Tuesday, January 5, 2021

PPM is dead, long live PPM!

 Stop scheduling your projects, manage your portfolio instead…

The acceleration of the transformation towards a digital world has been a reality for several years now. The sanitary crisis the world is currently going through with unprecedented economic and human impacts has highlighted the need for greater adaptability and responsiveness of companies.

Regardless of the sector, companies must reaffirm their vision, clarify their strategic initiatives and realign their investments.

We are entering a new era where the need to quickly align strategic vision and execution is increasingly necessary. This is not just a transitional phase to get out of this crisis but a long-lasting operating model that should be adopted to face the world of today and tomorrow. One of the levers to achieve this is the implementation of a new approach to a more dynamic project and portfolio management.

Change of paradigm

The paradigm of the previous decade on portfolio management was a bottom-up approach, favoring the creation and management of portfolio through the consolidation, the aggregation of a multitude of projects. We are now making several observations questioning this model:

  • The implementation of the operational layer of portfolio management requires a certain level of maturity, strong change management and significant effort.
  • The population of project managers is changing. Compared to "career" project managers certified and trained, the new project managers are webmasters, consultants, business analysts who move into the world of project management.
  • The activities to be managed in an organization are heterogeneous in their characteristics such as the delivery mode (Agile, V model), and are often already supported by an existing IT ecosystem (legacy).
  • The cycle times between the consolidation of operational activities at the strategic level then the operational application of the strategic realignment can be very long and lead to latency in the organization management.

Based on this observation, we can now distinguish two complementary areas in the playground of Project & Portfolio Management (PPM):

  • Strategic Portfolio Management (SPM)
  • Adaptive Project Management (APM)

Strategy and execution, a complementary approach

It is therefore recommended to implement as a first step the upper layer of portfolio management (SPM), a core-model or common denominator that makes possible to align the execution of activities with the business strategy. This layer provides a maximized and immediate ROI by dynamically declining the strategic drivers of the organization at the execution level, with a controlled effort. We therefore bring in the first place and quickly decision support tools on the overall management of activities with a pragmatic approach. The SPM corresponds to “Do the right projects”.

In addition, the management of project execution is the core of the operational performance optimization. Based on the core-model, a necessary and sufficient prerequisite, the organization is autonomous to adapt the operational management of its activities as needed, on demand, depending on its maturity and its context. The compliance with the minimum portfolio management framework gives to teams a full autonomy and flexibility to manage the execution of projects, in terms of approach, depth or tooling. Thus the implementation of a PPM does not call into question the use of backlog tools. Through the APM, we are addressing to the stake of "Do the projects right".


We are therefore in a top-down portfolio management approach, supported by market PPM solutions that support the complementarity of SPM and APM. Organizations that focus exclusively on the operational component of PPM solutions are likely missing out on its ability to drive the digital transformation of the organization.


Strategic approach & processes maturity

PPM solutions are at the crossroad of business processes: strategic management, financial management, resource management, project management, enterprise architecture, etc. The processes definition and maturity are often and wrongly shown as a prerequisite for the implementation of a PPM. This is wishful thinking because the processes are living artefacts that evolve with the market, the context and the stakes of the organization. In this time of crisis, we have never adjusted our processes as much as in the past 6 months.

We therefore emphasis on the concept of the common denominator here. Strategic portfolio management can be implemented on a set of strong markers such as an RACI, the life cycle of different types of activities and KPIs. Reporting is an essential aspect because management indicators come from the requirements for structuring portfolio management. Thus the PPM solution will anchor the management processes in the operational model and its governance.

For example a first layer of portfolio management, sufficient to dynamically and in real time support the strategic alignment of project execution, could be a simple form for each of the projects containing start and end dates, some attributes and indicators, associated with a capacity plan at skills level. This ensures the immediacy and dematerialization of the relationship between the project manager, the project office and the decision-makers. Moreover, with the flexibility and autonomy of the operational teams, we smooth out the differences in maturity at the process level.

Dichotomy of hybrid portfolio

The challenge of an approach based on autonomy and operational flexibility is even more critical as the portfolios are now mainly hybrid, resulting from the cohabitation of traditional projects (V model) with Agile products. Unlike the bimodal mode (cohabitation of homogeneous portfolios, either traditional or agile), this hybrid world requires the management, selection and prioritization of heterogeneous objects.

This cohabitation seems to be insoluble because it implies the manipulation of structurally different objects, by nature, management and content. So how do you prioritize a project versus an Agile product? Projects are driven and managed by tracking progress, products are by measuring value.

If this dichotomy is still little modelled or implemented, we can try to provide some answers. Here again, we will try to bring a common denominator to the KPIs, by bringing the two typologies into a field of co-management. For example, we will introduce progress indicators on products based on the backlog items as well as on the capacity of the Agile team. On the other hand, we will propose for V model projects to add the notion of value, possibly by dividing up the project.


PPM : from control to steering

From a rigid, uniform but unitary framework, with a bottom-up and control-oriented approach, we have moved into an opposite paradigm. PPM solutions now serve strategic objectives from which a flexible operational management and variable depth is applied, encouraging the autonomy of the teams and therefore the efficiency of management. On the other hand, they require total transparency in the management of activities.

While being less complex and less time-consuming, implementations of PPM solutions now deliver more quickly a maximized ROI and are an excellent receptacle for managing hybrid portfolios. The preferred methodology for deploying PPM solutions is to start with an MVP (Minimum Viable Product) avoiding the tunnel effect and to enhance it with successive addition of value as the digital transformation of the organization progresses.

There is no doubt that PPMs are reinventing themselves and evolving with digital transformation. While some players have already integrated various delivery and governance modes into their platforms, they will undoubtedly have to go even further by adapting to new uses through AI, bots, mobility, etc., by providing a complete and on-demand horizontal (end-to-end lifecycle) and vertical (information depth) coverage.

 

 

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