Portfolio Management Best Digital Online practice

“Being complacent with portfolio management leads to failure with delivering expected outcomes”

PMO leaders are challenged with the disruptions of COVID-19 along with increasing demands and decreasing resources.  As a result, many organizations are seeing negative impacts.  Without integrated portfolio management, leaders do not possess the necessary visibility into programs and initiatives including interdependencies, risks and changes. With all of these disruptions, PMO leaders should consider evolving the traditional Project Management Office (PMO) to be more aligned with Project and Portfolio Management.

PMO and PPM Leaders must evaluate their organizational internal capabilities by assessing how they are applying portfolio management best practices. It is important to build out a plan to optimize the effectiveness of organizational portfolio management by reviewing the entire framework and finding practical methods for improving delivery.  Below is a list of six portfolio management best practices leaders should follow in making these changes: 

portfolio management best practices

As you look at your internal PPM practices, you will need to understand what is meant by each one.  Once you understand each portfolio management best practices, you will be able to build internal processes which adhere to them.  A good way to see success is to engage your team into researching and working together to discover gaps requiring remediation. 

1.     Identify a PPM Strategy

The first step is to identify and develop a PPM strategy.  When looking at building a portfolio management framework, it is critical that senior management is involved in the process so there is a better chance of success.  The main goal should be to align PPM with Strategy so the right investments are being made.  For that to happen, you will want to develop a framework that facilitates communication, prioritization, and the necessary resources.  It is important that whatever strategy implemented is able to breakdown silos.  One of the challenges many organizations have is they lose sight of resource allocation and visibility into interdependencies and risks. Without proper oversight and visibility, the quality of delivery is negatively affected.  Any strategy must also include a communication plan so stakeholders and leaders stay informed.  

2.     Establish a PPM Office

Once a strategy is in place, PPM Leaders will want to develop a Project and Portfolio Management Office. The PPM Office is an evolved PMO and will focus on Projects, Programs, Portfolios, and Products and will be more than just an office of governance.  The PPM PMO will actually be more of a Strategy Office and should be organized effectively to consider the new roles that will be needed.  Establishing a PPM Office will require Senior Leadership alignment and sponsoring so the PMO has the authority to do its mandate.  There is significant pressure to PMO Leaders to show value with the PMO and by incorporating the PMO into the intake process and investments will help with showing value.  

3.    Align PPM to Strategy

Executives are requiring the alignment of PPM to Strategy as mentioned in the previous section.  There are ways to do this and you will want to establish an overall intake process that will process requests and prioritize them based upon the strategic objectives set up by the organization.  In addition, the PMO can facilitate the Business Case creation of initiatives and help drive the executive approvals of them.  If a particular initiative does not meet a specific strategic objective or is not considered regulatory or compliance, it should not be approved.  You should also have an overall committee that makes the decision on what initiatives are approved. As you look at allocating resources for these initiatives, you will be confident that the right work is being worked on by the right team members. 

4.    Implement Enterprise Risk Management

Enterprise Risk Management will include all of the methods and processes used by the organization to manage risks and seize opportunities related to the achievement of objectives.  Managing Risk effectively at an enterprise level will reduce failure and increase delivery results.  From an enterprise standpoint, risks can be avoided, reduced, insured, or accepted and the risks can be anything from financial, strategic, or operational.  In developing an Enterprise Risk Management framework, you will want to develop a process which identifies, analyzes, integrates, assesses, prioritizes, controls and monitors risks.  

5.     Perform PPM Maturity Assessment

Change Management is obviously an important part of any PPM PMO but the first thing that should be done before implementing changes is to perform a PPM Maturity Assessment.  Whenever I have been brought into an organization to run its PMO, the first thing I did was perform a PPM PMO Maturity Assessment in my first couple of weeks.  Without understanding the current state of the organization, it is not possible to create an effective Future State or planned PPM PMO.  There are several PPM Maturity Assessment tools including the PMO Maturity Cube developed by the Project Management Institute (PMI) which are available for PMO Leaders and are useful.  

6.     Invest in a PPM Tool

I always tell clients to wait until they have done the other five steps before investing in a PPM Tool.  One of the problems that you see is that some organizations see a PPM Tool as a Godsend which will by itself improve quality and delivery.  However, without the right framework, maturity, and processes in place, PPM tools will not prove the value or benefits expected.  Also, you will want to make sure and go through an RFP Process which includes Demos, Questionnaires, and Pilots.  As far as a specific tool goes, there are several good PPM tools that are highly recommended by independent researchers and users.  It is always best to find a tool that will support your organizations with existing processes instead of having the PPM tool dictate your organizational processes.  

Author
 
James Proctor – Managing Partner
 

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