CONNECTING THE DOTSEXTRACTING VALUE FROM YOUR PORTFOLIO DATA

INFORMATION OVERLOAD?

For this latest sitting of the EPPM Board my fellow members and I set ourselves an ambitious goal; to assess the quality of information available to the executive on project portfolio performance. Quality is of course the key value in this pursuit, because no organisation suffers for a lack of information quantity. Rather, the emphasis is on providing focus, and aligning the insights generated with the values and measures most directly connected to the decision-making process. The momentum companies are gaining in terms of their approach to information delivery, and ensuring the right data is available at the point of need, is discussed in the following pages.

I would welcome further contributions to what is clearly a very complex topic, and one that will no doubt be explored in future EPPM Boards. What’s exciting is the international flavour of the discussions following recent sittings in EMEA and the US, and long may they continue because maintaining this open channel for external viewpoints is essential for ensuring relevance in our product.

Yours sincerely

Mike SiciliaSVP GM, Oracle Primavera

The Oracle EPPM Board is a prestigious international steering group of senior industry executives, academics and commentators. It has produced a number of reports highlighting how the C-level can successfully prioritise and manage the project portfolio, ensuring it remains a strategic asset.

VIEWS FROM THE BOARD

At the executive level, project and portfolio level management tools have delivered much in terms of transparency to encourage greater collaboration with customers. Strategic visibility that has dramatically increased intervention times in response to challenges and opportunities – and helped align resources and schedules around mutually agreed priorities.

The challenge now for organisations is to maintain this C-level focus as the spotlight is turned inward and onto more executional data points. As one Board member stated, “there can be a general tendency for executives to consider their job done and to move on from a project once the decision to invest has been taken. However, there is a danger of not maintaining a constant two-way flow of information to chart progress.”

In the words of another member, “to me it’s the analogy of a construction company cutting a road through a dense jungle. The teams hacking away up front are very task-oriented, and therefore unable to take a step back and measure the accuracy of their work or rate of progress. Alternatively, the people with the map, the managers and planners at headquarters, are unaware of any immediate challenges, necessary course corrections, or looming problems. Yet, constant data is being generated by both parties, and success is increasingly dependent upon our ability to connect this data together, as well as our ability to make sense of it.”

ASSESSING THE CURRENT REALITY

An analysis of the effectiveness of current information flow and availability, particularly with regards to crossing the divide between execution and strategy to inspire executive decision-making…

FUNCTIONAL RIVALRIES

This connection in the information flow was also seen as vital for transferring the C-level focus from project portfolio management to project portfolio direction. Such a development was considered essential for driving wider strategic transformation, and ensuring a suitable balance exists between investing in ‘business as usual’, versus initiatives capable of driving real change in organisational behaviour.

Central to improving information flow, and to unlocking its full potential, is connecting the ‘top down’ strategy piece with the ‘bottom up’ execution data – an endeavour where few organisations can claim success. Rather, it is more frequently a cause of friction as delivery teams massage the data pushed upward and the executive aligns finite money and resources to the projects they consider most likely to deliver a decent shareholder return.

The solution for one board member was straightforward; “we need to move beyond creating rules to focusing on communication methods that are aligned to the basic problem solving disciplines. I need to uncover the real forums for identifying indicators of performance, and what barriers exist to creating a single version of the truth. These are the fundamental questions that aren’t being addressed; instead we rigidly maintain our functional rivalries.”

VIEWS FROM THE BOARD

The consensus from the Board was that the majority of companies have made great strides in generating more detailed insights into project portfolio activities. This has however created a new challenge – how to extract strategic insights out of this vast pool of data?

Part of the answer relates to the challenge of segmentation, and how effective organisations are at dividing the project portfolio by the totality of its performance. This was seen as an extremely valuable exercise because it supported the identification of similarities; for example, what key components are consistently found in successful ventures, and what common causes typically lead to project failure? It is the information uncovered here that can have the biggest impact on future planning, and as such was described as the ‘sharp end’ for analytical insights – analysis that moves the focus beyond project execution to business outcomes and results.

As one board member commented, “I want my analytics to help me uncover patterns of activity so I can better predict the future not reflect on past activity. I need to uncover the real factors impacting our ability to meet delivery commitments, as the basis for evolving our strategic capabilities.” Another attendee agreed with this point, stating, “this is the goal we all aspire to. However, in my experience I would argue that a large number of organisations are not really aware of the root causes of project failure even if the information resides within the business.”

PUTTING INFORMATION TO WORK

Exploring current approaches for turning data into strategic insights, and the challenge of making sense from them…

LINKING INSIGHT TO STRATEGY

Information accuracy was also a concern for the value and practicality of KPIs. The view was that with the constantly changing nature of project measurement, KPIs could quickly become ignored or discouraged. The task for executives therefore is to build a clear vision of where they want to be, and how this journey should best be measured – and then link the two together. According to one Board member, ”we need the capability to measure performance on an on-going, daily basis. But we also need the ability to make sense of it, and through this knowledge have the courage to alter strategy if the results aren’t going as planned. In reality, such decisions can be based on one or two metrics, because what’s critical is not the quantity of KPIs I’m presented with, but the quality of insight the measurements offer.”

For another member, what was vital was to ask the right questions. “We’re being overwhelmed by data, and the real challenge has become one of focus. The information is out there, I just need to align it to what values I’m really interested in measuring and ultimately predicting.” This led to a discussion of how information alignment is intimately connected with risk. As one attendee commented, “connecting disparate pieces of data together is the essence of risk prevention, and exploiting this knowledge to augment our understanding of what’s headed our way, and how to adequately prepare for it. To me it’s the missing piece in the jigsaw, and the action we need to take is to work on the interface between risk thresholds and strategic planning to ensure its output resonates with an executive audience.”

