Optimizing Project Demand Management
The Hackett Group’s Chris Key speaks with Senior Research Director Rick Pastore about best practices that enable top performing IT organizations to more effectively prioritize and manage IT projects to deliver greater business value.
Welcome to the Hackett Group’s Business Excelleration Podcast, where – week after week – we hear from experts on how to avoid obstacles, manage detours, and celebrate milestones on the journey to world-class performance. This episode of the podcast, hosted by the Hackett Group’s Chris Key, focuses on optimizing project demand management. This is a challenge tech organization leaders have been wrestling with for years, and it’s an issue Chris considers the Achilles heel of the tech function. However, the Hackett Group has recently completed research on the topic, and Senior Research Director Rick Pastore joins the podcast as today’s guest to share new data and discuss its implications.
The topic of project demand management is particularly pressing today because of the phenomenon of digital acceleration, which is rooted in factors like the COVID-19 pandemic. Growth in demand has been outpacing resource growth by a large margin, and this reality served as part of the motivation for the survey the Hackett Group carried out in August to gauge how corporate security leaders are thinking about both the challenge before them and best practices.
The survey utilized a number of definitions, which must be defined. Tech project demands are requests from stakeholders that are typically subject to upfront governance and, if approved, are included in the tech organization’s project portfolio. A portfolio project includes objectives, deliverables, resources committed, estimates, and a budget (versus a program, which is a grouping of multiple projects). Project acceptance doesn’t mean that IT judged the project independently, but IT likely helped validate it and prioritize its placement in the pipeline. The Hackett report highlights a particular subset of survey respondents, the 25% who reported the best project success, and labels them top performers. These organizations are singled out to help researchers pinpoint what they may have done differently from peers to achieve greater success.
Turning to survey results, Chris and Rick first discuss the finding that those companies managing demand well work on fewer projects than their peers – by about half! The key performance indicators of these top performing companies are better than those of their peers, and the types of projects they accept are materially different. Top performers place a heavy focus (48%) on projects that are strategic in nature, rather than work to keep the lights on or make company enhancements. Peers, on the other hand, focus significantly more attention and effort on these other categories of project. The deduction may be made, then, that better performance correlates with a higher value and higher impact pipeline.
Interestingly, while research in 2018 showed top performers accepting 40% less of the projects they considered than peers, there is now parity. Top performers and peers accept about 64% of the projects they consider. What, then, sets the top performers and their peers apart? One major difference is the quality of project proposals. The project requirements at top performing organizations are higher. Further, the companies do a better job assessing, planning, validating with proof of concept, etc. Peers process more proposals, but as they accept many projects with less stringent standards, they end up spreading themselves thin.
Moving forward, Chris and Rick talk about the biggest factor on the demand side of demand management: project vetting. Top performing organizations have higher hurdle bars for project acceptance, and are more consistent in applying them. They have fast-track governance when needed, but use this approach less than their peers do. The benchmark study of the Hackett Group’s research compared peers with digital world class organizations, and found that the latter were far more likely to have a single, centralized demand management process (often with a demand oversight board) and to conduct proof of concept studies on proposed projects.
Top performers excel in allocation of even limited resources, adoption of automation, rapid-app development, and crafting demand management boards to avoid unilateral decisions and represent all stakeholders in project decisions. There are many challenges still ahead for the tech sector, including the major hurdle of priority shifts; however, progress is being made, and there are concrete ways to take action and drive positive change in one’s organization!
- 0:54 – Welcome to this episode, hosted by Chris Key and featuring Rick Pastore.
- 2:22 – The Hackett Group conducted a survey on project demand optimization.
- 4:13 – The first big takeaway is that top performers work on fewer projects.
- 9:35 – On the demand side, the biggest factor is project vetting.
- 11:21 – Chris and Rick talk about the benchmark study and the value of seeking proof of concept.
- 14:31 – The vetting process often involves a demand oversight board.
- 17:39 – Priority shifts are a major hurdle, but the future of the field looks hopeful!