Last week I attended Gartner IT Symposium in Barcelona. My interest was to check what is on the agenda of CIOs these days as well as to look closer at what Gartner is saying about the Project Portfolio Management Market. Over 2000 CIOs from Europe flew to Barcelona this year, around 45% from companies with 20k+ employees, the majority from Financial or Government sectors, UK and Scandinavia.
Here I'll share some findings, mostly related to the topic of Project Portfolio Management, as this was my focus there.
Where CIOs spend IT budgets
Among all CIO's priorities, the top list this year looks like this:
Overall, the digitalisation of businesses happens rapidly, 60% of all services are expected to digitalise in the next 2-3 years.
One buzzword which I heard almost every half an hour was
Simply put, bi-modal means that there are two modes of operation: mode 1 - stable, where priorities are on productivity, safety and optimised cost, and mode 2 - experimental, where the focus is on innovation and agility. The message here is: don't just operate your IT, innovate and be agile too. Almost in every session I attended Gartner analysts mentioned this buzzword. The threatening message to CIOs was that if they don't innovate there will be disruptive newcomers from even outside their known market segment who may leave them without jobs.
Agile was mentioned quite often, Gartner stated that 76% of companies do Agile these days and this certainly sounded as the way to go. Other practices mentioned from Mode 2 were Multi-Disciplinary Teams, Crowdsourcing, Different Metrics (operation, innovation, guardian), and working with Startups.
Agility in application context was also a big topic. The key recommendation was: reduce your application complexity (Application Agility = 1/Complexity). IT organisations should:
- benchmark the current complexity of applications (there are tools that evaluate code complexity, etc.)
- set goals for reducing the complexity
- measure and refactor or replace complex applications
The agile methodology should be used to deliver value faster and should not be regarded just as an effective way to expedite the development processes. Here is a convincing slide about the direct results from agile delivery focused on speed only:
This fancy term stands for HR, although I certainly like that we talk about talent and not resource. Apart from the necessity of becoming good leaders and creating a proper company culture, getting it right with Talent Management is critical because people are the main asset of any company.
So here Gartner was telling CIOs to "let people work on what they want" and "help them develop their skills".
This reminded me of an interesting case I heard recently from Jens Korte, an agile coach I had a chance to work with lately. Jens is well versed in both Talent Management and Project Portfolio Management. He consulted a customer who wanted to have a clear and visual way to manage talent in their company. The line of thought is the following:
what jobs do we want to get done? > what skills do we need for that? > which skills do we have? > where is the delta?
On the photo below you see a board where the horizontal lanes are people and the vertical lanes are different skills required for the best results of work. The red color of the post-it means this person has insufficient skills for a particular job, and green means s(h)e is great in it. A map like this helps to visualise some business capabilities which are currently underdeveloped in the team (e.g. in the 4th column from the left if Felix is sick - nobody can replace him for this kind of work).
That’s the physical version:
...or the digital version in Targetprocess (of course:)
As a side note, I believe that helping modern companies to do Talent Management/Development is a promising area for a visual management tool like Targetprocess and we shall definitely be looking more into this soon.
PPM: Link between Strategy and Execution
I attended a session by one of PPM analysts at Gartner - Lars Mieritz - to the subject of Business Outcomes in a Project Portfolio.
The message was rather simple: there is a gap between the goals of a company's senior management and the execution of the projects. And we need to close this gap by making business benefits more meaningful in the pre-project stage through a set of business outcome performance indicators and metrics that tie back to the business case and its stated benefits.
Example: CEO and the Board of Directors have a business initiative like "increase client satisfaction with our customer service in 2016". This generates a portfolio of projects e.g. trainings for customer service teams, replacement of the old CRM with a more modern one, etc. Problem: when PMO plans this portfolio it is hard for them to understand which projects are more important than the others (they cannot do all of them due to limited resources) and how to see if projects were successful. As a result, they would often just evaluate the projects by the Cost/Benefit ratio and those projects which have the highest ratio are considered to be successful. But this is not always true.
Solution: CEO/Executive Board define Critical Success Factors (CSF) and metrics to measure those business outcomes. E.g. CSF = 30% increase in satisfaction rate with Customer Service and the metric = a customer survey in the beginning and the end of the year should benchmark the current and new satisfaction rates. Practically, this happens by providing a Business Case document for each objective which has a bunch of parameters. The Business Case document needs to be filled in by the business executives who should indicate expected outcomes and the metrics for measuring the project success.
