Digitisation is changing organisations rapidly. It is changing how problems are tackled, how challenges are overcome, how we work efficiently and how new revenue is generated. Digital approaches are also creating new complex pathways which many are struggling to successfully navigate.
According to Aurecon’s recent Our Digital Futures research, 83 per cent of those surveyed believe change will be considerable in the next 2-5 years and a majority of respondents feel their organisations are not properly prepared to thrive currently.
The research shows that most agree significant strategic initiatives to improve, transform and develop organisations will be needed to meet the challenges ahead and the most critical areas to be addressed for preparing to move forward in their digital journey are: understanding and ownership of digital, strategy, upskilling staff and embracing automation.
However, the research also indicated that many grapple with pinpointing where to start. For those organisations that have begun their journey there is often a lack of connectivity between initiatives, which leads to an inability to track and measure benefits such as return on investment.
Connecting all the moving parts of ‘digital’ and navigating this new landscape is a common challenge. As change permeates more deeply into our everyday there is an increasing need for project management professionals to take a lead role in delivering an organisation’s strategic projects to facilitate this digital transformation.
For centuries, when human kind embarked on a journey through an unfamiliar landscape, they sought the help of maps prepared for travellers to see them safely and quickly along their journey. With organisations looking for better ways to navigate the digital landscape, does project management map out a route for all?
Effective program and portfolio management is an important part of the transition to a new digital world, and it is a key enabler to thriving into the digital future. Our industry insights reveal that although the role of project management in digital transformation is well understood, the extent to which it is embraced across an entire organisation greatly varies depending on their maturity and the size and scale of the projects being implemented.
In businesses with large scale, high dollar complex projects, with well-established governance frameworks for project delivery, there was a strong understanding of the need for this same approach to be adopted in delivering large digital projects. As would be expected, for projects with large investments there is an expectation that a certain level of governance is applied, which then drives management to ensure they are doing what needs to be done.
However, the role of program and portfolio management for the many smaller to medium sized projects is not always clearly, or uniformly defined. This subset of smaller to medium ‘business as usual’ projects, which happen under the radar, often lack structure and investment for how they are approached and how they are collectively managed. They have less governance, are often led by individuals in isolation, benefits are not being tracked and organisations are therefore not realising value. In isolation, success or failure of these smaller projects may not have a huge impact, but collectively the impact can be significant if organisations don’t get this right.
When we consider best practice, there is no silver bullet, but no matter what the scale of your project, the complexity of your organisation or where you are on your digital journey, there are actions that can be taken to move forward in the right direction.
Program and portfolio management for digital transformation is not just about downtime, cost or quality metrics. It moves away from this to link those implementations to strategy, centralised control (or ownership of digital programs), tracking and monitoring value of the investment, and also, critically brings human change into the process.
Internal transformation projects are just like any other – when not managed strategically, the risks of failure and negative impact are significant. With a clearly defined digital strategy aligned to the business strategy, organisations can do more than just keep pace, they can also create new business opportunities and unlock new value.
Our research found that at the high end of town, the large, highly complex projects which are driven by strategic intent, also apply this same approach to digital – there is a business case created, and a governance process undertaken to get the project off the ground.
However, at the smaller end of town, for a significant number of projects the strategy is less clearly defined and many are just keeping pace either with competitors, regulatory changes, customer expectations or with technology. Keeping pace isn’t driven by strategic intent, it’s essentially making strategy up while you are running faster and faster, trying not to trip up, without knowing where you are running to.
There's a whole bunch of projects that kick off when your competitor has done something, so you have to now do it as well – or else you get a massive draining of business. The ROI of staying in the game is pretty clear.– Ian Sharpe, Associate Director Business Transformations, Western Sydney University
For many – such as those in the superannuation industry reacting to regulatory changes – their strategy is based around not being left behind, rather than how can they get ahead. These regulation overhauls are forcing organisations to make changes or risk non-compliance and becoming redundant. While this may bring competitiveness in the market to some extent, at the same time this is purely just staying alive. To move from keeping pace to instead getting ahead, strategic thinking is needed which defines governance and benefits realisation of digital initiatives. This clearer vision for where you want to be will give you a greater chance of differentiation, help you stay ahead of the game and ensure survival into the future.
Equally as important as strategy, is implementation, and in the digital world, successful implementation is underpinned by ownership of digital within the organisation (or centralised control), where the portfolio of projects can be connected, tracked and analysed to enable more informed decisions. While these organisations within the project management profession would be labelled a PMO, they currently exist in many organisations under different titles.
