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The current global COVID-19 crisis has had a critical impact on business operations. In project and portfolio management, these circumstances might delay decisions, which can lead to overspending and wrong resource allocation. It is key to build confidence in your portfolio and ensure that resources are focused on the right projects that are “needed to survive” the current crisis from an organisational perspective.
To help you, we have created an overview of scenarios, suggested activities and guiding questions for responding to the crisis and recovering the business. As the progress of COVID-19 is hard to predict you might find your business switching between these two phases.
We provide an external view based on our experience in assessing project portfolios for their strategic fit and give project stakeholders an independent report and continuous feedback.
Our proven method of project recovery can support you in rescuing projects affected by COVID-19.
Key questions to consider
There are a number of activities that could be affected. Here are some questions you should consider:
- Have you considered changes to your portfolio from the organisation’s strategic perspective?
- Do you have external deadlines that your project needs to meet (e.g. legal or regulatory change, tax implications)?
- Which of your projects have a large workforce consisting mainly of external third parties?
- How many projects are still in the initial phase rather than full-blown execution?
- Do you have projects that need a lot of top management attention (which is scarce right now)?
- How does your project affect the way the organisation is currently run?
- Do you have contractual obligations that you need to fulfil?
- Do your projected benefits need re-evaluation to reflect changes in the short/medium/long-term economic outlook?
Typical Project Phases
Observations suggest that projects could be affected by COVID-19 in many ways during the project lifecycle.
| Project initiation | Project planning and execution | Project roll-out | Operate and review | ||
| Description | Projects currently still in the strategy phase should be strictly checked against must-have criteria, and if they are not truly necessary, put on hold. | Critical projects in the planning & design phase need to have their plans re-assessed based on the new implications. | For projects already in construct or execute mode, an evaluation should be made of the new conditions, including a forecast of budget spending. | For projects that are in the implementation phase, an assessment should be made as to whether implementation is still possible with the new restrictions (including contractors). | Overall regular operational review cycles need to be reduced to stay on top of latest developments and take fast, decisive action. |
| Consequences if interrupted |
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Coronavirus scenarios and mitigation for project management
COVID-19 will affect organisations to different degrees, requiring several actions.
| Details | In a minor impact scenario, only a small amount of your workforce is out, your project team members can all work from home and you do not lack any immediate resources in terms of infrastructure or supply chain. | In a medium impact scenario, your workforce is significantly reduced for a longer period of time. Further-more, you are affected by a lack of IT infrastructure or working from home is not possible for your projects. | In a major impact scenario, the majority of your workforce is out and the IT infrastructure and supply chain are interrupted. Business operations are critically impaired. |
| Functional impact | Organisations need to consider whether the timeframes assignedto projects are still feasible or if they need to be extended. Only a small number of projects might need to be postponed or put on hold. | Projects that are not essential to the survival of business need to be put on hold regardless of the project phase. Full focus must be on business-critical projects in order to ensure completion. | Only the projects of the highest criticality can be kept ongoing; staff need to support business operations first and deliver change second. |
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The financial industry seems mostly not to have been severely hit by the direct effects of the COVID-19 crisis. However, some effects are already observable, or are at least expected in the near future:
The COVID-19 outbreak weakens the capacity of the financial sector to extend credit; credit crunch as pessimistic scenario
Main channel for overall financial services is negatively impacted on asset quality and prices – global monetary easing by central banks and related fiscal policy initiatives will help to relieve liquidity, will pressurise but not outweigh profitability
Weaker economic environment could depress sales of overall financial products, lowering (fee and commission, underwriting) income of banks, insurers, asset managers/mutual fund sellers, brokers
Potentially positive impact on insurers and reinsurers from reduced insurance claims in face of lock-down
Key questions to consider when recovering your business:
- What is the most critical impact on the project portfolio management, and the most important task for the restart?
- Do you need to change your entire strategic perspective for the portfolio in order to steer out of the crisis successfully?
- Do you need to manage/stabilise existing projects first, before starting on new projects, or can you start new projects right away (while on the way out of the crisis)?
- Are you fully aware of the benefits attributable to your portfolio components?
- Do the projected benefits need to be re-evaluated to reflect changes in short/medium/long-term economic outlook?