PMO would then be able to clearly define their project portfolio based on these expected outcomes and related metrics. To summarize it, the correct sequence should be as follows:
- Business objectives are defined with Critical Success Factors (CSF)
- Business benefits are formulated
- Required business changes are defined along with the metrics (they should be directly related to the original business objective vs. being purely technical such as e.g. server availability %)
- The defined business changes are enabled
- Project portfolio is managed by the CSF and metrics
Another topical problem for many companies nowadays seems to be the necessity to enable fast feedback in both directions:
BUSINESS > IT (e.g. "guys, don't do this project anymore, the priorities changed last month")
IT>BUSINESS (e.g. "this project is stuck or this has been already delivered, try this out")
Gartner recommends to have an agile feedback mechanism between Business and IT, which means to exchange information faster and more often.
(Side thought: Targetprocess customers could solve these problems by
- a) Letting company's executives create initiatives and specify their expected outcomes and metrics as part of the initiative’s attributes
- b) PMO/IT Dept quickly feed back the status of projects and are updated on the changes in strategy
Our product specialists can help you set up Targetprocess that way.)
PPM Hype Cycle
Another PPM presentation I attended was called "PPM Hype Cycle" by Teresa Jones. A hype cycle is something that could be easily described with an analogy with a couple's relationship. In the beginning there is a lot of excitement then a lot of disappointment and later (if the couple did not get divorced in the greyest days) the line goes up again, and this is called a "mature relationship" then:)
It looks like this:
So now here's what Gartner says about the hype cycle of the Project Portfolio Management market. I will go through different stages of its development, I marked the most important ones with numbers on the graph above. I didn’t catch all items so I will mostly highlight here those that I think are especially interesting:
1)... (not sure what it was)
2) adaptive Enterprise
3) Business Transformation office
4) Hybrid of Cloud and On-Premise application management skill set
5) Project Collaboration space (=online tool for project management)
6) Adaptive Program Management
7) Collaborative Work Management (knowledge work, not just projects)
8) Integrated IT Portfolio Analysis (this means an alignment of applications, projects and services in the same portfolio)
9) NPD = New Product Development Portfolio (here the Gartner analyst pointed out that this space is new and there are no good tools covering this yet, it is still a niche to be filled and new tools сan be expected in this space soon).
10) Agile project management
11) Kanban for programs
12) Application Portfolio Management (the challenge here is to monitor the status of applications in real-time)
13) Cloud-based PPM tools (here Gartner said that the new cloud-based tools are good at Project Management and not yet good enough at Portfolio management)
14) PPM Certification
15) Reporting Enterprise PMO
16) Resource Management. Gartner's point here was that current implementation of Resource Management in PPM tools is too detailed, too complex, needs to be done differently: rather high-level capacity management is needed than too detailed person-level management)
17) IT PMO
18) Earned Value management
19) IT PPM applications. They said here that old PPM tools are hard to update and a new generation of PPM tools should come around
20) PPM for Professional Services
21) Idea Management (they thought that this area may soon move into another market segment).
An interesting thing is that Integrated PPM, NPD, Agile and Kanban are on top of this hype wave and these are the areas where agile tools like Targetprocess are surely most familiar with and powerful at.
I had a chat with Teresa after her session and introduced Targetprocess quickly (she didn't know of it, of course). We didn’t go into many details but to my question about Capacity Management, she said that current PPM vendors may be doing too much there and 80% of this functionality should be more than enough. Also she said that planning and managing people resources too granularly and too in advance could be a big mistake and her suggestion is that there should be a 2-step process:
Step 1: High-level capacity planning. We ask ourselves "Can we do this project next summer?" And if the answer is most probably YES, we put it on the roadmap
Step 2: When it comes closer to the implementation of the project, we plan it in more detail (which skills do we need, do we have people with the required skillset available? Days off and public holidays?)
Capacity Management is a topic we are working on full speed right now and it would be indeed interesting to collect more feedback from any of you reading this post and involved with Project Portfolio planning and capacity management in your companies. How long in advance is capacity and resource planning relevant for your business, do you plan on the personal or less granular (team? squad?) levels? Please feel free to post in the comments here or contact us directly by mail info(@)targetprocess.com if you want to share your ideas.