Implementing an IT PPM Solution?
4 processes that provide the most "bang for the buck"
Applying portfolio management techniques gained early adherence in IT in the 2000s. Today, IT departments still turn to project portfolio techniques to focus the organization's resources on the IT programs, projects, and applications best aligned with strategic enterprise goals. But how?
1. Use Business Cases to Assess the Largest Demands
The ability to assess a business case is at the foundation of all modern project portfolio techniques. By collecting financial and qualitative data you will be able to compare projects and initiatives according to their merits.
In the infancy of PPM, assessments leaned heavily on financials. Today, common practice includes consideration of qualitative criteria. To reduce subjectivity, qualitative data is collected with multi-user scorecards: a rare case where "garbage in" provides you with "quality out." A single score might be off, but in aggregate, scoring will be stronger.
Our customers often collect data such as ROI/(e)NPV as well as assessments of risk, technical feasibility, etc. IT organizations adopting Agile processes are increasingly tracking duration/effort and cost of delay to compute a WSJF (Weighted Shortest Job First).
Given sufficient data, project forecasts and assessments can be machine- assisted. However, artificial intelligence remains accessible only to the few companies that have been able to hoard large volumes of meaningful data.
2. Allocate your Budget
Budget management and how budget is allocated among themes (or buckets) is straightforward. Each project (or potential project) is assigned to one theme or bucket. Meanwhile, the level of funding allocated for each bucket bounds the maximum total cost of the projects that can be approved within the bucket. This ensures that your project pipeline aligns with the strategic objectives of the organization.
But how do you rank projects? This is critical because ranking within each bucket informs which projects get selected. Here, we have two challenges. First, there isn't just one way to rank projects, since you may aim for a variety of desired outcomes, including "cost reduction," "business improvement," "new offerings," "maximum ROI," etc.
Second, given a constraint (for instance the budget), the first set of projects that rank the highest under the "cost reduction" objective that fall within the budget may not be the best set of projects. What if a different set of projects combined captures more value?
This is where a second set of techniques kicks in, which entails the ability to compare portfolio scenarios against multiple objectives (where a scenario is a collection of projects that are optimized for a given objective). The selection of projects within each scenario can be manual to factor in "mandatory projects," or you can leverage advanced algorithms such as Pareto Optimality or Multi-Constraint Computing.
3. Make project execution agile
Over the past decade, project management has changed dramatically within IT. Waterfall project management practices - think Gantt, PERT, and heavy scheduling - are diminishing. Agile is now king - think teams, kanban, features, and stories. You may even consider adopting Scaled Agile practices for your very large programs and projects.
But a new methodology doesn't mean the essence of managing a project has changed. Albeit, often via a more decentralized style, the Project Management Office (PMO) still ensures that the right practices get adopted, fosters maturity improvement, facilitates communication and provides insight throught consolidated data.
For a Project Portfolio Management (PPM) solution, flexibility is key. Organizations may want to keep Agile process solidly decentralized and let teams decide on tools and practices. The PMO can rely on interfaces between local software and the PPM solution.
4. Drive your resource activity
Resource management is a complex subject. At the portfolio level, an effective technique is to focus on making sure that the projects selected don't lead to the overcommitment of resources. This is not unlike the budget constraint, but the challenge is that lead levels may vary through time. So not only do we need to take care not to overcommit in the short term, we also need to find solutions if we need more resources in the mid- to long-term time horizons.
This leads us to the variable of time. It's important to be able to time-shift projects to find some room for new initiatives that take priority. This is where an integrated solution make sense. Instead of manually dealing with disconnected data and time, an integrated solution enables a quick and visual what-if assessment. And you're able to repeat the exercise often and become more and more confident in your subsequent decisions.