The first iterations of project, program and portfolio management (P3M) were linear programs designed to accomplish a set of tasks in a structured way. Simply checking the boxes was a goal in and of itself. And that model worked really well to safely launch a rocket into space or complete a new aircraft design.

Today the P3M discipline has evolved and expanded. Completing those tasks is no longer considered an end goal. Instead, the organization – and the project management office (PMO), in particular – must be able to deliver value, which is usually defined as marked progress toward one of the company’s strategic goals, such as revenue growth or cost reduction.

Becoming that kind of value-driven organization requires the right kind of technology. Here are three principles to consider when building an effective  PPM framework to deliver a value-driven organization:

Connect the ‘Top Down’ with the ‘Bottom Up’

According to analyst firm Gartner, the P3M, or more commonly PPM, software market has bifurcated into two distinct segments: strategic portfolio management for top-down planning and adaptive project management for bottom-up work execution. Proponents of work management would have you believe that great execution, or delivery, is all that is needed to create a value-driven organization – but this is a flawed approach. Without strategic portfolio management to enable the proper prioritization of projects when demand is limitless and supply is finite, all work management may be doing is enabling you to deliver more of the wrong work faster.

Further, just offering strategic portfolio management doesn’t accomplish the goal either. A structured, optimized portfolio of projects does little good without the time and resources necessary to deliver those projects.

Instead, a viable PPM solution must allow you to connect top-down portfolio optimization and bottom-up project execution. Only then can you ensure the right projects are being delivered at the right time by the right resources – in other words, only then will you have the structure in place to create a value-driven organization.

Don’t Mandate a Methodology

Different types of work lend themselves to different work methodologies. While software development projects are best served with an Agile approach, hardware or compliance projects usually require a more traditional Waterfall work style.

The structure of a value-driven organization has to support multiple work methodologies, and that requires a PPM tool that can integrate with any system where work is getting done: Agile tools like Jira or Microsoft TFS; ITSM systems such as Cherwell; traditional Waterfall-style project management software; even spreadsheets and shared documents. That flexibility allows the PMO to manage work and financial tracking, approvals and prioritization, capacity planning, and reporting in one system while getting maximum productivity on project execution, because supporting personnel get to operate in whatever tool works best for them.

Look Beyond Deadlines and Budgets

The substance of value is the delivery of some kind of benefit. While sometimes the expected benefits from a project may simply be defined as delivering “on time and under budget,” often times more is required. An initiative to develop a new knowledgebase may have customer satisfaction as its ultimate goal. Migrating to a new CRM system might be intended to boost recurring revenue. Executing companywide training around new security protocols could have regulatory compliance as its success metric. And so on.

A value-driven PPM system must be able to support a wide range of benefits tracking and have a reporting infrastructure sophisticated enough to communicate the organization’s progress toward those benefits. With such a structure in place, an organizational initiative can quickly graduate from being a “low-value” IT or operational effort to being a business-level project that supports the realization of essential company strategy.

The Way Forward The journey to become a value-driven organization requires an organizational structure that can marry strategic planning with project execution; support a broad range of work styles while unifying reporting; and measure projects against business-level company goals and strategies. The right PPM software can accelerate this transformation by giving the PMO and project leaders the tools they need to evolve beyond the boundaries of traditional project, program and portfolio management.

Back to Building an Effective PPM Framework.

Rachel Hentges
PMO Influencer
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Rachel Hentges

Rachel Hentges is challenging PMO leaders to think differently about their role. Rachel is the author of key industry related surveys, reports, blogs and more that challenge the status quo of today’s PMOs.