Doing the right projects is at least half the challenge in a complex change environment writes Andrew Sloper , a Campion Willcocks Associate with huge experience in programme management.

In recent years a lot of attention has been paid to “doing projects right” yet at least half the challenge in getting full value from project investments is in “doing the right projects” The potential gains in successful outcomes and ROI from effective selection and management of the project portfolio management led to our carrying out research in 2004 with professors at the London Business School.

Building on literature reviews and practical experiences, we conducted interviews and analysis with over 50 organisations. The research focused on key questions: is project portfolio management being used, what benefits does it bring, and do advanced portfolio techniques bring more benefits? The research showed that the positive impact for organisations can increase at each of the three evolutionary stages of portfolio management.

Stage 1 - Inventory: basic inventory of significant projects; project-level analysis with financial focus; and infrequent review with decentralised control

Stage 2 - Administration: portfolio categorised; limited portfolio analysis, especially finance and interdependencies; and periodic review with a central point for information and analysis

Stage 3 - Optimisation: regular review with senior management; portfolio analysed as a whole from multiple viewpoints; this is an ongoing process, with centralised control that has business accountability

We found that portfolio optimisation led to improvements in many dimensions. These ranged from working more effectively within people and financial constraints to reducing the problems of having too many projects, a lack of co-ordination, conflicting objectives, lack of cross-functional working, and late delivery of projects. We also found the best results came from a combination of the harder ‘rational analytical' approaches with ‘softer' approaches, recognising the value of the process itself as much as the end result.

• ‘Hard' approaches like a bottom-up selection process, a linear approach, financial performance based, etc.
• ‘Softer' approaches including top-down asset allocation, an iterative and intuitive approach, capability-based, and tolerance of ‘pet projects'

We also found several areas where specific attention brought disproportionately large rewards. For example:

• Ensuring a clear link with ‘strategy' (this may sound obvious but the full value of developing the portfolio as part of the strategy process is not always appreciated. For many organisations, the decisions made in deciding the portfolio are the first manifestation of where the organisation is “placing its bets” and as importantly, deciding what not to do)
• The upfront use of genuine programme-based approaches
• Explicitly considering ‘capacity' from the outset (in terms of financial, IT and ‘business' capacity)
• Adopting a pragmatic rather than ‘purist' approach to prioritisation and project selection, and
• Ensuring effective follow-through to stop it all unravelling the moment your back's turned.

A ‘classical' definition of programmes is “A portfolio of projects and activities that are co-ordinated and managed as a unit such that they achieve outcomes and realise benefits.” But today, such a view risks missing the fantastic opportunities offered by true programme-based approaches. These include developing a far clearer link with the implementation of an organisation's strategy, the ‘asset allocation' and prioritisation process, and forging stronger links with performance improvement. Modern approaches mean you can retain the continuity of knowledge and the balance of your project portfolio, help you deal with the ‘capacity' challenge and, ultimately, develop more coherent sets of projects.

In summary, it seems clear that managing your project portfolio in smarter ways can pay real dividends.

For more information please call 01494 787925 or email