Dynamic Planning
Periodically assess and reallocate funds to optimize portfolio performance
Dynamic planning techniques enable you to continuously rebalance the portfolio to optimize spend and maximize ROI from all strategic initiatives.

To quickly react to changing variables, today’s PMO needs tools and techniques that go beyond the set-it-and-forget-it approach to annual planning. Dynamic planning enables organizations to proactively manage inflight portfolios, quickly gauge the economic impact of investment decisions and easily take the appropriate action to reallocate funds. Automated project status and variance reports provide timely updates, informed by stronger and more accurate forecasting. Enhanced visibility encourages quick approval of redirects and budget releases, increasing budget utilization and maximizing portfolio value.

Dynamically assess performance.

For years, organizations have used Strategic Yield – calculated by dividing Strategic Value by Cost – during the annual planning process to help them select the portfolio that delivers the best bang for the buck. They then resort to financial metrics like ROI or NPV to measure the impact of in-flight initiatives. Using Strategic Yield to conduct periodic assessments of in-flight projects provides the organization with an “early warning” investment viability indicator for project, program and portfolio investment performance, giving you the insight required to make more informed investment decisions.

Culture of empowerment fosters better forecasting.

Project managers often hold back funds as a cushion. But executives need to understand that the portfolio impact of “sandbagging” or not utilizing all of the budget (assuming it’s not reallocated within the fiscal year) is actually worse than going slightly over budget. Unless the organization addresses this culture of fear to help improve their forecasting capabilities, dynamic reallocation will remain an exercise in futility. Encouraging a culture that reduces the fear of requesting more money for projects and promotes the quick release of funds for projects that demonstrate an appropriate yield is key.

Automate reporting & variance analysis.

Status reporting for PMOs remains a logistical nightmare with too much time spent manually reconciling data to drive dynamic planning. By locking down budgets and automating status reporting, the organization can import actual costs from their ERP and provide an intuitive interface for PMs to forecast remaining costs and capture project health. With variance analysis automated, it’s easy to identify which projects are forecasting overspend, underspend, and potential underspend, and make decisions to redirect, release and takeback money accordingly.

Aggregate change requests to reinvest funds.

Change requests are a foundational element that fuels the Dynamic Planning process. Automation now makes it much easier for PMs to raise change requests to redirect funds for projects that are over budget or release funds for projects that are forecasting an underspend. Automated workflow routes change requests to the steering committee for approval, which is a key step to the reallocation process.

Continuously analyze the portfolio and reallocate funds.

With change requests automatically routed for approval, the steering committee has all the information they need to support all dynamic planning reallocation decisions. The releases from projects are simply accepted, and the team can then analyze the impact of giving money to existing projects versus funding net new initiatives. The process ensures that the PMO has all the insight required to more effectively optimize budget utilization and maximize strategic yield.

Clearly demonstrate PMO impact.

Successful dynamic planning doesn’t just enable the organization to more effectively manage the delivery of projects and programs. It also enables the PMO to demonstrate its impact - clearly showing how the decisions made throughout the year to invest more in existing projects, or to bring in new investments, or to kill specific initiatives, helped maximize budget utilization and yield.