Measuring project value and alignment with business strategy When examining an existing portfolio of projects, either for the first time or as part of a standard review process, it is important to identify inappropriate projects that do not support the corporate strategy and are not adding value. These projects are at an increased risk of failure and may limit the capital that is available to undertake more appropriate projects with higher inventive merit and reward. Investment resources are always limited, so organizations should always be keen to overcome such potential value leakage. While some organizations excel in the execution of project management, many still do not have a mature portfolio management process in place — this can cause issues with the strategic alignment of programs and projects. The result is that although the organization may deliver projects on time and within budget, the value delivered from those projects is not aligned to the organization’s strategy. This represents a misallocation of investment capital, essentially wasting project money in the portfolio. Typical issues faced by organizations who struggle with keeping their portfolio under control include: • Too many projects running at the same time that ultimately do not deliver the expected results because of a lack of focus or lack of select resources and underperformance • Strategic objectives that are not supported by a project or program • Wasted investment in a project or program that is not aligned to strategic objectives Leading practices leverage project portfolio management tools, processes and techniques to assist organizations in balancing their portfolio of projects. When analyzing a portfolio, examining multiple metrics within financial, benefit, status, alignment and economic value areas is advised. In this manner, management has a more effective decision criteria in determining whether a project should be stopped, accelerated, monitored as it is executed, or evaluated to improve value and achieve strategic goals. Project portfolio analysis EY’s toolset assists in identifying those projects in the portfolio that should be continued and accelerated. Importantly, it also identifies those projects that are candidates to be stopped, freeing up capital and skilled resources for more important initiatives. A B C Accelerate Monitor P alue Q E F For more information on how portfolio management onomic v X can unlock the value of your c G Stop K E program investment, please Evaluate Must-do H J see our Portfolio management L Y transformation report. ey.com/portfoliomanage Strategic alignment Unlocking the value of your program investments | 5