10 Trends in Strategic Portfolio Management for 2024

The beginning of a new year is always a good time to pause and reflect, drawing on learnings from the previous year to devise plans and strategies for the months ahead.

As part of my role, I get the opportunity to work closely with teams in some of the world’s leading enterprises. I lead product management for Clarity, and I’ve helped manage the solution for 18 years.

I’ve worked extensively with many clients over this time, which has provided invaluable insights into how to effectively manage investments and resources. These interactions give me a unique vantage point, enabling me to see those specifics that are unique to each team and organization as well as common themes that apply to broad swaths of the market.

In customer engagements over recent months, I’ve seen some emerging trends that are poised to have a big impact on enterprises in 2024.

In the sections below, I’ve outlined the top 10 trends in project and portfolio management (PPM) and strategic portfolio management (SPM). Read on to find out about key changes to consider as you navigate the year ahead.

1. The shift from turnkey to tailored technology

Over the years, technology products have largely been turnkey in nature. Teams could buy a product and implement it without significant customization. An implementation in one organization looked very much like one in another organization.

Recently, there’s started to be a significant shift, with teams moving to tailored solutions. In this new paradigm, the move from a traditional project-management mindset to a product-management approach will be increasingly vital. Product management will be integral in enabling teams to get the most out of their software investments, and ultimately leveraging technology in the most strategic and impactful ways.

2. Significant backlash is mounting around a perceived lack of value from Agile

Within many organizations, we’re hearing about a backlash against the move to agile. Some are feeling that agile hasn’t delivered the anticipated value. In some cases, teams are looking to revert to traditional practices, such as project management; in others, folks are seeking new alternatives, often exploring approaches for going “beyond agile.”

In this latter case, Scaled Agile Framework (SAFe) is growing increasingly popular. I encourage teams moving in that direction to view SAFe not as a one-size-fits-all solution, but as a toolbox. Teams can pick among an array of tactics and strategies and employ those that are best suited to their specific organizations and objectives. Overall, I expect that most organizations will not go 100% in either direction, and instead land on a hybrid approach that combines traditional and agile methodologies.

3. There’s been an overemphasis on engineering efficiency at the expense of improving investment prioritization

The move to tailored technologies has accentuated a challenge in many organizations: how to prioritize investments effectively. Generally speaking, teams have been focused on maximizing engineering efficiency at the expense of improving prioritization capabilities.

The reality today is that engineering efficiency isn’t enough; there’s always going to be more demand than the most efficient teams can support. This is particularly true in today’s tailored technology paradigm. For example, bringing in outside contractors is increasingly difficult when software is highly customized within an organization. Ultimately, the number of skilled developers available will represent a consistent bottleneck. That’s why it’s now vital to start prioritizing effectively. That means ruthlessly saying no to low-priority efforts and taking steps to ensure only the efforts that yield maximum value are being pursued.

4. Product management skills will be in ever increasing demand

In many organizations, folks with “product manager” titles are readily available. However, deep product management expertise tends to be in short supply. Compared to traditional project managers, product managers must have deep product knowledge. This understanding is crucial for several reasons:

• Prioritization. Product managers need to prioritize initiatives and explain their rationale to stakeholders. Without technical knowledge, their credibility crumbles.
• Stakeholder trust. Investors and executives need to trust the product manager's vision for value creation. Technical knowledge is integral in fostering that trust.
• Tailored technology. In this era, a grasp of specific technologies and their capabilities is essential for realizing value.

It is for these reasons that outsourcing technology expertise keeps getting more difficult. Internal product management know-how and skills are increasingly irreplaceable.

5. As technology becomes woven into the business, organizations struggle to “operationalize” technology

In recent years, technology has come to be woven into the fabric of every business, representing the engine of business growth. Given this, it is vital to “operationalize” technology. However, this shift is proving difficult for many organizations.

Here are a few keys to achieving this objective:

• Bridge the knowledge gap. While it used to be fine to have a select, isolated group of specialists assigned to the technology domain, that approach is no longer tenable. Non-technical individuals must begin to grasp technological complexities, such as how software is built, why it takes a given length of time to develop a new feature, and the resource constraints teams are contending with.
• Align around value. Instead of focusing on boosting internal efficiency, teams across an organization need to focus on achieving key business outcomes. Ultimately, teams need to be focused on value delivery, and tracking the metrics that gauge their success in that endeavor.
• Establish technology definitions that are aligned with value streams. In today’s landscape, the line between operational and non-project technology investments tends to blur. That’s why it is vital to concretely define the scope of operational technology and align it with value streams.

