Organizations rely more on digital transformation as disruptive technologies enable businesses to interact with customers in new ways. These advancements force firms to adopt new business transformation strategies.
Still, they cannot manage this degree of digital transformation using standard project and program management methods. Instead, organizations should align project portfolio management with digital transformation to keep pace with ever-evolving technologies.
What is Project Portfolio Management?
Project Portfolio Management (PPM) is a centralized project management system that enables businesses to manage their initiatives under one roof. These projects typically include strategic and supporting programs and the vehicles used to connect those programs to company operations.
What is Digital Transformation?
Digital transformation integrates digital technology into all elements of a business. It radically changes how organizations operate and provide added value to clients. It is a cultural shift requiring firms to explore innovative solutions and challenge the status quo.
The Evolution of Project Portfolio Management Through Digital Transformation
Project Portfolio Management continues to evolve in many ways because of digital transformation. Three of those are as follows:
PPM Now Expands Beyond IT
While PPM began as tools and methodologies to support IT departments, businesses eventually realized they could apply its features more extensively across the enterprise. As technology evolves, so do customer expectations, and companies are continuously under pressure to provide faster and more seamless services.
Organizations can adapt these tools and approaches to measure on-time and on-budget delivery and focus on maximizing value and alignment to drive more substantial business outcomes. They can also use PPM to improve governance in various sectors, including research and development, capital projects, and mergers and acquisitions.
Portfolios Contain More Than Projects
Organizations no longer treat PPM as a series of end-to-end projects delivered independently. Instead, they view it as a fluid vehicle delivering solutions that constantly modify and enhance products. As a result, PPM must be adaptable and capable of performing multiple tasks, including projects, products, services, and other investments that contribute to organization success.
PPM Promotes Agile Delivery
As mentioned earlier, digitization fosters the expectation that businesses do everything faster. They are always looking for ways to improve delivery speed.
Many organizations traditionally adopt a “waterfall” approach to project execution. This sequential process means that business-related involvement occurs at the project’s initiation during requirements collecting and at the end for project testing and launch. However, as IT and business operations integrate, this paradigm has shifted. Businesses are now employing agile methodologies and cross-functional teams that promote an iterative approach to fine-tuning products and services as demands change.
Six Steps to Ensure Successful PPM Implementation
Organizations might consider the following six steps when adopting PPM:
1. Secure Stakeholder Buy-In
Executive support is a crucial first step and should start at the organization’s top. As such, project managers should identify key stakeholders and present the initiative and its objectives early in the process.
Topics should include:
- Defining PPM and its objectives
- How it benefits the business
- The short and long-term objectives
- The impact (if any) on projects
- How PPM integrates with current processes
- Whether or not this requires an investment in new technologies
2. Build the Implementation Team
Organizations should develop their implementation team after gaining executive support. The team should include key stakeholders, technical personnel, and portfolio managers.
3. Collect Information
Next, organizations should analyze existing and proposed projects and cross-reference their objectives with firmwide strategies. This information allows teams to determine critical data points, including:
- The total cost of all projects
- Number of current and upcoming projects
- Number of projects per strategic goal
- Projected return on investment (ROI)
- Estimated project schedules and timetables.
4. Model the Portfolio
After acquiring the necessary data, the PPM team should build a new portfolio by changing the status and priority of existing projects. These changes include ceasing duplicate tasks and initiating relevant but temporarily suspended ones.
The objective is to create a well-rounded portfolio that meets organizational requirements while providing an appropriate risk-reward ratio.
5. Test and Modify
Before launching it company-wide, PPM teams should test the portfolio before a small audience – ideally, crucial stakeholders. This group can provide feedback as needed, and the PPM team can refine the process to ensure a smoother roll-out..
Teams might also consider enlisting a user group to test new software or processes as stakeholders provide feedback before the official launch.
6. Manage and Monitor
Once projects begin, the PPM team will continue managing and monitoring them, including tracking performance to adjust and recalibrate the portfolio when necessary. These adjustments might include relocating resources and re-scoping.
A Successful PPM Initiative and Digital Transformation Go Hand-in-Hand
Digital influences are changing the essence of PPM and forcing it to adapt and serve augmented purposes. Understanding and anticipating these digital trends can be crucial to ensuring PPM continues to add business value. These organizations will have a competitive advantage over companies that do not digitize and improve efficiency and productivity.
Request a quote today and learn how Cask can help you align your project portfolio management with digital transformation to maximize business services.