Why Executives Need Enterprise Project Portfolio Management: 3 Key Considerations to Drive Value Across the Organization
- by Melissa Centurio Lopes
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By: Guy Barlow, Oracle Primavera Industry Strategy Director
Over the last few years there has been a
tremendous shift – some would say tectonic in nature – that has brought project
management to the forefront of executive attention. Many factors have been driving this growing
awareness, most notably, the global financial crisis, heightened regulatory
environments and a need to more effectively operationalize corporate strategy.
Executives in India are no
exception. In fact, given the phenomenal
rate of progress of the country, top of mind for all executives (whether in
finance, operations, IT, etc.) is the need to build capacity, ramp-up
production and ensure that the right resources are in place to capture growth
opportunities. This applies across all
industries from asset-intensive – like oil & gas, utilities and mining – to
traditional manufacturing and the public sector, including services-based
sectors such as the financial, telecom and life sciences segments are also part
of the mix.
However, compounding matters is a
complex, interplay between projects – big and small, complex and simple – as
companies expand and grow both domestically and internationally. So, having a standardized, enterprise wide
solution for project portfolio management is natural. Failing to do so is akin to having two ERP
systems, one to manage “large” invoices and one to manage “small” invoices. It makes no sense and provides no enterprise
wide visibility.
Therefore, it is imperative for
executives to understand the full range of their business commitments, the
benefit to the company, current performance and associated course corrections
if needed. Irrespective of industry and
regardless of the use case (e.g., building a power plant, launching a new
financial service or developing a new automobile) company leaders need to
approach the value of enterprise project portfolio management via 3 critical
areas:
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1. Greater Financial Discipline – Improve financial
rigor and results through better governance and control is an imperative given
today’s financial uncertainty and greater investment scrutiny. For example, as India plans a US$1 trillion
investment in the country’s infrastructure how do companies ensure costs are
managed? How do you control cash flow? Can you easily report this to stakeholders?
2. Improved Operational Excellence –
Increase efficiency and reduce costs through robust collaboration and
integration. Upwards of 66% of cost
variances are driven by poor supplier collaboration. As you execute initiatives do
you have visibility into the performance of your supply base? How are they integrated into the broader
program plan?
3. Enhanced Risk Mitigation – Manage and
react to uncertainty through improved transparency and contingency
planning. What happens if you’re faced
with a skills shortage? How do you plan
and account for geo-political or weather related events?
In summary, projects are not just the
delivery of a product or service to a customer inside a predetermined schedule;
they often form a contractual and even moral obligation to shareholders and
stakeholders alike. Hence the intimate
connection between executives and projects, with the latter providing executives
with the platform to demonstrate that their organization has the capabilities
and competencies needed to meet and, whenever possible, exceed their customer
commitments. Effectively developing and operationalizing
corporate strategy is the hallmark of successful executives and enterprise
project and portfolio management allows them to achieve this goal.
Article was
first published for Manage India, an e-newsletter, PMI India.
