Project Portfolio Management as a Process
Traditionally, PPM has operated as a lifecycle process for all projects that the business wants to work on. Most organizations don't find it difficult to generate ideas. However, they often do have trouble identifying and implementing quickly those ideas that are best for their business. Consequently, PPM is often cited as a major problem that needs to be fixed. As organizations continue to rely on information technology (IT) as an enabler for today's businesses, and an area that receives a large and growing capital investment, PPM has become a focus for many CEOs, CFOs and CIOs.
There are three main challenges to the traditional approach and how it impacts IT and ultimately the CIO.
First, like most business processes, checkpoints and gateways exist to move a project along its path. But traditional Product Development Life Cycle (PDLC) models don't necessarily ask all the right questions at the right time when it comes to really describing and articulating the value of the given project to the business, it's customers, shareholders and it's market.
Some would argue that the steps in the process to vet ideas and describe them are enough to justify the intended spend but even then, prioritizing the projects in the order of the highest value is a challenge for many organizations. Understanding the problem that the project will solve, the benefits it will bring and the dependencies it will have are simple questions to ask but fairly difficult to always answer correctly especially when an organization needs to then prioritize them.
Second, we need to identify who the stakeholders are in the process. The CIO or a representative from his or her team are not always engaged early enough in the portfolio management process. For some time now, we've live in a technology driven business climate. Technology will be the primary platform for making successful projects a reality.
If this is true, then why is that IT not at the table when the idea is being discussed? This is the opportunity to weigh in on how technology and IT as a partner to the business can provide value to making the project successful. It can help the business prioritize better and bring transparency to the process itself so that potential challenges and risks that are so common in developing the project, are discussed upfront. This is much preferable to the traditional approach where IT is required to provide an early estimate but is destined to ask for more time and money because it was not able to influence early decision-making.
I've seen one recent example of an organization that has essentially integrated IT into the business and they are now viewed as a single organization or entity. In this way they work simply as one team where the burden of separate lines and boundaries has been replaced by a focused group of stakeholders.
Third, research over the last twelve months has shown that PPM tools are being looked at by companies to help drive value and manage change and not just as the platform for running projects. This is encouraging but it still doesn't solve a major problem; people run the process. Regardless of the reasons why companies might invest in a PPM tool, their people need to work differently than they are today if the requirement is to extract more value and better change. Lean portfolio management models introduce improved methods to streamline how an idea is vetted and how all ideas are then prioritized.
Teaching people how to leverage a lean approach to portfolio management with the right stakeholders, asking the right questions and looking for a better set of indicators will then help maximize the investment in a PPM tool. This challenge of relying on a tool or platform vs. improving the people was evident in recent years with the exponential growth of agile project management tools.
Once it became evident that agile practices would make a significant difference in how applications were developed, tool vendors abounded and companies bought thousands and thousands of licenses only to finally hit the wall and realize that while the tools brought change to the process, people didn't.
Keeping these three main challenges in mind, I believe it is imperative that the CIO, as a role, needs to quickly evolve into something more than just the information technology executive. The following five points below touch on why portfolio management and the CIO need to be become more intimate.