6. Fixed asset accounting rules are stifling digital transformation

We’re living in a world of operationalized technology and digital transformation. The reality is that traditional fixed asset accounting rules are ill-equipped for this paradigm. In fact, these legacy rules can incentivize teams to stick with traditional project and portfolio management structures, rather than making the advancements their markets and businesses require.

Standard-setting bodies, like the Financial Accounting Standards Board (FASB), haven’t adapted their standards to the realities of digital products. Consequently, teams must navigate a hybrid world, juggling adherence to traditional rules as well as principles like agile. This presents a tough challenge for many teams today.

7. Product management offices are becoming strategy realization offices

How are successful product management offices (PMOs) navigating these evolving realities? In the past, many PMOs tended to emphasize compliance over coordination and communication. These organizations are expanding their offerings and rebranding, often to become strategy realization offices (SROs). The focus is on truly partnering with other teams and providing expanded support.

SROs are integrating agile practices, product management expertise, and other methodologies. As organizations navigate the complexities of operationalizing technology, SROs can play a crucial role by providing education, coaching, and process guidance. The result of this is that the SRO moves from being seen as administrative overhead and becomes a valuable source of expertise.

8. Objectives and key results are increasingly popular—but their potential isn’t being realized

Organizations have increasingly embraced objectives and key results (OKRs) as a tool for alignment and focus. Popularized by tech giants like Google, OKRs promise to spark innovation through improved motivation and clarity. However, too often, teams fail to capitalize on the potential of OKRs.

One common pitfall is treating OKRs as a simple replacement for traditional goal setting and KPIs. This “top-down” approach contradicts the core principles of OKRs, which emphasize collaboration and stakeholder buy-in. When done right, everyone is involved in OKRs. There’s widespread participation in OKR definitions, and everyone understands, and takes ownership for, the goals established. Ultimately, OKRs shouldn't feel imposed, but rather aligned with individual and team priorities.

9. Composable architecture is a hot topic

Composable architecture is a term showing up all over, from industry trade shows to board rooms. For those unfamiliar with this latest buzzword, a composable architecture is an approach that allows developers to create reusable components for building applications. This is an evolved version of previous, component-based architectures, but with a twist. Instead of monolithic applications, composable architectures focus on microservices: small, independent units that solve specific problems. (There are other composable options besides microservices, but microservices approaches are currently the most popular.)

These microservices are building blocks. They're interchangeable, allowing them to be combined and recombined to create various applications. Composable architectures are analogous to building with Lego blocks. If developers need authentication in their new system, they simply plug in an existing authentication microservice instead of building it from scratch.

This modularity offers several advantages:

• Reduced vendor lock-in. Each microservice can be replaced independently. This enables teams to take a “best-of-breed” approach every time and minimizes dependency on a single vendor.
• Increased flexibility. A composable architecture remains adaptable, accommodating future changes and additions without significant rework.
• Faster delivery. Reusable components streamline development, enabling faster deployment of new applications and capabilities.

10. AI will have a very significant impact, but not in the short term

The current frenzy around artificial intelligence (AI) resembles the early days of the web and mobile. The volume of press and hype leaves many executives eager to make major investments, fueled by FOMO, or fear of missing out. However, just like the speculative bubbles that emerged around web and mobile, many AI investments will likely fall flat.

AI is undoubtedly a game-changer, but its impact won't be immediate in the enterprise. A major analyst firm predicts it will take 10 years or more for AI to reach the “plateau of productivity,” the point in which real value is consistently delivered. [provide source?] A big reason for this is the fact that organizations are contending with mediocre data. Remember, AI is only as intelligent as the data employed.

So far, evidence suggests that generative AI is more beneficial for individuals than enterprises. While AI can handle tasks like text generation, its broader value for businesses has yet to be proven.

That said, leveraging AI for query generation shows promising potential. Imagine asking a question and having AI reformulate the submission into a precise technical query, delivering the information you need in a dynamic and insightful way. This could be the first true value-adding area for AI within organizations. Make no mistake, AI is a powerful tool. However, AI’s true value will only be unlocked by focusing on solving real business challenges, not chasing after technology for its own sake.

Conclusion

In the coming year, we’ll undoubtedly see many of the above trends take hold across organizations.  To learn more about these trends, be sure to watch our webcast, [title, link to webcast replay to follow]. Navigating these changing dynamics will not necessarily be easy, but the good news is that Broadcom can help. With ValueOps by Broadcom, leading organizations around the world are gaining enhanced visibility, alignment, and efficiency—making them well positioned to accelerate digital transformation and boost business outcomes.