{"id":22591,"date":"2020-06-18T04:46:21","date_gmt":"2020-06-18T09:46:21","guid":{"rendered":"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/"},"modified":"2024-07-08T10:26:48","modified_gmt":"2024-07-08T15:26:48","slug":"single-source-of-truth-make-way-for-a-single-source-of-understanding","status":"publish","type":"post","link":"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/","title":{"rendered":"Single Source of Truth, Make Way for a Single Source of Understanding"},"content":{"rendered":"<p>In my\u00a0<a title=\"\" href=\"https:\/\/blog.planview.com\/no-time-like-the-present-finally-ready-for-a-single-source-of-truth\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">last post,<\/a> I covered the essential attributes of an effective single source of truth\u2014a consolidated, reliable source of project information. But simply collecting project details into a centralized vault is not enough for effective decision-making. Your single source of truth needs to become a <em>single source of understanding<\/em>. A single source of understanding moves beyond the (admittedly already ambitious) single source of truth to:<\/p>\n<ul>\n<li>Drive consensus on what you do and do not know about the cost, risk, and value of your initiatives<\/li>\n<li>Resolve (not just surface) disagreements<\/li>\n<li>Go beyond \u201cwhat is\u201d and highlight \u201cwhat\u2019s changed\u201d since the last discussion<\/li>\n<li>Support conversations around available options and their impacts<\/li>\n<\/ul>\n<h3><strong>Is there really a single truth?<\/strong><\/h3>\n<p>It is a cruel irony that you can create a single source of truth, but there is\u00a0<em>no single truth<\/em>. Business is fraught with uncertainty, and no one truly knows whether an innovative product will meet engineering specs, cost constraints, customer requirements, or sales expectations <span class=\"TrackChangeTextInsertion TrackedChange SCXW226472824 BCX0\"><span class=\"TrackedChange SCXW226472824 BCX0\"><span class=\"TextRun Highlight SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">or whether <\/span><\/span><\/span><\/span><span class=\"TrackChangeTextInsertion TrackedChange SCXW226472824 BCX0\"><span class=\"TrackedChange SCXW226472824 BCX0\"><span class=\"TextRun Highlight SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">a capital investment will be completed on time, stay within its budget, <\/span><\/span><\/span><\/span><span class=\"TrackChangeTextInsertion TrackedChange SCXW226472824 BCX0\"><span class=\"TrackedChange SCXW226472824 BCX0\"><span class=\"TextRun Highlight SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">or realize <\/span><\/span><\/span><\/span><span class=\"TrackChangeTextInsertion TrackedChange SCXW226472824 BCX0\"><span class=\"TrackedChange SCXW226472824 BCX0\"><span class=\"TextRun Highlight SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">its <\/span><\/span><\/span><\/span><span class=\"TrackChangeTextInsertion TrackedChange SCXW226472824 BCX0\"><span class=\"TrackedChange SCXW226472824 BCX0\"><span class=\"TextRun Highlight SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">projected <\/span><\/span><\/span><\/span><span class=\"TrackChangeTextInsertion TrackedChange SCXW226472824 BCX0\"><span class=\"TrackedChange SCXW226472824 BCX0\"><span class=\"TextRun Highlight SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">benefits<\/span><\/span><\/span><\/span><span class=\"TextRun SCXW226472824 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW226472824 BCX0\">.<\/span><\/span><\/p>\n<p>So why even bother? Because focused, productive conversations about the many possible truths drive confident decisions, and those conversations are impossible without real-time access to expert opinions from across the company.<\/p>\n<p>Happily, your repository can (and should) not only support those conversations but preserve them and trace their evolution. A single source of truth that does those things becomes a single source of understanding. A single source of understanding communicates not only what you know but how confidently you know it. That goal is achieved through tools that accomplish two things:<\/p>\n<p><em>Capture multiple stakeholders\u2019 opinions.<\/em> Let project teams, program heads, and managers provide their estimates of project risk, technology readiness, or strategic fit. Then, analyze each opportunity in light of these estimates.<\/p>\n<p><em>Express key inputs as a range.<\/em> For the most important (and least known) drivers of project value, such as market share <span class=\"TrackChangeTextInsertion TrackedChange SCXW228749578 BCX0\"><span class=\"TrackedChange SCXW228749578 BCX0\"><span class=\"TextRun Highlight SCXW228749578 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW228749578 BCX0\">for product development or benefits for capital investment<\/span><\/span><\/span><\/span>, don\u2019t use a single number. Provide a range of values and, if the organization supports it, use a simulation to see how different iterations of these uncertain values affect key business case metrics.