Consider this scenario. A government department charged with delivering the IT component of a massive infrastructure program recognised complexity caused its $3 billion project environment to perform in, at times, mystifying ways.
Complexity, rather than the nature of the projects themselves, created a tangle of interdependencies that were inexplicable, emergent and mostly impossible to manage.
Unfortunately, this is a common scenario. Complexity slows down, or at worst, completely halts technology projects. Too often, project portfolio management (PPM) environments suffer from bloated, convoluted solutions that impede project delivery and make PPM a discrete function rather than a core organisational capability.
Companies in the banking, mining, logistics and other sectors have all found that eliminating PPM complexity removes unnecessary, hidden costs, and organisational friction.
Once the complexity is removed, project delivery dramatically improves. This helps bring project portfolios under control, reduces project execution cost, improves success rates and stakeholder confidence.
Take a simple approach
Unnecessary PPM complexity arises from growing misalignment between the needs of the project environment and the processes supporting it. It is easily managed once identified.
Once the project management office (PMO) has a clear picture of where complexity hampers effectiveness – and the easiest way is to analyse the incumbent project environment against the PPM Operating Model – removing complexity requires the integration of fundamentals, experience and expertise.
The PPM operating model, illustrated below, is the critical link between project environment performance and organisational design.
PPM, and its mother ship, the PMO, have had indifferent careers in the past decade. Despite being regarded as critical to ensure project success, PPM and PMOs can be, as one client said, “Sluggish, expensive; sometimes a hindrance”.
Despite widespread agreement that PPM environment complexity creates big problems, few PPM consultants (regrettably) and only some PMO managers understand what PPM complexity looks like.
PPM environments, like Hollywood action movies, are simple creatures (and they’re all the same). Apart from master scheduling and portfolio optimisation, which can be tricky, PPM theoretical disciplines are straightforward.
PMOs can boost PPM environment effectiveness through a combination of two things: Removing complexity that doesn’t add value and aligning PPM processes, frameworks and business rules to a streamlined, integrated operating model.
Fortune favours the fundamentals
The challenge with eliminating complexity is, of course, that the short-term actions, which reduce costs and create reliability, can also expose other performance problems.
Often, staff numbers need to be reduced. Sometimes a more streamlined and controlled way of operating uncovers underperformance and a bias towards operating in chaos.
The key task is to manage the balance points by attacking environment complexity first (the superstructure), process complexity next and only then focus on performance issues.
The reason is this: Complex processes often reflect poor environment design. If you attempt to deal with performance issues first, without streamlining the operating model and simplifying processes, you find even more complexity cropping up in some other process area.
It’s like trying to make a balloon smaller by squeezing one part of it – another part just gets bigger.
In the case of the government department, mentioned earlier, the answer was to reduce complexity through the well-sequenced activities of fixing the fundamentals.
Improving environment design. A best-practice PPM Operating Model design minimises complexity, eliminates redundant activities, and creates clear accountability and targets from within theoretically strict PPM disciplines.
As an interim measure, the PMO centralised scheduling, project budget management, resource utilisation and project scope confirmation until the project environment fundamentals were fixed. These processes were sent back to the projects once the environment was operating to acceptable performance targets.
Aligning processes. The frameworks, processes and business rules within the project environment were streamlined and simplified. Any processes that did not conform to the operating model were eliminated or sent elsewhere to rapidly implement and operationalise core PPM procedures.
Improving capabilities. Once an environment knows where its complexity lies and has used structure and other mechanisms to minimise costs, it must build the capabilities of the individuals who will assume the roles that may be pivotal to managing the new operating model.
Complex project environments don’t always behave in a linear way. Altering cultural, environment and operating models can therefore have unintended consequences that may generate even more complexity.
Although it’s importance of removing complexity from the PPM environment, you must address complexity in the context of value creation.
Selectivity should inspire you to reduce or even altogether eliminate some processes, which can have a positive and dramatic effect on project environment performance. If that’s done within the framework of the operating model, environment performance dramatically improves.
If all PPM environments operate in the same way, regardless of organisational position or from whatever industry they hail, then a streamlined and scalable PPM operating model removes complexity by arranging the processes, people and systems that reduce cost and achieve optimum project environment proficiency.
Even if the goals are clear, the vision of the target operating model won’t come into sharp focus until the environment begins moving toward it.
To get going, prioritise efforts to score some quick wins, both to realise the savings that can be reinvested in these efforts and to maintain momentum for the larger, longer-term transformation.
As new processes and frameworks are implemented, the target operating model may be redefined in light of key insights from early improvement initiatives and the implementation effort adapted accordingly.
Corinne Forrest is head of PPM strategy at PPM Global Consulting.