1. What are the latest trends in portfolio and project management for Pharma & Biotech companies?
Pharma and Biotech organizations are moderately improving the ability to better align the organization from strategy through to execution to answer – What programs/projects should I do/not do? How do I optimize my resources in alignment with strategy? Am I on/off track? Common challenges we often see include – lack of solid business process design; cumbersome communication channels; utilization of disparate systems to collect and communicate information; relying on ad hoc, or draw-the-line decision making; a focus solely on execution (doing things right) vs. a focus on doing the right things right (Portfolio through to execution). GenSight has witnessed both clients and prospects are becoming more aware of best practices for choosing, resourcing, and executing the right innovations most profitably. In turn, many are enhancing business processes and swapping out disparate systems with enterprise software to improve Portfolio, Resource, Stage Gate, and Program/Project Management capabilities and drive value.
2. What are the main attributes to select the right projects that bring the greatest contribution to the organization?
First, the foundation for selecting the right projects to bring the greatest contribution to the organization are business process design, an enterprise portfolio management software, and implementation acceleration (change management). Organizations may lack one or two of these foundational components, but all three ensure better performance of the Portfolio Management organization and software implementation. An enterprise portfolio management system should enable executives through to team members to have clear visibility and focus on strategic goals. Further, it should support a criteria-based process for evaluating and prioritizing projects, and optimizing resources in alignment with strategic goals. Finally, market and business cases for individual programs/projects are not static, and the planning and strategic execution of a business shouldn’t be either. A system should enable continuous strategic execution, track performance vs. KPIs, strengthen governance, enable feedback and communication, and empower decision making and agility at the portfolio and program level. In sum, these attributes support maximizing “contribution” and resource optimization of the organization.
3. How does an organization ensure that resources will be optimized and distributed to the best projects?
“Best” projects should be defined as the portfolio that provides the most overall value to the firm, in alignment with strategic goals, and within the firm’s resource limitations. Aligning the organization’s resources is the most complex of all business processes that enable portfolio management. The fundamentals capabilities required to ensure optimal allocation of the firm’s resources include: 1) a process to assess and prioritize the portfolio of projects; 2) a centralized data repository for all project and resource data; 3) based on historical data, the ability to accurately estimate the resources required for the project by role, phase and time; 4) visibility of the availability and shortfall/excess resources by role and by time; 5) analytical tools to run resourcing scenarios, and 6) an application to efficiently capture actual resources spent of a project to continually improve the organization’s ability to estimate resources required.
4. What are the main steps to optimizing resource allocation?
The macro steps to optimizing resources include the following: 1) Define the organization’s strategic plan and goals. 2) Innovate to identify the projects that will achieve the strategic goals. 3) Assess, value and prioritize the portfolio and align the organization’s resources to the portfolio. 4) Agility to reprioritize and resources projects based on the changing dynamics of the portfolio over time.
Best in class Life Science companies are not just optimizing resource allocation quarterly or annually, these organizations are doing so continuously by coordinating, collaborating and communicating across the portfolio level and execution level. It is a dynamic relationship. To optimize resources, organizations should have a view of resource requirements over some time period to deliver each program/project’s benefits, and each project/program should be scored across an organization’s criteria (innovation, strategic, financial value, etc.). This enables an organization to prioritize the portfolio in alignment with strategic goals and inform the debate of what an organization should/should not do. Secondly, it enables the organization to allocate resources to the highest value projects. Finally, an enterprise system and business process should support continuous planning and execution. Resource availability changes on a regular basis and so does the “value” or business cases of projects or innovations that comprise the portfolio. Thus, business processes and the supporting enterprise software should be utilized to regularly review priorities vs. resource availability, to ensure resources are being optimized.
5. What are the benefits of the New Discipline of Enterprise Portfolio Management?
The benefits of the New Discipline of Enterprise Portfolio Management enable strategic choice and resource optimization to select, resource, and execute the highest value portfolio of products/projects in alignment with the company’s strategy. Organizations should have a systematic approach for making tradeoffs (what to do/not do), and this is one of the biggest drivers of value creation within organizations. Secondly, this new discipline improves the strategic agility of an organization by enabling performance management vs. KPIs, collaboration and communication up and down, and across the organization, with a single source of truth. By ensuring a focus on doing the right projects, optimizing resources, and doing these projects well, the organization is equipped with the real time information and processes to continuously make informed decisions that drive value.