortable.
PPM and agile portfolio management help keep all work flowing, with the flexibility to let teams work in the manner that best suits them, while tracking teamwork delivery toward common goals.
Faster speed of delivery
Today’s enterprise is all about speed. Companies need to get products and services to market before their competitors do, or risk losing out on business opportunities.
PPM increases the speed at which projects are completed and final products and services delivered, which can lead to business benefits such as:
- Increased sales
- Competitive advantage
- Higher customer satisfaction rates
Improved management of projects and resources keeps project teams on or ahead of schedule; therefore, projects are likely to be completed more quickly. This is especially important for the delivery of products and services that are time-sensitive, such as seasonal offerings. PPM software has been shown to shorten project duration by a significant factor.
Suggested Best Practices
Senior business executives as well as PMOs, finance directors, and others need to be aware of best practices for adopting agile portfolio management to help ensure success. These practices can apply to the organization as a whole or to the PMO, who might very well be called upon to lead the transition to this new way of managing portfolios.
Make project portfolio management a team effort
It’s important to remember that while the PMO owns portfolio management, coordination with all parts of the business, from executives defining strategy and initiatives to the teams delivering the work, is necessary. Agile portfolio management along with PPM spans multiple components of an organization and involves many stakeholders across the enterprise.
Furthermore, continuous streams of collaboration and information sharing are mandatory among those involved if these efforts are to be successful. For example, if senior management does not clearly communicate strategic goals to the PMO, chances are greater that objectives will not be met.
Organizations are relying on PMOs, who have the ability to define execution roadmaps and are known for leading change management, to identify the required resources and drive the transition into agile portfolio management.
One of the first steps toward making this a reality is for PMOs themselves to become more agile and embrace agility in their own practices. That means they will need to refine their roles and their approaches to managing portfolios. There will no doubt be some conflict with the traditional ways of doing things, but now is the time to be more open and adaptive.
Just enough governance
Even though the concept of agility is to complete work faster, deliver products to market earlier, and provide broad latitude to team members, that doesn’t mean governance goes out the window.
Organizations can practice a level of just enough governance without falling back on stodgy bureaucratic management methods that are counter-productive to agility, placing hindrances on flexibility, creativity, and innovation.
A certain amount of planning, strategy, and the alignment of business goals with portfolios is required. The right amount of governance can be especially effective at resolving issues that crop up when multiple teams across the enterprise working together get out of sync; it helps them get back on track toward achieving the goals of the organization.
Leverage continuous planning
As they aim to become more agile, organizations must make the shift to continuous planning, which involves continually updating roadmaps to adapt to internal or external events that affect the plans. These might include:
- A change in business priorities, funding, and resources
- New regulatory compliance requirements
- Market upheavals
- Some other event
Continuous planning contrasts with more traditional, static planning approaches that might include annual or bi-annual planning reviews. As such, it’s much better suited for an agile environment supportive of flexible and iterative planning that can be adapted to shifting conditions.
Companies need to be able to continually reassess and shift gears quickly as priorities change and new opportunities arise, and a continuous planning approach allows them to do this. It ensures that the organization is always delivering value while at the same time keeping in mind capacity constraints.
Without continuous planning, organizations might find themselves ill equipped to adjust projects, resources, and priorities as needed. That can lead to:
- Cost overruns
- Insufficient resources
- Greater corporate risk
- Other issues
With continuous planning and an agility mindset, companies can quickly shift a plan to ensure that resource and capacity constraints are alleviated when change happens.
Move to product-centric portfolios
Much of the work done in agile environments today is focused on delivering digital products and services to customers, and speed and flexibility are vital when trying to satisfy changing customer demands.
To support this, organizations need to shift to managing their portfolios as products rather than projects, with the focus no longer on executing on-time and on-budget, but rather on delivering value.
Managers should plan and manage in terms of the end products and services created, and need to understand everything that’s involved in order to create them. That includes technologies, services, locations, and people.
As part of the move to product-centric portfolios, PMOs need to work closely with product managers and product owners to develop forward-looking plans and roadmaps, rather than simply putting together project schedules. Not only does this allow for ease and flexibility in updating the roadmap should changes arise, it also offers the opportunity to find ways to improve and innovate on products, services, and customer experiences.
Select the right technology
A big part of moving from traditional project portfolio management toward agile portfolio management is deploying the best technologies, or in some cases reconfiguring current technology to just the right capabilities, to enable this new approach and meet the unique needs of the business.
Project portfolio management software should offer the opportunity to visualize the bigger picture by connecting strategy to delivery and integrating and aligning strategic portfolios to projects, programs, applications, technology, and finances.
The road to agile portfolio management is a journey. Organizations should look for technology that can adapt to changing requirements, with the capabilities to help them reach their goals and ultimately transform.
The Bottom Line
For many organizations, agile portfolio management is transforming the way they plan and execute work, which can lead to tangible business benefits such as increased revenue, enhanced customer services, and improved processes.
As consulting firm Accenture notes, traditional portfolio management is no longer sufficient.
“Entrepreneurial competition has picked up and customer expectations have skyrocketed…..This ever-changing world requires business ideas to be validated more quickly, more initiatives to be run in parallel and in a more effective and coordinated fashion. Many CEOs are grappling with this complex reality. Lack of transparency, increasing overhead costs, and a thorough disconnect between a company’s strategy and its operations have made it painfully clear that traditional project portfolio management no longer suffices.”
With agile portfolio management, companies can:
- Better align project portfolios to strategic business goals
- Determine whether teams are working on projects that are aimed at achieving those goals
- Mitigate the amount of time team members spend on low-value work
The increased visibility of portfolios and reporting for projects can lead to better decision-making and improved results.