Effectively managing a project and meeting deliverables on time and budget is a challenge. When organizations are juggling dozens or hundreds of projects simultaneously, it’s a big challenge. Juggling your resource management, materials, and conflicts along with change orders and an ever-growing list of new projects to add takes a skilled project manager.
Overview
It also requires you to look beyond individual projects to evaluate your entire strategic portfolio management (SPM) strategy for the long term.
While 2020 saw a huge number of projects stall, 2021 has seen a significant uptick in activity, especially in the areas of digital transformation, business strategy, organizational adaptability, and approach to innovation. The management strategy teams that are producing consistent high-performing results are those that are adapting to this enhanced urgency in SPM.
Intelligent strategic portfolio management is key.
This requires that you align projects with strategic objectives and use real-time data to monitor all of your organization’s projects. When you connect strategy and execution with SPM tools, you have easy access to the data you need to excel and can position you and your team members for better outcomes in terms of successful projects.
That’s just one of the benefits of incorporating a formal SPM process into your business strategy.
The Benefits of Strategic Portfolio Management
Here are 10 benefits of utilizing an SPM strategy.
1. Better Project Controls
On average, construction projects run over budget by 16% and that doesn’t take into account the skyrocketing lumber, steel, and material prices we’ve seen in 2021. For IT projects, the picture is even more frightening. The average IT project exceeds its budget by 27%. An astounding one in six projects exceeds budget by 200%.
Better project program tracking and active management of strategic project portfolios create better project controls. When project controls are integrated into your project portfolio management software, you can more effectively control costs and ensure projects stay on track. Budgeting, forecasting, and performance tracking all become easier to manage.
2. Better Decisions
When you have the tools and data you need, you can make better business decisions to stay aligned with your organization’s strategic goals. Evaluating your entire project portfolio helps you see how potential projects can fit into your portfolio or disrupt current projects.
SPM allows you to see instantly where you are on every project you are managing and which ones are meeting their goals.
3. Enhanced Risk Management
One of the fundamental parts of a project manager’s job is to manage risk. It takes skill to balance the need to reduce risk in projects while accepting enough risk to drive projects to completion and increase stakeholder value.
SPM allows you to evaluate risk continuously before and during project execution to make any necessary adjustments.
4. Increased Project Delivery Schedules
Besides suffering cost overruns, 85% of construction projects fail to be completed on time. For IT projects, 70% miss their scheduled deadlines. Lack of funding, poor budgeting or forecasting, resource conflicts, and misalignment of goals can all play a part in delaying projects.
SPM allows you to more accurately plan business cases for your projects and manage every aspect. The Project Management Institute reports that using SPM tools, such as the Cora SPM platform, can improve delivery and performance by about 30% and reduce project failure rates by 60%.
5. Single Source of Truth
In many organizations, data can live in silos or get stuck in spreadsheets with formulas that don’t connect or update in real-time. Project updates get shared in email, text messages, or by phone and often don’t quite make it into the data that’s being used to manage projects.
Out-of-date, inaccurate, or missing data can derail projects. Transparency is essential for making good decisions and your team need the most current data to make good decisions.
Strategic portfolio management practices, with SPM tools, can create a centralized database for all of your project information so it can be readily analyzed. With real-time and accurate data, you create a single source of truth that everyone can rely on.
6. Keep Projects Aligned with Goals
Of course, one of the big reasons you want to initiate a project portfolio management strategy is to keep projects aligned with business objectives and goals. SPM provides the framework to review potential projects and business cases to ensure alignment.
When changes are requested, being able to view the impact of such changes on an individual project and the entire portfolio, helps you foresee conflicts.
For example, let’s say you are asked to juggle the schedule to bring one project to a conclusion faster. By projecting the impact using your SPM tools, you realize that to do that you will have to pull resources from another project which delays its completion. Which project is more important to keep on schedule and best aligns with company goals? An SPM strategy gives you the insight you need to make an informed decision.
7. Optimizes Resource Allocation
Perhaps the only thing worse than not having the resources you need when you need them is paying for staff and labor to sit around and wait until they’re needed. SPM helps you schedule resources efficiently to minimize downtime and wait time while helping you better plan to have the resources available when they are needed.
Efficient resource allocation keeps projects on time and costs under control.
8. Better Communication
Another benefit of implementing an SPM strategy is to foster better communication with key stakeholders. When you use a digital platform as a centralized database for data collection, you can easily share files and organize your workflow.
Depending on the access levels you grant, executives and team members can view real-time data down to the granular level on projects so they are better informed. This cuts down on the number of phone calls and emails asking how things are progressing and reduces the number of surprises. When you are transparent about project timelines, budgets, forecasts, and schedules, it keeps everyone in the loop.
When managing multiple portfolios, SPM tools make it easier to demonstrate the impact of one project on others and deal with requests that may be outside of the project scope.
9. Deep Reporting and Analysis
By tracking everything within your SPM system, you can monitor, measure, and analyze what’s taking place. You can maintain governance over projects and use the insights you gain to predict the best opportunities for future potential projects.
10. Increased Return on Investment
SPM is all about maximizing your return on investment (ROI). Keep costs under control, utilize resources efficiently, and make sure projects conform to meet company goals. SPM Planning helps you keep costs in check and assign resources to the projects that generate the largest return on investment for your organization.
According to the Project Management Institute’s 2021 Pulse of the Profession report, companies have a 75% success rate for projects. That’s an improvement over recent years but still means one in four projects fail.
With Cora SPM, we guarantee a return on investment. Cora SPM can help you achieve measurable results. Some of our clients see results such as:
- 68% reduction in systems used
- 50% reduction in project cancellations
- 33% lower project management office (PMO) staffing
- £600k ($819,960) in efficiency savings in just two years
Contact Cora today to learn more about the benefits of strategic portfolio management and how we can help your organization.
