Strategic framework Connecting enterprise strategy with portfolio operations
Overview
Successful portfolio management depends on a robust connection between enterprise strategy and portfolio operations. Defined at top level, enterprise strategy sets an organization's long-term vision and goals, including its mission, value optimization for shareholders, corporate goals, cost and headcount efficiency, and market-share analysis. These elements guide the direction and priorities of a company.
Translating the enterprise strategy into actionable portfolio management involves long-range planning, competitive analysis, project prioritization, and evaluating scientific and operational feasibility. This ensures projects align with the strategic objectives and have high potential for success. Tools like event simulation and risk assessment are helpful to manage uncertainties, and therefore to maintain a balanced portfolio.
Between portfolio management and daily operations, there must be a clear asset strategy focused on detailed planning for individual projects. This includes clinical development plans, indication formulation, population planning, and commercial or launch strategies. By meticulously planning each asset's journey, the company can better manage resources and timelines, ensuring each project contributes effectively to its overall strategy.
Lastly, executing portfolio management strategies requires robust portfolio operations. This involves project management, resource management, maintaining high standards for data, leveraging analytics for decision-making, utilizing advanced technologies, and continuously improving business processes. These operational aspects ensure that strategic plans are executed efficiently and effectively.
Case study Strategic portfolio management in action
Client Background
Our client was a biotech company pioneering a new platform to create treatments in oncology and for infectious diseases, among others. This company operates in a highly competitive environment characterized by high cash burn rate, and faces numerous risks and significant market pressure from investors and competitors.
The Challenge
Several strategic factors drove the need for a full portfolio review, including leadership changes, conflicting priorities among stakeholders, severe resource constraints, fragmented program views, and incomplete therapeutic area strategies. The company's portfolio, heavily influenced by partnerships, required a focused strategic approach to identify and prioritize high-value programs. Additionally, there was a lack of transparency and limited data on project plans and resource needs.
Our approach
Setting up the quality AI systems in a responsible and ethical way comes with its own set of challenges. Based on our expertise and experience within PwC and our firmwide connections worldwide as well as our collaboration with PwC Legal law firm, we foresee these challenges arising for companies seeking compliance within the tight timeline provided:
1 Reviewing the enterprise strategy
The process began with a thorough review of the company's enterprise strategy, which naturally led to a critical examination of their strategic portfolio. Aligning the long-term vision with operational capabilities and market realities was essential for the success of this project.
2 Conducting a comprehensive portfolio review
To conduct a comprehensive portfolio review, we needed extensive information on portfolio operations, including project demand, available capacity, generic project plans, the impact of operational activities on resource capacity, and financial data. The strategic fit of projects was assessed based on value, time to value, probability of success, and contractual and partner obligations.
Once gathered, all this information was integrated into a portfolio management model using Power BI. This model enabled the company’s leadership to establish a ranked portfolio, view organizational readiness by comparing planned projects versus resource capacity, and to simulate various portfolio scenarios for informed decision-making.
3 Implementation and execution
Communicating the New Portfolio
After completing the portfolio review, the new re-prioritized portfolio and strategic choices needed to be communicated and executed within the operational portfolio. This involved updating project plans, developing new hiring strategies, and reviewing and adjusting the budget for the next fiscal year(s) to align with the updated priorities.
4 Enhancing reporting and monitoring
The portfolio was previously managed without adequate data and reporting tools. To address this, we helped set up routine and executive reporting systems, including:
High-level reports for management and board members
Strategic portfolio boards for middle management
Detailed reports for resource managers to track project progress and resource utilization
All key reporting needs were addressed using Power BI, which allowed us to co-create fully customized dashboards that addressed the client’s need for robust reporting tools. This transformation allowed leadership to track progress, continuously monitor their portfolio and make data-driven decisions based on qualitative data. The data fed into these models originated from sources extracted from different ERP systems in SAP.
Outcomes
The first result of the portfolio review was a fully assessed and reprioritized portfolio where clear actions were identified to address identified constraints and implement better resource management practices to become more efficient. On top of that, the new reporting tool improved data transparency and consequently impacted the effectiveness of decisions made by management. In particular, the ability to simulate different scenarios facilitated informed planning and execution.
Key learnings
Role of leadership
The clear definition of strategy and operational plans by leadership was crucial. Their top-down approach in implementing new data reporting practices and maintaining project hygiene ensured alignment and efficiency. Implementing this change enabled better decision-making and strategic alignment across the organization.
Continuous alignment of strategy and operations
Realigning strategy with operations is not a one-time effort, but an ongoing process that adapts to market changes and internal dynamics, keeping the organization agile and responsive. This alignment ensures that strategic objectives are consistently met through effective operational execution.
Importance of reporting and analytics
A unified source of truth through enhanced reporting and analytics ensures decisions are made quickly and accurately, facilitating better alignment and understanding across departments. Transparency enables stakeholders to make informed decisions, leading to efficient portfolio management.
Project managers' pivotal role
Project managers bridge the gap between strategic objectives and operational tasks. In a matrix-driven organization, their role in keeping projects aligned with the strategic vision is essential to maintain coherence and achieve corporate goals. They ensure projects are executed effectively and deviations are promptly addressed.
Co-creation
Both managers and leadership rely on tools that bring value and efficiency to their daily operations. To meet the requirements, it is crucial to have an agile approach, and more importantly an open dialogue with stakeholders to make sure their needs are met. Only a continuous and iterative approach with open feedback will lead to a successful creation and implementation of new tools, and consequently a successful transformation to stay competitive.
Contact us
The key to success in project and portfolio management is to ensure the portfolio remains aligned with existing overall organizational goals, and that the projects run smoothly and remain compliant. PwC can advise you on defining the right strategy, but also serve as a trusted partner for the implementation, execution and monitoring of project performance and compliance. PwC has an excellent pool of subject matter experts and Project Managers to provide tailored support. Don’t hesitate to reach out to us to talk about how we can help you.
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