How to prioritise projects and programmes within an organisation

by Nicki Carruth | Aug 4, 2021 | Portfolio Assurance

Transformation or business improvement is created through the vehicle of projects or large programmes. Almost all large organisations have a number of projects in play at any one time. It’s very common for these different initiatives to pile up against each other and suddenly the impacts of any one of them going over budget, overtime or worse, failing entirely become exponential. In our work with New Zealand organisations, we regularly help them with assuring the way they prioritise their project and programme activities suits their needs and is effective in ensuring they’re doing the “right things” at the “right time”. In this article, we’ll provide some insights into how you, as a senior leader, might start to do this within your organisation.

Engage all senior stakeholders and leaders in the business

Before trying to make any decisions around what stays and what gets put on the shelf, leadership teams must bring in all leaders and stakeholders on key programmes into the discussion. Ultimately this is a senior leadership decision but without ample consultation with owners of the various programmes live in the organisation, the decision-making process will be greatly clouded by the existing perception of how each initiative fits in. It is incumbent on the SLT to gather as much data about the status of each programme, and the benefits on the business’ wider objectives. To do so, you must engage far and wide first.

Conduct an audit of all active or planned projects

Leadership teams are well-advised to build a bird’s eye view of all existing projects and programmes within a portfolio, manifested in a shared document that outlines:

Current project status
Benefits to business
Key milestones (and if these are being met if the project is in play)
Budget – total
Budget – used / burn rate
Deadline to completion

Getting the high-level facts across each programme or project enables a starting point on which leadership can start to prioritise. Is there a business need to keep focused on a longer-term project in favour of smaller peripheral ones? Or is there more value to getting ‘wins on the board’ before attacking the big fish? An audit of all projects helps drive this conversation.

Assess urgency of each programme to current FY business objectives

Large organisations are looking beyond the existing financial year all the time, but that doesn’t negate the importance of current FY objectives. The senior leadership team and board will have set strategic imperatives for the next 12 months – a portfolio’s prioritisation should be conducted according to what these are. Does the business need to deliver a transition to a better customer-facing portal? If so, that technical project will likely stay high on the list. Is there a legacy system that would assist with staff efficiency in carrying out their job? This will be important but perhaps it is not business-critical at that point in time. Using urgency combined with risk is an excellent way to get an initial shortlist of essential programmes and projects. Now it’s time to focus on the practicalities of delivering these.

Determine resources and budget requirements

The balancing act that is part of a senior leadership team’s daily life is delivering on business objectives within a set timeframe and budget. So often these are at odds – a full digital transformation programme may be required to achieve the primary goal of improved end-user experience, but behind this is a sizeable budget that on first assessment will leave little room for anything else. With capital expenditure being a scarce resource, organisations will need to ascertain clear profiles of the total cost of each project within the financial year and over its life. Not all of these projects will need to be delivered in full by the end of that FY, but equally, need stringent budgets and milestones applied to them. This budget for each project will be made up of various components, including vendors, hires and technology. We’d suggest that planning for upcoming FY budgets is done with as much lead-in time as possible, in order for SLT and stakeholders to get quotes from external delivery partners, estimated contractor costs and technology stack estimates. Any project with unclear budgetary implications during a prioritisation will usually present a risk and should be subsequently pushed back until more information is available. Prioritising isn’t about choosing what’s affordable to complete that financial year. But it is about considering cost as a means to delivering on business outcomes – organisations shouldn’t set themselves up to fail by committing to more than is practical with the available resources.

Look ahead to 5 and 10 year goals

Making changes on a 12 month window only is simply not prudent for most large organisations. Typical programmes within New Zealand’s public sector span over financial years (sometimes 3 or 4 or more financial years!), meaning that SLTs and boards will be keeping one eye on the future state of the business while doing annual planning. We help clients identify and formulate milestones from a longer-term project that serve as meaningful FY business objectives. The decision around prioritisation must be made with the future state in mind – if this transformation takes 5 years, the programme should start as soon as possible.

Stay wary of the new and shiney

Many of the projects already planned or in play could be the best route to addressing business challenges. It’s not uncommon for new programmes to be established with the benefit of a clean slate and a new approach. But in so many cases, the existing portfolio can be refined to better deliver on solutions for business challenges, without the added cost and time of getting a new initiative live. Part of your prioritisation of a portfolio should be to find opportunities within existing projects to build in additional scope (following the right governance of course). This can be an important step to bringing initiatives back into line with the business and steering them away from failure.

Be ready to make some hard calls

A good majority of projects and programmes are beneficial in theory to an organization’s growth and improvement. And there’s no shortage of compelling arguments from stakeholders and product owners as to why each of their projects is worth committing to. But with the business strategy as a compass, SLTs may need to delay the start date of some projects in favour of other more critical activity. In some instances, a project may need to be paused while in progress, which can be hard for everyone involved. However, with the cooperation of product owners and project leadership, personnel involved in a particular project may be transitioned over to priority projects.

In an ideal world, organisations don’t stop projects halfway through to pick up at a later date – this runs the risk of losing important staff, and can even lead to ultimate project failure should it not be returned to within a reasonably short timeframe.

Instead, organisations can control some of the risk of project abandonment by chunking these up into small projects with a shorter time frame to completion. You can read more about this approach in our article on the topic.

Not quite sure where to start with prioritisation?

Assuring the scheduling and organising of a project portfolio is our speciality. We know that in large complex organisations across public and private sectors, knowing what’s the most important next cab off the rank can be difficult. IQANZ applies a set of methodologies to help leadership teams map out all active projects and programmes to ensure they get delivered successfully. Let’s chat!