The following content is taken from the whitepaper, “Portfolio-Driven Performance: The 7 Process Areas That Drive IT and Business Results,” written by Jerry Manas. To make it more easily accessible to you, we are giving it everlasting life here on the blog.
Today’s organizations face enormous challenges to get more done without spending more. Rising costs in a tough economy have led to tightened budgets and reduced workforces. On top of this, globalization, mergers, and outsourcing have resulted in greater complexity and a more dispersed set of stakeholders. This lack of resources amid growing complexity must also be addressed in an environment of intense competition. As a result, innovation and agility are becoming more vital than ever as organizations fight to compete in today’s marketplace, something attained through portfolio-driven performance to improve project delivery.
This triple threat of less resources, more complexity, and intense competition would be challenging enough, but then we must add the change factor. We are living in an era of relentless change, and nothing escapes unscathed, not the economy, technology, politics, markets—nothing. All these changes and more impact organizations, and only the most adaptive and innovative will survive.
None of this is going away any time soon.
Indeed, doing more with less is the new standard. And as organizations show they can meet expectations with fewer resources, they will be expected to continue to do so. But, under this strain, how does an organization remain innovative and productive? How can it remain adaptive in the face of constant change?
Most organizations have strategies, or a strategic plan of some sort. All have financials. All have operations, generally consisting of projects, services, applications, products, and the processes that manage all those components. Yet, very few have visibility into how these components impact one another, and instead look at them as isolated parts. When change happens, chaos ensues.
Organizations that take an integrated approach are in a much better position to adapt.
Information Technology is a crucial part of facilitating this integration. In this compilation blog series, we will discuss how adopting portfolio management methods across the 6 process areas, IT departments can help businesses keep their strategy, financials, and operations aligned as change happens.
This approach takes active participation across IT and the businesses, but it can pay dividends. Indeed, managing these vital process areas in an integrated fashion can enable organizations to not only survive, but to thrive in the face of continual change.
Introduction: The Portfolio-Driven Approach
A portfolio-driven approach involves creating and managing a set of portfolios (i.e. prioritized groupings) for each major component in an organization’s ecosystem. For example, the following types of portfolios can be created and maintained:
- Strategic Portfolios: including missions, objectives, strategies, and tactics (such as defined programs and products)
- Investment Portfolios: funding agreements at the departmental, strategy, program, product line, and product levels
- Execution Portfolios: including project and resource portfolios
- Product Portfolios: categorized product lines, products, releases, and roadmaps
- Application Portfolios: software applications vital to business operations
- Idea Portfolios: ideas that are generated via an Idea Campaign, and then vetted and structured into genuine opportunities
Categorizing the components of an organization in this way enables a set of processes that can help keep them integrated. For instance, it can address questions such as:
- How much is this application really costing us, considering the related ongoing improvement projects and the services to maintain it?
- If we shift our staffing for our two most vital programs, how will it affect our overall strategy, and what other efforts will it impact?
- What impact will there be on our product’s commercial release date if the projects underway to develop it are running late?
- If we change strategies, what products, projects, applications, and services will it impact?
- If we trim the budget for this quarter, what will be the downstream effect on our projects, our products, and ultimately, our strategy?
- What is it that all these people in IT are doing? Are our resources being used wisely?
- What are all our projects and services contributing to the business financially, either in cost savings or revenue potential?
These are just a few questions that typically plague organizations and answering them is rarely easy. Often, there’s a flurry of communication to various departments, each with their own set of spreadsheets or systems, and often their own assumptions, understandings, and language. Sometimes, there’s no data at all to support the decision.
In the remainder of this series, we will propose combating these problems using a portfolio-driven approach that weaves through the following areas:
- Strategic Planning and Funding
- Aligning Strategy and Operations
- Managing Demand and Capacity
- Managing Projects and Resources
- Product Portfolio Management for IT-Developed Products
- Application Portfolio Management
Together, this approach can help an organization overcome the confusion and disparity that impedes business results. Indeed, a business and IT partnership that develops mastery of these areas can create better visibility, greater cooperation, and ultimately, more informed decision-making capabilities, even when change happens—especially when change happens.
Stay tuned for part two, where we will investigate the first process area—strategic planning and funding. To learn more, visit www.planview.com, and register for a free demo of one of our solutions today!