FIRST, WHAT ARE BUSINESS-DRIVEN PROJECT CAPABILITIES?
The diagram below outlines the relationships and flow of project capabilities within an organization when aligned with strategic business objectives.
Portfolio management focuses on the work of executives to identify, define, select, and prioritize projects. Program management is the managing of a group of projects that are related – by purpose, by department, by organization, by technology, or by some other category that makes sense to the company. Think of it as project “air traffic control.” Project management is the actual execution of the projects, and what most organizations think of when they think about “project capabilities.” Every organization does portfolio, program and project management. The question is how well.
Many companies don’t think about all three aspects and how they work together and impact each other. Often, a highly skilled and organized manager or group of managers keeps track of the projects as they see fit. They provide information to others when asked. Sometimes a shared list of projects exists, and might even get reviewed periodically. And few, if any, know whether the projects being done actually align with strategic business goals. This approach might work when a company is small and everyone knows everyone and everything, but as a company grows, conflicts with priorities and shared resources along with a lack of clear and consistent processes begin to highlight a need for improvement.
At one organization where Shepherdwise is helping to develop an enterprise PMO, a key leader recently noted that many projects are active, but only a small percentage clearly align with strategic business goals. Busy does not equal effective. Busy does not equal valuable. The new PMO will change that. As business-driven project capabilities are developed, implemented and ultimately enculturated, this organization will select and effectively execute only the projects that drive the business.
Opportunities to improve project capabilities abound – from small, simple steps that create immediate value, like collecting, statusing and adjusting all projects routinely with organization leadership, to building out a full-blown PMO.
DOES A FISH KNOW IT’S WET?
This question sums up the challenge. You have great people. You are immersed in your corporate culture, your methods – and they generally work. You may tend to think…
“If our people work hard and the outcomes are OK, then our company is doing program management just fine, right? No need for improving our project capabilities. Yeah, some are complaining of overloaded schedules, but that is normal. In fact, coaching, tools and methods will just muck us up and slow us down. And putting in a PMO is far too expensive for the value. Unless we have a major melt down, we just don’t have time to consider it.”
Therefore, unless you hit a major crisis with your projects or see a mass exodus of disgruntled talent, you rarely stop to consider whether this is an area of substantial opportunity to improve your bottom line.
HIDDEN BENEFITS EXPOSED
Over the years of acting as a PMO consultant in the healthcare IT field, and implementing two PMOs, I am still amazed at how much difference a few well placed improvements can make. At one organization that Shepherdwise worked with, over $700,000 of “hidden” value was added to the company with just three of the projects. The actual hidden value gain for all projects over a six year duration is hard to measure, but likely exceeded $3,000,000, and reversed a negative trend of IT employee dissatisfaction.
Let’s explore these not-so-obvious benefits and identify why improvements to business-driven project capabilities create the benefits so powerfully. And if you want to understand the “visible” benefits, read here.
Want to learn how to obtain these hidden (and visible) benefits? Let’s talk.