If you’ve considered whether your PMO needs a new outlook on strategy, you might find yourself reflecting on whether your foundational approach is a top down focus or a bottom up approach. While it is important to strike a balance between these two dynamics, it helps to establish which one is the primary purpose of your PMO – and which will be prioritized. Let’s first define each of these methods and take a look at the advantages and disadvantages to determine which is better for your organization.
TOP DOWN PORTFOLIO MANAGEMENT
A “top down” approach to portfolio management essentially takes a “strategy first” mantra. It ensures goals are not only defined for the organization and agreed upon among all parties, but that projects and work are aligned with those goals. Starting with strategic goals and objectives of the business, you then evaluate and assess projects based on their merit for a specific goal. It sounds simple, but is not always straightforward in practice.
- Defining goals: for a PMO that is a delivery machine, this might be counterintuitive – instead of taking projects that are requested, they must first ask “why” the project is being done in the first place.
- Assigning value to goals: it’s not an easy process to assign a numerical value to a goal and decide which is more important than another.
- Agreeing and communicating value: in many organizations “value” is arbitrary and subjective. A clear understanding of what is valuable and how much value is gained might be a foreign concept.
While there are many obstacles to getting started with a top down approach to PPM, it is beneficial in the long run because it makes the PMO a strategic driver of value. It ensures the work that is approved and managed by the PMO is the best investment for the business. To get started with a top down strategy, it requires a large amount of upfront planning, agreement, and buy-in from all parties. While it may seem exhaustive when getting setup, the benefits are clear:
- Alignment between the PMO and the business
- Focus resources on the most important work
- Simplified, objective prioritization of work
- Impactful outcomes with a measurable result
BOTTOM UP PORTFOLIO MANAGEMENT
A “bottom up” approach is common for PMOs because it follows a logical progression: start simple and build on what works. This method is helpful because it provides efficiency and structure to otherwise unstructured work. It can helps teams get started with providing visibility into work and a level of collaboration on projects that improves productivity. This is helpful for many teams looking to make adjustments to their working habits or improve their general time management. A bottom up approach is founded on:
- Easy adoption and intuitive user interface: getting people to centralize information in a single repository is the name of the game.
- Visibility and collaboration: a clear understanding of what people are working on and the scope of their usage can quickly be uncovered.
- Execution-level outcomes: streamlining tasks and assignments is a major driver for a bottom up approach.
For many PMOs just getting started or trying to corral casual project managers to using a tools, they might start with a bottom up approach. This helps to get a large number of users centralized on a single system for better outputs. Many teams realize quick wins and the benefits are evident:
- Improved efficiency for tasks and activities through automation
- Quick onboarding and a low learning curve for large user base
- Visibility into work and workloads of high demand resources
CHOOSING A PATH
Some PMO leaders might find themselves with a bottom up approach without much commitment to the idea simply because they built on existing processes. Others might have an intentional goal of focusing and improving project execution. What is important to understand is you are not necessarily stuck with one or the other – and it is possible to change your approach should you decide a more strategic (or less strategic) need is adequate for your business. Keeping in mind how your team is designed and the degree of change management needed, here are a few considerations when deciding which approach is right for your business:
- Top down does not mean less agility: strategic direction changes and the PMO must change with it. Just because projects are aligned with the business does not mean they can’t change or be re-prioritized as needed. Adopting a strategy-first method simply means the projects that are taken on directly align with a strategic objective. How quickly you are able to adapt to changes depends on your commitment to change and your team’s ability to reprioritize.
- Bottom up does not mean no governance: visibility and collaboration are key elements of any PPM process and maintaining a level of governance ensures all projects adhere to the PMO standards. The level of process and governance for projects is unique to your business and independent of your PPM approach.
- There can be a degree of both: where top down planning meets bottom up execution is where the magic happens. But this is a “can’t have your cake and eat it too” where more of one often means less of the other. Striking the right balance is the art, but it is beneficial to be clearly one or the other to commit to a strategy.
PPM is a long and continuous journey for PMO leaders. You are constantly looking to improve, developing new strategies and increasing value contribution to the business. What’s important is to find what makes the team successful and grow on your journey.
To learn about portfolio management solutions from KeyedIn, visit us at https://www.keyedin.com/project-portfolio-management-software/.
