I am sure you may be asking, “What is a Portfolio Management Office (PMO)?” In order to better understand a PMO, we can begin with some high-level definitions.
A portfolio is a collection of projects and/or programs that are coordinated (timed and sequenced) to support the efficient execution of strategic initiatives. Portfolio management is an approach that incorporates tools, processes and methodologies to support achievement of strategic goals through transparent reporting and outcomes tracking. The Portfolio Management Office serves as a center of excellence to ensure project prioritization, resource allocation, goal alignment and outcomes achievement are occurring in an efficient and effective manner. Portfolio management ensures that the collection of projects/programs selected are supporting the achievement of the strategic goals of the organization.
Shortly after the OSF HealthCare Performance Improvement division (supporting the execution of strategic initiatives) was formed in 2009, the need to establish a PMO was quickly identified. Absent a PMO, speed to value and achievement of outcomes were stifled. The challenges included:
- No central tracking for project work
- Lack of visibility into resources and timelines
- No shared reporting to executive leadership
- Inability to spread internal best practice when outcomes where achieved
- No consistent tracking of outcomes achievement
- Lack of project transparency resulting in duplication
A small team began working to build a customizable, centralized database that would allow consolidation of information across the organization and mitigate the challenges encountered. Building the shared database was complex. We had to understand and agree upon what information was needed within the database to support an efficient and effective PMO. Our ability to build a robust tool linking our strategic goals, prioritized initiatives, ongoing progress monitoring, detailed reporting and outcomes tracking provided significant value across OSF for executives, PI practitioners and other Mission Partners.
Developing a PMO for OSF Innovation
In 2016, Performance Improvement moved into the OSF Innovation space along with several other disciplines including Jump Simulation, OSF Ventures, OSF Partnerships, Healthcare Analytics and Telehealth. These disciplines were brought together to work collaboratively to solve the most complex problems facing health care. As our teams began working together we quickly identified the need for a shared portfolio. We had all been working on various strategic initiatives but were doing so within our own silos. We recognized that in order to collaborate, create speed to value and solve the most complex problems facing health care we needed a PMO for Innovation.
OSF defines innovation as the process of translating ideas that align with our vision of transforming health care into value for the benefit of the patients and communities we serve. Our ability to translate ideas into value requires efficient portfolio management and transparent sharing of information both of which are achieved through the PMO.
Managing an Innovation portfolio introduces additional complexities such as the mix or balance of projects within core, adjacent and breakthrough. Core initiatives involve optimization of existing products, processes or assets for existing patients and employees. Adjacent projects are those that expand from an existing model to a new model. Breakthrough projects include developing concepts and inventions for areas and/or markets that don’t yet exist. Many studies have been conducted over the past several years linking effective portfolio balance to improved outcomes.
The “gold standard” when determining balance is 70% core initiatives, 20% to adjacent and 10% to breakthrough. Focusing efforts in the core allows you to build a solid, stable, reliable foundation that can support the introduction of new adjacent models as well as new inventions. Organizations will always have a need to advance their strategy which requires 70% focus on the core initiatives, but if you don’t balance that with the other 30%, you will likely only achieve incremental improvement and miss the opportunity to introduce innovative solutions. You must also consider how to manage adjacent and breakthrough work as an integrated component of your portfolio to achieve your desired outcomes.
The PMO at OSF supports our ability to make decisions that will advance our innovation portfolio and extend our Mission to serve with the greatest care and love.