Our interviews revealed most large projects driven by strategy were also collectively managed and tracked by a centralised business function. Again, however, the subset of smaller to medium projects that are not managed in this same fashion. Our interviews highlighted the fact that capital and operational infrastructure spends are commonly managed differently by organisations with a less mature approach to asset management. The benefits gained by organisations managing operational expenditure through enterprise level PMOs could be achieved in the same way by organisations in their digital transformation journey, however, the more complex and variable digital landscape presents more unique challenges in achieving these benefits.
Tamara Mirkovic, Program Manager, Accelerating Science Delivery Innovation (ASDI) Program, Department of Environment and Science, shared her thoughts on what best practice PMOs look like for digital transformations:
If your IT department is not quick enough to innovate, people will innovate around you. You then miss the opportunity to be strategic.
To be successful, PMOs need to be seen as an enabler and not a blocker. PMOs need to have a supportive and scalable mindset, because heavy, traditional governance doesn’t work well in the digital space.
There is a strong need to deliver rapid business value through innovation and the PMO should scale its governance process accordingly. We're finding that PMOs have to provide a balanced, pragmatic approach. The days of filling in a 30+ page template are behind us.
In addition to the requirement to have an effective but flexible PMO, our interviews highlighted that the requirement to track and measure the portfolio and individual benefits of digital transformation programs was a challenging restriction to centrally controlling them.
Our research revealed organisations are under pressure to demonstrate financial return on digital investment. Measuring and tracking value is something everyone understands the need for and is trying to do. At an individual project level many have the answers, but are unclear how to monitor and track a program of multiple, concurrent projects of varying sizes and complexities which touch every aspect of a business.
Knowing which part of an integrated strategy moves that performance needle, and therefore knowing if individual investments are sound, is an ongoing challenge. Nearly all larger projects have clear business cases which define what they will do and the result they will get, however when that project is added to the landscape of potentially 100 digital transformation projects which are all trying to move a specific needle in the organisation, many struggle to track what portion of which project is actually having the desired benefit.
While some organisations have taken the approach of pairing back focus to several key areas, there remains a question mark, particularly in the government sector, around benefits realisation at the back end and how these things are being tracked all the way through to post delivery to verify they are delivering benefits.
Many of our interviews – across different sectors and industries - were very honest about the difficulties of tracking and measuring the benefits of their digital transformations.
Being a reasonably large organisation with a global presence, we are finding it challenging to manage the portfolio of improvements across the group. To be completely honest, being able to track them individually and to ensure that we know we're not overlapping with other initiatives has proven to be a challenge.– Anonymous
If you're delivering in an environment subject to full blown VUCA (volatility, uncertainty, complexity and ambiguity), it's really hard to say that an individual project or program achieves specific outcomes.– Anonymous
We designed a benefits framework and we rolled that out, but for us it was really difficult to get people to think with that lens.– Anonymous
I think largely because we were challenged by our ability to implement single solutions that satisfy all of the internal business requirements, it was difficult to measure. What we found was that in a lot of instances (if not all) the improvements and investments that were being made were too many and the approach we were taking was too broad to measure.– Anonymous
I don't think there is much benefit realisation happening in the federal government sector at all. It’s more a benefits realisation harvesting approach post-delivery and is not as integrated as is happening elsewhere.– Anonymous
For some of the larger organisations we interviewed the answer to this challenge was to employ intelligent digital solutions that helped the shift through this data and provide clarity; however, the cost barriers for implementing such systems was clearly a barrier for smaller organisations. Smaller organisations were more likely to be rationalising and focusing their digital initiatives but when the increasing rate and scope of digital progression is considered, it has to be asked if this is ultimately an oversimplification of a complex environment.
Digital is not solely about technology, it is also about workforce transformation – the way organisations work, how people operate. It’s about leaving a legacy and creating depth of skills so when the next project arrives, everyone is progressively and continually getting better, faster, smarter and more efficient. These projects are not so much digital transformation projects as workplace transformation projects. We are trying to redefine the way people work and that needs to be actively considered by the project team.
Thought leaders such as Jon Seely Brown – the co-author of The Power of Pull – have been advocating the need for increasing the rate of learning in organisations as they adapt to the changing nature of work: “the ability to improve performance more rapidly and learn faster by effectively integrating more and more participants distributed across traditional institutional boundaries.” This understanding was reflected in the comments of every individual interviewed.
