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Prioritization – Making The Right Tradeoffs

(Part three of a series on the forces helping to drive a tactical to strategic transformation of the PMO.)

A recent Gartner report provides some interesting perspective on the impact that prioritization has on today’s enterprise. Gartner reports that a majority of CIOs agree that non-prioritized, competing projects and programs are an obstacle to implementing strategies. Clearly, the ability to appropriately set priorities is crucial when it comes to managing enterprise investments.

When an organization prioritizes, it is simply making tradeoffs by deciding that one thing is more important than another. For the PMO, the tradeoffs boil down to selecting which competencies or business drivers are deserving of investment, which are not, and how much to invest in each. The realities of monetary and resource constraints mean an organization can’t do everything. The more it chooses to invest in one competency, the less another receives.

During investment planning cycles, there are always more opportunities to be considered than can be acted on due to time, resource and cost constraints. As a result, discussions must occur and trade-offs must be made. In many organizations, these discussions involve questions like “do we prioritize at the business driver level or at the project level?” or “do we prioritize based on strategic importance or on bridging performance gaps?”.

But are those the right questions? Business drivers can certainly be prioritized by their importance, but it can be difficult to measure their performance. Fortunately, we have a powerful lens through which to look at choosing priorities – business capabilities. A capability-based model – which focuses on closing gaps in both importance and performance – ensures that the organization is asking the right questions. This is a significantly superior method to help an organization determine investment priorities.

With our strategic capabilities identified and our priorities established, what’s next? A thoughtfully developed road map can help illustrate when and how capabilities and outcomes are delivered in support of the enterprise’s strategic objectives. Executives that sign off on a road map or a hierarchy of road maps should only do so if they have confidence that the road map represents the optimal approach for delivering outcomes.

But first, we need to look at the process of allocation. In my next post, that’s just what we’ll do.