6 PMO Tools to Keep Your Portfolios Aligned to Strategy

The PMO is no longer just the gatekeeper for best practice and champion of the delivery schedule. Forward looking organizations are increasingly turning to them to close the gap between strategy and project delivery. Put another way there has never been more pressure to deliver greater alignment for less resource, and the PMO is at the heart of this challenge.

So why do PPM tools focus on detailed delivery? What tools are available to help drive strategic alignment?

At TransparentChoice we believe strategic alignment is a challenge best met by smart PMOs who build effective relationships with stakeholders... and that these leaders deserve fit-for-purpose tooling. What they don't need is to spend their time wrangling with complex spreadsheets. That's why we've built a solution that knits six must-must-have tools into one easy-to-use software package.

1. A Kanban Board for managing the pipeline

Chasing data collection is low value-add work. Moving to a Kanban approach means leveraging structure, rigor and automation to make the job easier and more effective.

A project board is a simple visual representation of status, but becomes a powerful resource when you customize the steps to reflect your decision making process. For larger reviews consider formal stage-gates to enable better progress reporting. Add color coding to make it exec-friendly.

A decision log means you'll never again be staring at a critical number wondering who on earth made that assumption. Moreover, date-stamped updates reduce the risk of stale data corrupting a model, meaning you can stay compliant without adding to the burden of administrative overhead.

Stakeholder alignment is critical to the success of a portfolio, but again it's built on low value-add tasks - updating reports, circulating updates, chasing feedback. If this sounds familiar it's time to reclaim your day, and shift to live links, triggered alerts and targeted forms, all managed via an interactive Kanban.

2. A weighted model that works

Weighted models are commonly used to rank projects within a portfolio, traditionally in a spreadsheet, but increasingly also via a PPM tool component. This is better than guessing, but it's not the best way deliver your strategy. Using software built on the decision science discipline of AHP (Analytic Hierarchy Process) will deliver three key wins for the PMO

Firstly it drives alignment. Criteria need to be weighted using Pairwise: a process of determining the relative importance of 'competing' business goals. By doing this as a Team Sport with your C-Suite you will identify areas of mis-alignment & encourage conversations that resolve them. Critically doing this in an abstract strategic way, and not in the intense heat of a divisive conversation about your project vs. my project is a far better way to get egos on the same page.

Secondly, a homemade weighting system will produce a lower quality model. You're reinventing a wheel that's been refined over thousands of decisions, so expecting any other outcome is, frankly, delusional. We've see ranking models with plateaus (where most projects get the same score), Fibonacci scales which multiply project scores and weights (trust me this isn't right)... and that's some of the better ones. As a leader in your organization you need to be able to rely on your model as a platform for driving change, because if people don't trust the numbers then you will fail.

Finally, as a PMO it's important to realize that a 'free' resource such as Excel can come with a not-so-hidden cost of your time. By spending days developing your in-house model are you really living your best (work) life?

3. Automated scoring surveys for reviewing portfolios at scale

Scoring projects is a key role for the PMO. Specifically, being able to complete a Prioritization Matrix which will show the value and effort for all prospective projects. There's probably a temptation to just do it - to fill in the model based on your judgement, or grab an hour with the manager of the delivery team. This would be a mistake for three reasons.

The first reason is Noise. Put simply ask one person to make an estimate, there's a strong chance they'll be wrong. Ask their colleague to make the same estimate and they'll be wrong too, but in a different way. This does not happen because your colleagues are idiots. It happens because they are (I'm assuming) human. Read Daniel Kahneman if you want to learn more, or why not run your own test. Ask three engineers how long a project will take and see how different their responses are. Most of the time the closest you'll get to a 'correct' answer is the average.

Secondly, project scoring is a fantastic opportunity to build buy-in to your model with your 'resources'. The best way to drive productivity is to motivate, and having people participate with a scoring process does exactly that. They build confidence that they're not assigned to a stupid pet project. They feel more driven to stick to the time estimate they made. And of course they might well tell you things that weren't apparent from the helicopter view in the PMO.

