Partnering with an experienced portfolio management consulting firm to implement a proven portfolio methodology brings many benefits. One primary gain for organizations is the ability to run data-driven what-if scenarios that can help inform the portfolio analysis process and enable better business decisions.
Consider these common what-if scenarios that provide valuable insight and empower your leadership and project teams to identify the right strategic actions as well as opportunities for improvement.
What if a strategic project fails?
No one wants to experience a failed project, but it’s important to understand just how much impact the business might feel if an initiative doesn’t succeed. Running a what-if scenario will give you insight into several critical elements of project failure:
- Does the organization remain financially and competitively viable?
- Are resources sufficient to continue operations at a sustainable level?
- Do other projects fall into jeopardy? If so, which ones?
- Can linked projects continue forward with their current scope and resource allocations or would adjustments need to be made?
The understanding gained from evaluating this what-if scenario will help you identify which projects in your portfolio are simply too important to fail. Using that knowledge, you can then direct resources in the most effective way and secure the stakeholder commitment needed to drive even highly demanding and potentially disruptive projects to a successful completion.
What if a key project is delayed?
Project delays can create numerous ripple effects. Before executives determine whether it’s most appropriate to accommodate schedule delays or to take drastic action to correct them, they must first understand where impacts will occur and what the aftermath of any setbacks will look like. Working with a skilled portfolio management consultancy to run this complex what-if scenario can help sift through the multiple downstream effects of project delays and identify the key elements that should influence your team’s decision-making process. Depending on your business goals and capabilities, you may be most interested in determining effects on budget forecasts or staffing requirements. Other priority factors often include possible loss of competitive posture in the marketplace and reduced capacity to deliver products and services to customers.
What if we lose internal capabilities?
Most companies rely on a mix of in-house and external resources to execute projects across the portfolio. The loss of essential internal expertise or skills could come as a result of the departure of a key project team member or a change in regulatory guidance that limits the relevance of credentials or licenses currently held within the organization. If those key capabilities are no longer available internally, you need to know how other projects in the portfolio will be affected.
- Will multiple efforts require budget adjustments?
- Will work need to be staggered to accommodate contractors’ schedules?
- Are timelines likely to shift?
- Do you need to consider other downstream issues?
What if a project is eliminated?
Removing a project from the portfolio is sometimes a difficult decision to make. Projected near-term cost savings gained by eliminating the project could be quickly consumed without the process improvements or increased efficiencies the project would deliver. However, redirecting resources toward more impactful projects may create big opportunities to generate more revenue down the road. Running a what-if scenario gives you insight into the most likely expected outcomes and also any unanticipated effects—positive or negative—that may arise as a result of dropping an initiative from the roster. Without a good understanding of the many ways the change is likely to affect the overall portfolio, it’s difficult for the leadership team to make an informed choice on the matter.