According to the most recent Gartner study (Gartner Magic Quadrant for PPM May 2019),
By 2023, 80% of organisations will have an enterprise project, programme or product management office (PMO).
As the individual focus might be different, reflected by the name itself or the scope of services provided, the commonality lies in the word “enterprise”. This is a shift in the marketplace which started not that long ago and is continuing. At the same time, it is only fair to admit that strategic management disciplines such as Enterprise-wide Portfolio Management, stretching from strategy definition to strategy execution with an emphasis on choosing the right investments, are still developing themselves.
- an integrated set of strategic processes and arrangements
- that together enable the most effective balance
- of investments in change and other activities.
What is of equal importance, is to determine what Enterprise-wide Portfolio Management (PfM) is not:
- Extension to Managing Successful Programmes/PRINCE 2, PMI
- IT focused
- Tool driven
There are also quite a few maturity models in the market which I regard, for one reason or another, as insufficient to address the needs of a fully functioning Enterprise-wide Portfolio Management ecosystem. Some just see Portfolio Management as an extension to Project and Programme Management, some see it as an “IT only” function, some believe that only financial criteria are relevant for the selection of potential investments. A great deal of my customers historically focused on the processes and supporting tooling aspects rather than applying a more holistic view across several factors, some of which are very difficult to address, admittedly.
At its most mature, Enterprise-wide Portfolio Management can be recognised by eight distinctive features.
- The central direction and targets are set by the Board.
- Clear decision-making rights are cascaded down.
- A Corporate Portfolio Office is in place and supports analysis and decision-making.
- Planning is recognised as a key management task and is at the core of every activity.
- A change lifecycle, from ideation to demand management to benefit realisation, is standardised end-to-end across the organisation.
- A “Corporate” culture is supported by performance measures and individual targets.
- The investment portfolio is reassessed on a quarterly basis and coincides with the funding release.
- Management by exception.
While those eight features allow for a very quick evaluation where an organisation might be concerning its Enterprise-wide Portfolio Management, it does not allow for a more detailed analysis for any potential shortcomings nor does it provide enough guidance for any practitioners as far as roadmaps for improvement are concerned.
Those eight features, plus lots of practical experience, gained over many years of management consulting across almost any industry, is reflected in my framework, measuring the maturity of Enterprise-wide Portfolio Management across six different themes.
- Strategy and Leadership
- Corporate Culture
- Governance Arrangements
- Supporting Functions
- Processes and Tooling.
In my next blog, I will reflect more closely on those six themes.
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Blog post written by Holger Heuss, our trainer for the new two day Portfolio Management and the PMO course.
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