Finally, automating scoring is critical to running a PMO at scale. A steady flow of projects means new data collection, especially if you're using a team scoring approach. Consider one client, who collected 30k data points in a review. Sounds like a lot, but it's simply what you have to do with a massive portfolio, where 'keeping it simple' basically means allocating the same money as last year hoping for the best.

4. Ranking + constraints = Efficient Frontier Model

Prioritization often stops with a ranking, but to deliver your strategy it's critical not to lose sight of constraints.

Defining constraints is a critical element of a strategy, but can get forgotten in the enthusiasm to ideate new initiatives. Too often the PMO has to be the party pooper who says no, or worse, the tyrant who tells the delivery team to figure it out anyway when capacity is shot.

By adding a cost in relation to value, your portfolio analysis acquires a very practical focus. Essentially you're introducing a new 'north star' metric, value for money, which right away should start important conversations, for example do we want a few 'big wins' or a bunch of smaller ones?

By taking this data and visualizing it cumulatively, ranked by value for money, you get... a little bit of magic, whereby you can simply pick projects up to your budget's limit and then stop. There will be exceptions, but don't under-estimate the power of a base case, where adding more cannot happen unless you take something out.

Efficient Frontiers also work brilliantly with one another. If you are managing multiple portfolios, quantifying the benefit of projects within each is critical to being able to determine the right level of allocation between them. Better still offer your leadership choices - eliminate this much risk at the cost of this much growth... it's their call.

5. Portfolio Optimizer Tool

For small portfolios with relatively homogenous resource types, picking the best value for money projects should be relatively easy. But when your portfolio is 50+ projects and you're managing 8 types of non-fungible resource then you probably need an algorithm. Do this for three parallel portfolios sharing the same deliver teams and you definitely need one. 

Portfolio Optimization takes multiple constraints and figures out how to achieve the most value. In doing so you're increasing the likelihood your portfolio delivers the strategy. Critically it does so on the click of a button, therefore eliminating the need to manually 'fill the backpack'.

This AI-enabled speed opens up new possibilities for selecting a portfolio with super-easy scenarios. What If we tolerated a bit more risk? What If we moved open headcount to relieve bottlenecks? What If a group of projects are now 'must have'? The key is that the PMO is able to present choices, thus empowering the executive team to be accountable for selection.

6. Build a roadmap with Project Scheduler

If you're using a PPM tool you probably have very detailed execution plans that define and allocate project workload. This can be an invaluable framework for managing tasks and modelling capacity during execution - but to get here takes a lot of planning, when in all probability your strategic plan only needs a 'broad brush' roadmap.

The key point is that we cannot know exactly what the future holds. By requiring our plan to work through a level of faux-detail we spend a lot of time analyzing things that won't happen. This is why the world invented Agile.

But of course the board still (quite reasonably) want timings. Projects A,B & C in Q1, Projects X,Y and Z in Q2. This is where Project Scheduler is invaluable. Using top down estimates of effort we know roughly what's needed, so feed this data into another algorithm that fits the portfolio against month by month level resource constraints. And as before, in a few seconds we have a base case. Want to get Project X into Q1? What drops? Want to add extra headcount? You can have Project Y faster...

Once again the key is that quality tooling enables the PMO to present choice, and that means leadership get to make the big calls, rather than being swamped with detailed assumptions that will all change anyway.

Conclusion

Finance have an ERP system. Business Intelligence have a data warehouse. Marketing have a CRM solution. The Engineers won't do a thing unless it goes via Jira. Even HR have got in on the act with Workday or equivalent. The point is that they know that effective performance starts with fit-for-purpose tools.

The growth of the PPM market shows that the Project Management Office is getting more support, but only in the context of project execution. When it comes to strategic alignment the solution is all too often the 'free' spreadsheet, a costly anachronism that will drastically reduce the executive team's ability to control their investment choices, and in doing so undermine the delivery of their strategy.

If you want to learn more about strategic portfolio management and how it can empower your PMO to align portfolios with strategy, explore our detailed strategic portfolio management guide for in-depth insights, best practices, and practical tips.