Quick Take:
- Emerging technologies can make your products and services obsolete
- Digital Transformation (DX) means using current technologies to rework an organization\’s products, processes, and strategies
- The biggest trends driving Digital Transformation are:
- Mobile technologies
- Artificial Intelligence
- Machine Learning
- Internet of Things
- Cloud Computing
- You can utilize Project Portfolio Management (PPM) best practices to support your Digital Transformation goals and increase the chances of successfully leveraging not only the current new paradigms but future changes as well
We Live in a Rapidly Advancing Technological Landscape
We\’re sure you understand how quickly technology is changing. What was impossible last year becomes commonplace this year. For example, let\’s look at one fast-growing technology: the Internet of Things (IoT):
- Worldwide technology spending on IoT is forecasted to attain a Compound Annual Growth Rate (CAGR) of 13.6% by 2022
- Cellular IoT connections will reach $3.5 billion in 2023, with a CAGR of 30%
- With mass adoption of 5G still a few years away, the market for IoT middleware will rise from $7.71B in 2019, to USD 22.36B by 2025, a CAGR of 19.72%
Even if your organization is not in the IoT/5G space, chances are good that the availability of these evolving technologies will offer opportunities for organizations that shouldn\’t be ignored. Like it or not, your organization must adapt to changing market forces. You must anticipate how emerging technologies could make your products and services obsolete.
Embracing Digital Transformation is necessary for any business, nonprofit, or institution that seeks to survive into the future. Evolve or become extinct.
This post focuses on the impact of global changes within the IT department, specifically the Project Portfolio Management process (PPM).
What is Digital Transformation?
Digital Transformation (DX) is the reworking of the products, processes, and strategies within an organization to leverage current technologies. Implementing DX requires the examination and reinvention of most, if not all, areas within an organization, from supply chain and workflow to employee skill sets and board-level discussions, to customer interactions and stakeholder value.
Effectively implementing a Digital Transformation strategy enables an organization to better survive and compete as technology evolves in a constantly changing economic landscape.
According to the MIT Center for Digital Business companies that have embraced digital transformation are 26% more profitable than their average industry competitors and enjoy a 12% higher market valuation.
Gartner characterizes \”top-performing businesses\” as those that have already embarked on digital transformations or where digitization is built into their business model.
What is Driving DX and What is its Impact?
Wikipedia defines Digital Transformation as the adoption of digital technology to transform services or businesses, by replacing non-digital or manual processes with digital processes or replacing older digital technology with newer digital technology. The major forces currently driving Digital Transformation evolution are:
- Mobile technologies
- Artificial Intelligence
- Machine Learning
- Internet of Things
- Cloud Computing
These technologies have drastically changed how quickly customers can get information, thus altering their expectations of the quality of products and services from businesses and other organizations with whom they interact. Similarly, this same collection of digital tools has changed what employees and stakeholders (business partners and investors) expect from organizations.
Why Do I Need to Take Action?
The new digital normal has led to mounting pressure to deliver faster, better, cheaper on an increasing number of DX-focused initiatives as organizations scramble to maintain their competitive positioning. To help their companies compete in the new digital marketplace, CIOs are tasked with developing an increasing number of customer-facing applications and nimble platforms.
At the same time, Worldwide IT spending is projected to total $4.1 trillion in 2021, an increase of 8.4% from 2020, according to the latest forecast by Gartner. Gartner also says the source of funds for new digital business initiatives will more frequently come from business departments outside IT and charged as a cost of revenue or cost of goods sold (COGS).
Despite the potential growth in funding, CIOs are being asked to do more with less—and a lot of that \”less\” is going to maintain the status quo, not to digital transformation. As a result, IT resources are scarcer than ever.
How Will This Benefit My Organization?
Without a robust PPM methodology, organizations risk overwhelming their IT departments by investing in the wrong projects, failing to transform the business, and ultimately falling behind the competition or going out of business.
Utilizing PPM best practices to support your Digital Transformation goals increases the chances of successfully leveraging the new paradigm by ensuring that your IT department is aligned with your corporate strategy.
Project Portfolio Management Action Plan for DX
The preceding may have increased your anxiety, but rest assured: There are ways your organization can use Project Portfolio Management to survive, and even thrive during the DX transformation.
Here are three key areas of the Project Portfolio Management process to consider to ensure your DX strategy is successful without sacrificing delivery of ongoing projects.
Project Selection
Digital Transformation affects all areas of an organization, from sales and marketing to supply chain to management to HR. But its impact will probably be the biggest on your organization\’s IT department. DX is likely to produce more IT resource requests from more stakeholders than ever before. Identifying which initiatives to select, approve, and fund remains a cornerstone of PPM best practices and is of paramount importance for managing DX initiatives. Project selection and prioritization will become even more important for DX projects.
Key questions to challenge your current PPM process regarding growth in project requests include the following:
- Does our project selection process support corporate guidelines concerning Transparency and Governance?
- Who can request a project?
- What is the method by which requests are submitted?
- What information is gathered during the submission process?
- How is this information stored?
- Do we have quantitative measures in place to select DX initiatives?
- How do we communicate when and why projects are/are not approved?
Project Management
Once the DX initiatives aligning with the portfolio goals and/or corporate strategy have been identified the next step is to successfully execute them.
Digital Transformation will likely require new systems to be implemented, new skills to be utilized, and new methodologies to be deployed.
Key questions to challenge your current PPM process regarding project management include the following:
- Can the process scale to support the management of an increased number of active projects?
- Do you have the capacity to deliver these projects in terms of skills, quantity, and availability?
- How do you measure risk to both the project and the portfolio?
- Does your process allow immediate understanding of the impact of each initiative on the entire portfolio?
- Can you support stakeholders’ need for near real-time project metrics?
Portfolio Results/Value Delivered
Digital Transformation means that the successful execution of Projects, Programs, and Portfolios will be scrutinized by more areas of the organization than ever before, possibly increasing the pressure on IT to deliver on time. Providing results, value, and metrics will be vital to ensuring success and alignment across your organization.
Key questions to challenge your current PPM reporting processes include the following:
- Do your PPM analytics support corporate guidelines concerning Transparency and Governance?
- Does your process measure the value delivered by the initiatives—as both a forecast and actuals?
- Can all of the stakeholders access project, program, and portfolio level metrics?
- Does IT need to deliver reports or are they accessible via self-service?
- Is DX Worth the Investment?
DX and Project Portfolio Management Success
The Digital Transformation will continue to create winners and losers. There is mounting pressure to deliver on DX-focused initiatives as organizations scramble to maintain their competitive positioning. With an increased number of project requests generated by DX, it is vital that your PPM process allows the IT team to select the right projects, to successfully deliver projects, and to provide metrics to stakeholders across the enterprise.
Selecting the proper initiatives aligned to corporate strategy and enabling stakeholders to understand the resulting value will position the PPM process and PMO function as the focus of this new paradigm.
Projectric delivers to key decision makers across the enterprise portfolio-level KPIs and metrics via dashboards and graphs. We call this 360° view Portfolio Intelligence®; it is the transformation of project and program data into relevant, actionable information for making business decisions. This unparalleled insight provides assurance that your DX initiatives have the transparency and governance necessary for your business to quickly adapt and succeed.
Interested in learning more? Contact us at [email protected] or request a free demo.
