2. TheEPPMBoard
The Oracle EPPM Board is a prestigious
international steering group of senior
executives, academics, and industry
experts. It has produced a number of reports
highlighting how senior executives can
successfully prioritize and manage the project
portfolio, ensuring it remains a strategic asset.
Innovation for transformation
Innovation is a critical factor in business
transformation. The challenge for organizations is
to tap into the creative instincts of their people and
allow them to be expressed and applied effectively.
Enterprise Project Portfolio Management (EPPM)
has a critical role to play in unlocking and delivering
innovation. In considering the key issues and
opportunities, the EPPM Board explored the
question of culture, the challenges of execution,
and the manager’s ever-present running mate: risk.
I hope you find the outcomes from their discussions
enlightening and valuable.
Yours sincerely,
Mike Sicilia
Senior Vice President and General Manager,
Oracle Primavera
3. TheEPPMBoard
Innovation is a hard word to
use. It has become jargon, a
word thrown into business
conversations without real
consideration for its meaning.
But when it is taken seriously,
it has challenging implications
for senior decision-makers.
Real innovation requires a skilled
balance of risk and return.
The November meeting of the
EPPM Board took a fresh look at
innovation as a driver of business
transformation. In particular, it
sought a new understanding
of the meaning and process
of innovation, in the context of
globalized markets where true
novelty and differentiation are
hard to find. In other words,
when there really is rarely
anything genuinely new under
the sun, how do you find and
exploit opportunities for any kind
of innovation?
First of all, you look beyond
innovation in purely product
or R&D terms. Many mature
markets are saturated with
products whose differentiation
may lie in little more than a logo,
and options for color schemes.
Furthermore, product innovation
may not necessarily drive
transformation on a wider scale
within the business.
When you view innovation
in the context of business
transformation, its impact
becomes far more profound.
Every department, from HR and
Finance to Customer Services and
Logistics, can contribute to the
drive to transform by finding new
and better ways of doing things.
Productive discomfort
The EPPM Board found that the
impulse for this kind of change
has to be driven from the
executive team.
Teams working on the operational
front line may not have the longer-
term view that would persuade
them to change behavior. When
things appear to work, you
don’t waste time tinkering with
potentially risky changes.
But if the strategic view
demands transformation, to
protect competitive advantage
and enable new growth, then
delivery and administrative teams
need to be jolted out of their
habitual ways of working and
encouraged to innovate.
Accepting greater risk
At the heart of this cultural shift
is the organization’s attitude to
risk. This is where the executive
team may need to examine its
own principles and decide to
accept higher levels of risk than
it may have done before.
Employees must be confident
that if they suggest ideas,
or even try to put them into
practice, they do not run the risk
of reprimand or worse. Equally,
they must sense that the
business is open to new ideas.
Creativity thrives on recognition,
and if people feel that their ideas
are falling on unresponsive ears
– or, indeed, that others may take
the credit for them – then they
will be less willing to share them.
What does innovation mean in a globalized
competitive environment?
Every department,
from HR and Finance
to Customer Services
and Logistics, can
contribute to the drive
to transform by finding
new and better ways
of doing things.
4. TheEPPMBoard
Customer-driven innovation
There was strong consensus that
the impetus for innovation must
come from customers.
The impulse may be indirect, in that
there may be a need to protect or
grow market share, or to respond
to a new entrant. Or it may be
that customer feedback, or net
promoter scores, suggest areas for
improvement and opportunities to
do something new.
At the same time, game-
changers such as the Walkman
or the iPad must be based on
a deep understanding of the
dynamics of the market. Even
though customers may not know
they need something until they
see it, the developers of the new
product or service must base
their work on insight that clearly
defines the gap in the market.
In any case, the customer is
at the heart of the process,
and must be the focus of the
outcome. If an innovation
initiative does not in some
way lead to a better customer
experience, or better value for the
customer, then its value to the
organization may be questioned.
Even the transformation of
back office functions, such as
the finance and accounting
department, can have a major
impact on the customer, from
simplified billing, to service center
agents with greater powers to
make financial decisions when
dealing with customers.
Innovation in the supply chain
For some industries, such as
the automotive sector, the
supply chain is a valuable source
of innovation. Smaller, more
agile suppliers may be better
positioned to experiment and
take risks than larger corporates,
which may operate on much
tighter margins and, simply, be
too big to innovate quickly.
