Companies in industrial value chains work on projects of nearly unfathomable complexity, making a metric like “return on innovation” a challenge to harness. The steps and procedures required to provide energy to the global economy, for example, or manufacture millions of products every day, require a level of coordination that puts even the most widely adopted management methodologies to the test. Beyond this, linking a whole suite of projects into a coherent vision that delivers strategic value for a company is a daunting task all on its own.
As industrial firms face increasing pressure, from decarbonization and sustainability to upstart competition to regulation, this imperative will only grow. This is where strategic portfolio management (SPM) comes in. SPM describes “a set of business capabilities, processes and supporting portfolio management technology…that focus an organization’s finite resources to execute the enterprise-wide business strategy.” The goal of SPM is to paint a clear picture of how projects contribute to strategic goals and whether they make sense in the context of a company’s wider mix of initiatives.
While SPM may sound like a complex methodology and difficult to implement, having a flexible digital solution which ties everything together can be a huge help. Keto Software, our latest portfolio company, makes just such a platform. In this interview, Michal Natora talks about the importance of SPM and why a flexible software tool unlocks its full value.
What value does SPM provide for companies in industrial value chains?
Managers in industrial firms must juggle a huge number of considerations when dealing with the projects they oversee. At the top sits the company’s overall competitive positioning, while the middle layer is occupied by resources, strategic value creation, long-term risks and innovation potential. Closest to the grind, we find immediate risks, day-to-day project progress, and objectives and key results (also known as OKRs).
SPM brings all these factors together, so that none is dealt with in a vacuum. Especially when projects are diverse, spread around the world, and at various stages of development, it is vital to have a single “dashboard” that connects the big and the small, the past, the present and the future, the what, the why and the how.
Why does SPM provide value for Emerald’s sectors of interest—energy and packaging specifically?
In energy, the transition to a net-zero economy is causing seismic shifts. Old ways of working are being torn up as entirely new pieces of infrastructure — solar panels, battery storage, and small modular reactors — supplement traditional coal, oil and gas facilities. Developing a new paradigm of value creation requires forging links and uncovering synergies between the old and the new. SPM is a powerful tool to make this happen.
In packaging, the push for greater sustainability and waste reduction is also a major driver of increased complexity. Packaging producers have to add end-of-life, reuse and recycling to their list of concerns. This is increasing workflows significantly as circularity initiatives proliferate. From new types of packaging materials to collection and refill of empty containers, packaging players are confronted with an array of hurdles to their value models that SPM can help sort through.
SPM tools have been around for a while. What benefits does the SPM tool from Keto Software offer and why should an organization consider switching to it?
An SPM tool creates most value if it is being used frequently by many employees across all departments. However, legacy SPM tools offer clunky interfaces and are not flexible enough to capture all processes of an organization. This results in low a user engagement and in an incomplete portfolio representation, making the SPM tool yet another cumbersome reporting tool instead of an active help in strategy execution.
Keto Software’s SPM is user centric and highly flexible, allowing it to represent the organization as it truly is. Moreover, since it offers full no-code functionality, it empowers users at the business unit level instead of handing all control to external IT service providers.
More on industrial IT & robotics at Emerald:
Leading the way in automated vehicles for industry – an interview with Mehran Zaker
Emerald leads $5M investment in Mantis Robotics to Redefine Robotics through Physical AI
Robots everywhere: the exciting possibilities of human-robot collaboration