PORTFOLIO PIPELINE METRICS
Those who have worked in the online sales industry will be very familiar with it’s obsession of measuring. Almost every engagement with customers is measured, those metrics are then used to drive action.
The sales process is split into many stages, like a project management lifecycle. At the boundary of a stage some leads don’t make it through to the next stage. This also happens in a project management lifecycle, as projects pass through gates some don’t make it because they are not economically viable.
Let’s take a look at two common visualisations that are used in the sales process and how they could be adapted to managing your portfolio of projects.
The sales funnel is used to show the progression of leads through the sales process. To achieve a healthy stream of revenue lots more leads are required than will actually purchase. The same is true in portfolio management, you must load the early stages of the project lifecycle with more projects than you intend to deliver. That way you can make sure that you select the best projects to proceed to development and delivery.
Here’s an example of what a healthy “Strategic Investment Funnel” would look like:
LEAD CONVERSION SPEED
Sales teams look at the time it takes each lead to progress from one stage of the sales process to the next. They try different techniques to reduce the time in each phase, and convert a lead to a sale quickly.
In the portfolio management world, we can use this metric to improve the efficiency of our early stage projects. By targetting a specific length of time during the business case stage, for example, you could speed up the “conversion” of projects into delivery.
This “Pipeline Agility” visualisation shows the average time a project spends in each phase of the project lifecycle. Checking the trend of this metric would allow you to pursue efficiency gains in your portfolio management process.