Companies that execute more than a handful of initiatives each year have access to tremendous volumes of useful project data. Unfortunately, unless you have a process in place to make sense of all that incoming information, you’re likely to miss the most meaningful metrics. You may not have enough visibility into project performance to know where opportunities exist to do better and you won’t be equipped to spot efforts that aren’t going well in time to get them back on the right track.
A robust portfolio management methodology offers the analytic capabilities you need to evaluate the health of your entire project portfolio. You’ll be positioned to proactively address trouble spots on the horizon before they can hinder the performance of your other initiatives. The use of targeted analytics also helps you maintain better control over your portfolio’s long-term return on investment.
If haven’t yet moved toward a more data-driven approach to project portfolio management, consider where a strong analytics strategy delivers essential value.
Identify at-risk projects. Ongoing analysis of the most current project portfolio data is key to knowing if any of your initiatives are trending toward failure. Is an effort in danger of overrunning its approved budget? Will key milestones be delayed? Is a project going to miss its forecasted financial returns? Is progress falling short of meeting the effort’s primary deliverables? Using analytics across your project portfolio shows you which initiatives may be at risk so you can focus on returning them to a successful path.
Spot delays before they ripple through downstream projects. When executing linked strategic initiatives—typically a series of projects that move your organization toward broader goals—one unresolved delay could have disastrous consequences down the line. By analyzing scheduling data, you will know where the timelines for these key projects may be in jeopardy of stretching beyond their anticipated milestone dates. With that information in hand, you can then implement a plan to resolve the current problem plus ensure future initiatives remain on track to complete in a timely manner.
Drop projects that won’t deliver the results you need. A long list of initiatives can be difficult for executives to sort, prioritize, evaluate, and review. But companies with a tendency to plan more projects than they can realistically deliver need a mechanism to identify the efforts within the project portfolio that won’t result in sufficient benefits in the long run. Analytics give you a way to know how the projects in your portfolio stack up against each other. You’re able to eliminate low-priority efforts from the list and allocate the organization’s resources to projects that offer greater value. Reliable data and the right analytics strategy will provide your team with the insight necessary to know the difference between urgent and important, and you can use that visibility to make difficult—but necessary—strategic decisions that are in your company’s best interests.
Flag and resolve expenditure overruns before they can diminish your portfolio’s ROI. Every initiative begins with an expected rate of return. When more money is needed to get your project to the finish line, your ROI goes down. However, falling short on the current project isn’t just a short-term concern—future projects could also be similarly underwhelming if you don’t have awareness around how your ROI is shaping up at every stop along the way. Without good analytics, you won’t know that costs are getting out of control and today’s issues could continue to snowball. Routine analysis of your project spend and the assessment of interim financial metrics will enable you to quickly address potential budget overages before your ROI collapses.