- As an IT leader, you’re responsible for steering the realization of business strategy through wise investments in and responsible stewardship of assets, applications, portfolios, programs, products, and projects.
- You need a tool to help align goals and facilitate processes across business units. You’re aware of a tool space called Strategic Portfolio Management, and it looks like it could help, but you’re unsure of how it’s different from some of the existing tools you already pay for and don’t use to their full functionality.
Our Advice
Critical Insight
As a software space, strategic portfolio management lacks a unified definition. In the same way that it took many years for project portfolio management to stabilize as a concept distinct from traditional enterprise project management, strategic portfolio management is experiencing a similar period of formational uncertainty. Unpacking what’s truly new and valuable in helping to define strategy and drive strategic outcomes versus what’s just repackaged as SPM is an important first step, but it's not an easy undertaking.
Impact and Result
In this concise publication, we will cut through the marketing to unpack what strategic portfolio management is, and what makes it distinct from similar capabilities. We’ll help to situate you in the space and assess the extent to which your tooling needs can be met by a strategic portfolio management offering.
Make Sense of Strategic Portfolio Management Research & Tools
Besides the small introduction, subscribers and consulting clients within this management domain have access to:
1. Make Sense of Strategic Portfolio Management Storyboard – A guide to help you drive strategic outcomes.
In this concise publication we introduce you to strategic portfolio management and consider the extent to which your organization can leverage an SPM application to help drive strategic outcomes.
- Make Sense of Strategic Portfolio Management Storyboard
2. Strategic Portfolio Management Needs Assessment Tool – Use this tool to determine if your organization can benefit from the features and functionality of an SPM approach.
Use this Excel workbook to determine if your organization can benefit from the features and functionality of an SPM approach or whether you need something more like a traditional project portfolio management tool.
- Strategic Portfolio Management Needs Assessment
Further reading
Make Sense of Strategic Portfolio Management
Separate what's new and valuable from bloated claims on the hype cycle.
Analyst Perspective
Do you need strategic portfolio management, or do you need to do portfolio management more strategically?
Travis Duncan
Research Director, PPM and CIO Strategy
Info-Tech Research Group
While the market is eager to get users into what they're calling "strategic portfolio management," there's a lot of uncertainty out there about what this market is and how it's different from other, more established portfolio disciplines – most significantly, project portfolio management.
Indeed, if you look at how the space is covered within the industry, you'll encounter a dog's breakfast of players, a comparison of apples and oranges: Jira in the same quadrants as Planisware, Smartsheets in the same profiles as Planview and ServiceNow. While each of the individual players is impressive, their areas of focus are unique and the extent to which they should be compared together under the category of strategic portfolio management is questionable.
It speaks to some of the grey area within the SPM space more generally, which is at a bit of a crossroads: Will it formally shed the guardrails of its antecedents to become its own space, or will it devolve into a bait and switch through which capabilities that struggled to gain much traction beyond IT settings seek to infiltrate the business and grow their market share under a different name?
Part of it is up to the rest of us as users and potential customers. Clarifying what we need before we jump into something simply because our prior attempts failed will help determine whether we need a unique space for strategic portfolio management or whether we simply need to do portfolio management more strategically.
Executive Summary
| Your Challenge | Common Obstacles | Info-Tech's Approach |
|
|
|
Info-Tech Insight
In the same way that it took many years for PPM to stabilize as a concept distinct from traditional enterprise project management, strategic portfolio management is experiencing a similar period of formational uncertainty. In a space that can be all things to all users, clarify your actual needs before jumping onto a bandwagon and ending up with something that you don't need, and that the organization can't adopt.
Strategic portfolio management is enterprise portfolio management
Evolved from various other capabilities and vendor solutions, strategic portfolio management (SPM) seeks to connect strategy to execution.
While the concept of 'strategic portfolio management' has been written about within project portfolio management circles for nearly 20 years, SPM, as a distinct organizational competence and software category, is a relatively new and largely vendor-driven capability.
First emerging in the discourse during the mid-to-late 2010s, SPM has evolved from its roots in traditional enterprise project portfolio management. Though, as we will discuss, it has other antecedents not limited to PPM.
In this publication, we'll unpack what SPM is, how it is distinct (and, in turn, how it is not distinct) from PPM and other capabilities, and we will consider the extent to which your organization can and should leverage an SPM application to help drive strategic outcomes.
–The increasing need to deliver value from digital initiatives is giving rise to strategic portfolio management, a digital investment management discipline that enables strategy realization in complex dynamic environments."
– OnePlan, "Is Strategic Portfolio Management the Future of PPM?"
