Enterprise Transformation: Why success lies in your approach to strategic portfolio management
Ensuring your organization drives strategic change demands the right platform — and users that embrace it
If you’re leading transformation, chances are you’ve been here: business has a bold vision to drive strategic change — which, instead, results in havoc. Done right, enterprise transformation can help companies become more efficient, pivot to new products or markets, and gain an edge over the competition. Too often, though, firms attempt to do too much too quickly: different parts of the organization, all seeking to play their part, launch change initiatives in parallel, which overburden staff and lead to bottlenecks. This is especially true in the era of software-as-a-service: since SaaS applications are often owned by business units rather than IT, governing the IT landscape as well as processes becomes even more difficult. Enterprises in this state are like mountains at risk of an avalanche: without proper coordination, change projects pile up like snow and ice that can trigger a collapse, instead of driving transformation.
A big part of the problem is a lack of transparency. Just as wilderness authorities often lack a “whole view” of avalanche risks — from weak layers of snow to human and animal activity — leaders often struggle to capture a complete set of data related to the project portfolio. For many companies, tracking change is an ad-hoc exercise, defined by sporadic project updates, often in Excel or PowerPoint, that lack a standard format and are often imprecise. To make truly informed decisions, enterprises need to do better. They need to understand the state of all initiatives and their interdependencies, so they can prioritize change that’s most impactful.
Luckily, there are tools designed exactly for this task. Today, a growing number of organizations are turning to strategic portfolio management, or SPM, an approach combining strategy execution management, integrated IT portfolio management, project portfolio management, and process management. SPM makes it possible to visualize the cost, complexity, and feasibility of proposed changes, and better align the goals of all involved stakeholders.
SPM tools, like Software AG’s Alfabet, are built to provide this much needed visibility, though they’re not a magic fix: the SPM approach typically leads to success only when a critical mass of users embraces it. This means that firms bent on successful transformation must find a way to ingrain SPM into their everyday way of working. It means that personnel responsible for the execution of strategy, including project managers, must see value in the SPM tool and proactively ensure their project data stays up to date. Only then will decision-makers have enough information to align resources to strategy, accelerate projects, and focus on innovation — rather than end up buried in a metaphorical pile of snow.
Practicing what we preach
At Software AG, our expertise in getting the most out of SPM comes from our many years of supporting customers utilizing Alfabet to guide their transformation. But we also practice what we preach — and have a story to tell about our own SPM journey we believe offers some valuable lessons. It begins back in 2018, when Software AG embarked on a strategic transformation of its own. Known as “Helix,” the strategy sought to boost growth by sharpening our product focus and accelerating a shift toward a subscription business model. It was a move in line with the major trends of the enterprise software industry.
Like many of our customers, we began our transformation journey without an SPM platform. Instead, our program and project managers tracked all change initiatives through Excel. Not only was this tedious; it was also never clear which file was up-to-date, and the large number of users meant versions were routinely corrupted. In 2020, our transformation office began using Alfabet to track proposed projects along a clearly defined approval process. The intent — preventing unnecessary projects — was a noble one. Yet project managers found the process to be tedious. Their resentment kept them from keeping their project information up to date, resulting in stale data that severely hindered collective planning efforts.
Eventually, we changed course. Informed by a series of workshops with our project manager community, we pivoted toward a more user-centric approach. Instead of asking project managers to submit “change demands” and then wait through multiple rounds of approvals, we invited them to be active participants: our new project lifecycle workflow automatically guides them through the project lifecycle stages, including project initiation, planning, execution, and closure with the quality gates and approval steps embedded.
Through this holistic approach, we significantly improved our system of setting up and executing projects. Using Alfabet, we streamlined the creation of project impact assessments, stakeholder assessments, and other tedious tasks, which saved project managers time and incentivized them to keep their project data current. We enabled them to map their projects to corporate strategic priorities — a major step toward ensuring we maintain the right number of projects in the most critical areas. We introduced a project scoring approach based on easy to assess evaluation criteria and constructed a central repository of all program and project data. Almost immediately, project managers felt more invested in their projects, and motivated to share their knowledge and successes through updates that resulted in more robust data for everyone.
A culture of continuous improvement
Today, our transformation office is still just getting started: our new, user-centric approach only went live last October, and we’re continuing to refine it. Next up, we’re planning to further simplify the project approval process through the introduction of a value stream framework. We’re also organizing another round of workshops and trainings to help close some additional skill gaps our SPM journey so far has brought to light.
Already, however, our embrace of Alfabet — combined with our shift from a governance to a user-centric approach — is helping us manage change in a more efficient, better coordinated manner. It’s giving us a new appreciation of the ability of SPM to be a driver of the process — and for the power of our own product, Alfabet, which is helping so many of our customers transform into more agile, innovative, and ultimately, thriving businesses.
It also leaves us with a final word of advice for IT and transformation managers: when introducing an SPM tool, make sure your users are engaged at every step of the process. By focusing on creating more value for them, they’ll in turn bring more value to your enterprise. Not only will you avoid the avalanche of too many ill-coordinated projects; you’ll also begin to forge a culture of continuous improvement, and your transformation journey will be far better off for it.