3 Keys to Delivering Business Value in the Face of a Dynamic World
The recent tariffs placed on Chinese products, which will raise the cost for doing business for several major industries, illustrates the necessity of organizational adaptability. Project success is not just on-time, on-budget, on-spec. Projects exist in the first place to deliver the value originally outlined in the business case. In this case, the investment necessary has changed before the benefits can be realized, so the ROI of the original business case is outmoded.
The recent GDPR regulations also demonstrates the constant ebb and flow of “fluid requirements” that exist in almost every facet of business operations. Organizations are accountable to dynamic external stakeholders—in this case new legislation, but also to changes in community needs, ever-evolving technology, and increased globalization. These factors force businesses to change their direction and priorities constantly, often in ways that are difficult to track and quantify.
Organizations need an intensive process for the original business case and nimble, ongoing governance of the projects in the portfolio. Annual planning cycles face serious pressure to make this process as fluid as the realities of the marketplace.
As the world changes, projects drift, and business objectives evolve you need an airtight process to ensure those changes are identified, acknowledge, and revised in a way that’s complementary to the original expectations. There are often deficiencies somewhere in the following process:
Any gap in the process will lead to misalignment that requires a budget, schedule, and/or scope change. Often a large difficulty here is for the stakeholder to expect and understand the costs associated with not only the changes themselves but with the impact analysis process. Impact analysis is often unwelcome because projects rarely budget for the process, it disrupts the current “status quo”, and it consumes project funding. The saying in project management is, “Yes, we do charge for estimates.”
Another challenge for governance is properly managing risk, especially in monitoring and responding to project risks during execution. Executives have enough “real” problems to address that they rarely focus on hypotheticals, like “What if the new president implements new taxes that increase the cost of our initiatives?” It takes a well-oiled process to have the project manager dedicate the bandwidth to continually monitor the risks, have the fortitude to report negative findings to the stakeholder, and for the stakeholder to know when a significant change is needed, even pulling the plug on the project altogether when necessary. Most organizations have difficulty with at least one stage of that process, which often leaves the benefits of risk management unrealized.
A well-defined set of Key Performance Indicators can be pivotal for organizations keeping to the expected project outcomes. KPIs offer bottom-line-oriented objective measures that are often more independent of market changes than the project scope. When you nail the original schedule, budget, and scope of a project plan, you may be aiming for a target that has since moved. When you’re meeting organizational KPIs, you are hitting a bullseye that is always of value to the company.
So don’t let the new taxes and regulations be an excuse for project failure. With proper oversight and governance, an organization is able to continually monitor the portfolio and all the associated project plans. This way, they can identify the best projects to do and the best way to execute them today, rather than relying on the information of yester-year.
Our comprehensive white paper on addressing the challenges of project and portfolio management is available here.