If your organization spends months on the annual planning process, it’s likely you are familiar with this scenario: After setting the annual plan, inevitable change happens…new information becomes available… projects are organically delayed and new projects are added without any prioritization or revisions to the annual plan or portfolio. There is general confusion over how to improve plan accuracy, or it isn’t considered at all.
Does your organization understand how these changes affect the overall project portfolio? Are the changes going to result in a more balanced portfolio, increased innovation or improved business capabilities? Can you keep up with new information and evaluate the changes in the portfolio that leads to prioritization, alternative scenarios, to make trade-off decisions when faced with constraints?
As a CPA, I understand that the more often you assess actuals and update forecasts, the more accurate your hold on your financials are. Now, as a product manager, I talk to customers daily about forecasts for both financial and resource forecasts and the importance of an updated forecast for in-flight projects and new demand to drive effective portfolio management.
The ultimate takeaway is this: Companies need to shift from annual planning to continuous planning to drive agility and drive effective portfolio management.
I am not the only one passionate about this subject. According to Ventana Research study “Next-Generation Business Planning,” with highlights featured in a newly published eBook: Improve Agility Through Continuous Planning, regular reviews to the portfolio plan mean you can adapt to change, evaluate project status and priority, track performance, and adjust schedules and resource capacity forecasts. They recommend to revisit the plan often to support the changing needs of the business and new market demands.
The eBook also shines a light on the fact that while companies can plan projects accurately, many do not. Why?
Here’s some of the findings:
- 91% say improving plan accuracy would be valuable to their company
- 56% say improving accuracy is the main reason to change a company’s planning process
It appears we want to change the way we plan, but we don’t know how to get started. In order to change these stats, shift the way you plan. I believe that this works best when there is an active dialogue between the business functions including finance, the PMO, and other lines-of-business. To support this communication and investment visibility, companies need the right technology to support their continuous planning efforts.
Many of the Planview customers I have been talking to are making a shift to a continuous planning model leveraging bottoms up and top down capabilities in Planview Enterprise. One company that forced their PMO to integrate updated projects plans with new demand in order to prioritize and adopt a continuous planning model cut costs by 10% across the board. That’s real money.
Ventana Research findings provides validation to the value of the PMO highlighting how it can leverage continuous planning to create a partnership with finance and the business to drive prioritization and effective portfolio management for agility that will lead to an increase in on time projects with lower costs that add value. Take a look for yourself, download eBook, Improve Agility Through Continuous Planning.
I’d like to hear from you. How are you currently planning? How do you adapt your plan when change happens?
Ventana Research is the leading benchmark research and advisory services firm providing insights, best practices and research-based benchmarking of people, processes, information and technology across business and IT functions worldwide.