We’ve talked elsewhere about how EAP can provide sophisticated strategic resource planning and capacity planning. In those cases, the concerns were mostly around staffing—making sure key projects had the right people at the right time and anticipating and addressing staffing shortages. But other resources can benefit from this approach as well. Money, for instance—always needed and often in short supply. EAP’s strategic portfolio planning capabilities can help you figure out the best way to deploy a defined budget. The process isn’t far different from the kind of holistic portfolio review we generally advocate, but it is tailored to accommodate the strictures of a budget-driven R&D program.
Funding a Six-year Plan
One of our clients had a particularly well-defined investment cycle. Because it was federally funded, the organization worked on a six-year funding schedule. Each year, the government provided a budget detailing how much money would be available to the organization in each of the coming six years. With that information in hand, the organization’s yearly portfolio review involved prioritizing its technology initiatives and determining which ones it could afford to support given the promised funding. In the ideal process, the organization would create a plan for the entire funding period, which would then be updated and adjusted each year to account for the actual progress made by each initiative as well as changes in the actual funding, and then extended as the six-year plan rolled forward.
In reality, though, both the planning and updating processes had become seriously bogged down. Managers struggled with all three aspects of the process—collecting information about active initiatives from technologists across the organization, prioritizing the initiatives, and determining how to fit the initiatives into the funding schedule. With incomplete data, consensus on what set of initiatives to pursue was elusive, and the decision process dragged on for months. The lack of decision delayed new projects and left existing projects in a state of limbo. The impact was felt in confusion, frustration, and delays across the organization.
Clearly, a streamlined process was needed, both to ease data collection (and ensure data were complete and accurate) and to facilitate prioritization and portfolio planning. When the client came to us for project prioritization software, we created an instance of EAP specifically tailored to the organization’s budgeting process.
Aligning the Solution with the Problem
We began the customization process by developing a set of scoring criteria for the initiatives being considered. The review process began when technologists logged in to the tool and submitted proposals for new initiatives. Then, each senior manager logged in to individually review and score each proposal against the criteria, which were integrated into the interface. This meant that the final review meeting could be very focused, first on resolving scoring discrepancies and then on assessing the portfolio as a whole. As a result, it was much easier to gain consensus on a prioritization of the initiatives. The outcome of the meeting was a ranked list of all active and proposed projects.