THE IMPORTANCE OF PROJECT PORTFOLIO VISIBILITY FOR MODERN ORGANIZATION
PPM considers the big picture of all projects grouped together; past, present, and future – and calculates the optimal prioritization and sequencing of projects to maximize return on investment. While we often theorize projects as discrete, independent units – the truth is that we rarely manage projects in isolation. The reality is that they’re inextricably interconnected. The question is by how much. For example, you have 50 projects on the go, and they’re all overlapping, some of them for the same client, all using the same resources, some of them you’re doing to “keep the lights on” – others just for pure innovation.
But as an owner, CEO, PMO, project or program manager, how do you know if you’re making good decisions? How do you know if you’re focusing your teams and their projects on the right things? We’re all asking the same questions. What projects should we be prioritizing right now? How can we focus our resources most efficiently? How can we run these projects concurrently, and profitably? It is important to align the portfolio with the corporate strategy and have a “bird’s eye view” on how the concept is brought to life. Good governance will ensure that projects are aligned to one strategic driver and that decisions are made purely on merit and on time. Project portfolio visibility is the characteristic, that aids in doing so. It gives all team members, regardless of the role, the ability to see all work done in one place completely transparently.
Project portfolio management that provides visibility facilitates the executive decision-making process by providing accurate information and a realistic perspective on the projects. “Visibility” is an elusive term. It means that every team member is aware, whether the project is “on track” with the overall priority to deliver a project on schedule and within budget. It also means that decisions as to which projects should be continued or shut down can be better determined. It means that PPM team controls and able to ensure that supply and demand are matched both to the wishes of stakeholders and capabilities of the enterprise. This is particularly important either when resources are involved with more than one project, and there is a need to prioritize or where project performance is under review. Inefficient and ineffective resource allocation will result in missed deadlines and the failed deployment of strategy.
Problems to be solved
Collecting information can be time-consuming, but it is the main process in the functioning of a business. By having reliable, complete information about the company creates its image, affects the construction of all its further activities. And the cornerstone is not the amount, but the correctness and relevance of the data. Until now, in many small and medium-sized enterprises, the process of gathering information is a challenge. And even more challenging may seem the creation of a transparent system to analyze and disclose the data. The difficulties of accepting the new age tools, like PPM platforms and project management tools causes negative emotions from both ordinary workers and qualified specialists. By building the management process on already established principles and methods, it is sometimes difficult and supervising for managers to use new trends and innovations in the field of IT technologies in their system. But the solution to the problem of systematization of the information flow is the automation of a project management portfolio.
Portfolio Transparency – the first step to a well managed and successful business
Economic development determines the basic conditions for the competitiveness of enterprises. And a bright predominant fact is the use of a PPM system. The introduction of the PPM system will provide an opportunity to display data, work with which will simplify the task of selecting key factors for each interested person. The use of PPM platforms in conjunction with other enterprise-wide systems will make information open and create a single data space. This will help identify problem areas, make the business transparent, and therefore more competitive and investment-attractive.
With many competing projects and priorities stretching resources in different directions, PPM software that provides transparency and visibility is the only thing standing between us and bad project decisions which offer nothing but the poor return on investment. The transparency of the project portfolio in business has always been one of the hottest topics for discussion when it comes to the implementation of electronic accounting and data management systems. Some companies strive to be as transparent and open as possible by publishing the salaries of their employees and their motivation systems, others, on the contrary, are not in a hurry to reveal all the secrets of their “inner kitchen.”
The choice of how much to disclose is always yours to make. However, the transparency within the is equally important and a total “must” in today’s economy. Lack of transparency in portfolio management is one of the factors hindering the development of the company and its effectiveness. By sharing the structure of your processes with your employees, you help them understand how the company works, what happens in it, and who is responsible for what business process. Moreover, transparent business processes help you, as a manager, to create competent duties and requirements for employees and automate part of the management of the organization.
