After the crisis is before the crisis. Economically, Corona has led to heavy losses, which almost all companies more or less feel. In addition, the market and working conditions in many sectors have changed considerably, so that quick reactions were and still are necessary. There are many levers that can be turned to react to these changes. One option is to take a closer look at the project portfolio, because it is precisely here that efficiency increases, savings potential and strategically necessary adjustments can be achieved. Assessments of all current and planned projects should urgently be carried out to assess risks and analyse dependencies, on the one hand to prepare for a possible new wave of economic restrictions and on the other hand to become more independent in the future. In the long term, the incorporation of prioritization criteria for portfolio management helps to align it ideally with the corporate strategy as well as the IT and digitization strategy in the future.
Tobias Richwien, as a consultant specialized in Project Portfolio Management, has supported companies from a wide range of industries in realigning their portfolio. Here he answers the most important questions.
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1. How can companies quickly re-prioritise their IT project portfolio in difficult economic times in order to implement short-term and medium-term cost-saving measures?
Tobias Richwien: At the beginning, an analysis of the portfolio should be made with regard to the savings potential and its character. In order to be able to carry out suitable assessments, these should be accompanied by people who have a thorough knowledge of the mechanisms behind IT costs and IT projects. Long-term effects and risks in the portfolio assessment must definitely be reflected in the consideration; under no circumstances should only the current situation be included here. And finally, a decision must be made on the basis of the results of the assessment in order to actually leverage the identified potential. Experience shows that this sounds easier than many companies find it. The decision-making process is perhaps the fastest part of the project, but almost always the most difficult. It helps to open the tunnel vision and also to consult the perspectives of external observers.
2. How can companies quickly determine completely changed requirements and strategic goals in order to meet the changed global situation and align the project portfolio accordingly?
Tobias Richwien: First of all the analysis of the strategic situation is necessary. The consultant brings in additional perspectives and aspects. In particular, the strategic decision criteria for portfolio management must adapt to the new circumstances, and do so very quickly. Afterwards, an assessment of the existing portfolio according to the requirements is also necessary here. Just like strategic goals, company-wide measures in the context of the corona crisis should be found in the direct beneficiaries of the planned project results. A further focus is on the speed of implementation of the plans and projects, which should not only show their benefits and effectiveness in a few years’ time. A wide range of tools, methods and visualisations can be used to support the various committees and governance bodies in the decision-making process.
3. How can the company get the necessary measures in the Corona crisis quickly and unbureaucratically through the existing portfolio process?
Tobias Richwien: Fast but prudent action is always crucial in crisis situations. There are simple but very effective methods for adapting the governance processes to the situation of the company or for making extraordinary decisions quickly. I am thinking, for example, of very closely controlled workshops in which a re-prioritization of individual portfolios can be implemented in the shortest possible time. With all measures, it should be a matter of course that the “why” that led to this measure is also documented and, of course, all consequences of each decision are well-foundedly planned and made transparent. Despite “driving on sight”, as is often the case in a crisis situation or under extreme pressure, a plannable future must be designed. Sharpening this vision with the customer is on of the most important aspects of my work.
4. Due to the changed framework conditions, many companies have created fast workarounds, especially in IT and in terms of processes. How can these now be best transferred and stabilized into regular operations and how do companies decide whether they should continue to use these at all?
Today’s rescuers in need can become tomorrow’s problem children. With IT workarounds it can happen that in the future these are the ones causing the main problems. Because when IT operations return to calm waters, all solutions should follow the standards and processes that made the company’s IT so efficient and secure before. Especially in terms of IT portfolio managementit is therefore necessary to start thinking about converting the quick solutions into permanent services, even if workarounds still seem necessary. Flexibility in portfolio processes is therefore a core criterion for mastering this task.
5. How can companies use the current situation to achieve a more agile portfolio management?
Tobias Richwien: It has been apparent for some time that the annual planning, whether in terms of content or finance, which is predominant in many companies, is no longer up to date. In the current situation within the framework of Corona, it is quite clear that the existing processes and mechanisms are far too rigid. Therefore, companies should urgently address the question of how project portfolio management can be modernized and made more agile. As a consultant, I personally have had many positive experiences with enterprise portfolio kanban, quarterly planning, OKR’s or similar, which I can highly recommend to companies as a method towards a more agile approach. By making smart decisions, something positive can be gained from this crisis and lasting optimizations for the company can be achieved. I see this as an opportunity for companies to set a new course.
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mgm – Consulting services in Project Portfolio Management
- Analysis and evaluation of existing portfolios – e.g. assessment of all current and planned projects, identification of potential savings, risk assessment, analysis of dependencies, run cost impact analysis, etc.
- Re-prioritization of the existing portfolio
- Development of prioritisation criteria for portfolio management and alignment with the corporate strategy / IT strategy / digitisation strategy / crisis strategy
- Analysis and evaluation of projects and how much they contribute to the strategy – Business Capability Management
- Introduction of methods for the agile prioritization of portfolios
- Definition and implementation of portfolio governance processes and an operational portfolio management project, including review of existing processes and development of improvements and measures
- Introduction or adaptation of suitable tools for Project Portfolio Management
- Comprehensive view of all interfaces to Controlling, Finance and Purchasing for rapid implementation of changes
- project risk management