Only 2% of business leaders are confident that they will achieve 80% to 100% of their strategic objectives.
Source: Smith, 2022
Put strategic portfolio management in context
SPM is a new stage in the history of project portfolio management more generally. While it's emerging as a distinct capability, and it borrows from capabilities beyond PPM, unpacking its distinctiveness is best done by first understanding its source.
Understand the recent triggers for strategic portfolio management
Triggers for the emergence of strategic portfolio management in the discourse include the pace of technology-introduced change, the waning of enterprise project management, and challenges around enterprise PPM tool adoption.
Spot the difference?
Scope, focus, and audience are just a few of the factors distinguishing what the market calls "SPM" from traditional PPM.
| Project Portfolio Management | Differentiator | Strategic Portfolio Management |
|---|---|---|
| Work-Level (Tactical) | Primary Orientation | High-Level (Strategic) |
| CIO | Accountable for Outcomes | CxO |
| Project Manager | Responsible for Outcomes | Product Management Organization |
| Project Managers, PMO Staff | Targeted Users | Business Leaders, ePMO Staff |
| Project Portfolio(s) | Essential Scope | Multi-Portfolio (Project, Application, Product, Program, etc.) |
| IT Project Delivery and Business Results Delivery | Core Focus | Business Strategy and Change Delivery |
| Project Scope | Change Impact Sensitivity | Enterprise Scope |
| IT and/or Business Benefit | Language of Value | Value Stream |
| Project Timelines | Main View | Strategy Roadmaps |
| Resource Capacity | Primary Currency | Money |
| Work-Assignment Details | Modalities of Planning | Value Milestones & OKRs |
| Work Management | Modalities of Execution | Governance (Project, Product, Strategy, Program, etc.) |
| Project Completion | Definitions of "Done" | Business Capability Realization |
Info-Tech Insight
The distinction between the two capabilities is not necessarily as black and white as the table above would have it (some "PPM" tools offer what we're identifying above as "SPM" capabilities), but it can be helpful to think in these binaries when trying to distinguish the two capabilities. At the very least, SPM broadens its scope to target more executive and business users, and functions best when it's speaking at a higher level, to a business audience.
Strategic portfolio management offers a more holistic view of the enterprise
At its best, strategic portfolio management can accommodate various paradigms of work management and incorporate different types of portfolio management.
Perhaps the biggest evolution from traditional PPM that strategic portfolio management promises is that it casts a wider net in terms of the types of work it tracks (and how it tracks that work) and the types of portfolios it accommodates.
Not bound to the concepts of "projects" and a "project portfolio" specifically, SPM broadens its scope to encompass capabilities like product and product portfolio management, enterprise architecture management, security and risk management, and more.
- Where a PPM solution only shows one piece of the puzzle, SPM looks at the entire investment ecosystem, tracking strategic goals, the ideas generated to help achieve those goals, and all the various kinds of investments made in the service of those goals.
- what's more, where traditional PPM tools required users to adhere to a certain way of working and managing tasks, SPM is more flexible, relying on integrations across various ways of working to provide higher-level insight on the progress of work and the achievement of goals.
Deliver business strategy and change effectively
"An SPM tool will capture business strategy, business capabilities, operating models, the enterprise architecture and the project portfolio with unmatched visibility into how they all relate. This will give...a robust understanding of the impact of a proposed IT change " and enable IT and business to act like cocreators driving innovation."
– Paula Ziehr
You might need a strategic portfolio management tool if–
If you find yourself facing any of these situations, it might be time to step away from your PPM tool and into an SPM approach:
- Your organization is facing a large implementation that will cross multiple departmental units and requires alignment across senior leadership (e.g. a digital transformation initiative).
- You currently have disparate systems tracking different portfolios (project, product, applications, etc.) and types of investments, but lack insight into the whole in terms of how work efforts and investments tie back to strategy realization.
- You are an ePMO or a strategy realization office that doesn't manage work necessarily, but that rather ensures that the work, assets, and capabilities that are funded connect to strategy and drive the realization of strategy.
Sixty one percent of leaders acknowledge their companies struggle to bridge the gap between creating a strategy and executing on that strategy.
Source: StrategyBlocks, 2020
Get to know your strategic portfolio management stakeholders
In terms of users, SPM's focus is further up the org chart than most applications, relying on high-level but usable outputs to help drive decision making.
| ePMO or Strategy Realization Office | Senior Leadership and Executive Stakeholders | Business Leads and IT Directors and Managers |
|---|---|---|
| SPM tools are best facilitated through enterprise PMOs or strategy realization offices. After all, in enterprises, these are the entities charged with the planning, execution, and tracking of strategy.
