PPM Leads to Better Corporate Governance
Enterprise Project Portfolio Management (PPM) tools are core to helping executives manage the business and apply effective corporate governance across the portfolio. They provide a mechanism to review the whole portfolio in a way that isn’t possible without a system to bring everything together.
Governance at the corporate level requires complying with legislation, providing effective controls, risk management and accountability.
This is far easier said than done. Executives need a system that provides the framework for doing all those things, that can also elevate information to the correct level so they spend time on the areas that matter.
PPM tools can support corporate governance by acting as the mechanism for defining and communicating project, program and portfolio objectives, managing risk and monitoring performance. They can also record benefits so you can see whether or not projects are delivering what they set out to achieve.
Here are 3 reasons why PPM tools improve governance, and how you can leverage these in your own organization.
1. Providing visibility
PPM tools offer complete visibility about what is going on in the organization with regards to change initiatives. Whether it’s a business as usual change, a huge program or a small project, the purpose of PPM systems is to consolidate and aggregate data to present the complete picture.
PPM tools offer robust reporting across the portfolio so you can shape the data any way you want. Dashboards let your executives see crucial facts and figures.
Reporting is an important part of governance, but it’s what people do with the information in the reports that really matters. That’s why it’s essential that PPM systems are kept up-to-date with data, so governance decisions can be taken with timely information.
Visibility is widely considered to be a benefit, but if you are the project manager whose project is struggling, you might suddenly feel uncomfortable to be in the spotlight. It’s important that the PPM team take a supportive role and are not too keen to replace project managers who have been working in difficult situations. Failing projects should be supported with a recovery plan – your PPM tool will quickly show whether or not the plan is having the desired effect.
Extra benefit: Many PPM tools like Primavera P6 allow you to automate standard reporting so the same information is created on a regular basis. You get visibility of what’s going on but also comparability back to the last month’s report or last year’s performance. If you want to track operational performance, it’s important to be tracking like for like, or at least understanding why the data is different if you are reporting on different variables.
2. Mapping historical to actual data
PPM tools give you a balanced perspective on organizational performance by providing different viewpoints. They store all historical data relating to projects and programs, creating a repository of information on which to base future estimates. They also give you a window into current performance – the actual data. This gives project teams the information they need to tweak the project delivery approach to ensure work completes on time, on budget and to the required quality criteria.
Real-time project information helps the PPM team identify which projects might need additional support, or where governance processes are failing to provide adequate checks and balances. It can also inform ‘what if’ analysis – take a look at past performance and use that to model what could happen on the project.
Extra benefit: PPM tools also allow you to forecast future performance. This information feeds into risk management decisions and project prioritization. Use resource utilization forecasts to know when you can realistically start new work. Plan the project roadmap for future quarters or years and plot out how you are going to achieve the organizational goals through project delivery.
3. Enabling real-time financial visibility
Finally, PPM tools capture and present financial information in a clear and concise way. They don’t replace the need for a dedicated, certified team of Finance professionals in your business, but they do help non-Finance people understand the viability of the project portfolio.
Financial data helps with project selection and is a key driver in making the right choices for new projects. It feeds into risk responses as well, making sure teams have the investment they need to improve the chances of project success.
PPM data at the project level helps teams understand the financial performance of an individual project. This provides information for governance decisions: is the project on budget? When will the project need additional funding? What’s being pushed into a Phase 2 or later development effort that will need funding next year? All these questions, and more, can be answered by improving financial visibility for projects, helping the business manage cash flow and make sound investment decisions.
Extra benefit: You can maximize your return on investment by grouping projects together with similar goals. Better resource utilization and effort can reduce duplication of effort and let you capitalize on economies of scale. For example, if you have two projects that require similar construction materials, purchasing for both projects together could help you secure a lower price for those supplies.
PPM tools provide the basis for better governance because they make everything easy. All the information is in one place. Everyone has access to what they need, in a format that makes it simple for them to review when they need to. And most importantly, everyone sees the same information. It doesn’t matter if you are the CFO or a project manager: the data is the data, and there is full transparency across the entire organization.
The bottom line is that effective governance gives you the foundation for competitive advantage. Faster access to accurate information is possible when you’ve got PPM tools embedded in the organization. That means you can quickly take decisions and pivot if necessary to adapt to the changing marketplace.
PPM tools have a fundamental role to play in business success: isn’t it time you took a look at your tools to check they are doing as much for you as they can?