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Demand better demand management

Written by Ben Chamberlain on May 7th, 2021 at 12:13 pm

Click here to read the previous post in this series, or start from the beginning

Has any executive ever complained that they had too few projects?  Most feel that they have way too many projects, and can never get them all completed.  Yet having failed to deliver 100 projects for each of the last ten years they’ll still happily approve another 100 projects next year in the hope that something will magically change.

But of course, nothing changes all by itself.  And to be fair, the problem isn’t necessarily an inability to deliver projects – or programs, products, epics, capabilities or anything else.  It’s really an issue of effective demand management.  Most organizations are trying to deal with the dual challenge of controlling the amount of demand and where it’s coming from, and the ability to analyze and prioritize that demand.  Effective strategic portfolio management (SPM), enables you to address both of those issues.

Demand can come from anywhere, but should it?

Let’s start by considering where demand comes from.  There’s good news here.  As you evolve your planning approach from project focused delivery to product or program focused delivery and ultimately capability focused delivery, so you change where demand is driven from.  When business capabilities are at the heart of what you are doing you decompose the key initiatives directly from strategy – you have a top-down demand management approach.  That’s how the core of your demand should be derived, it should be produced directly from the decomposition of strategy.

The trick to effective demand management is identifying and distinguishing innovative ideas from run-of-the-mill demand – and making sure that the next great idea doesn’t fall through the cracks.

That doesn’t prevent demand from bubbling up from the front line, from the bottom of the organization, but it does mean that’s not the only way it happens.  That’s a significant contrast from when all work is project driven and virtually every project proposal is developed from the bottom up.  Bottom-up demand isn’t necessarily ‘bad’, but it should be producing ancillary demand items – proposed initiatives that support strategy but aren’t directly driven by strategy.

Right sizing the business case

That leads to the need to control the amount of demand.  Historically the business case was the ‘sanity check’ for managing demand.  An early assessment of how much a proposed piece of work would cost and how much benefit it would deliver allowed for the ‘bad’ ideas to be weeded out early.  But business cases have gotten a bad rap over the last few years, and that’s led to the removal of those sanity checks.

There’s no reason for that.  Business cases have always been, and will always be important tools in managing and analyzing demand.  The reason they have become devalued in recent years is that they were often used as ‘sales pitches’ with understated costs and overstated benefits.  This could be done because the proposers of an initiative knew that after approval the business case would never be looked at again.

Standardizing business cases requires the organization to move away from disparate sources of business case information like Excel, Word and Powerpoint to better govern and standardize all demand and improve decision making.

For SPM to succeed, the business case must be accurate, consistent across all proposed initiatives and an integral part of the historic record of an investment.  It must be a living document that is updated throughout the process and contributes to the review process that forms part of continuous and adaptive planning.  Effective business cases help to eliminate inappropriate or misaligned initiatives early, preventing them from making it to the demand funnel and allowing for improved analysis and prioritization of those initiatives that do make it into the demand process.  And it must be one queue.

Centralizing and standardizing all demand is key

All information around all demand items must be consolidated in one place and must be consistent in its nature and structure.  Only then can better decisions be made between the different initiatives.  Only then can prioritization be effective.  Centralized demand also makes it much easier to implement bulk funding models, funding that is higher up the organization and tied to strategy and capabilities.

Savvy organizations use powerful and interactive roadmaps to help them model the effect of any portfolio change and quickly sort through all demand.

Demand management in many organizations is a tactical process that frequently gets lost in the weeds and rarely results in the ‘best’ initiatives being approved.  Indeed, in many cases there is no understanding of what those best initiatives are because the business cases can’t be relied upon.  When you implement SPM effectively you can drive demand directly from strategy and you can rely on your business cases which are managed and maintained throughout the process.  And that makes it far easier to maintain benefit projections and manage those benefits so you actually deliver on the promise of value.

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