Strategic View

2017. A new year. A new plan. In the project portfolio planning world, the start of a new year often brings in new strategies, new priorities, and an update to the project portfolio. As we finalize our plans for this new year, we would like to take some time to examine trends in Project Portfolio Management (PPM) that can help successfully achieve goals for the new year and beyond.

Trend #1: How to Use PPM to Drive Business Transformation

The term “business transformation” became quite popular in the last few years. Before we examine the relationship between PPM and business transformation, let’s identify what we mean by business transformation.

Scott Anthony, in his article ‘What Do You Really Mean by Business “Transformation”?’, identified “three different categories of effort” that are encompassed by the term. (Source: Harvard Business Review) The first category Anthony identifies is “doing what you are doing, better, faster, or cheaper” which is the most basic level of business transformation as you are not changing what you are doing, but how are you doing it. Digital transformation fits into this first category as companies use new technology to help solve the same issues they have had all along.

The next level is “doing what you are currently doing in a fundamentally different way.” In other words, you still have the same goal but you are going about solving the problem in a completely different way. The example that Anthony provided is Netflix. Their goal is still to entertain people, but instead of renting DVDs to customers through the mail, they are now providing that entertainment via online streaming as well as creating their own unique shows and movies.

The third category of business transformation that Anthony identified is a complete strategic transformation, changing the entire goal or product or adding a completely new segment of the business that has nothing to do with the core segment. One such example is Google moving from being simply a search engine to building driverless cars.

PPM could drive your Business Transformation

Every company has some element of business transformation to manage. As technology moves forward at a lightning pace, businesses have to keep up and ensure they are choosing the right solutions or they won’t make the cut. Even if the company’s transformation only fits into that first level and they are simply trying to find a better way to do what they have been doing, it is important that the transformation is managed well and that it makes sense for the business in terms of strategy, financially and also in terms of resource capacity. This becomes even more important for the second and third levels of business transformation when you are fundamentally changing how you achieve your goal or completely transforming the business as a whole. So, this is where PPM comes into play.

In the past, many thought to use PPM solutions to simply do what the name implies: manage project portfolios, so in terms of business transformation, they used their chosen PPM solutions to manage that transformation. In this age of digitalization and automation, these solutions themselves are constantly transforming and improving. Therefore, now they are suitable not only to manage business transformation but PPM can now help drive that transformation.

One way that PPM drives business transformation is by helping you to think more strategically. For instance, through your PPM solution, you may realize that the projects that you think are the most important do not fit into what you have defined as your corporate strategy. This may lead you to believe that they are the wrong projects, but perhaps they are the right projects and the strategy is wrong. Once you have determined that vital projects are outside of your current strategy or that these projects are not feasible based on current resource capacities, you can take a deeper look and you may decide to change your strategy and transform your business on a large or small scale.

In his article, “Gartner Insights: PPM’s Role in Driving Real Business Transformation”, Vlad Vecerzan reviewed this topic from Gartner’s PPM & IT Governance Summit in Orlando, Florida. (Source: Projects at Work) He stated that “it’s imperative for PMOs to move beyond the tactical and eventually adopt an enterprise PMO mindset to gain transparency across all enterprise portfolios.” This is another way that PPM can help drive transformation—through transparency. The right PPM solution will allow you to make better decisions to effectively transform your business by giving you transparency into what is going on across your entire enterprise. When you have a “comprehensive view into all aspects of the projects and portfolios [you] manage across the business, [you] begin to gain the insight to drive smarter and more timely investment decisions,” writes Vecerzan. You can use PPM methodology and technology to gain a good understanding of the connections between projects and investments across your enterprise portfolio. You will learn how different portfolios affect resource capacities and resource constraints across your organization, which, in turn, will help you make the right strategical decisions to efficiently manage your budgets and resources across your enterprise and better transform your business.

Trend #2: Lean PPM

Lean PPM is a relatively new term in the world of PPM, so what exactly does it mean? You may already be familiar with lean manufacturing, which can be defined as a systematic method for the elimination of waste within a manufacturing system. “Essentially, lean is centered on making obvious what adds value by reducing everything else.” (Source: Lean Manufacturing Times) This same principle can be easily applied to Project Portfolio Management—reducing or eliminating waste within the project portfolio and focusing on what provides the most value. In Gartner’s articles, “The Lean PMO: Promoting Lean Practices from Project Initiation Through Closure” and “Activist PMOs and the Struggle for Lean PPM”, they encourage PMOs to use lean practices to focus on the most valuable functions of the PMO. “Cut waste wherever it exists—from projects, project management processes, the PMO itself and from the portfolio. Leveraging lean management techniques, run an internal program to reduce waste on projects, in project management processes and in the IT project portfolio.” (Source: Gartner)

Lean PPM System

The Lean PPM process begins with strategizing, which is often an on-going process to ensure the company remains current in an ever-changing business world. Project proposals and ideas are collected. During the design phase these proposals are evaluated, compared and prioritized. A key essential of Lean PPM is Resource Management, which is often times very complex, accomplished ineffectually or even completely overlooked in traditional PPM. During the design phase, it makes sense to plan your portfolio not only according to budgets and strategy, but to also take a close look at resource capacities and resource constraints that could arise if the proposed projects are executed. The project portfolio is then designed, decided upon, communicated and adapted as necessary. During the execution phase, the progress of projects is analyzed, conflicts are resolved, action is taken as necessary, and the portfolio is reviewed and adapted as necessary.
For companies that choose a Lean PPM process, then it only makes sense to also choose a Lean PPM solution. A great thing about many PPM solutions out there is that they often have an abundance of features. They have most of the functions that you need, plus many that you don’t know about or will never use. What is not so great is that this same abundance of features results in a high cost of maintenance as well as substantial time and money spent to keep the data up to date. What if you don’t need or even want all of those features? Is there a simpler, faster and more efficient way to accomplish what you need without the excess? That is where a Lean PPM solution enters the equation.
A Lean PPM solution supports the Lean PPM process. It has just enough of the functions that you need to successfully manage your project portfolio, thus reducing complexity. You can also be set up and ready to go with your Lean PPM solution in a couple of weeks (or less!) instead of waiting months for a full implementation of the more complex systems. (Stay tuned for future articles outlining how Meisterplan is a Lean PPM solution that can help you accomplish Lean PPM).

Der Schritt Collect im Lean PPM System
  • Capture demand

  • Specify demand

  • Initiate evaluation, fast track, critical issues

Der Schritt Design and Decide im Lean PPM System
  • Evaluate proposal

  • Compare proposals

  • Prepare portfolio suggestion

  • Make portfolio decision

  • Communicate decision

  • Adapt/detail projects

Der Schritt Execute im Lean PPM System
  • Capture progress

  • Resolve conflicts

  • Identify need for action

  • Review and adapt portfolio

We hope that this article has given you something to think about and even steps to take to make 2017 even more successful. Feel free to contact us if you have any comments or questions about Lean PPM or how Project Portfolio Management can help drive business transformation. And we wish you the very best for 2017!

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