In many organizations, a portfolio management strategy was traditionally reserved for IT projects. Keeping a handle on the various technology initiatives—which are often proposed by different lines of business and haven’t always undergone an assessment by the IT group before receiving approval—proved challenging. Companies found that managing projects at a portfolio level was a useful way to counteract the lack of information sharing and Wild West mentality that sometimes accompanied these technology efforts.
But that’s all changed, and more businesses are finding tremendous value in applying a portfolio management methodology to projects in other disciplines. To create a better understanding around the benefits of project portfolio management for non-IT initiatives, we put together some of the primary elements behind the shift toward a more holistic approach to portfolio management.
Among the most impactful factors is the rapidly accelerating pace of business. Companies no longer have the luxury of time when it comes to assessing, launching, and executing strategic projects. Products and service offerings are expected to reach the market faster, customer expectations are pushing product development to move more quickly, competitors have access to the same efficiency-enabling technologies and workflow tools everyone else is using, and the need to drive revenue and capture sales in a highly dynamic market are all causing companies to aim for project completion in less time. A portfolio management strategy enables fast-moving organizations to assess their non-technology projects, determine potential impacts across the wider organizational base, and position initiatives more effectively against the other efforts the business may be pursuing.
There’s less room (and tolerance) for inefficiency in today’s hyper-competitive landscape. And with business intelligence and data analytics platforms increasingly available to companies of all sizes, there’s strong pressure to minimize waste at every turn. As a result, right-sizing has become a business imperative. Resource allocations are scrutinized more closely, with executives reluctant to approve staff or funds without first seeing that opportunities to consolidate, streamline, and coordinate labor and material purchases have been maximized. A portfolio view of resource distributions across all strategic projects enables leadership teams to keep their organization’s workforce and budget allocations lean.
The nature of work is evolving, leading to changes in how project teams procure, schedule, pay for, and manage the different components that go into executing each initiative. Craft labor, for example, has become more specialized in many ways. Remote work was growing in prevalence before the pandemic and is now the default arrangement for many organizations. Regulatory mandates are increasing in complexity and scope. Automation has refined many workflows, affecting task dependencies and other aspects of project execution. With so much that is new and different, a portfolio view provides a way for executives to maintain awareness of what’s going on as well as what’s on deck, along with resource constraints, funding challenges, and timing issues.
Looking across the numerous operational changes, technology advancements, and workforce shifts businesses have experienced, it’s little surprise that financial expectations are also different than they used to be. The ROI from one strategic project may fund progress on other initiatives down the road. Delays in achieving key milestones and poor fiscal management are just two weak points that can lead to a diminished ROI, leaving the company with less cash to execute downstream projects and fewer opportunities to drive revenue in the future. The viability of the business can sometimes be jeopardized if these problems aren’t identified and resolved early. By implementing a project portfolio management strategy, risks can be identified earlier and more effectively addressed, ensuring the company’s project investments deliver the expected rate of return every time.