The real drivers of enterprise project portfolio delivery effectiveness

Projects might be: the way that organizations deliver new products or services, internal business changes and improvement initiatives, new technology implementations or everything an organization does (because their business is about delivering assignments for clients).

An organization’s portfolio of projects can have a direct impact on its cash flow and its longer term health. The selection, redirection or postponement of projects within a portfolio can all contribute to the objectives of the business but they are all subject to the reliable delivery of results. Organizations unable to guarantee reliable delivery are diverting cash and resources into areas that actually destroy value.

We have observed that there usually isn’t much guidance on the prioritization of prescribed practices and usually no direct matching on how those practices can help deliver an organization’s specific improvement goals. Equally, the focus of the practices is generally on the ‘harder’ elements (organization, process and standards) with insufficient emphasis on the ‘softer’, capability aspects (the really difficult stuff – insightful intelligence, strong decision making, political influence and personal credibility). 

There are, therefore, many things an organization could do to improve and assure delivery. The real question is, what should they do?

One can always assert what the relationships are between practices and outcomes. The question we sought to answer was what the data tell us about the relationships statistically.

Analysis of over 100 responses to our Project Portfolio Delivery Effectiveness diagnostic survey enabled us to establish the relationships between the:

  • Maturity of practices – the quality of how things are done
  • Effectiveness of outcomes – what organizations get as a result.

The relationship between the various practice domains and outcome measures, as well as the relative importance of the variables are illustrated in the diagram below.

While all of the practice domains had at least one statistically valid relationship with at least one of the outcome measures, the most significant determinants of overall effectiveness were portfolio, resource and financial management. Gaps in these areas should be of most concern to an organization.

The others impact specific outcomes and are often enablers of these other domains – so should not be ignored. They might be characterized as necessary but not sufficient to drive overall performance.

There were some surprises. For example, we would have expected: governance to have had a stronger relationship with accountability, workforce management to have had a stronger relationship with supply capacity, and project management to have had a stronger relationship with both delivery reliability and stakeholder satisfaction. In fact, relationships in these areas do exist, however, they just aren’t as statistically significant based on the existing data set.

Two main conclusions can be drawn from this:

  • Horizontally – if an organization has a deficit in an outcome measure, this table indicates which practice domains might be examined for improvements
  • Vertically – where maturity gaps exist in portfolio management (managing the workload), resource management (staffing projects) and financial managing (funding projects), these should be addressed as a matter of priority.

Tim Pare

http://www.linkedin.com/in/timpare

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