PPM or project portfolio management in IT means allocating a reasonable budget to projects. Depending on the success of the project initiatives, the management can further enhance the project capabilities or remove support entirely. In this article at ThoughtWorks, Sriram Narayan explains how PPM works differently when applied for real-time projects.
I. The PPM Dichotomy
PPM managers basically depend on business cases to fund projects after a careful screening process. Influencers could also help sanction funds for projects that might not be eligible without lobbying. These decisions are either made once in a year or when managers put forward project initiative plans. To be precise, IT companies are more worried about the project presentation than actual value additions.
1. Benefits versus Scope
Organizations that develop IT products are merely delivering what the scope has been. It is the product organization that calls the shots. This disables incremental enhancement of features by not considering the lessons learned in the development phase. Businesses create more ideas which create further confusion. While ‘delivery organizations’ worry about scope, product companies feel concerned about solutions. Narayan recommends that the product and project organizations should work together to come to a proper conclusion. Once that is done, you can concentrate on deriving benefits.
2. Benefits Realizations
The best way to prove your product is beneficial for the company is sales figures. However, some customer-facing products might be based on projects happening in the backend. Also, you might receive sales updates after the completion of an iterative cycle. To avoid that, have smaller cycles. This helps to experience benefits realizations faster. Use analytics to gather results. User surveys are also a good way to understand if customers find the product useful.
3. Single Funding During Project Initiation
You must realize benefits to gather funding for the next iterative cycle. However, business cases are funded right in the beginning. So, even if the project has derived significant benefits, PPM is unable to fund any further. The purpose of such behavior is to avoid undergoing approvals multiple times.
II. Differences Between Product-Centric and Project-Centric IT
Product-centric IT has teams that are already aligned with company strategy. They are responsible for the entire lifecycle and need more resources for maintaining stability. Long-term investments also make for fewer infrastructure debts. A capability owner manages a team of product owners who in turn monitor product teams. Teams rather than projects receive funding. Capability owners provide funds based on objectives in a year.
III. The Three Horizons
You can classify an organization as stable, emerging, or experimental. While experimental ones can have a separate PPM, stable and emerging can be grouped under one PPM. However, senior leadership still holds control over funding and line managers supervise capability owners.
To view the original article in full, visit the following link: https://www.thoughtworks.com/insights/blog/how-product-centric-it-disrupts-portfolio-management