According to a recent survey, 75% of business projects were not well aligned with strategic business priorities, and 81% of practitioners felt they didn’t have the necessary resources to meet demand. Strategic Portfolio Management (SPM) can help rectify both of these problems, which has resulted in an increased interest in this practice.
Given recent challenges businesses across the world have faced, including the COVID-19 pandemic, altering and executing strategy at speed is now more crucial to operational resiliency than ever before. As a result, businesses have had to make themselves more agile and better able to respond to unforeseen change.
Successful businesses have to make strategic plans concerning the activities they implement in order to meet their goals. These are the choices that form the strategic portfolio, which covers everything a business does, including:
Business-as-usual
Entering new markets
Driving continual growth
In this article, we will look at Strategic Portfolio Management (SPM) in more detail, and provide some best practice advice. Let’s get started.
Suggested: For an even more in-depth examination of SPM, check out our free resource — The Definitive Guide to Strategic Portfolio Management
Defining strategic portfolio management
SPM is concerned with the high-level strategic selection, prioritization and control of business programs and projects. This is not to be confused with Project Portfolio Management (PPM), which focuses on the execution and delivery of products and services, or Application Portfolio Management (APM), the practice of governing and optimizing software applications to help achieve business objectives.
Most crucially, SPM aims to align strategic objectives with a business's capacity to deliver, balancing the implementation of new strategic initiatives and the maintenance of business-as-usual while optimizing returns on the bottom line.
Deciding where best to focus an organization’s finite resources to meet strategic objectives in the long term is no easy task. Strategic Portfolio Management enables businesses to make difficult choices and unlock resources to focus on the right things at the right time — identifying those most closely aligned to strategic success.
Strategic Portfolio Management builds on existing information systems to provide focused business intelligence. This enables leadership teams and senior management to make strategic trade-offs that can only be made at that level, and offers strategies and structures for closing the gap between strategy and results.
The fundamentals of SPM
SPM requires the centralized management of an organization’s processes, people, and technologies to analyze existing and future projects in light of strategic value.
Most organizations work across fragmented ecosystems while trying to maintain enterprise portfolios. Done well, SPM strengthens these ecosystems, enabling businesses to achieve enhanced agility at the strategic level with the help of fundamental principles and best practices, which should include:
Aligned decision making: SPM is all about ensuring initiatives are aligned with strategic goals. Back office, or supporting functions, can require additional regulations and use their own frameworks. SPM should encourage a stakeholder engagement model to link company-wide governance with management structures — creating better aligned and coordinated projects that adhere to the architectures and blueprints defined for the business.
Value creation: Crucial to SPM is that decisions are focused on creating value at each development stage. SPM should enable companies to take advantage of transformative initiatives, potential opportunities for growth and cost reductions.
Data transparency: Inaccurate, out-of-date, or incomplete data can ruin programs, which is why transparency is so crucial to making the best decisions. With the help of SPM tools, strategic portfolio management practices can create a centralized database for all project information and accurate and real-time data, providing a single source of truth that everyone can trust.
Stakeholder involvement: It’s difficult to understate the importance of inclusive and collaborative processes throughout a business. Large businesses often have to contend with enterprise-wide siloes, hoarding data and functions away from the rest of the business due to geography or systems issues. Siloed data can come back to bite you if it’s not addressed, whether through important stakeholders not being consulted or vital data becoming unusable.
Clear communication: Enterprise-wide tracking and notifications are central to SPM, helping to ensure aligned expectations and continuous improvement. By integrating and sharing information, companies can prevent isolation and confirm any change happens consistently and with minimal impact.
Crucial to implementing these principles is the deployment of effective software. For example, with the help of SPM tools, businesses can measure, monitor and analyze what’s happening, ensure governance is in place and even identify opportunities for future success.
Furthermore, when dealing with multiple portfolios, SPM tools can be used to demonstrate to stakeholders the impact of one project on others, and accommodate requests outside of the project scope. Fundamentally, these are critical capabilities to consider when going from planning to implementation.
How to deliver SPM
Understanding Strategic Portfolio Management and its fundamental principles is one thing. Achieving the desired outcomes from SPM is something else entirely. When it comes to implementation and delivery, businesses need to deploy tools and software that provide the functionality required for effective SPM. Let’s take a look at some of the key features businesses should look out for in more detail.
Visualization of enterprise portfolios
Visualization is a vital element of any SPM solution to ensure effective stakeholder communication and facilitate improved planning processes. As a result, businesses should look to deploy software that enables them to:
Bring enterprise portfolio data to life with compelling dynamic dashboards
Align portfolio management decisions with business strategy
Auto-generate graphical representation of repository data to help understand relationships and dependencies across the organization
Display the impact of change across numerous different enterprise landscapes
A central source of truth for informed decision-making
Effective SPM software should interface with as many systems as possible, creating one central repository that can be trusted to provide cross-organization insights with reliable and transparent data. This enables businesses to:
Ensure technology portfolios are enabling digital transformation
Make decisions on cross-portfolio data, centralize from silos and gather data from stakeholders
Address multiple stakeholder concerns with a broad range of repository data views, including list, matrix, hierarchy and traceability views
Leverage data from existing technology ecosystems to engage the business in tools they use every day
Delivery of insights beyond technology portfolios
Businesses need support for their decisions across their portfolios as well as IT — from strategy and business capabilities to projects and product development. As a result, businesses need to utilize software that facilitates analytics through several lenses, such as value, risk and lifecycle, allowing them to:
Discover dependencies and track project delivery to business outcomes
Make critical decisions fast
Identify redundant applications and drill-down to learn more
Answers to key questions
In order to ensure stakeholders are well-informed, real-time data needs to be viewed and examined right down to the granular level. Leading SPM software should provide users with customizable dashboards that help answer critical business questions out of the box, thereby providing specific insights that help achieve business outcomes.
Get the best results with OrbusInfinity
To help support SPM best practices, here at Orbus we developed OrbusInfinity. Our software offers a comprehensive range of SPM dashboards and reports to provide enterprise architects, PMOs, and executives with the insight needed to manage their organizations.
OrbusInfinity gives you the ability to instantly generate dashboards in Microsoft’s Power BI, get unprecedented insight into the health of your project portfolio, and utilize pre-packaged report packs tailored for specific portfolios to accelerate decision making.
To learn more about the capabilities of OrbusInfinity and the SPM-based decisions it can help you with, book your free demo with us today.