Archives 2021

It should be clear to all of us by now, COVID-19 will change the entire notion of offices. About 74 percent out of 317 CFOs and business finance leaders surveyed by Gartner last week expect some of their employees who were forced to work from home because of the pandemic to continue working remotely after it ends. 

According to S&P Global, the biggest industries affected by COVID-19 will be airlines, automobiles, travel, and oil & gas. Not every part of an industry will be affected equally. Some industries, such as banking, might see a big drop in revenue, but will not see the same impact on personnel compared to manufacturing as this Forbes study brought to light. 

The following three tips can help you to effectively deliver the project portfolio that your company needs in a COVID-19 world:

Tip 1: Evaluate your portfolio

Assess your existing portfolio and any new projects driven by the COVID-19 outbreak. Key considerations include:

• The strategic importance of the project
• Any compelling regulatory or legal compliance
• The project status and stage (On time/in scope/below budget? Close to be monetised?)
• Skills availability
• The likeability to work from home
• Possible new risks, issues and challenges on the horizon 
• Training (Is virtual training available?)
• Testing (Can remote testing cover all testing requirements?)
• Support (Can support activities be guaranteed and performed remotely?)

Tip 2: Re-prioritise your projects

With the answers from step one in place, use scenario analysis techniques to evaluate and re-prioritise your project portfolio. Apply both qualitative and quantitative measures to rank projects, and then select one of the following options for each:

• Slice/merge: Consider whether you can quickly achieve a minimum viable product (MVP) by splitting projects’ scopes or merging their teams.
• Defer: Pause the lowest-ranked projects to adjust to new organisational constraints and priorities.
• Slow down: Reduce the pace of projects ranked in the “middle”, ones that do not immediately contribute to your COVID-19 response and whose benefits are not materially impacted by a longer timeline.
• Accelerate: Speed up initiatives with the highest-ranked projects so they can deliver value quickly, especially if you have identified new (or less costly) resources to support them.

Tip 3: Mitigate the impact of slowed or deferred projects

Slowing or deferring projects is a delicate task and in order to minimise the disruption and make it easier to get the projects back up to speed tomorrow, you will have to navigate a number of complex considerations, including the following:

• Notify all relevant stakeholders: These stakeholders may include the owners of internal controls.
• Consider contractual impacts and communicate with vendors: Work with your legal and procurement teams to understand and address contractual impacts, including possible cancellations. 
• Understand the accounting impacts: Determine whether you have an asset (capex) that can be recognized or if you should expense all work already performed (opex).
• Lay the foundation to restart or reaccelerate later: 
  • Consider now what resources and data the project will require to get back up to speed. You may even need to consider new staffing models such as Project Management as a Service. You may no longer need full time resources on the project(s).
  • Create robust, detailed documentation on open activities and lessons learned to support a rapid, cost-effective continuation.
  • Invest in innovative Agile practices in your project development streams (DevOps, DataOps, …) 

With this initial recalibration complete, your job has just begun! Continue to assess COVID-19’s impact and modify your projects and the overall portfolio accordingly. The following considerations can help successfully monitor and manage a portfolio remotely:

• Leverage a centralised program management office: If not already done, consider the investment in a centralised portfolio solution to share all project information, best practices, including remote tools, guidance and templates.
• Proactively manage vendors and partners: Evaluate service level agreements KPI’s and determine if interim exceptions are needed. 
• Sharpen your risk management focus: Update your risk framework that considers all desired outcomes in light of COVID-19’s continuing evolution.
• Share your virtual management approach: Reassure executive stakeholders by sharing information regularly and report on progress on individual projects and the overall portfolio.
• Regularly re-evaluate assumptions and scenarios: As resource capacity, productivity and business conditions may continue to change.

In the end, sound portfolio management leads to benefits, ONLY if done well.

Meanwhile #staysafe and #goagile

The harsh economic impact of COVID-19 will be beyond any doubt. Budget pressure requires a rapid response, especially during uncertain and turbulent times like this. Most to all companies started budget cut exercises on all levels. Programs and projects are postponed or simply cancelled. But rash decisions can jeopardise your longer-term objectives for success and growth.

Leading companies take a proactive and agile approach to cost optimization. It better equips them to sustain through headwinds and unknowns. What does it take to do that? How to get to an efficient approach in which you know and evaluate the risks and benefits of your cost initiatives, for now and for tomorrow?

Agile can affect the bottom line 

For the record, I’m not exactly a fundamental religious follower of Agile Scrum but even for companies that don’t apply Agile Scrum by the book, the Agile Manifesto foresees quite a useful framework that supports a continuous cost cost/benefit assessment. If for every project, you have broken down the minimum viable product deliverables or even the expectations into small enough units then these can be evaluated individually whether or not to re-prioritise or even stop them. In Agile Scrum it’s a common practice to work your way down to the details from epics or themes to user stories which represent requirements. It’s also a best-practice to apply the INVEST principle when putting together meaningful user stories. 

Well, here you are! If you have done a good job, then the first 5 INVEST characteristics will help you to: 

• Prioritise your projects or cost initiatives by mission and potential outcomes.
• Combine a scoring method and executive judgment, to identify key cost optimisation initiatives to implement over time.
• Assess the level of impact across the entire portfolio (although I need to get back on that in a following article). 
• Evaluate the trade-offs between the benefits, costs, mission risk and viability of cost optimisation initiatives.

If you apply a user story mapping technique that focusses on business value with every activity, you can map your cost optimisation initiatives on a simple grid to show the impacts, trade-offs and help build buy-in from Finance. 

In the end, Agile leads to cost savings because of the principles that form its base!

Meanwhile #staysafe and #goagile