Their roles within the tool typically entail:
|
As those with the accountability and authority to drive the organization's strategy, you could argue that these stakeholders are the primary stakeholders for an SPM tool.
Their roles within the tool typically entail:
|
SPM targets more business users as well as senior IT managers and directors.
Their roles within the tool typically entail:
|
What should you look for in a strategic portfolio management tool? (1 of 2)
Standard features for SPM include:
| Name | Description |
| Analytics and Reporting | SPM should provide access to real-time dashboards and data interpretation, which can be exported as reports in a range of formats. |
| Strategy Mapping and Road Mapping | SPM should provide access to up-to-date timeline views of strategies and initiatives, including the ability to map such things as dependencies, market needs, funding, priorities, governance, and accountabilities. |
| Value Tracking and Measurement | SPM should include the ability to forecast, track, and measure return on investment for strategic investments. This includes accommodations for various paradigms of value delivery (e.g. traditional value delivery and measurement, OKRs, as well as value mapping and value streams). |
| Ideation and Innovation Management | SPM should include the ability to facilitate innovation management processes across the organization, including the ability to support stage gates from ideation through to approval; to articulate, socialize, and test ideas; perform impact assessments; create value canvas and OKR maps; and prioritize. |
| Multi-Portfolio Management | SPM should include the ability to perform various modalities of portfolio management and portfolio optimization, including project portfolio management, applications portfolio management, asset portfolio management, etc. |
| Interoperability/APIs | An SPM tool should enable seamless integration with other applications for data interoperability. |
What should you look for in a strategic portfolio management tool? (2 of 2)
Advanced features for SPM can include:
| Name | Description |
| Product Management | SPM can include product-management-specific functionality, including the ability to connect product families, roadmaps, and backlogs to enterprise goals and priorities, and track team-level activities at the sprint, release, and campaign levels. |
| Enterprise Architecture Management | SPM can include the ability to define and map the structure and operation of an organization in order to effectively coordinate various domains of architecture and governance (e.g. business architecture, data architecture, application architecture, security architecture, etc.) in order to effectively plan and introduce change. |
| Security and Risk Management | SPM can include the ability to identify and track enterprise risks and ensure compliance controls are met. |
| Lean Portfolio Management | SPM can include the ability to plan and report on portfolio performance independent from task level details of product, program, or project delivery. |
| Investment and Financial Management | SPM can include the ability to forecast, track, and report on financials at various levels (strategy, product, program, project, etc.). |
| Multi-Methodology Delivery | SPM can include the ability to plan and execute work in a way that accommodates various planning and delivery paradigms (predictive, iterative, Kanban, lean, etc.). |
What's promising within the space?
As this space continues to stabilize, the following are some promising associations for business and IT enablement.
| 1. SPM accommodates various ways of working. |
|
| 2. SPM puts the focus on value and change. |
|
| 3. SPM fosters a coherent approach to demand management. |
|
What's of concern within the space?
As a progeny from other capabilities, SPM has some risks and connotations potential users should be wary of.
| 1. The space is rife with IT buzzwords and, as a concept, is sometimes used as a repackaging of failing concepts. |
|
| 2. Some solutions that identify as SPM are not. |
|
| 3. SPM tools may have a capacity blind spot. |
|
Does your organization need a strategic portfolio management tool?
Use Info-Tech's Strategic Portfolio Management Needs Assessment to gauge your readiness for SPM.
- As noted in previous places in this deck, there is often a grey area in the market between project portfolio management tools and strategic portfolio management tools.
- Some PPM tools offer SPM functionality, while some SPM tools avoid traditional PPM outcomes and stay at a higher, strategic level.
- Depending on the scope of your PMO or portfolio optimization needs, you may need a tool that has just one, or both, of these capabilities.
- Use Info-Tech's Strategic Portfolio Management Needs Assessment to help you assess whether you require a high-level strategy management tool, a more low-level project portfolio management tool, or a mix of both.
Download Info-Tech's Strategic Portfolio Management Needs Assessment
1.1 Assess your needs
10 to 20 minutes
- The Strategic Portfolio Management Needs Assessment is a 41-question survey broken up into three parts: (1) PMO Type, (2) Features and Functionality, (3) Roles.
- Go through each section using the provided dropdowns to help identify the orientation of your PMO, the feature and functionality needs of your office, as well as the roles whose needs will need to be serviced through the potential tool implementation.
This screenshot shows a sample output from the assessment. Based upon your inputs, you'll be grouped within three ranges:
- Green: Based upon your inputs, you will benefit from an SPM tool.
- Yellow: You may benefit from an SPM tool, but you may also require something more traditional. Clarify your requirements before proceeding.
