Globally enterprise organisations are striving for higher performance from their project portfolio programs with a desire to do more with less. Naturally, capital project and portfolio programs are no different. Yet surprisingly, 23% of organisations don’t use any kind of project management software to manage projects – which subsequently gives little insight into the performance of the portfolio.
Mike Duell and Kim Featherstone know the correlation between an organisation’s maturity level and software use is undeniable - 95% of organisations within the highest maturity category use project management technology.
The benefits go beyond reporting capabilities though; the value of portfolio management in strategic alignment and measuring ROI, prioritisation of projects, embedding project management methodologies into the project lifecycle, and guidance towards greater project management capability.
With the adoption of project management methodology tethered to improved project performance, the business case for capital project and portfolio management software is a simple one.
But where do you begin? We know that buying enterprise software can be overwhelming. The average buying group in any organisation involves 6-12 internal stakeholders, with a range of varying expectations. And some have little experience buying enterprise software before.
Enterprise organisations can have significantly more hoops to jump through due to the size and scale of the business. It’s not surprising for the buying process to take more than 6 months, from initial discovery to contract close. Although no buying journey is linear, we do find they often go through similar steps.
Buyers Roadmap
During your research phase and before you have decided that you need a software solution, you can begin to lay the foundations for a compelling business case.
1. Engage stakeholders and build consensus
2. Map solution benefits to business pain points
3. Quantify the benefits
4. Preparation is key
“As much as 11% of capital portfolio investment is lost to inefficiencies with project portfolio management. With performance directly linked to using a dedicated tool to manage projects and portfolio success, it makes sense to explore your organisation’s case for change" - Mike Duell
Engage stakeholders and build consensus
We see organisations experience similar challenges when it comes to capital project and portfolio management. By solving these pain points and mapping them to the business impact and the benefit to stakeholders and beneficiaries, the value of making the change will become clear.
For example:
| PAIN POINT | BUSINESS IMPACT | BENEFIT |
|
We have poor transparency across our portfolio |
Portfolio information is stored in multiple systems with no effective means for locating it. A significant amount of time is required to manually manipulate data to generate portfolio insights |
CAPEXinsights collates all project and portfolio data into a single application. From this richer and broader data set, the business can undertake more readily robust analysis and gain insights that it previously could not surface easily. Strategic decisions are made with deeper analytical backing. |
“ We find creating a vision of the organisation’s future state will make it easier to build consensus with the right internal stakeholders” - Kim Featherstone
Quantify the benefits
Capital project and portfolio management software can improve business performance and maximise commercial returns. At a project level, the return on investment comes from:
• Reduced budget overruns from improved visibility into project performance.
• Savings from reduced project management effort and increased profit potential. Projects completed ahead of schedule deliver their benefits faster and allow people to be diverted into other value-adding tasks.
• Further savings due to improved resource management, as those on the shop floor can spend more time on tools and less time filling in paperwork.
Industry research suggests that as much as 11% of capital portfolio investment is lost by some organisations which can equal millions of wasted expenditure.
"Until you can easily drill down into valuable information aggregated across the portfolio to see what’s going wrong, it’s hard to calculate efficiency gains.” - Mike Duell
There are three areas across the portfolio that present an opportunity for greater efficiency when addressed:
• Avoidable costs – like gold plating assets or flawed projects going all the way to the capex gate
• Value erosion – poor cashflow forecasting means capital could have been used elsewhere or from too much duplication between systems.
• Lost opportunities – when strategic projects are delivered late this means the organisation may lose the opportunity to transform the organisation and remain competitive.
Use our calculator to calculate the percentage of opportunity for your organisation.
Preparation is key
By preparing your business case with a considered approach your key stakeholders will have the confidence to support your conclusion and greenlight your proposed change. Having well-thought-out answers to potential questions gives you the advantage when presentations are often given minutes to address any outstanding concerns.
You will find there are common questions raised when proposing to implement software. For instance, your stakeholders will want to know these answers:
• How the software integrate will integrate with existing business solutions.
• The return on investment
• What time, money and resources need to be considered to realise the change.
• What change management assistance is offered.
Having these answers prepared ahead of time will help to expedite buy-in and make potential software vendors easier to veer towards in your business case.
We have constructed many business cases. In fact, business case validation is part of our product because we know it’s part of any successful capital strategy. Download our complete guide to buying Capital Project and Portfolio Management software and use the resources to help you build your case for change.