Many organizations fail to thoroughly assess the alignment of projects and programs to strategy, often because they are busy managing many projects and programs at one time.
Our 2015 Thought Leadership Series demonstrates the value of project portfolio management for maintaining alignment between an organization’s investments and business strategy. The reports, which provide executive-level insights, were developed in collaboration with the Economist Intelligence Unit (EIU), The Boston Consulting Group (BCG) and Deloitte Consulting LLP.
Project portfolio management — or simply portfolio management — is defined as the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations.”
To examine how companies fare with their portfolio management, this study, done in collaboration with EIU, draws on a global survey of more than 500 senior executives from a range of industries plus interviews with 10 corporate leaders and other experts. Sixty percent said improving management of strategic projects is a “high” or “very high priority” including 77 percent who consider portfolio management similarly important to strategy implementation. One expert describes portfolio management as “absolutely critical.”
Although companies and experts recognize the importance of portfolio management, far too few firms do it well or even meet basic goals in this area.
To gauge the impact of superior portfolio management capabilities, we collaborated with BCG to capture the often neglected but very important view of portfolio managers. The objectives of this study were to:
• Assess the current level of project portfolio management maturity among organizations;
• Track correlations between maturity and operational and financial performance; and
• Explore tactical measures such as how decisions are made to support, prioritize, adapt and potentially terminate projects that are no longer on course to achieve objectives.
The findings confirm that portfolio management maturity correlates to organizational success. Companies that execute portfolio management well differentiate themselves through processes, leadership and culture.
This report reveals the leading practices of organizations that realize the benefits of portfolio management. Developed with Deloitte, it’s a synthesis of lessons learned from the C-suite and portfolio managers.
Effective portfolio management is essential to implementing an organization’s strategy. It’s the glue between strategic intent and the initiatives that deliver the strategy. It’s also a practice that every organization can do well.
Ensuring that senior leaders have a clear and early warning of problems and their related impacts is essential, so they have sufficient time to course-correct and reallocate resources. And to accomplish that, portfolio managers need the right resources and support to balance the conflicting demands among portfolio components.