EPPM is used to capture
innovation from across the
supply chain, with a single view
of complex interdependencies
that can highlight opportunities
for improvement. In particular,
EPPM is used as a powerful tool
for the management of effective
supply chain transformation.
The Board discussed the
example of an organization
which had recently completed
a comprehensive reorganization
of its supply chain, reducing
costs and improving efficiency.
Regular meetings between non-
executive directors and senior
managers from supply chain
partners ensure a strong line of
communication and plenty of
scope for introducing new ideas.
The Board recognized that
Enterprise Project Portfolio
Management has been shown
to be both a driver and an
enabler of innovation.
Companies with successful
track records of transformation
use EPPM methodologies and
solutions to establish a unified
view of resource and capacity-
planning information, together
with a single list of innovation
projects and a summary of
associated costs. The reporting
capabilities, showing key metrics
and progress towards goals,
are also seen as powerful tools
for effective execution and
stakeholder engagement.
As the culture begins to change,
and opportunities begin to
emerge, the challenge becomes
one of recognizing them and
capturing them in a way that
allows them to be properly
exploited. Given that the culture
has to change if the organization
is aiming for transformation,
then the executive team must
be ready for a steady and timely
flow of management information
of all kinds. A clear view of reality
is essential for decisions that can
both reduce risk and mitigate the
impact of any problems.
Collaboration tools such as
corporate social networks help
to remove the barriers – both
cultural and technological
– that work against easy
communication and the flow of
ideas. Gamifying the process of
generating and evaluating ideas
can also help to boost wider
engagement with innovation
programs, and winnow out those
ideas that have greatest support
across the organization.
The view emerged that the
best ideas tend to come from
across the organization, rather
than from the close confines of
a project management team.
The suggestion was that project
teams may be too narrowly
focused to consider the wider
needs of the organization.
How do you recognize and capture
innovation from all areas of the organization?
5. TheEPPMBoard
Execution was recognized
across the Board as the single
most challenging aspect of
any innovative project.
Forbes research shows that
41% of senior decision-makers
cite inefficient execution as
the principal reason for project
failure*. On the plus side, support
from senior management and
competent execution are also
shown by the research to be the
keys to success for a project.
In large enterprises, ideas for
change that come from the
C-suite may be subject to many
levels of interpretation by the
time they reach the point of
action on the front line, which
can significantly dilute their
impact as originally envisioned.
The other serious threat to
effective execution, particularly
with long-term change, is the
movement of people. Promotion,
reorganization, departures, and
arrivals can all take the impetus
and shared understanding out of
a project. The well-intentioned
enthusiasm of newcomers, who
are taking over from the original
team, can rarely be as deeply
felt and effective as the shared
vision of those who were there
at the beginning.
Enterprise Project Portfolio
Management can play a key
role in capturing best practice
and mitigating the impact of
change. It can also give those at
senior level a clear view of how
the original vision is unfolding,
alerting them to any risks of
dilution that may arise when new
people move onto a project.
As an engine of execution, EPPM
has a strategic and operational
role. By providing a unified, end-
to-end view of projects that may
previously have been managed
with a variety of incompatible
and inadequate tools, it presents
a single view of the truth to
all stakeholders. This enables
more effective and efficient
execution at the operational level,
and allows senior managers to
ensure key projects are on track.
Trust the PM
Culture was again highlighted
by the Board as a critical factor.
Organizations that give project
managers and other teams
high levels of autonomy, and
responsibility can unlock plenty
of innovative potential, whereas
those with closely enforced
regimes of accountability may
stifle the instinct to innovate.
Technology can also be used
to foster innovation. Paper-
based processes, which are still
widespread in industries such as
construction and manufacturing,
inevitably impose limitations on
the ability to implement new
ideas. Digitization and automation
can enable closer collaboration
that accelerates the flow of
information, reducing cycle times
and time-to-value for new ideas.
*Forbes Insights in association with Oracle: Making The Change – planning, executing and measuring successful business transformation.
As we have seen, customers
will have a major influence on
decisions around prioritizing
innovation opportunities.
There is a clear case for focusing
on opportunities that deliver
positive outcomes for the
customer, provided that other
risk factors do not outweigh the
benefits to the organization.
The Board explored the idea
of building innovation into the
budget cycle, with specific
pots of investment allocated to
support more radical, higher-risk
opportunities. In effect, this is an
expression of the old gambler’s
adage that you never bet more
than you can afford to lose.
