6 Best Practices to Drive Effective Strategic Portfolio Management

In this article, we unpack the Gartner® 6 practices for effective portfolio management and how it provides an action plan to help organizations achieve their desired strategic outcomes.

Previous blog posts have shown how important the technology scouting process is to sparking innovation within organizations. The 2022 Gartner® Hype Cycle™ for Emerging Technologies helped “enterprise architecture and technology innovation leaders expand immersive experiences, accelerate AI automation and optimize technologist delivery.” The identification is the first step, but how do you continue to derive value from these innovation assets?

For us, portfolio management represents that critical next step; monitoring, managing, and eventually infusing these innovation assets into your business operations. Gartner research has found “84% of organizations that were surveyed had moderate-to-low effectiveness at portfolio management”. In short, poor portfolio management can cause businesses to fail to deliver on their innovation objectives.

So how can teams fix this and derive tangible value from their strategic portfolio management?

We believe the 6 Practices for Effective Portfolio Management report by Gartner provides insights that can help solve the innovation problem many business leaders agonize over.

The importance of portfolio management

Portfolio management allows businesses to align their suite of trends, technologies and start-up activities with internal capabilities alongside strategic objectives. Gartner® research projects that "by 2025, 70% of digital investments will fail to deliver the expected business outcomes, due to the absence of a strategic portfolio management (SPM) approach." Consolidating innovation assets into a strategic portfolio management tool - a single point of truth - has become imperative to delivering tangible value to organizations' business activities.

However, Gartner insights show that even organizations with some type of portfolio management tool may not achieve the desired results for several reasons.  

Gartner states that "[s]iloed portfolios cannot work in isolation to provide the organization with a true picture of performance. You need to optimize the value of all major organizational initiatives, which requires integrated portfolio management."

Let us show you how Gartner's methodology helps you optimize your portfolio management to create tangible value for your organization in general and your digitalization strategies in particular.  

The 6 practices for effective portfolio management

Our takeaways: 

1. Visibility to Work and Constraints: Have a clear view of what needs to be done, who owns the work and by when the work needs to be completed.
   
   
2. Customer-Driven Prioritization: Ensure that the undertaken initiatives meet the needs of customers as well as the internal capabilities of your organization.
   
   

3. Adaptive Resource Allocation: Constantly monitor needs to deploy resources where needed in the organization and foster an environment where resources move between initiatives and address priorities.   

4. Continuous Execution of Value: Develop a process to clearly define and track the value of the initiative, and ensure that all relevant stakeholders in your organization are kept apprised of developments and outcomes.  
   
   

5. Change Enabled Culture: Create a systemic and cultural processes to ensure that employees buy into the initiatives and have appropriate feedback channels to optimize execution.
   
   

6. Continuous Value Realization: Use customer expectation as the benchmark for the value being created by initiatives in a steady, consistent, measurable fashion. 

According to Gartner, the six practices will help business leaders to:

• “Ensure that the intake process, prioritization and investment decisions align with customer and business objectives.”
• “Create an adaptive culture to ensure that resources can support changing customer needs.”
• “Track KPIs based on customer expectations.”
• “Implement benefit realization, including continuous feedback, to future prioritization decisions and business case assumptions.”

Using the ITONICS Innovation OS for effective portfolio management 

We think if the Gartner report provides the best practice and framework for portfolio management, then the ITONICS Innovation OS provides the home for all your innovation activities using our strategic portfolio management tools. 

Our portfolio management software provides end-to-end innovation capabilities, from environmental scanning to the ideal effective portfolio management for globally distributed teams.

You can use our strategic portfolio management tools to:

1. Build a suite of innovation assets identified by CTOs, CIOs, and business leaders as the key to digital transformation and innovation objectives
2. Create, consolidate, and rate opportunities and projects
3. Map, analyze, and prioritize opportunities and projects
4. Establish clear processes to qualify and manage innovation projects
5. Track KPIs in the process
6. Consolidate data to report on innovation portfolio developments and results

See it for yourself and learn more about the features and functionalities of the ITONICS Innovation OS in a free demo from one of our experts.

Gartner, 6 Practices for Effective Portfolio Management, Anthony Henderson, 26 April 2022
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.