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The Role of Enterprise Architecture: Project Portfolio Management
Transformation. Everybody is talking about it, and in all contexts: business transformation, digital transformation, agile transformation… With almost every B2B software vendor saying they support these transformation styles, how can you avoid confusion about which tools support which project capabilities? How do you cut through the fuzz and find the necessary tools to execute your transformation projects?
This blog explains the differences (and similarities) between four core fields of business transformation: Project Portfolio Management, Strategic Portfolio Management, Strategic Portfolio Architecture, and Project Management. Additionally, we explain the crucial role that Enterprise Architecture plays in gluing these fields together.
Project Portfolio Management and Strategic Portfolio Management
When transforming your business, the vehicles to do so are changes. Changes are given many different names in the market, such as projects, programs, initiatives, epics, or whatever your organization names them. Ultimately, they all do the same: they create shifts in smaller or larger parts of your organization for optimization. Optimization has many forms but usually focuses on making things more efficient, less risky, or more valuable. The problem is that your organization’s possible optimizations are infinite. Therefore, we need a way to prioritize which of these changes we choose to pursue. Bring in Project Portfolio Management (PPM) and Strategic Portfolio Management (SPM).
What is Project Portfolio Management?
Let’s start with eliminating a misconception: Project Portfolio Management and Strategic Portfolio Management aren’t two separate fields that any organization should both implement; Strategic Portfolio Management is actually an evolution of the Project Portfolio Management discipline. Thus, you implement one or the other.
The term Project Portfolio Management (PPM) has been around for over 20 years. In a nutshell, PPM aims at prioritizing the right portfolios of projects. With Project Portfolio Management, organizations have a more objective and data-driven way to compare the value vs. cost of projects. Meaning they are enabled to spend their resources more efficiently. Metrics often used here are estimated project costs, risks, duration, and value.
How PPM Turned Into SPM
In 2017, Forrester coined the term Strategic Portfolio Management (SPM). Forrester stated that the old disciple of PPM was way too bottom-up and siloed. Therefore, a completely new approach to prioritizing projects and initiatives was required in the age of shortened project cycles and agile methodologies. This is what became SPM, and Forrester immediately released a Forrester Wave on the subject. In 2020, Gartner also released a Gartner Magic Quadrant, which ranks using the same metrics, also stating that the old field of PPM is now a commodity, and the world is moving to a new way of prioritizing projects. SPM focuses more on identifying the strategic objectives and emphasizes the importance of continuous planning, with traceability of the results achieved throughout the planning cycles, the impact projects have on Business Capabilities, as well as the adoption of agile planning and making the process much more iterative and adaptable.
Project Management & Adaptive Project Management
Now that we know which projects we want to prioritize, we also need a way to ensure that we achieve a single project’s goals within the given constraints. This means we must ensure the execution of projects or initiatives is within the given time, budget, and any other constraints defined for project success. This requires operational excellence: setting up a way to ensure all stakeholders involved are aligned on executing the assignment. The assurance will help execute the strategy we have operationalized with PPM/SPM.
This is what Project Management (PM) is for. It’s the discipline that helps teams and project managers meet the parameters assigned to business initiatives. PM is very often supported with project management tooling such as Jira or Asana that allows organizations to plan and distribute tasks across different members of the project management teams and to monitor the progress of activities per project.
Project Management vs. Adaptive Project Management: What’s the Difference?
Just as with PPM and SPM, Adaptive Project Management (APM) is the evolution of Project Management. Adaptive Project Management is based on the Adaptive Project Framework and is more suited for dealing with today’s pace and agility. The Framework is a style of project management that encourages flexibility and places the client as the central figure who decides on the project’s every next step. This again means that the approach is much more iterative and change-oriented than the traditional Project Management approach.
To summarize: Project Portfolio Management and Strategic Portfolio Management are focused on doing the right projects, while Project Management and Adaptive Project Management are focused on doing the projects right.
Strategic Portfolio Architecture
Moving on, now that we know how to support the prioritization of projects and the management of the project execution, there is a big question left: How do people in project/agile teams, strategic teams, and business stakeholders communicate what needs to be done? There is surely a set of organizational rules, policies, and guardrails the project will have to meet. This is where Strategic Portfolio Architecture comes in.
Strategic Portfolio Architecture (SPA) focuses on visualizing and communicating what needs to be done within projects and initiatives, as well as identifying the impact the projects will have on daily operations. Therefore, it’s most effective during the building and designing phases of a project or initiative. SPA supports transformation in a flexible, agile, iterative, and preferably distributed way. There isn’t one single person in charge of making designs. Rather, the process of creating transformation designs is an ongoing, structured process where the design is ping-ponged back and forth between different stakeholders. It follows approval cycles and workflows, through which the final design is constantly adapted based on the newest insights.
Thus, Strategic Portfolio Architecture is an iterative design process based on architecture, process, and data modeling. It supports decision-making by visualizing the impact and value a project will have on the organization via key metrics. This requires deep integration with both PPM/SPM as well as (Adaptive) Project Management. The project priorities can be adapted based on the insights generated in Strategic Portfolio Architecture. At the same time, we want to measure the progress of execution in Project Management and weave the workflow for approval into the project management cycle.
The Role of Enterprise Architecture
And then, finally: Enterprise Architecture. PPA/SPA, (Adaptive) Project Management, and Strategic Portfolio Architecture all provide the key elements to connect strategy to execution in a clear, structured, and smooth way for all stakeholders involved. However, they still need to be brought together. Enterprise Architecture does exactly this: it’s the glue to align strategy with execution.
Enterprise Architecture translates strategies, goals, and objectives into structured formats. When you tie change projects to these formats, you can measure their value. It provides and structures the current and future state capability models that allow organizations to set strategic roadmaps and provide a north star of where we’re heading. Next to that, EA is often responsible for the different domain architectures of business, applications, data, and technologies. Together, these domains comprise the current state architecture: the starting point from which to do the impact and scenario analyses in Strategic Portfolio Architecture and plan for the future state.
Lastly, EA often analyzes and sets the policies, principles, and guidelines to which new solutions must align. With that, EA provides the guard rails for the project delivery and requirements. Modern Enterprise Architecture practices are also increasingly focused on aligning the whole process from strategy to execution: They act as the main facilitator to successfully combine SPM/PPM, (Adaptive) Project Management and SPA.
Successful Transformation
To summarize, successful transformation requires full alignment between strategy and execution. It’s critical that prioritization with Project/Strategic Portfolio Management, execution with (Adaptive) Project Management, and designing with Strategic Portfolio Architecture are all in place, while a maturing EA organization should help to glue these disciplines together.
The key when starting this off is to start small, realize results, and expand as you gain more experience with this golden transformation combination.
Solution Portfolio Architecture One-Pager
Manage your portfolio of transformation projects and prioritize in line with strategic business objectives with Solution Project Architecture
