Many organizations struggle to prioritize effectively and stay focused on what’s essential. One urgent task replaces another and project teams seem to find themselves in a constant “firefighting mode”.
However, the number of projects will always exceed by far the organization's capacity to deliver. This is one of the golden laws of business transformation and project management.
In such a context, the challenges of project selection will be one of the keys to the success of your project portfolio management.
Let’s recall that a project portfolio can be defined as "a set of competing projects" (Fernez-Walch, 2004).
In this blog post, we will review five common misconceptions regarding project selection methods and decision-making. We will highlight why these approaches don’t work or, at the very least, why they can work but will damage the relationship between IT and business units, as well as everyone's enthusiasm.
For each of the five misconceptions, beyond identifying the issues, we will explore what can work better in specific contexts, thanks to experiences from IT departments, insights and pragmatic methodological approaches. Our goal remains the same: to inspire you and help your company transition to a modern selection and prioritization framework.
The IT department's capacity is not limitless, and it faces challenges in meeting all project requirements as the business units' capacity to innovate is limitless.
"It's an complex equation," says Sylvain Bourdette, CIO of Indexia, as a guest speaker on the CIO Revolution podcast produced by AirSaas.
To select the "right projects," Sylvain organizes bi-weekly meetings per business unit. According to Sylvain, "The key challenge is to explain the rules of the game to the business units and avoid being trapped in a client-supplier mindset. It's more about enhancing cooperation and open discussion."
When we explore this selection process further, we find that during these workshops, Sylvain aims to obtain a priority ranking of business unit projects. He asks, "What are your top priorities for the period?" He does not disclose the IT department's capability to deliver, instead, he provides an initial estimate, providing size and complexity assessments, using the agile t-shirt sizing method. Additionally, he gives feedback on whether the "need is clear," needs refinement, or is not clear at all.
Once this step of reviewing priorities and ongoing projects is completed, the big picture is therefore established and the IT department can start the complex task of fitting projects together, much like solving a puzzle.
Sylvain Bourdette admits, "While it doesn't solve the capability problem, it does improve relationships." By making both the rules of the game and all of the projects under review visible to everyone across the organization, it builds trust and open communication.
With this prioritization workflow, if everything doesn't fit into the schedule, there may be situations where decisions need to be made between two departments, or an escalation management procedure might be necessary, though this seems to be rare.
In cases of capacity conflict, another approach is considered: project segmentation. This can allow 80% of the need to be met with 20% of the functionality delivered. Thank you, Mr. Pareto!
Likewise, to avoid the tunnel effect in project management, Isabelle André Perussi, the CIO of Ouigo, shared one of her practices “Flash Design workshops” during her interview on our CIO Revolution Podcast, episode 34.
Rather than waiting to address the need of the business unit only when the IT department has time to handle it, Isabelle explains that she organizes 2-hour Flash Design sessions as soon as the business unit submits a "ticket." These 2-hour brainstorming sessions bring together business and IT teams to outline the need, explore potential "miracle" SaaS solutions and allow time for the need to mature — all well before the project scoping phase. The investment is said to pay off quickly and many frustrations are avoided.
In today's rapidly changing business environment, long-term project prioritization (2-3 years) is no longer sufficient.
Indeed, in the past, IT portfolios were driven by long-term roadmaps, conflicts, and financial metrics. Today, with such an evolving IT landscape, the standard practice is to continuously reassess and adjust project priorities.
It is not only individual success at stake, it's the transformation of the company, with its clients and partners, that's at the center. Given the volatile, uncertain, complex and ambiguous conditions (VUCA) of the current business landscape, it is essential to be prepared for frequent changes in strategic priorities."
When surveying some CIOs about their current prioritization rhythm beyond annual projects, a real shift in the roadmapping of project portfolios is clear.
Who said CIOs weren't agile?
Let's remember that while 70% of projects tend to fail, the main cause is a change in the organization’s priorities (39%). This is followed by changes in project objectives (37%) and inaccurate requirements gathering (35%). (Source: Pulse of the profession 2018 study by the Project Management Institute).
The challenge here isn’t to reject priority changes, costs, scopes and restrictions that inevitably occur in project management but to choose and manage them proactively. By anticipating such changes during portfolio reviews, you can plan for the unexpected and reallocate resources quickly and easily.
It’s still common to see PMOs, CIOs and transformation program managers proudly sharing their Excel files alongside their most refined PowerPoint presentations for reporting and roadmapping processes.
Indeed, if you limit yourself to simply managing IT investments that might be sufficient. However, if you're managing transformation programs and teams, the answer is no!
A centralized dashboard that facilitates transparent communication and collaboration among all stakeholders is essential for the success of your transformation program.
A platform’s support in such management will then become indispensable.
This dynamic dashboard will enhance your ability to compare and select projects within your portfolio. All key information will be found on a single page. You will visualize interdependencies, dependencies and links between portfolio projects.
A shared control center will empower you and your business units to work together effectively, monitor progress and make informed decisions throughout the transformation process."
Indeed, ad hoc tools for portfolio views and management are a must-have for successful project selection processes. However, don't forget the approach and the importance of management all around the tool.
Scoring cards, ratings, spreadsheets... The goals and selection criteria can easily multiply and become much too detailed and complex, losing therefore the essence of an agile, opportunistic and pragmatic project portfolio approach.
Cost-benefit ratios, risks, ROI, resources, strategic alignment and budgets… These rigid metrics are still too often major factors that provide a reassuring but inefficient way to manage a portfolio.
While traditional metrics provide valuable insights (cost-benefit ratios, risks, ROI, resources, strategic alignment, budgets…), it's important to recognize their limitations and consider other factors, such as qualitative assessments and strategic alignment, to ensure effective portfolio management.
Finally, one can also choose to shift paradigms and base project selection on the results of an opportunity study and a pre-POC (Proof Of Concept) to make better and more informed decisions.
Well… Yes and no.
Let’s say it’s more the types and timeframes of the projects that need to be adjusted.
A common challenge in project portfolio management is the lack of a clear classification system, coupled with the tendency to undertake overly complex and time-consuming projects, which can negatively impact project success and lead to burnout among project managers.
Every day, we see that current project portfolio management practices often fail to define and maintain focus on what is truly important. One urgent matter replaces the previous one and employees are constantly setting out fires... Yet, even with only the "essential" projects, teams are overloaded.
When faced with frequent changes in strategic direction, project scope and stakeholder involvement, relying solely on rigid planning methods and Gantt charts can be counterproductive.
What is essential for an organization? But… Defining essentials is a personal judgment… Beyond the specific content of the project, which varies from company to company, it’s really the team, its continuity, motivation and cohesion that provides the assessment of a project's feasibility.
Once essential projects are sorted, everything else will need to be ranked: strategic projects, compliance projects, foundational projects, unexpected projects, high-risk projects that require strong business involvement and smaller projects where business involvement is needed but with lower risks.
With this macro classification, you can redefine management and the do's and don'ts of your project portfolio by category.
The way you structure and manage your project portfolio will significantly influence your future project management practices, rituals, and processes.
We cannot emphasize enough the importance of defining minimum and maximum sizes for your project portfolio. Many PMOs and CIOs remind us: if you want to succeed with a project, start small.
"The most effective approach is the 'small steps' policy," says Thomas Vrignaud, Head of Transformation and Strategic Projects at KEDGE Group and a guest on episode 14 of the Podcast CIO Revolution.
He suggests breaking down projects into small manageable tasks, so as to approve, adjust or decline goals and benefits along the way. This approach prevents failure in change management.
Here are the insights to keep in mind:
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