The three phases of project recovery
In responding to COVID-19, organisations must follow a structured and disciplined approach as they move from acute crisis management into recovery. Various actions can be applied at the ‘strategic’ portfolio and project ‘delivery’ levels.
Prepare Mobilise and prepare your response |
Respond Implement responses and dynamically respond to new developments |
Recover Transition to BAU and review lessons learned |
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| Strategic portfolio level | For example:
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For example:
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For example:
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| Project delivery level | Address the fundamental elements of effective (remote) teams by focusing on:
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For example:
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For example:
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Optimising the project portfolio
The project portfolio must be continuously and rapidly optimised to the changing priorities of the organisation
The portfolio prioritisation and scoring framework should be synchronised and/or heavily weighted to the immediate organisational responses and priorities.
Example Criteria:
- Contribution to COVID-19 response
- Financial return
- Current status
- Dependencies with COVID-19
- Resourcing
Review the portfolio based on the adjusted scoring framework. This can be used to inform decision-making on whether to accelerate, slow down or defer a project.
The portfolio is optimised and composed of key projects to be approved for delivery. The optimisation of the portfolio results in the selection of projects to accelerate, slow or defer.
Even Though the financial sector has been hit hard by this crisis, it has been analysed that many financial institutes have continued with their portfolio as before the crises, and to do so successfully.
Project approaches
- Accelerate projects with alignment to refreshed priorities and support the organisation’s response to COVID-19.
- Slow down projects that still have strong strategic alignment but provide less support to the COVID-19 response.
- Defer projects that tie up cash in slow returns on investment and provide little support to the COVID-19 response.
For each project approach, there are several key considerations that should be addressed.
Perform scenario planning to analyse the various scenarios of portfolio compositions and impact (e.g. benefits, resourcing, multi-project critical paths, etc.)
In the industrial services sector, a very diverse picture has unfolded. While industries like pharma or could benefit from the immediate crisis, whole sectors like passenger transport, travel and hospitality services are amongst the hardest hit, and will need to be supported by subsidies for the foreseeable future.
Pharma
- Supply chain: raw materials, APIs and manufacturing; long-term shift to diversify the channel
- Rapid vaccine development for COVID-19 along with other potential therapeutics
- Clinical trial disruption due to concerns of patients entering medical facilities
Industrial manufacturing (incl. construction)
- Significantly effect on the industrial sector, esp. due to decline in demand from target industries (esp. automotive, airlines)
- Cost pressure on operations; focus on supply chain resilience – however boost for further digitization
- Metals and mining impacted by easing demand for base metals consumption from China
Key questions to consider when recovering your business:
- What is the most critical impact to the project portfolio management, and most important task for the restart?
- Do you need to change your entire strategic perspective for the portfolio in order to steer successfully out of the crisis?
- Do you need to manage/stabilize existing projects first, before starting on new projects, or can you start new projects right away (during the way out of the crisis)?
- Are you fully aware of the benefits attributable to your portfolio components?
- Do the projected benefits need re-evaluation to reflect changes in short/medium/long term economic outlook?
Free Project Helpdesk
Extraordinary times require exceptional project management. Strategic changes of perspective, deadlines that cannot be postponed, visibility with top management, external service providers, contractual obligations are just a few of the current challenges in projects. We would like to be at your side with our helpdesk. Free of charge.
Contact us
We can support you with questions around the following topics:
We can answer your questions about:
- Project portfolio prioritisation measures
- Validity of your projects
- Feasibility of your projects
- Communication channels with customers, governments or regulators
We can answer your questions about:
- Problem identification
- Recognise the superficial symptoms
- Addressing the basic causes
- Definition and implementation of recovery plans
- Monitoring and control functions
We can answer your questions about:
- Benefit identification and structuring
- Return on investment
- Realisation of benefits
- Outcome review and evaluation
- Potential and benefit increase
We have also written a white paper about benefits management.
We can answer your questions about:
- Virtual collaboration
- Optimising the critical path
- Suitability of the project methodology
- Project restructuring
- Process automation with tools
- Coaching and team mix
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Contact us
Senior Manager, Strategy & Transformation, PwC Switzerland
Tel: +41 58 792 21 69
