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Three steps to manage your digital portfolio during times of change
Key takeaways
- Businesses need to update their overall and digital strategies to account for the impacts of recent uncertainty.
- Defining a portfolio of transformation projects will allow companies to to rebalance as needs change.
- Delivery of benefits should be monitored against the portfolio and wider strategy to control investment.
COVID-19 created a burning platform for companies to invest in the digitalisation of their operations, products and services. Customers and employees, forced to quarantine at home, had no choice but to rely on digital methods of work and play.
Businesses knew prior to the pandemic that they needed to go digital, but timelines have since accelerated. As one of our clients recently reflected, “the digital transformation we had planned for the next 10 years will [instead] be executed in 10 months.” The health crisis and subsequent economic downturn has resulted in a very different business landscape locally. As research firm Forrester recognised, it is affecting global prospects too. The Asia-Pacific region “is finally entering a decade of a digitally levelled playing field in which firms in the region will be on par with or even exceed the rest of the world in terms of technology-driven business model innovation.”1
How do we achieve such transformation? Forrester believes 2021 will be the year companies will double down on technology projects, but even if companies take longer to implement them, action is essential. So when we look at our organisational strategies, how do we manage the portfolio of technology changes necessary to enable this digital uplift, all while keeping the lights on?
The answer lies in strategy.
Prioritising direction
The demand to deliver technology enabled capabilities must be translated into solutions across industries and functions sooner rather than later. Even prior to these ‘unprecedented times’ organisations often found themselves with a stack of unfinished technology projects, driven to different states of completion by business unit agendas. Reflecting on how they fit with the overall strategic direction wasn’t even in the picture
It’s a common challenge to have a mix of old projects competing with exciting new initiatives. Executives campaign for individual needs, with no mechanisms in place to determine which projects are the right ones to pursue or if the organisation has the capacity (budget, resources, change fatigue) to take them on. This inevitably leads to frustrations, a disparate technology mix, and in the worst cases, write-offs.
Yet predictions on coming investment in technology would seem set to exacerbate the problem. IDC predicts that by 2022, 45 percent of repetitive work tasks will be automated and/or augmented by AI, robotics and RPA, and budgets for secure access solutions will quadruple as flaws in legacy VPNs come to the fore.2 By 2023, they believe 75 percent of the ‘Global 2000’ IT organisations will automate operations practices to transform their IT workforce and support unprecedented scale.
To realise these digital capabilities while avoiding the common pitfalls, businesses should take the following steps:
1. Update your strategy to account for uncertainty
First, organisations must update their overall business strategy — not just an IT one — to drive outcomes that can flex in response to today’s turbulent landscape. A typical cycle for developing and executing an organisational strategy lasts three to five years, however as the world shifts socioeconomically and politically, strategies need to be evaluated more frequently.
The changes we’ve seen in the wake of COVID-19, such as remote working and shifting consumer trends will likely remain in the ‘new normal’. One of the findings from our Global Consumer Insights Survey, for example, was that in the retail grocery space, 86 percent of consumers said they were likely to continue to shop for groceries online/by phone when social distancing measures were removed, even though only nine percent did so before the pandemic.
Your business’ three year strategy and program of digital initiatives did not account for such dramatic changes when it was written in 2019.
2. Define your portfolio of digital transformation projects
With an updated strategy, you will next need to define the digital transformations needed to keep up with the pace of change.
Assembling a portfolio requires an understanding of what initiatives you have, what are needed, and a baseline of data. This should include expected benefits, costs, resourcing, scheduling, risks, organisational change impacts and any other key metrics that you will use to evaluate the appropriateness of a project and analyse it against the broader strategic portfolio. Don’t forget to include the resource impacts of business-as-usual in your thinking around capacity to deliver.
Assessing the needs of your portfolio.
With these elements in place, define the processes and governance functions needed to support ongoing flexible portfolio management. A governance body group should meet regularly to review progress, ensure strategic goals are being delivered, consider new projects, and consider any changes to strategy. This continual evaluation creates the ability to shift priorities and resources to prevent or respond to disruption through an informed and controlled process.
Questions for your governance group to consider.
To balance out longer term strategic initiatives, consider an investment bucket for innovation and experimentation. For ultimate flexibility and benefit, consider driving these initiatives using Agile ways of working. This will support the cultural and wider benefits of a digital-first mindset.
3. Monitor delivery to control investments
You’ve updated your strategy, built a balanced portfolio of projects to deliver on that promise, and defined a process to manage it going forward. Now, monitoring will be critical to driving decision-making.
Organisations typically make great efforts to explain the benefits of proposed projects in strong business cases. The better ones tie them back to strategy. But it’s important not to stop being strategic after the proposal stage and continue tying benefits to strategy through measurement as projects progress.
A framework to clearly measure those benefits, not only on individual projects but across the strategic portfolio, is essential to understanding clearly how you are doing. The data points defined in the case for change need to be owned, maintained and fed back into the portfolio governance group so they can monitor the realisation of benefits and make decisions to rebalance investments of time and resources as required. Feedback on organisational change impacts and external environmental factors are also essential to seeing the full picture.
A framework to establish and measure benefits to inform your portfolio.
There are a variety of ways to bring this together, from bespoke tools through to robust portfolio management solutions. However you do so, continuous monitoring can be the difference between persisting with irrelevant technology investments and pivoting quickly to solutions that accommodate strategic needs.
Update. Now.
If you haven’t updated your strategy based on the world of today, now is the time. While your digital transformation portfolio isn’t aligned, you are at high-risk of making poor investments that don’t realise intended benefits. Worse, they may be completely out of sync with your organisation’s new direction.
Balancing the rewards of quick-win changes with longer term strategic digital endeavours is a no-regrets investment in understanding your company and the world around you. A process to define the strategic portfolio, as well as monitor, report on and communicate performance is essential for maintaining relevance, bolstering resilience, and unlocking your growth potential in this time of continual disruption
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References
- https://go.forrester.com/predictions/
- https://www.idc.com/getdoc.jsp?containerId=prUS46913820
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