PPM has long been the name of the game, encompassing the way organizations select and drive projects. However, with the advent of the hybrid organization, it’s become clear that PPM has a couple of disadvantages. Maybe you find it hard to focus on a common way of doing projects when half the organization is agile, another part is creating products with strict milestones, and still others are running initiatives that deliver results to different parts of the organization.
That’s where SPM comes in. Strategic Portfolio Management puts strategy first: aligning the portfolio according to strategy and practicing decision-making that brings the portfolio closer to the overall goal.
But this doesn’t mean that your efforts have been wasted. But you can still gain a lot from shifting your focus from project execution to strategy execution.
A lot of elements of PPM are also part of SPM. Both involve managing portfolios and getting good results; however, their focus can vary somewhat.
In short, the key differences can be summed up like this:
PPM drives projects. SPM drives strategy.
So, where PPM often keeps the focus on project execution, SPM keeps long-term organization strategy in mind.
Where PPM ensures efficient execution, SPM aims to align projects with the strategic goal so projects are feasible as well as contributing to your company vision, both now and in the future.
Where PPM decisions often revolve around project feasibility, risk management, and resource management, SPM takes it a step further and includes the strategic relevance of projects, how they impact the business, and the overall portfolio balance.
Strategic Portfolio Management is not just about the projects. It’s about making the parts fit together in a way that drives strategy forward.
SPM is the obvious evolution from PPM.
Strategic Portfolio takes things a step further, moving away from just doing projects well and getting results but also taking the overall timeline into consideration, ensuring that the right projects deliver the right value at the right time.
SPM can be difficult to master as it requires doing all the aspects of PPM and more. However, with SPM, you get a more cohesive organization that is aligned in moving forward toward a common vision.
The best way to begin SPM, is to get clear on your strategy. Using tools like OKRs has been popular for SPM organizations as it gives an efficient way to visualize and communicate the strategy – on all levels of projects and portfolios. Read our guide to OKRs here.
The next step is finding a tool that can manage projects and initiatives according to that strategy.
Sounds great, right? Well, according to Gartner, “Only 16% of organizations are highly effective at all three key attributes of strategic portfolio management: portfolio alignment, ongoing portfolio flexibility, and value-driven decision making.”(Gartner)
A lot of that is down to not having the right solution that can manage those elements.
That’s why we’ve updated our SPM solution, built on more than 20 years of experience, Power PPM, to include strategic elements, like OKRs, so the execution of projects can be tracked according to strategy. Furthermore, we’ve added the What If module that lets you simulate on strategy with your own data to see, in real-time, the strategic consequences of your portfolio.
All these elements set you up for succeeding with SPM and thereby succeeding with your strategy, so you can create results.
The right results.