In large organizations, enterprise project portfolio management plays a key role in the success of strategic initiatives. Yet, it’s not uncommon for ambitious innovation strategies to fail. How does this happen? A lack of integration of projects into a common governance structure is often to blame. All too often, innovation initiatives run in silos, with no direct ties to the company’s strategic priorities. This misalignment can jeopardize the value delivered to the company.
In my experience as a project manager, I’ve found that combining projects under a single governance structure is essential to transforming innovation into performance.
For leaders, this presents an immediate challenge:
- What are the projects that support our strategic objectives?
- Where are we over-investing? Where are we under-investing?
- How can we strike a balance between immediate performance and long-term innovation?
This first article in a series offers real-world answers to these questions. We’ll explore why integrating innovation projects under a cohesive portfolio governance structure is essential to maximizing their strategic impact.
Enterprise project portfolio management: why an integrated approach is essential for innovative projects
Before diving into integration mechanisms, let’s see what the data and experts have to say about misaligned innovation portfolios.
According to PMI’s Pulse of the Profession 2025, professionals who align their projects with strategic objectives often:
- Achieve better outcomes
- Adhere to timelines and budgets
- Experience fewer failures
However, as Jim Bodio points out in his article in Innovation Leader, what many organizations call an “innovation portfolio” isn't really one at all. All too often, it’s a pipeline of projects without any clear direction or strategic allocation of resources, and with no mechanism to kill underperforming initiatives. In other words, it's a loosely connected collection of projects, without true strategic governance.
These findings highlight the urgent need for an integrated approach, guided by strategic governance that effectively bridges innovation and performance.
What is enterprise project portfolio management?
A project portfolio consolidates all of a company’s projects and programs under one governance umbrella.
Project portfolio management aims to:
- Optimize resource allocation and capacity planning
- Manage risks
- Identify synergies
- Ensure strategic alignment with organizational goals
As the Project Management Institute explains, portfolio management serves as a decision-making tool that reflects an organization's intent, direction, and progress. According to project portfolio management experts Christian Zarka and Sarah Guerrier (link in French only), a well-aligned project portfolio can transform a strategic vision into concrete results. It can help companies juggle the sometimes-conflicting requirements of a project with the resources available.
Balancing exploitation and exploration in project portfolios
Companies generally manage two types of portfolios:
- Exploitation projects: aimed at optimizing existing operations
- Exploration projects: designed to open up new opportunities
Each portfolio relies on different tools, operates on different timelines, and measures success differently.
Exploitation projects
Exploitation projects focus on immediate performance. They are evaluated based on profitability, on-time delivery, and cost control.
Projects you might find in a portfolio of exploitation projects:
- Projects to bolster competitiveness and revenue growth: through the use of tech platforms such as those from Microsoft, Oracle, AWS, and Salesforce.
- Sector- or department-specific business projects: such as optimizing financial processes, modernizing HR systems, or implementing decision-making scorecards.
- Projects to ensure regulatory compliance: by updating systems to reflect new regulations or security standards.
Exploration projects
Exploration projects, typically focused on innovation or new opportunities, are inherently uncertain. Their value comes from the insights they create, along with the flexibility to pivot and adapt to different situations.
These projects fall under three types of innovation:
1. Core innovation
Projects in this category aim to improve the performance of a product or service without changing the value proposition. These are often targeted additions that optimize the efficiency or visibility of operations.
Common examples of such improvements:
- Adding a forecasting tool to an existing system: to better anticipate demand or necessary resources.
- Automating repetitive tasks in financial processes: with the help of tailored ERP solutions.
- Implementing business intelligence solutions: such as Alithya's data and analytics consulting services, tailored to the specific needs of an industry or department.
2. Adjacent innovation
Adjacent innovation projects focus on introducing new products or services to a new market segment or creating new products for an existing market. In many cases, this means strategically expanding a company’s existing offering, requiring modifications to processes, technologies, and business models.
Initiatives may include:
- Transforming your supply chain: to cater to a new market segment, with the help of our supply chain management consulting services.
