Drive Portfolio Management Success with Proven Value Realization Approaches
This month I will have the pleasure of returning to the Project Management Institute (PMI) Spring Symposium sponsored by the Great Lakes Chapter. For those of you who may not be familiar with PMI and the number of symposia that occur throughout North America (and the world) this time of year, a spring symposium is perhaps the largest gathering of regional practitioners focused on portfolio, program and project management disciplines. This year the Great Lakes Chapter Symposium theme is “Retool for Success in a Changing World.” Indeed the world is changing and arguably no time has ever been more relevant given the step-wise gains in technology and business capabilities bombarding executives, directors, employees – and their customers who demand unique customer engagement.
My presentation entitled “Drive Portfolio Management Success with Proven Value Realization Approaches” gets to the heart of how best to manage portfolio investments across business and technology – and why organizations appear to be reluctant to do so. Based on working with strategic customer program (SCP) customers of SAP America for the past year, the rationale is as diverse as the number of business models are customers represent. An underlying rationale though appears to be – it’s tough to do. The discipline and capabilities to manage value across a portfolio may or may not reside in the organization, and the appetite to engage service providers to provide them can be quite limited. Education and experience is needed to guide an organization best to integrate project management, program management, and portfolio management cycles around value management principles and tasks. This helps to drive idea flow to business outcomes, as shown in the following illustration:
Program and project managers are well-advised to consider this approach for two very important reasons. First, through an active value management program focused on key business outcomes, programs and business initiatives they support are protected through value-drivers, facts and key performance indicators (KPIs). These keeps the program business relevant, protects it from de-funding actions, and safeguards the program – and its broader portfolio – to fruition. The second reason is that when market forces and business drivers change (as they always do), there is a mechanism in place to make adjustments to protect value as well as to adjust as needed to new value opportunities. Without this flexibility, organizations basically sit behind the wheel of the car, driving down a curved road while looking out the rear-view mirror (since most metrics are dated) and unable to turn the wheel. It’s no wonder that portfolios without active value management discipline can experience benefit erosion of levels up to 50% or higher. This can greatly frustrate business stakeholders, program and project managers, and advisers who might be charged with supporting them.
I’ll post more on SAP Services around the work we are doing to support active Value Management approaches. I do hope you will join me for the PMI GLC Symposium on April 24 in Farmington Hills (MI). If you live outside of Michigan, consider attending one of the many PMI Symposia and events this spring season. For my personal invitation and why I participate over the years in these programs, please enjoy my YouTube testimonial from 2010.