The Secret to Better Portfolio Planning: Connecting the Project Lifecycle

June 7, 2024

Anna Morris

Most will have heard the idiom “missing the forest for the trees.” It speaks to a struggle we often face – being so focused on the details that we miss the bigger picture. This is a trap project-driven organizations can fall into if they aren’t careful. When working on a slew of projects, it can be easy to treat them as separate entities, but doing so can result in misalignment between your project efforts and your strategic business objectives. To prevent this, project-focused organizations rely on portfolio planning to keep their efforts aligned and on track.

What’s portfolio planning and why is it important?

Portfolios offer a 10,000-foot view of a group of projects and aggregates their collective performance. Portfolio planning sets portfolio direction by ensuring the projects an organization selects are right for their business. When determining whether a project is worth pursuing, portfolio planners compare the characteristics of a potential project with the characteristics of past and current projects. Critically, they also consider their organization’s goals, their budget, their bandwidth and more. The process evaluates different scenarios of project combinations and the opportunity costs of selecting one over another. All this information is housed within the greater portfolio plan and is utilized to ensure the projects selected empower the organization to meet strategic objectives.

Steps to creating and implementing an effective portfolio plan

One might ask then, how is a portfolio plan built? The following are steps that all project-driven organizations take to ideate, craft and implement their portfolio plans:

Step 1 – Determine your business objectives

Portfolio and project teams must work together to create a strategy map. Included in this map should be what the business objectives are, how they will be measured, and how team members should prioritize them.

Step 2 – Identify potential projects

After you’ve determined your business objectives, create a list of project characteristics to look for that will help you reach your goals. Then identify potential projects, big and small, that contribute to those characteristics.

Step 3 – Select the projects that align with your objectives

Once you have your list of potential projects, rank the characteristics you looked for above based on how well they support your business objectives. Then narrow down your list of potential projects by selecting the ones whose characteristics combine to result in the highest rankings. This will allow you to select the projects that best align with your business strategy. Armed with this information, you’ve created a tentative portfolio with the highest scoring projects.

Step 4 – Validate feasibility

Now that you have a tentative list of projects, you’ll need to make sure you have the resources, bandwidth and stakeholder buy-in needed to successfully implement and execute. Based on past project data, take account of the resources you’ll need, and list out setbacks you’ll most likely experience. If the projects still seem doable despite this, and your stakeholders agree, you can commit and move forward with your portfolio plan.

Step 5 – Continually monitor the portfolio, making alterations to your plans where needed

As you’re managing your projects, keep a close watch on how they perform. As projects progress and issues arise, you can revert to the portfolio level to ensure resource optimization and continued alignment to business objectives.

An age-old problem still lingers, unnoticed

Even if an organization follows these steps exactly, a nagging question remains: are you overlooking pieces of information that are critical to portfolio success? This concern grows especially as you move into step 5 of portfolio planning. With so many factors to consider, it can seem almost impossible to build and implement portfolio plans that lack the inevitable smattering of blind spots.

These blind spots have been perpetuated by the fractured project environment. Project-focused organizations continuously work to bring together their siloed data sources, mending their project environments and supporting better connectivity. However, there is another facet to connecting the project environment that many organizations have not yet considered. The key to fully tackling this challenge lies in connecting the phases of the project lifecycle. .

A need for more connectivity

As hinted above, organizations are now able to integrate their previously siloed house-built systems, third-party solutions and spreadsheets into a consolidated and seamless environment. While this paints a clearer picture into project data and allows users to gain critical insights into overall project performance, another layer of connectivity is missing. The data environment is still not completely whole as, more often than not, an organization’s project lifecycle is left unconnected.

The fractured project lifecycle

Let’s discuss how many project lifecycles operate currently: portfolio planning funnels into portfolio management and then into project planning and subsequent project execution. However, once data funnels into the next phase of the project lifecycle, there is often no way for the data to flow backward to inform continued planning efforts. As a result, when unforeseen challenges arise, plan teams are alerted, but at a point where remedial efforts can’t make a difference. This lack of proactivity has resulted in missed opportunities, resource waste and diminished margins for an untold number of organizations within the projects industry… until now.

The portfolio performance feedback loop

Enter the feedback loop! The feedback loop is a phrase we’re coining in this blog to reference the next step in improving the connectivity of the modern project portfolio environment. The feedback loop closes the gaps between portfolio planning, portfolio management, project planning and project management. It allows data to swim upstream, from even the most minute projects, to merge with relevant data from other projects and inform the highest levels of portfolio planning.

The enhanced level of data connectivity and automation supported by the feedback loop allows data to work cross functionally, informing each phase of the project lifecycle simultaneously. This greatly reduces the complexity of portfolio planning as you achieve greater visibility with near real-time access to every piece of critical project data.

Due to this, data becomes more trustworthy as it begins to paint a clearer picture of your portfolio progress and performance. Data can be presented automatically within easily consumable reports, empowering organizational leaders and portfolio planners to make the best decisions not only for their portfolios but their business as a whole.

The result

As organizations utilize the feedback loop, their portfolio planning becomes more effective. Instead of “missing the forest for the trees,” organizations are equipped to see a complete picture of their project portfolio. This empowers organizations to tackle complexity and accurately pinpoint potential challenges, enabling better and faster decision-making.

Due to this, portfolio planners can ensure the projects they select align to their business objectives, so when challenges arise, they’ve already done the work to support a quick pivot. This increased proactivity results in resource optimization and maximizes financial returns.