Value driven Portfolio Management
Traditional portfolio management processes attempt to predict future ROI based on predetermined plans, and where the main focus is on funding, often pushed from the strategy level down. Don’t get me wrong, ROI can be useful, but as with any other item, it is only useful under the right circumstance. There are other values better able to inform decision-making for innovation.
To support innovation, portfolio priorities need to be based on a hypothesis of value creation and described by customer-value oriented measures of success.
And as also fully supported in the Adaptive Project Management framework, also portfolios, or I would even say the organization, needs to emphasis that change, unpredictability, can and will happen.
- Organizations running projects, besides the typical challenges within a project itself, can for example experience unpredictability coming from inefficiency within the organization, derived from items such as high workload, setting priorities, lack of focus, no clear direction, insufficient transparency and dissatisfied employees. And let’s face it, in today’s world there are many external factors also leading to unpredictability.
- Organizations are often demand-driven, make detailed plans, build a project organization in which they look for plan stability and have hierarchical structures to reduce unpredictability. Yet, this results again in rigid inflexible processes and/or systems. How does this work though for organizations using the Adaptive Project Management framework, and where as a part of this framework a part of , or the entire organization, runs Agile? In such cases the focus is not on reducing such unpredictability, but instead on embracing it, embracing change, and trying to make it a part of your project day to day handling.
Value Driven Portfolio Management
VDPM is aimed at maximizing values for the customer, organization, and employee. What are values, is it only money or funding? Certainly not! It can be many, here are some examples:
- Expected life expectancy
- Business Value
- Risk reduction
And it is exactly that, which needs to be managed by value driven portfolios, to identify and prioritize based on these values. Such prioritization then needs to be used to visualize how the improvement of these values are met, what sort of team is required, effort, funding and other tools needed.
- VDPM is not a linear process, but a cycle. This means that periodically (typically every quarter), values as described above, are re-evaluated, for what concerns the highest priority for improvement. This cycle of continuous improvement is central to VDPM.
- Value Driven Portfolio Management enables your Company to adjust the strategy and to face the unpredictability of today tomorrow and the future
- Uppwise not only fully supports the Value Driven Portfolio Management framework, but it also allows you to respond to the periodic changing of priorities and simulate as well as implement the necessary changes to underlying initiatives and projects, avoiding misalignment between set values and project execution.
In addition, values identified within a portfolio, or it’s underlying initiatives and projects are seamlessly connected to Strategies and Objective & Key Results. This allows you as an organization to map your Strategy with the day-to-day execution and measure progress and performance at Strategy level as well.
Uppwise services can help you with ensuring a successful establishment of strategy management within your organization.
If you wish more information, please reach out at any time!
We would be happy to guide and support you in your search for better, more tailored solutions.
Hans is leading the Uppwise product strategy and execution. He has more than 20 years of Project Portfolio Management experience. Prior to Uppwise, Hans worked for a number of global enterprises where he contributed to the implementation of PPM products. Hans is an open thinker with a deep passion for IT and PPM. He also led several initiatives to innovate PPM, including the implementation of semantic models to maximize information integration and set the basis of AI capabilities in PPM software.