<\/p>\n<p>If you allow these two things to happen within your single source of truth repository, you can start to identify key sources of uncertainty and manage them to reduce uncertainty and increase the probability your portfolio will produce the results you need.<\/p>\n<h3><strong>What you need to resolve disagreements (or agree to disagree)<\/strong><\/h3>\n<p>A single source of understanding helps resolve disagreements on project cost, risk, and value by storing (and reporting) key assumptions.<\/p>\n<p>I\u2019ve never seen an argument about a project\u2019s revenue forecast or a cash-flow metric like net present value go anywhere productive; shouts of \u201coptimistic\u201d or \u201ctoo low\u201d won\u2019t lead to a meeting of the minds.\u00a0The conversation needs to address the assumptions behind the metric.\u00a0If the underlying assumptions are documented in your single source of truth, executives and project teams can productively debate the assumptions\u2014rather than the numbers\u2014and their ties to the business case.<\/p>\n<p>For instance, your single source of truth <span class=\"TrackChangeTextInsertion TrackedChange SCXW172532524 BCX0\"><span class=\"TrackedChange SCXW172532524 BCX0\"><span class=\"TextRun Highlight SCXW172532524 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW172532524 BCX0\">for a product <\/span><\/span><\/span><\/span><span class=\"TrackChangeTextInsertion TrackedChange SCXW172532524 BCX0\"><span class=\"TrackedChange SCXW172532524 BCX0\"><span class=\"TextRun Highlight SCXW172532524 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"none\"><span class=\"NormalTextRun SCXW172532524 BCX0\">within your development portfolio <\/span><\/span><\/span><\/span>might capture assumptions underlying projected revenue, such as market size, market share, number of competitor products, relative product strength\/novelty, and price positioning. Similarly, assumptions about the probability of technical success for a capital investment project might rely on assessments of technology readiness, the engineering capabilities required, and the availability of vendors or subcontractors.<\/p>\n<p>The information supporting these assumptions may be structured, like a table of market attributes, or it may be unstructured and stored as paragraph text. Either way, if information is buried in PowerPoint or Word documents, it won\u2019t be available when it is needed most, to resolve disagreements about project prospects.<\/p>\n<h3><strong>The importance of knowing how we got here<\/strong><\/h3>\n<p>I\u2019m often asked how to identify underperforming projects in a portfolio of investments. My answer is to look beyond the current forecast for the project and observe whether (and how) that forecast has changed. Consider trends, not point data. Learning that project launch costs have recently tripled offers more insight into a project\u2019s trajectory than knowing those costs are $1.5 million. Knowing that a project originally positioned as a first-in-class market leader is now considered a market fast-follower is critical to evaluating its future prospects\u2014and deciding whether it merits continued funding.<\/p>\n<p>To provide this insight, a single source of understanding must provide not only an assessment of current prospects but also the ability to highlight significant changes in cost, risk, timing, and value at all levels of the portfolio. Not surprisingly, there is no single way to report variance; which method you use depends on the <a href=\"https:\/\/www.enrichconsulting.com\/2016\/02\/17\/7-views-of-project-portfolio-variance\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">type of variance and the variance context<\/a>\u00a0(project, program, or portfolio).<\/p>\n<p>Waterfall charts are a great way to highlight changes across an entire portfolio. Our customers often begin portfolio review sessions with a waterfall chart to answer the question \u201cWhat has changed since the last review?\u201d and to encourage executives to focus their questions on the projects driving the biggest changes in portfolio value.<\/p>\n<h3><strong>Nothing ever goes as planned, so what is plan B?<\/strong><\/h3>\n<p>A single source of truth can allow you to explore your portfolio, but for most strategic planning exercises, simply exploring the portfolio is not enough. Planning often requires assessing partnerships, acquisitions, and divestments in the context of the current portfolio. You also need to be able to understand the implications of specific projects, programs, and portfolio successes and failures.