“I want my analytics to help me uncover patterns of activity so I can better predict the future not reflect on past activity.”

VIEWS FROM THE BOARD

The tendency of organisations is to view their portfolio as finite entities created to achieve the strategic vision. This is of course what they are, but they’re also constantly changing in appearance in response to external forces. Keeping a handle on the size and shape of this extended operation is the role of project portfolio management – the critical interface between business KPIs and executional KPIs. Any disconnect here can have a dramatic impact on decision making processes, particularly if its missing the twin values of consistency and constancy:

• Consistency in terms of the metrics used to ensure progress is in the right direction.

• Constancy in terms of the corporate values, the long term vision that can incorporate change in an evolving but instantly recognisable business philosophy

However, according to one Board member, decision making in general requires a radical overhaul; “it has been suggested that executives make

between 50 and 60 important decisions a day, and on average take 11 minutes to absorb the detail before giving their answer. To understand this is to understand the information requirements of the top table. The emphasis will always be on what is easiest to consume, which for many on the C-level translates as financial data. We know numbers don’t convey context, and the challenge for delivery teams and for the PMO is to deliver project and programme data that fits within a wider, strategic frame of reference.”

This discussion also led to a common agreement on the most important question asked by the C-level: ‘what’s going to happen next?’ As one delegate explained, “If I can answer that then I’ll know if I’m prepared to exploit what’s happening to our advantage, or whether I’m going to be a victim of circumstance. This is why the interface is so important, combining different insights and opinions to offer a consolidated view of risk and reward.”

VIEWS FROM THE BOARD

Good project and portfolio management ultimately comes down to how well information is collected, managed and exploited across the organisation to support strategic decision making. Conversely, the biggest obstacles to future success are those aspects that can prevent a free flow of data – particularly the two-way flow between the top-down executive view and the bottom-up executional view.

At the same time, the innovation that surrounds the use of this information is increasingly the key element in accelerating a company’s performance. According to one Board member, “there are two broad benefits we want our information visibility to deliver. The first is organisational alignment, and ensuring project delivery is intimately linked to strategic priorities – and that these priorities emerge from a detailed consideration of what we can actually deliver. The second is to use EPPM information as a catalyst for change, and for helping us identify areas we need to invest in or walk

away from, as well as providing the vehicle for communicating these changing imperatives.”

The choice facing organisations is therefore one of how to use this data as much as it is about what data to use. “It’s no good chasing metrics every time something goes wrong,” explained a Board member describing the reactive nature of many organisations. It was also agreed that data should not be used to put the ‘shackles’ on project teams, or become so structured that decision-making is reduced to merely an act of interpretation. As one delegate described the situation, “at some stage someone has to apply human instinct to the equation, a sense of vision that cannot be rationalised by numbers and data. This for me is the long-term development goal for EPPM solutions; an agile framework for managing both the hard data and an enabling platform for the softer factors connected to the business strategy – with the ability to continually re-shape what we think best practice is.”

FROM CONTEXT TO DECISION INFORMATION FLOW

A discussion on the role of information availability and the quality of strategic decision making across the portfolio…

Defining the true source of information, and innovations in its future use…

It was these ‘softer factors’ that for the Board made up a significant percentage of the information to be found within organisations. Such a view tied in with the wider discussion on the future of project management: the discipline was seen as gradually evolving away from a focus on technical skills toward leadership skills and business acumen. This is a development closely associated with information flow. In the words of one attendee: “in many ways functional areas like project management have to increasingly become knowledge centres that are responsible for disseminating intelligence across the organisation, rather than trying to modify it themselves.”

For another Board member, the spotlight is firmly on the “people side of PPM, and identifying the best way to ensure different layers inside an organisation are effectively joined up. Technology will remain essential because the amount of data we have available is frightening, and with the board asking for more and more operational detail there are less and less places to hide.”

KNOWLEDGE CENTRES

The latest EPPM Board on ‘Connecting the Dots’ led to a range of interesting verdicts on the strategic use of data assets that are being generated across the extended portfolio. These included the importance of identifying a communication method that connects the executive to forums that offer a true indication of the factors behind performance. Further to this was the challenge of analysing data to detect patterns behind the success of investment decisions, and to use these insights to better predict future conditions. In addition, there was the discussion on context, and delivering intelligence to the C-level in a form that both fits within their strategic frame of reference, and provides new insights to guide subsequent investment decisions.

What it also highlighted however was the importance of aligning information assets to consumption patterns. The final discussion of the evening considered this dimension and concluded that such alignment was the principle driver of change. Why? Because millennials are entering the workplace, and with them come a whole new approach to accessing and utilising information resources. There is an energy here that challenges traditional approaches to compartmentalising information, of allocating access by hierarchy. The emphasis is shifting to output, and providing

users with the freedom to access and share information in any way they need to complete a task. This is a new way of viewing the potential of information, a new way of collaboration that transcends concerns with top-down or bottom up flow. Information will increasingly have no place to hide, as employees deploy the analytical capabilities to pull in relevant data with no consideration for access privileges or seniority. The task for organisations is to empower this behaviour, and to take the last steps to inspiring true information visibility.

IN SUMMARY

DISCOVER MORE

The Oracle EPPM Board produces regular reports and findings, all of

which can be accessed at oracle.com/eppm/eppmboard

For further information, please contact

patrick.chatterton@oracele.com

“Technology will remain essential because the amount of data we have available is frightening, and with the board asking for more and more operational detail there are less and less places to hide.”

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