By determining that innovation is
a strategic priority, and putting its
money where its determination is,
the executive team will be sending
a strong message to the business
that innovation is on the agenda.
There is a central role for
Enterprise Project Portfolio
Management in this process.
The ability to model risks and
assess different outcomes
provides decision-makers with
the insight they need to make
informed decisions, based on
timely, comprehensive data.
Assigning a value to innovation
Allocating budget also puts
a value on innovation as a
process, which helps to focus
the attention of decision-
makers on this aspect of their
responsibilities. And with specific
sums to invest, the starting point
for the risk assessment process
is more clearly defined.
Discussions also examined the
relative scale of opportunities for
innovation, with the view that the
best opportunities are not always
the biggest. With funds available
for higher-risk, smaller-scale
ideas, it may be more appropriate
to assess the cumulative
contribution of smaller steps
towards transformative
innovation, rather than seeking
out major projects that may take
much longer to deliver impact.
What are the factors that determine whether or
not to invest in developing or adopting an idea? Execution – how do you keep innovation on track?
TheEPPMBoard
6. TheEPPMBoard
Summary
Innovation is both a driver
for transformation, and a key
outcome from it.
Many organizations will need
to undergo a significant cultural
change before innovation
can flourish. But business
transformation calls upon all
areas of the organization to find
fresh ways of working.
Enterprise Project Portfolio
Management is the engine that
drives innovation and enables
transformation. It is applied
from end to end, from planning
and project selection through to
successful execution.
Organizations that deliver
innovation successfully use
EPPM to address some of the
key challenges, including risk
assessment and project selection,
cost control, and execution. EPPM
methodologies and solutions also
support the process of gaining
buy-in from all key stakeholders,
and serve to accelerate effective
project delivery.
The EPPM Board placed the
customer at the heart of the
drive for innovation. As customer
expectations evolve, especially in
the age of digital service delivery,
organizations must evolve to
keep pace with, or exceed, what
their customers demand of them.
At the same time, businesses
must look beyond their R&D
or product development teams
for innovation. Processes,
partnerships, and organizational
structures can all contribute
radical ideas for changes that
ultimately translate into better
outcomes for customers.
Paradoxically, success can be
one of the biggest obstacles
to innovation. When things are
working well, the risks involved
in innovation can deter senior
decision-makers from engaging
with initiatives for change.
But competitive pressures,
particularly from emerging
economies, alongside the
shift in customer expectations,
mean that the status quo is
not an option. Managers must
commit to innovation, and they
need tools that allow them to
do so with adequate controls
and a clear view of the risks and
potential rewards.
This is where culture becomes
a critical factor. Change in the
C-suite must translate into a more
entrepreneurial way of thinking
and working at every level.
The good news is that the
evidence from the EPPM Board
suggests that there is a wealth
of innovative spirit lying latent
within many organizations. Taking
the steps to make innovation
a key priority can unleash that
potential for creativity and
positive change faster than may
have been imagined.
One the most effective of those
steps is to budget for innovation.
Ringfencing funds for investment
in new ideas helps to protect the
organization from any risk, while
maximizing the potential for
finding innovation that can have
transformative impact.
The challenge then becomes
one of effective execution and
the Board again cited culture as
the critical factor. The executive
team must be able to ensure that
the vision remains intact as it is
passed through the organization
to the operational front line, or its
impact will be lost.
An understanding of risk, and
a willingness to engage with it,
are the hallmarks of effective
managers, because they are
measures of their ability to foster
and execute innovative ideas.
With the pressure for
transformation now acting
on enterprises in every sector,
managers must be ready to
test their appetites for innovation,
backed by tools and intelligence
that can enable better-informed
decisions, while ensuring that their
impact is felt deeply, sustainably
and with rapid rewards.
Learning lessons
The Board also considered
the impact of project
failure in the context
of a commitment to
transformative innovation.
Once risk is accepted as
a dimension of innovation,
then failures should be
seen as learning processes
that contribute valuable
intelligence to the longer-
term goals, rather than
sticking points that prevent
further exploration of
opportunities to innovate.
As with the movement of
people, the ability of EPPM
to capture best practices
and other insights can be
valuable in guiding future
decisions on innovation.
DISCOVER MORE
The Oracle EPPM Board produces
regular reports and findings, all of
which can be accessed at:
oracle.com/eppm/eppmboard
Or email:
serena.walker@oracle.com
