Theoretical Project Portfolio Management (PPM) meets reality - Opportunities and ideas from practice for more effective PPM
Companies in transition
The last few years have shown: the global change and the - also thanks to Covid - strongly accelerated digitalization force to rethink and act flexibly. In an increasingly complex environment, companies that want to scale and grow cannot avoid using work management and portfolio solutions to answer a key question:
How do you make the right prioritization decisions to realize desired business outcomes?
After business goals are known and strategies are worked out, a project/portfolio tool (PPM tool) is then used in most companies of a certain size to start the 'right projects' and then execute the 'projects correctly'.
Decision for PPM Tool
Already at the decision for such a PPM tool, we can see the first big difference:
Clear specifications for software tool: Clear specifications are developed - mostly based on current business processes - in order to then select a software and adapt it to the processes.
A good example is project portfolio management, this is often performed in different organizational units/functions and should involve many stakeholders.
Decision for software tool: A software tool is decided upon, the standard of which should then define and drive new processes in the company. Let's take a project gate review as an example: the fields of the tool - like material costs - have to be filled in by the responsible persons (in this case by purchasing) - if this is not the case, the project will not pass the gate.
Both approaches can be right - depending on the situation!
Better solutions thanks to PPM tool
The motivation to introduce something new is often driven by concrete weaknesses in the company or in the business processes. The PPM tool then addresses these points with the goal of establishing better solutions.
After the decision for a PPM tool is a big step, with many changes, one would like to keep - understandably - all options open for the future. Here we see the next differences in the introduction or use:
A large, comprehensive PPM tool is introduced, but due to its complexity often only individual modules are used.
Here is an example: the existing PPM tool consists of 12 modules:
Manage Idea, Develop Products, Implement Projects, Manage Portfolios, etc. However, only one of them is used, namely "Plan Resources", and it is used more or less as a controlling tool. The question of whether project portfolio management is carried out in the company was answered with "YES", because after all one has a PPM tool...
In this case, the complexity and size of the tool prevents its full use and thus the potential is not exploited.
A key opportunity for more effective PPM is the realisation that the use of the other modules will enable the core question to be answered: "How do you make the right prioritisation decisions to realise desired business outcomes?"
PPM tools are introduced specifically for an area, function or region, often with deliberately limited functionality. In the first step, important projects, resources and essential metrics should be implemented in the system, while other areas can be added later. A simulation function for all planned projects for the next years, with all metrics, does not have to be used immediately and can be introduced when the tool is running solidly. In this scenario, it is important to find the right balance between content, process and the right areas. Consistent use and expansion will then also lead to a more effective PPM.
An important factor that is central and often underestimated is us - the people!
Often people talk about the features, capabilities and of course the cost of software. Dashboards promise clear representations of information in a PPM tool. However, they only work if the tool is used uniformly by everyone and all data and information is filled/used equally, constantly and permanently.
To ensure this, departmental and functional boundaries must very often be overcome. This requires the understanding that everyone works together on projects - this is often only possible with a cultural change and close support from the change and transformation manager.
So what helps a company to make its Project Portfolio Management (PPM) more effective?
- During/before implementation: definition of the right scope and selection of the appropriate tool.
- During use: critical analysis of existing modules and processes, identification of potentials that are not yet used - continuous improvement.
- External view: neutral external analysis and comparison to other companies.
In all 3 areas AdEx Partners has extensive experience from many projects. Are you interested in an exchange about this? We are looking forward to your call or mail.
"There is nothing as useless as doing efficiently what should not be done at all."
With our holistic approach and our experts from different disciplines, we help you to shape and successfully implement your transformation. We help you to see the big picture, but also to take the right next small steps. Often small changes already have a big impact.
Feel free to contact our Trusted Advisors today. We look forward to talking with you.