<\/p>\n<p>The ability to arrive at this understanding\u2014without resorting to a labyrinth of one-off spreadsheet models only you will know how to interpret and extend\u2014is the final difference between a single source of truth and a single source of understanding. A single source of understanding enables real-time scenario analysis with a calculation engine that has seamless access to all portfolio information. And those scenarios can be preserved for future consideration. Rather than being forgotten on staff laptops, they can be saved within the system and reliably recalled weeks or months later, when business cases and their options are revisited. Scenarios representing acquisition decisions that come to pass can be folded into the portfolio base case with a few clicks.<\/p>\n<h3><strong>Portfolio management is a journey<\/strong><\/h3>\n<p>Whether you\u2019ve built a robust single source of understanding at your firm or you are still chipping away at the challenges of creating a complete, up-to-date single source of truth, I hope you\u2019ve identified some valuable improvements you can make to your current process.<\/p>\n<p>Learn more about how <a title=\"\" href=\"https:\/\/www.enrichconsulting.com\/rd-portfolio-management-with-eap\/\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Planview Advisor<\/a> can provide the cornerstone of your single source of understanding.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In my\u00a0last post, I covered the essential attributes of an effective single source of truth\u2014a consolidated, reliable source of project information. But simply collecting project details into a centralized vault is not enough for effective decision-making. Your single source of truth needs to become a single source of understanding. A single source of understanding moves&#8230;<\/p>\n","protected":false},"author":242,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[36,7549],"tags":[],"class_list":["post-22591","post","type-post","status-publish","format-standard","hentry","category-product-development","category-strategic-planning"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.8 (Yoast SEO v26.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Single Source of Truth, Make Way for a Single Source of Understanding - Enrich Consulting<\/title>\n<meta name=\"description\" content=\"In my\u00a0last post\u00a0I covered the essential attributes of an effective single source of truth\u2014a consolidated, reliable source of project information. 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But simply collecting project details into a centralized vault is not enough for effective R&amp;D decision making.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/\" \/>\n<meta property=\"og:site_name\" content=\"Planview Blog\" \/>\n<meta property=\"article:publisher\" content=\"http:\/\/www.facebook.com\/pages\/Planview-Inc\/89422974772\" \/>\n<meta property=\"article:published_time\" content=\"2020-06-18T09:46:21+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-07-08T15:26:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/blog.planview.com\/wp-content\/uploads\/2019\/10\/planview-logo-social-media-400x400.png\" \/>\n\t<meta property=\"og:image:width\" content=\"400\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Dr. Richard Sonnenblick\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Planview\" \/>\n<meta name=\"twitter:site\" content=\"@Planview\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dr. Richard Sonnenblick\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/\"},\"author\":{\"name\":\"Dr. Richard Sonnenblick\",\"@id\":\"https:\/\/blog.planview.com\/#\/schema\/person\/475112b0203e554249899b3887eeb93e\"},\"headline\":\"Single Source of Truth, Make Way for a Single Source of Understanding\",\"datePublished\":\"2020-06-18T09:46:21+00:00\",\"dateModified\":\"2024-07-08T15:26:48+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/\"},\"wordCount\":1126,\"publisher\":{\"@id\":\"https:\/\/blog.planview.com\/#organization\"},\"articleSection\":[\"Product Portfolio Management\",\"Strategic Planning\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/\",\"url\":\"https:\/\/blog.planview.com\/single-source-of-truth-make-way-for-a-single-source-of-understanding\/\",\"name\":\"Single Source of Truth, Make Way for a Single Source of Understanding - Enrich Consulting\",\"isPartOf\":{\"@id\":\"https:\/\/blog.planview.com\/#website\"},\"datePublished\":\"2020-06-18T09:46:21+00:00\",\"dateModified\":\"2024-07-08T15:26:48+00:00\",\"description\":\"In my\u00a0last post\u00a0I covered the essential attributes of an effective single source of truth\u2014a consolidated, reliable source of project information. 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