How PPM can improve strategy deployment
Launching projects and initiatives to drive revenue and achieve business goals is common practice, but less so is implementing project portfolio management (PPM) to decide on which projects to undertake, then drive through and monitor, in order to achieve strategic objectives. When done correctly, PPM focuses effort on improving strategy deployment.
Many organizations have large numbers of change initiatives running in parallel, addressing a wide range of factors. Deregulation, globalization, emerging markets and rapid technology innovation all create challenges and opportunities to which businesses need to respond. And that response requires continuous change across all aspects of the business, including people, processes, organization and technology; for example, mergers, acquisitions, offshoring activities, IT outsourcing and cost-reduction initiatives.
The aim is the “efficient frontier” where resource usage maximizes the expected return - in other words, the right combination of high economic value and high strategic alignment.
Managing and leading this kind of change is about the ability to cope with the competition, deliver strategy effectively and deal successfully with complexity.
Having the right strategy in place helps, providing it is executed properly. But making sure the corporate plan is carried out effectively is no easy task. To achieve this, directors should consider PPM.
Put simply, PPM involves managing the process of translating the strategy and objectives into the right projects and then focusing the execution of these projects on the delivery of overall strategic objectives. When implemented correctly, PPM helps managers to prioritize effort on those projects that have the greatest impact on achieving strategic objectives.
The decision to implement PPM is often based on whether it helps fulfil an organization’s business objectives. When done correctly, the project portfolios satisfy specific corporate goals that contribute to an organization’s overall strategy.
While it sounds enough, putting PPM into practice is a tough task. Management has to make sure that each project will clearly deliver against a strategic objective. Its next job involves clustering the initiatives into portfolios to manage them effectively and maximize efficiency. It then has to decide which ones take priority and the level of resources that should be dedicated to each.
Completing each stage is critical to achieving success: wrong moves can prove costly, but execute PPM properly and management will reap the rewards.
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