- Red: you're unlikely to leverage many of the benefits of an SPM tool at this time. Look for a more tactical solution.
| Input | Output |
|---|---|
|
|
| Materials | Participants |
|
|
Explore the SPM vendor landscape
Use Info-Tech's application selection resources to help find the right solution for your organization.
If the analysis in the previous slides suggested you can benefit from an SPM tool, you can quick-start your vendor evaluation process with SoftwareReviews.
SoftwareReviews has extensive coverage of not just the SPM space, but of the project portfolio management (pictured to the top right) and project management spaces as well. So, from the tactical to the strategic, SoftwareReviews can help you find the right tools.
Further, as you settle in on a shortlist, you can begin your vendor analysis using our rapid application selection methodology (see framework on bottom right). For more information see our The Rapid Application Selection Framework blueprint.
Info-Tech's Rapid Application Selection Framework (RASF)
Related Info-Tech Research
Develop a Project Portfolio Management Strategy
Drive IT project throughput by throttling resource capacity.
Prepare an Actionable Roadmap for your PMO
Turn planning into action with a realistic PMO timeline.
Maintain an Organized Portfolio
Align portfolio management practices with COBIT (APO05: Manage Portfolio)
Bibliography
Angliss, Katy, and Pete Harpum. Strategic Portfolio Management: In the Multi-Project and Program Organization. Book. Routledge. 30 Dec. 2022.
Anthony, James. "95 Essential Project Management Statistics: 2022 Market Share & Data Analysis." Finance Online. 2022. Web. Accessed 21 March 2022
Banham, Craig. "Integrating strategic planning with portfolio management." Sopheon. Webinar. Accessed 6 Feb. 2023.
Garfein, Stephen J. "Executive Guide to Strategic Portfolio Management: roadmap for closing the gap between strategy and results." PMI. Conference Paper. Oct. 2007. Accessed 6 Feb. 2023.
Garfein, Stephen J. "Strategic Portfolio Management: A smart, realistic and relatively fast way to gain sustainable competitive advantage." PMI. Conference Paper. 2 March 2005. Accessed 6 Feb. 2023.
Hontar, Yulia. "Strategic Portfolio Management." PPM Express. Blog 16 June 2022. Accessed 6 Feb. 2023.
Milsom, James. "6 Strategic Portfolio Management Trends for 2023." i-nexus. Blog. 25 Jan. 2022. Accessed 6 Feb. 2023.
Milsom, James. "Strategic Portfolio Management 101." i-nexus. 8 Dec. 2021. Blog . Accessed 6 Feb. 2023.
OnePlan, "Is Strategic Portfolio Management the Future of PPM?" YouTube. 17 Nov. 2022. Accessed 6 Feb. 2023.
OnePlan. "Strategic Portfolio Management for Enterprise Agile." YouTube. 27 May 2022. Accessed 6 Feb. 2023.
Piechota, Frank. "Strategic Portfolio Management: Enabling Successful Business Outcomes." Shibumi. Blog . 31 May 2022. Accessed 6 Feb. 2023.
ServiceNow. "Strategic Portfolio Management—The Thing You've Been Missing." ServiceNow. Whitepaper. 2021. Accessed 6 Feb. 2023.
Smith, Shepherd, "50+ Eye-Opening Strategic Planning Statistics" ClearPoint Strategy. Blog. 13 Sept. 2022. Accessed 6 Feb. 2023.
SoftwareAG. "What is Strategic Portfolio Management (SPM)?" SoftwareAG. Blog. Accessed 6 Feb. 2023.
Stickel, Robert. "What It Means to be Adaptive." OnePlan. Blog. 24 May 2021. Accessed 6 Feb. 2023.
UMT360. "What is Strategic Portfolio Management?" YouTube. Webinar. 22 Oct. 2020. Accessed 6 Feb. 2023.
Wall, Caroline. "Elevating Strategy Planning through Strategic Portfolio Management." StrategyBlocks. Blog. 26 Feb. 2020. Accessed 6 Feb. 2023.
Westmoreland, Heather. "What is Strategic Portfolio Management." Planview. Blog. 19 Oct 2002. Accessed 6 Feb. 2023.
Wiltshire, Andrew. "Shibumi Included in Gartner Magic Quadrant for Strategic Portfolio Management for the 2nd Straight Year." Shibumi. Blog. 20 Apr. 2022. Accessed 6 Feb. 2023.
Ziehr, Paula. "Keep your eye on the prize: Align your IT investments with business strategy." SoftwareAG. Blog. 5 Jul. 2022. Accessed 6 Feb. 2023.