Overcoming common pitfalls to achieve true portfolio effectiveness and sustainable growth
Project Portfolio Management: Best Practices for Strategic Control and Organizational Maturity
Overcoming common pitfalls to achieve true portfolio effectiveness and sustainable growth.
The Fallacy of Shared Resources and Its Impact on PPM
In today’s dynamic market, many organizations adopt a “shared resources” concept, often mistakenly believing it constitutes effective Project Portfolio Management (PPM). This misconception is a critical fallacy, particularly when shared resources are considered the sole or primary component of PPM. Such a narrow view can severely hinder an organization’s productivity and strategic objectives.
The consequences are far-reaching: persistent backlogs, unclear policies for incorporating service and project demands into the portfolio, resource depletion, and ultimately, ineffective project management. True PPM is a holistic discipline that goes far beyond simply sharing resources; it involves strategic alignment, robust governance, and continuous optimization.
Identifying PPM Issues: A Diagnostic Survey for Organizational Health
To accurately assess whether your organization is grappling with these pervasive issues, a comprehensive survey can serve as a powerful diagnostic tool. This survey should delve into various facets of project and resource management, offering insights into productivity and overall effectiveness.
Backlog & Demand Management
- Do you have a significant project backlog?
- Are service/project demands included in the portfolio without clear policy?
- Do many customers submit projects to the portfolio as they arise?
- Do urgent demands frequently pull resources from planned work?
- Do you initiate more projects simultaneously than can be delivered in a short timeframe?
Resource Allocation & Utilization
- Do you frequently shift resources based on urgent needs?
- Do you merge short-period projects with long-period projects?
- Do you have a problem retaining resources?
- Do you focus resources to deliver a project until it finishes, or are they working on many projects daily/weekly?
- What is the limit on the number of projects each resource can work on?
- How many tasks are teams working on the same day?
Organizational Alignment & Communication
- Do you have different functional managers?
- Do you have cross-functional dependencies?
- Do you have many meetings outside your portfolio teams?
- Do you have integration problems within your teams?
- Do you have silos not communicating with other disciplines?
- Do you encourage comments and initiatives from the team?
- Do you encourage change?
Governance & System Efficiency
- Do you have funding approval problems?
- Do you have clear priority ranking?
- Do you have a system helping you manage the portfolio?
- Do you have Project Portfolio Management policies?
- Do you have Project Portfolio Governance?
- What level of accountability and authority does the PPM team have?
- Do you have a system that can be updated live as one single source of truth?
Productivity & Performance Measurement
- Do you have KPIs to manage team productivity?
- Do you measure outputs as you measure outcomes?
- How do you measure productivity?
- Is your team satisfied with the productivity measuring tool?
- Is your team satisfied with the planned time for milestones?
- Do you have small milestones you can’t deliver?
- Do you have a high rate of project delays causing budget overrun?
Strategic & Cultural Aspects
- Does your organization encourage an agile approach?
- When was the last change initiative you did? Was it approved and executed successfully?
- How regularly do you engage your customers on what you do?
- What is your main communication tool?
- Do you balance your portfolio between different types of projects?
- Do you measure the social, economic, and environmental impact of your projects?
- What is the project ranking method you are using? Why?
- How regularly do you change priorities?
- What policy governs the priority criteria?
- Who is involved in the priority criteria?
The PPM Implementation Journey: Challenges and Strategic Solutions
The questions above highlight over a hundred potential challenges during Project Portfolio Management implementation and ongoing Portfolio Management. Management, often overwhelmed by operational demands and urgent tasks, cannot address all these issues effectively on their own. They frequently engage specialized external parties to assist with implementing PPM processes, policies, and governance.
However, a common trap organizations fall into is the belief that this transformation should happen instantaneously with existing resources and teams.
Key Considerations for Successful PPM Implementation:
Organizational Maturity Assessment
Implementing PPM is a complex process that demands careful consideration of the organization’s current maturity level. Rushing through stages without proper assessment places considerable strain on the organization, often resulting in an inefficient system that is overly complicated and difficult for teams to adopt and utilize effectively.
Phased Approach with Pilot Projects
The optimal solution involves first conducting a thorough study of the organization’s current state and needs. Subsequently, create small pilot project portfolios using available tools. This allows for iterative learning and adaptation, minimizing disruption and building internal confidence.
Comprehensive Training and Strategic Resource Enhancement
Teams must receive proper training tailored to the new PPM processes and tools. Additionally, new resources should be strategically hired to introduce fresh perspectives and raise internal competition. However, it is crucial to safeguard these new resources from potential resistance or undermining by established team members.
Leadership Commitment and Internal Ownership
While external expertise can be valuable, the most effective solutions for organizational maturity development involve internal change. This requires unwavering commitment from management to embrace the change and a deep understanding from staff regarding the challenges and benefits of delivering an effective PPM implementation plan, processes, policies, and governance.
Conclusion: PPM as a Cultural Transformation
In conclusion, Project Portfolio Management is not merely a set of tools or processes; it is fundamentally a cultural change that demands the organization’s unwavering commitment and a realistic understanding of its maturity level. Rushing the implementation process with existing resources and teams, without proper preparation, can lead to a failed system.
A careful study of the organization and its specific needs, including the strategic use of pilot project portfolios, comprehensive training, and the integration of new resources, is crucial for successful PPM implementation. By adopting a thoughtful, phased approach, organizations can build a sustainable PPM framework that drives strategic value and fosters continuous improvement.