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As a discipline, project portfolio management (PPM) has been relatively slow to mature, often seen as the remit of the IT function rather than a truly enterprise-level practice. And it is not yet an end-to-end process, with organizations applying some elements, such as portfolio planning and resource management, but with few using PPM to track and manage initiatives through from inception to retirement. Those that are able to do so derive significant benefit from it. As digital initiatives expand, business functions are taking on more responsibility for their own use of technology, and a greater proportion of project activity is shifting away from the IT function and into the business. This is matched by a move away from a command-and-control approach in IT, and in this context, PPM practices must evolve to meet the needs of the modern business and its digital project portfolio.
Digital projects are often dynamic and variable by nature, with “fail fast” as a common principle, so we should expect to see less predictable project patterns that will require greater flexibility. Approaches such as Agile, Lean, and DevOps mean that project teams have very different compositions, and will follow different processes. For DevOps in particular, PPM will need to explicitly extend out into deployment and become an end-to-end process. We will also continue to see increased convergence of lifecycles across PPM, new product development, innovation management, and engineering, all of which share common attributes and require a flow of common information.
One of the biggest issues for PPM is that despite these changes in project methodologies, portfolio review and decision-making cycles are overly long, with some still working on a quarterly, six-monthly, or even annual basis. Another disconnect arises from a lack of integration between portfolio management and strategic business planning, which typically take place as two separate exercises, making it difficult to set digital projects in a wider strategic context.
We therefore recommend that organizations review and look to develop their PPM methodologies at all levels. The first phase involves planning and the need to define a strategic road map and vision for digital transformation, together with a framework for digital innovation. This is a fast-moving and disruptive market, and the best-performing organizations build digital capabilities rather than working on isolated projects – i.e. they are more systematic in their approach. Part of this involves benchmarking your existing digital capabilities and mapping out the technology portfolio, taking into consideration what the organization needs to do to create a robust digital platform.
The next step involves prioritizing your investments, and while this is a core function for PPM, digital transformation adds a further dimension because it also involves working out the optimal set of digital capabilities that best fit your overall strategy. The key point here is that if you don’t have a clearly defined list of priorities, it’s easy for companies to lose track of that overall objective and get lost in a set of disconnected projects. An effective PPM methodology can therefore help you evaluate each initiative for its strategic alignment, and for its economic impact and feasibility.
Finally, organizations must become more flexible on project methodologies to meet the characteristics of digital projects, which generally include a wider range of external inputs and collaboration requirements. It’s also important for project managers to ensure that learning is shared across initiatives, and that there is bidirectional feedback between digital projects and the overall digital strategy.
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