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Portfolio Analysis Answers The Age-Old Question “What If…?”

Written by Ben Chamberlain on April 7th, 2021 at 1:52 pm

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

In an earlier post, we looked at roadmaps, something that has been getting a lot of attention in the last couple of years.  Most will agree that roadmaps need to have substance behind them and their purpose is to improve your ability to run your business and make key decisions.  And perhaps most importantly, they must have the ability to support portfolio analytics.

What if you could actually conduct a what-if scenario?

Whether you’re conducting initial planning, updating those plans through the year, or responding to emerging threats and opportunities, you need to be able to quickly understand the implications of decisions.  And you need tools that help you identify the changes that are the most appropriate to implement.  It’s all very well being able to drag items around a roadmap, but what’s the implication of those adjustments?  How much money will it cost, or save?  What will happen to resource utilization?  What’s the impact on payback and total benefits?  And what’s the optimal mix that balances all of those elements?

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Roadmaps aren’t just pretty pictures, they should specifically to help you model the effect of any portfolio change and quickly sort through scenarios to increase strategic value.

You don’t need the ability to do this ‘just in case’, you need it because, well, things are going to go wrong.  No matter how confident you are in your strategy, you will always need a plan B (and C, D, etc.).  Your competitors will do exactly what you don’t want them to do and you will have to respond.  Technology, customer expectations and heck even a global pandemic will disrupt your business to a greater or lesser degree and your ability to overcome that disruption is directly down to how quickly you can change direction.

Anticipating the next disruption is the new normal

Disruption aren’t new, and portfolio analytic tools have been around for some time, but they’ve traditionally had a singular focus.  You could analyze the portfolio (generally only a project portfolio) to see the forecast costs vs. planned for example and then identify ways to bring the two back in line as a way to dealing with the financial impact of the disruption that’s happening.  But then you would have to conduct separate, often manual analysis to understand the impact of those changes on resources, benefits, risks, scheduling and sequencing, etc.  That’s not efficient or effective, and it likely doesn’t result in the best decisions.

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With the right interactive portfolio analysis tool, any stakeholder can utilize key metrics and measure the impact of any change to the current state of their portfolios.

Effective portfolio analytics today has to consider all of those elements in combination.  Whether you create potential scenarios by dragging items around a roadmap or updating data directly, you need to see how that impacts the metrics that matter to you – all of the metrics.  Prioritization, payback optimization, multi-year fiscal and capital planning, capacity planning for all resource categories, etc.  You also need the freedom to define what those metrics are so you are using your own, not someone else’s interpretation of what you need.  Sure resources, schedules and budgets are obvious, but they’re not all you care about so they shouldn’t be all you base your decisions on.

The dreaded question: “What would happen if…?”

They’re also not the only thing you expect your teams to analyze, but when you ask those teams difficult questions that go beyond these basics their only option is often to stay late, get the pizza delivered and fire up the spreadsheets.  No one thinks that’s a good idea, and no one believes it generates good answers – no matter how good the pizza is!

You can’t be limited to making a choice between just two options.  You need to be able to create multiple what if scenarios within your portfolio and compare the results of each of those scenarios to determine the absolute best set of actions.  And of course, you need to do that for everything that you invest in – your projects, programs, epics, technology assets, business products, etc.  Those analyses have to be based on current and complete data and they have to be conducted without impacting production – until you have made a final decision.

With the right resource and capacity management capabilities, it’s easy to get the insight needed to better manage your most important assets.

You’re trying to deliver a digital business transformation, to create an agile business that can move in any direction it needs to close to instantly and without disruption.  How can you do that unless you can quickly and confidently assess multiple different scenarios and make the right decision every time?  (Here’s a hint – you can’t).  Heck, you’re going to struggle to move from annual planning to continuous and adaptive planning if you have to put the world on hold while you manually crunch different portfolio scenarios in spreadsheets and then take a ‘best guess’ at what you should do.  On the other hand, if you can perform portfolio analytics easily and see the results across multiple variables you have a powerful catalyst to help deliver that continuous and adaptive planning.

Portfolio Analysis is a key component of SPM

Powerful, Strategic Portfolio Management (SPM) enabled portfolio analytics is the only option, but inevitably the decisions you make will still involve compromise – there is no single solution that will optimize all factors.  Effective portfolio analytics must therefore help you interpret and compare all of the different scenarios – displaying targets and showing variances over time and by category.  It must provide the ability to seamlessly drill down into the details of the portfolio to understand what’s happening with individual projects or assets, with specific resource roles or even individuals.

You don’t want to have to go elsewhere in your portfolio management tool to balance an overallocated resource, you want to be able to do it directly from your portfolio analytics view by drilling into the details and then returning to the top level to understand how that adjustment has impacted each of your key performance indicators.  And all of your portfolio stakeholders need to be able to do that while collaborating on the development of the best possible investment mix.

Powerful portfolio management capabilities enable organizations to more effectively gain visibility across all projected benefits.

Perhaps most important of all, you need to be able to do this quickly.  The variables around your project are constantly shifting as a result of work execution and shifting operating environments.  Unless you can quickly assess all of those variables and make the right adjustments rapidly and with the confidence that you are making the right choices, you’ll fall behind.  And you’ll never be able to catch up again.

To some a roadmap is just a pretty picture.  To us, it’s the access point for powerful analytics that allows you to make better decisions in less time that can be communicated more clearly.  And any level of portfolio analysis will tell you that will lead to better business outcomes. Which is what we’ll tackle next.

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