Growing up: From Engaging the Business to Coping with Change

Growing up: From Engaging the Business to Coping with Change

Project prioritization remains one of the PMO’s key opportunities to generate business value.

The PMO remains under real pressure to generate business value within the limits of modest budget growth. To manage with this challenge, PMOs need to ensure the business project portfolio reflects a balance of projects that maximizes benefits for the enterprise.

The challenges PMOs face in balancing project portfolios include:
  • Understanding project value and generating consensus 
  • Keeping up with changing business needs 
  • Aligning the project portfolio with business’ priorities 

These challenges were mirrored in a finding from a Forrester Research survey of PMOs, who listed poor sponsorship, politics, project coordination, misalignment between business strategy and the investment pool as the key hindrances to project prioritization.

Project Portfolio Management Lifecycle

Even though such challenges exist, many enterprises have made real progress in removing these obstacles.

Project prioritization solutions help PMO shops guarantee that decisions are made by senior business leaders using “real knowledge”— enhancing the enterprise’s acquired and collective knowledge and experience with a framework for basing good decisions on objective business criteria.


Portfolio Prioritization is an Ongoing Process

Managing the Project portfolio and prioritization of project investment is a continuous process that requires regular stakeholder involvement and engagement with benefits from built in mechanisms that systematically react to business change. Ensuring the project portfolio is always full with strategically aligned investments is of key importance to helping PMOs impact their organizations. To make this happen, the PMO needs to impose a project prioritization methodology that reflects the organization’s strategic business and monitors changing situations throughout the project portfolio lifecycle.

Exceptions Monitoring
 
GOAL ALIGNMENT WORKSHOP
The initial step in this approach is to understand the business priorities and linking them to the enterprise’s project investment portfolio. To ensure the objectives of the senior-most business leaders are aligned with business strategy, thus ensuring that all projects compliment overall business strategy and that project performance is tied to business value.

Toyota Motor Company Heat Map
As business strategy can change and is not always exact enough to create detailed drill down plans, The Guardian Life Insurance Co. uses a strategic priorities ‘heat map’ to illustrate business goals and start a conversation about project investments. Still to be considered is the task of converting business requirements into projects. Morgan Stanley places all business processes on a “value/maturity matrix” differentiate highest-value opportunities. By doing this, a pipeline of high-value projects that cuts across the enterprise comes into play. If the PMO is well situated, it will harness insight because of cross-unit visibility to identify opportunities. Additionally, by using this process, the PMO is well positioned to come to the table with a solid project list grounded in the business’ priorities.

Linking Project Opportunities to Strategic Priorities

Some companies use a generalized business case to minimize politics. Depending on an enterprise’s strategic business objectives, they may build a solution that moves the project portfolio toward required project types. Don’t get sidelined. Seek out the highest-impact investments by focusing on ‘strategic’ and ‘high potential’ projects.

Knowing Where to Start
Build a grid that aims to reduce effort on the highest and lowest value projects to make time for the hard decisions.

The approach minimizes impacts to the prioritization process while it helps establish agreement. To ensure the project portfolio is widely accepted and accurate make sure that business stakeholders are included in prioritization process. To keep up with mapping the portfolio companies meet quarterly, or more often to maintain an on-going view.

Keeping Up with Need

Even the best prioritization processes implemented need to keep current with change. Over the course of a given year, changes will alter a project’s business case. Put in place mechanisms to ensure project investments are current. Meet regularly to reassess the portfolio. Provide a regularly updated risk register to serve act as a warning indicator. Reevaluate projects at regular intervals with required sponsor sign-on.