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Business-driven project portfolio management strategies for a successful IT transformation

By Mohammed Safder, Worldwide Lead, HP IT Strategy Consulting Services

 

mohammed_safder_badge.jpgToday’s IT transformation initiatives are primarily driven by the business vision to achieve agility, simplicity, sustainable growth and operational efficiencies. The technology trends supporting this business vision are cloud, hybrid delivery services, mobility, social media, security and data analytics.

 

In my previous blogs (see the list at the end of this post), I mentioned that IT transformation is not a one-time effort. In fact IT transformation is a journey, and different organizations are at different stages of the journey. Most organizations are struggling today with multiple ongoing projects, and the frustration is mounting because there are too many projects to deliver without enough time, resources and funding.

 

When you’re dealing with a large, complex organization with a global business operating model, the project portfolio management (PPM) function is very critical to the success of IT and business transformation initiatives. It must be carefully planned and established early in the transformation journey to deliver the desired business outcome.

 Project planning.png

PPM is a very broad topic. However, in this blog I will start off with the central issue related to business and IT alignment, and then briefly cover how the project portfolio management function can address key IT transformation issues. Essentially, I would like focus on a few important aspects and best practices to strategically drive IT transformation initiatives by using proven PPM strategies to deliver value to the business.

 

In most organizations, IT is trying to meet everyone’s business needs. There is decentralized decision-making. Business units independently manage the projects.

 

IT PPM means different things to different people, but briefly, the IT project portfolio management function must ensure that both IT and the business are aligned and working together right from the strategy to the execution of the IT transformation initiative – to identify, assign value, select, prioritize, execute and report on the benefits delivered by the projects that maximize the return on the company’s investment in IT.

 

Project portfolio management is not about asset management or inventory management. It is about managing a group of projects in a cohesive and collaborative manner to create alignment with the business goals and objectives.

 

Portfolio management must follow certain guiding principles, such as:

 

  •  It must be a top-down approach.
  •  It should provide a portfolio view, meaning every project must be included as a part of the projects portfolio, as opposed to running and funding project(s) individually.
  • It must include centralized governance to drive standards and to oversee the execution of the project portfolio strategies and guidelines.
  • It should leverage a single planning calendar shared between business and IT and aligning with the fiscal year and funding availability.
  • It should provide a dashboard view of projects in execution for the tracking and reporting perspective.

Project portfolio management must establish:

 

  • Executive sponsorship/ownership – the executive council approves the portfolio of projects to be delivered.
  • Financial credibility – projects must be selected based on a cost-benefit analysis
  • A single version of truth – decisions and approvals must be made based on the integrity and accuracy of data collected from multiple sources.
  • A results- and metrics-driven approach – establish a process to consistently monitor the results being delivered by the project(s) and their alignment with the organizational metrics.
  • Key stakeholder buy-in – identify the key stakeholders from both the IT and business sides; communicate effectively and get buy-in and approvals as required.

Some key portfolio management strategies are:

 

  • Optimized allocation: understanding projcect benefits, selecting a balanced portfolio, and aligning investments with company objectives
  • Effective resource utilization: understanding demand, matching skills with needs, and aligning resourc allocation and delivery timing
  • Strategic planning agility: rapid response to changing needs; scenario-based planning capability
  • Synchronized execution: understanding business drivers, prioritizing business needs, and delivering on time.

 For companies that are embarking on the data center transformation journey and that need help with PPM, HP Consulting Services offers the HP Data Center Strategy and Business Case Service, which provides a unified approach to data center facilities as well as IT Infrastructure and application projects within your organization. The Data Center Strategy Service puts you on a path to developing strategies and project roadmaps, which lead to the design and implementation steps, transforming the way you manage your data centers.

 

HP uses a time-tested framework for developing the data center strategy and financial business case that gives you the information required to thoroughly understand your current and future-state IT and facilities requirements. HP’s delivery framework provides a comprehensive analysis of the current data center framework and facilities environments. The illustration below outlines the Data Center Strategy methodology as modules that help you develop a project portfolio roadmap and financial business case.

 

HP Data Center Strategy and Business Case Service.jpg

 

 

Related blogs:

Beyond cost cutting: how to deliver real value to your business

Beyond improving efficiencies and automating business processes: deliver real value to your business

Beyond infrastructure convergence: how to deliver value to your business

Comments
pmhut(anon) | ‎02-24-2014 07:33 PM

Hi Mohammed,

 

I agree with you that the role of the PPM differs from one company to another. In fact, the PgM, the PMO, and the PPM can have very different roles in different companies.

 

I've seen PgMs taking the role of the PMO, I've seen the PMO taking the role of PgMs and PPMs (if I'm not mistaken, Erickson follows this model), and I've seen companies where the PPM doesn't exist.

 

I wish we can have a global definition of each so as to avoid confusion.

TS_Guest | ‎02-26-2014 03:22 PM

from Mohammed Safder

 

Thank you for your comment!

 

Every organization is unique in its own way in terms of organizational size, maturity, culture and business climate. All these factors will have to be considered when it comes to project portfolio managment. Certainly, one size doesn't fit all.

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