6 Principles of Strategic Enterprise Project Portfolio Management
The world's top oil and gas companies understand that strategic portfolio management is the next step in the maturity of enterprise project portfolio management. There is a substantive difference between strategic enterprise project portfolio management and conventional enterprise project portfolio management. Let's take a closer look at the distinguishing factors.
Principles of Strategic Enterprise Project Portfolio Management
Strategic enterprise project portfolio management refers to an approach that pinpoints the correct projects instead of the actual management procedures of the projects. This new approach came about in light of the fact that enormous sums of money were misspent on projects and products that failed. There's no point in sinking significant resources into a slew of projects that likely won't succeed. It is much more prudent to carefully choose the right projects in the first place. The proper allocation of capital and other organizational resources is critical to optimizing value.
Value Centric Strategies
Oil and gas companies focus on creating value when making decisions. These decisions center around three key categories: economic, resources and process. Each plays a unique role in value creation yet they all overlap. The economic area is central to strategic portfolio management as they often serve as the basis for deciding which projects have the most potential to generate revenue. Decisions in this realm center around where to invest capital, how to allocate resources and manage risk. The decisions made in the resources realm are essential for execution. They involve the distribution of human resources, striving for phase gate goals, establishing and following a budget and the dynamics of daily operations. Decisions in the process area revolve around taking projects form concept to launch.
There are 6 key principles to strategic enterprise project portfolio management:
- The “Aligned Decision Forum” principle centers on choosing the proper people at each level of the organization to correspond to the organization's growth as well as the idiosyncrasies of projects.
- The “Value Creation” principle focus revolves around making decisions that build value throughout the initial development stages.
- The “Credible, Comparable Evaluations” principle establishes evaluation frameworks that are solid and easy to understand.
- The “Embrace Uncertainty and Dynamics” principle pinpoints the ways that uncertainty affects the many variables involved in decision making processes. It also monitors their direction throughout the course of development.
- The “Inclusive, Collaborative Process” principle incorporates critical stakeholders from the point of conception to the point where the product is brought to market.
- The “Clear Communication and Learning” principle evaluates, monitors, educates and strives for continuous improvements.
Strategic Enterprise Project Portfolio Management has become vital to the success of oil and gas companies. It is essential to allocating resources in the most efficient manner possible. It is the latest step in the maturation of of project management and is quickly being adopted by companies across industries far and wide.
Strategic enterprise project portfolio management is distinct from regular enterprise project portfolio management.
Oil and gas companies are focusing on value based decision making that keys in on economic, resources and process areas.
The evaluation of projects and portfolios has become equally as important as the actual management of projects.
Software solutions for EPPM, like Oracle's Primavera P6 EPPM, can help your business deal with difficult enterprise project management. Follow the link below and feel free to contact us to learn about all of the project management software and solutions that IMS has to offer, feel free to get in touch with us.