We need a broader way of thinking about digital change and thinking about humans during the design phase. You can't introduce a transformational capability and then expect people to use it in the way that you intend. Change management in digital projects is much more challenging that it has been previously. Human behaviour can be difficult to predict because it is complex and heavily influenced by organisational cultures, performance measures, management styles, job stability, or flexible work arrangements. All these variables contribute to the way that people inherently prefer to work.– Tamara Mirkovic, Program Manager, Accelerating Science Delivery Innovation (ASDI) Program, Department of Environment and Science
While there is already a well-established link between digital transformation projects success and formal change management processes, our interviewees overwhelmingly confirmed that is it is indeed an essential element of such projects.
It's clear that this is an essential part of program delivery to our customers – not just a nice to have add-on. It's being increasingly recognised as the key element of successful adoption of digital changes in their organisations.– Clinton Temple, Head of Program Execution, Leidos Australia
When it comes to digital disruption the things that people are typically fearful of are: What if I lose my job? What if I'm being asked to do something I can't do? What if I can't learn? Every organisation is seeing them because they're natural human reactions. They need to be dealt with from moment one to help people adapt and thrive.– Ian Sharpe, Associate Director Business Transformations, Western Sydney University
Bringing people along on the transformation journey, early, was also identified as being fundamental to success, and project management plays a pivotal role in not just leading the implementation of physical tech solutions, but also in managing the transition of the people and the business.
However, a strategic approach to managing change is often the missing piece for many small to medium sized projects which are less funded and less structured from a management perspective. When you add up the smaller projects occurring in an organisation at any one time, this lack of change management support can have dire consequences on the workforce. Whereas by managing them collectively and supporting people through change, organisations set themselves up to bring out the best in their people and projects.
An important part of the change process is upskilling. Advancing people’s skills for ‘what’s next’ is a business imperative for any digital transformation journey. Teaching people how to adapt and change to manage projects is uniformly acknowledged as vital, but there is confusion around where to start and what is best practice, with upskilling often pushed to the end of the ‘to-do’ list.
Upskilling is not a back-end function of simply training someone in a system or a process, it should start at the very beginning and continue for the duration of the journey. Upskilling people in the process of change is resulting in an ancillary benefit of arming them with skills to manage and cope with change more effectively. As the rate of change will continue to gain pace, those who improve their workforce’s ability to carry out projects, will be performing better, longer, faster, and more efficiently into the future.
It’s not just about all the efficiencies, it's about saying what's the organisation that's going to be created?– David Counsell, Gas Asset Strategy and Planning Manager, AusNet Services
Just as navigation systems have evolved to guide future explorers, so must project management. Rather than framing our professional offerings as a map with defined steps, they need to be capable of sensing, analysing and communicating the full gamut of the environmental influences on a project and of the project on the environment in real time.
This is not a new theory of project management, but what is new is taking these well-established ideas, adapting and modifying them to cope with these emerging digital transformation activities, which are increasingly complex in scale and volume and often occur in real-time in a continually changing business and regulatory environment.
For a better example than just a digital map, the beginning of an answer may lie in a very unlikely source. Academics have recently been studying common threads that exist in high performing cultures and online gaming communities such as the World of Warcraft have been examined. Using this example, project managers could learn from how these gamers set up their user interfaces (UI).
These UIs are the gamer’s view of the online environment and manages all the information they need to manage their quests. Not only is does it show where they are and where they are going, but they are customised to measure and represent every aspect and interaction they are having with the gaming environment and their team members. UIs give information in real time but are also focused so that the gamer does not lose sight of their strategic focuses against an overwhelming wall of data. They help a team communicate, align and most importantly collectively and develop their skills over time.
The project management profession needs to replicate this degree strategic awareness and collective integration on digital transformation projects, and then use with a very human focus to lead the people sitting behind the screens. If we don’t, people will turn off and our game will be over.
The first wave of Our Digital Futures was released in July 2019. The results of Our Digital Futures research provide key insights into the issues – and opportunities – that digitisation creates. The research will be released over three waves as The Digital Landscape, The Future of Digital and Your Digital Strategy.
To learn more and read the full report for the first wave, visit ‘Our Digital Futures’ at Aurecon.
Lachlan Waite is a project leadership professional within Aurecon's Program Advisory team with over 15 years experience.
This article was written in conjunction with the Australian Institute of Project Management.