- Launching a digital strategy: to adapt your service offering to a new market, guided by our digital strategy consulting services.
- Implementing scalable technology solutions (ERP, CRM, cloud computing): to support your company’s expansion, leveraging enterprise software.
- Creating new products or services: from an existing offering, with the help of a multidisciplinary team dedicated to enterprise transformation.
3. Transformational innovation
Some projects don’t just seek to improve what already exists, but to replace it altogether. The goal is a strategic disruption, such as transforming an industry, abandoning a business model, or creating new market dynamics. This type of innovation requires a clear vision, advanced technological capabilities, and structured support.
Examples of transformation projects:
- Creating an online booking platform in healthcare: appointment scheduling software integrated with medical clinics and pharmacies.
- Redefining a business model: with the help of strategic advisory services including enterprise architecture, change management, and performance planning (business strategy).
Projects in this category reshape market paradigms and bring lasting change to an industry, effectively eliminating old business models.
Exploration and exploitation: why you need both
Separating these two project portfolios creates parallel workflows and spreads resources too thin. This siloed approach undermines both immediate performance and long-term innovation.
Such a siloed approach can: The impacts are significant
- Slower down decision-making
- Reduce synergies between teams and initiatives
- Increased costs and delays in project execution
- Missed opportunities to apply organizational knowledge
- Underfunding of innovative projects
- Misalignment between ideas and market needs
- Poor resource allocation, heightened tensions, and frequent rework
Despite pursuing different goals, exploitation and exploration projects should not operate separately. Instead, they work best under one governance structure. An integrated approach ensures the organizational ambidexterity needed to handle both immediate and future business needs. An integrated approach ensurs the organizational ambidexterity needed to balance today’s performance with tomorrow’s innovation.
A real-world example: A financial services company launched an innovation lab completely disconnected from its operations and clients. Two years later, none of the projects had been integrated into client-facing services. The result? Millions invested, a demoralized team, and an executive team forced to overhaul its strategy.
Despite pursuing different goals, exploitation and exploration projects should not operate separately. Instead, they work best under one governance structure. An integrated approach ensures the organizational ambidexterity needed to handle both immediate and future business needs. An integrated approach ensurs the organizational ambidexterity needed to balance today’s performance with tomorrow’s innovation.
Project portfolio management KPIs: measuring integrated performance
To effectively manage a portfolio that combines exploitation and exploration projects, companies need tailored performance indicators. These indicators are integrated into project portfolio management software and tools, making it possible to track project progress, assess strategic contribution, and adjust the portfolio in real time.
Three KPIs:
Expected Commercial Value (ECV): to measure the potential commercial value of innovative projects.
Earned Value Management (EVM): to track project advancement with respect to costs and schedules.
Stage-Gate: to provide structure to development stages while facilitating decision-making and ensuring compliance with governance standards.
These measures strengthen portfolio governance by providing an overview of investments, decisions, and expected returns.
Roadmap to integrated governance
Several initiatives can be implemented to shift from a siloed approach to integrated governance:
- Launching a portfolio of pilot projects combining exploitation and exploration projects
- Centralizing governance under one entity
- Rolling out common project management processes and tools
- Promoting the cross-functional use of resources
Drawing on program management consulting practices can help organizations accelerate this transition and align governance with strategic priorities.
This approach makes it possible to evaluate all projects against the same strategic objectives, adapting the tools to the specific features of each one. It also optimizes resource coordination, improves responsiveness, and provides comprehensive performance insights.
To keep the innovation going...
This first article lays the foundations for a strategic approach to portfolio management. It is based on a methodological framework developed as part of my master’s capstone project at l’École de technologie supérieure (ÉTS) (link in French only), designed to compare conventional and innovative project portfolios. This framework can help executives pinpoint the specific performance drivers for each type of project and adopt a governance structure suited to their innovation ambitions.
In the next articles in this series, we’ll be taking a closer look at the challenges of innovation, governance, and strategic balance. These insights will provide concrete examples, drawn from both research and practice.
Are you looking to assess or transform your project portfolio? Our experts can guide you through this strategic process. Contact us to get started.