Portfolio Management extends beyond the traditional project lifecycle
Today, more than ever, CEOs and their executive leadership teams must focus on their bottom lines to ensure future sustainability. The chainsaw approach to cutting budgets is long gone; executives now need to move beyond tactical portfolio management to the next level by using strategic portfolio management as a strategy execution mechanism.
Enterprise project management (EPM) solution provider, UMT Consulting SA, has introduced Strategic Portfolio Management, a set of practical tools and processes for expanding strategic throughput to close the gap between strategy and results.
Strategic Portfolio Management ensures the translation of strategy through a closed-loop, strategic portfolio management process that anticipates capacity constraints and risks. It determines the current state of the enterprise and the initiatives, programs, and projects required to achieve the organisation's strategic objectives. Furthermore, it also incorporates senior executive perspectives and what c-level executives want from their portfolio, program, and project managers.
Strategic Portfolio Management is thus the mechanism for strategy engagement and delivery and supports the organisation's achievement of strategic, risk and financial objectives within the required parameters of cost and time with optimal resource allocation. It is the continuous process of selecting and managing the optimum balanced set of portfolio investments to realise maximum business value. Most importantly, it considers the portfolio costs, risks, and returns of all projects within the portfolio as well as the tradeoffs between them.
RPM Systems Corporation chairman Stephen J Garfein says on average, company strategy is executed to plan only 56% of the time. “There is enormous room for improvement in strategic throughput, especially between an average organisation, where strategies are executed according to plan only 56% of the time, versus high performing organisations that achieve an 83% strategic throughput.”“The performance is measured on whether projects are aligned to the organisation's business strategy; whether the organisation works on the right projects, whether project resources are allocated optimally, whether projects are completed on schedule and on budget; and whether the organisation's strategies are executed according to plan,” he explains.
UMT Consulting's Strategic Portfolio Management specialist Dr Marthi Pohl says the portfolio must be aligned to company strategy, balanced for levels of risk and return as well as provide optimal business value. “Strategy needs to be engaged through proactive corporate portfolio management. Strategic Portfolio Management is the place where an organisation's purpose, vision and culture translate into performance and results.”
She points to conflicting direction in project investments decisions as a major concern. “All projects across all investment categories (eg, growth and sustainability) cannot be evaluated with the same set of criteria. More concerning is that investment allocation percentage across categories is not targeted in advance, but is rather an outcome of project funding. Furthermore, return on investment potential may be considered for an individual project investment, but the impact on the portfolio as a whole is ignored.”
“Correlation/dependencies between investments is ignored whilst quantified non-financial benefits analysis in business cases is almost non-existent. Resource utilisation may drive decisions rather than a business objective focus. More importantly, managing the company's tolerance for risk is lacking and portfolio risk is not addressed and dependencies not managed,” she explains.
UMT Consulting CEO Pieter Meyer says executives must ensure strategy is effectively translated into tactical execution through programs and projects, while ensuring these initiatives are delivering the intended value. “At a strategic level, they need to access and analyse cost, risks, benefits and trade-offs across the total investment (Capex and Opex) within an accepted investment framework with defined categories and appropriate mix in order to select, prioritise and balance.”
“At a tactical level, executives need to manage their spend in accordance to the strategic level decisions, ensuring real business benefits and optimising business performance, and also giving feedback to strategic level,” he concludes.
For more information, contact UMT Consulting on (012) 345 3518 or visit http://www.umtsa.co.za.
UMT Consulting SA
UMT Consulting SA is the largest project, program and portfolio management solutions implementation partner in South Arica and has serviced more than a 100 of the country's leading organisations with its offerings. UMT Consulting SA recently concluded a BEE transaction whereby the Notsi Group owns a 25% shareholding in the ordinary share capital of the company. The company is equipped with sound staff values, capacity to deliver on its promise, practical knowledge, and it has a BEE partner that actively participates and contributes to the company's success.
UMT Project and Portfolio Management Services South Africa (UMT Consulting SA) was formed through the merger of Fulcrum Business Solutions, South Africa's leading provider of enterprise project management solutions, and UMT Portfolio Management SA, the leading portfolio management organisation.
Since 1989, UMT Consulting has pioneered the field of project and portfolio management and devised unique methodologies that, when combined with effective project management, enable an integrated link between strategy formulation and execution. UMT Consulting SA contributes to its clients' success by linking business and IT strategies to execution through day-to-day activities leading to improved performance and tangible projects delivery results.
UMT Consulting SA methodology, training, mentorship and coaching approach assist organisations successfully to deploy practical and essential project, program and portfolio management processes, templates, systems and governance solutions across their multi disciplinary divisions or departments.
UMT Consulting SA solutions that consistently help its clients build capabilities that support effective business decision-making and enhances business delivery performance. Its objective is to assist its clients in ensuring the operational delivery of their strategy through effective project, program and portfolio management.
UMT Consulting SA is a Microsoft Gold Certified partner and a Microsoft Project, SharePoint and Portfolio Server implementation partner.
According to UMT Consulting SA CEO Pieter Meyer, the time has passed to just improve on your delivery processes but to introduce a new way of collaborating between team members, program and project managers, senior managers and executives. “Organisations need to enable and revive their processes by introducing a responsibility, accountability, consult and inputs (RACI) formal governance framework to their projects environments and to use workflow that will manage the governance outputs. Role base delivery management methods will become very important in any organisation to ensure return on investments in their project delivery space.”
IT Public Relations