Project Portfolio Management Visibility
Before we go into the analysis of the elements that make a portfolio transparent, let’s deal with the term “transparency” about the project portfolio. The transparency of a project portfolio is the ability of decision-makers to monitor, control and manage the processes to guarantee its successful completion. When a process is transparent to all those involved, it is easier for them to understand how it functions. The goal of the transparency of the process is not only to simplify it but also to draw the attention of decision-makers to the following indicators:
- Actual performance
- Regulatory indicators
- Concerns of stakeholders
When the process is transparent, decision-makers can compare actual current performance indicators with the standardly expected indicators and identify discrepancies, to be eliminated which a plan of action is developed in the future. In turn, the requirements for the process and the expectations of stakeholders will be the main criterion for evaluation. In case of discrepancies between these indicators, when developing a plan for their elimination, the responsible persons will adhere to these requirements. At the same time, the plan for changes and adjustments should not violate the transparency of the process.
Portfolio Architecture & Indicators
Consider what makes the whole process transparent and what elements it consists of. Practice shows that the most transparent and efficient business processes have a good architecture, including at least the following elements:
- Name. The short title is usually one sentence reflecting the purpose of the project.
- Description of the process. A summary of the process, two or three sentences describing the task, employees, and documents involved in the project, and its key metrics.
- The purpose of the project. Why this project is performed, and what business problem is solved with the help of it.
- Resources required for the project (finance, time – including the working time of the involved employees, documents, requests, cards, etc.)
- Process indicators. Indicators that determine the success and effectiveness of the project.
- Results. Deliverables, products, resources or process output.
These are the main, but not all possible elements of the architecture. A more detailed description of the business process can also include the complexity, duration, average number of repetitions per period, communication by inputs and communication by outputs.
These are the indicators by which we can judge how successful the business process is. You can only manage what can be measured, and business processes, in this case, is no exception. Below are the key indicators of the success of a transparent business process:
- Effectiveness. A measure of the result of a customer-friendly process. In other words, how often is the result of a business process achieved (sales, number of transactions, number of leads, etc.)?
- Efficiency. The ratio of the achieved result and the resources spent (cost of attracting a client, sales conversion, average bill, etc.).
- Quality. Customer satisfaction of the business process with the result (customer satisfaction, number of comments or complaints, number of errors, etc.)
- Performance. How actively performers work on the business process (elapsed time, the speed of execution, etc.)
- Costs of resources. What resources are spent on the execution of this process?
Using these indicators, you can easily track the effectiveness and success of your Project Portfolio.
Project and portfolio information visualization
Well-described business processes in the company will undoubtedly be an advantage and will increase their efficiency and transparency for employees. Another integral part of the transparency of Project Portfolio is their visualization. In our time of total visualization of information (infographics, presentations, reports, etc.) we have become accustomed to the fact that information is absorbed and stored faster if it is presented visually. In the US, 45% of people are visuals, and there is a tendency to increase them. Another advantage in the visual representation of Project Portfolio on the diagram is the opportunity to look at the whole process from the top. Seeing the process from beginning to end, we can easily identify its bottlenecks and potential problem areas and adjust promptly. If you have not yet visualized your business processes, we strongly recommend that you do, the result will not be long in coming. Luckily, modern software is created with multiple options for visualization of reports.
One of the vastest range of visualization option for reporting at the moment can be found in Power BI solution. However, as you might know, Power BI is not a complete project portfolio management tool. Some project portfolio management solutions are equipped with such options as well. For example, PPM Express, a complete yet lightweight solution suitable for both – small and medium business entities and large organizations. PPM Express also has build-in Power BI visual reporting options as well as “preset” reporting scenarios. Do not forget that the creation of transparent Project Portfolio in the company is teamwork. All persons involved must participate in it. By itself, the stage of creating a Project Portfolio can bring a lot of clarity and transparency to the work of the company for employees, and the management of the organization will have a solid basis for developing and improving the organization’s management system.