Philips

Drawing on our deep capabilities in developing and driving organisational agility, we established an innovative framework to transform IT portfolio management. Successfully overcoming the barriers posed by the pandemic, we enabled Philips to achieve a step-change in performance on key measures for agile portfolio management within less than a year. The difference is driving up satisfaction rates among internal customers. And for consumers and healthcare professionals around the world, it’s contributing to faster and more focused innovation that’s improving health and wellbeing wherever Philips’ health technology is in use.

Key successes

• Brought stand-out expertise in large-scale agile transformation
• Supported the rollout of agile portfolio management across a €millions portfolio of transformational innovation initiatives
• Shared skills, tools and insights to transform the way Philips manages its portfolio of IT platforms, creating a sustainable capability for the future
• Provided Philips with clearer insights into the benefits realised through technology and opportunities to optimise impact from investment

Investing in technology innovation 

Philips is one of the biggest and best-known health technology companies in the world. The company’s mission is to improve health and healthcare outcomes, making life better for billions of people around the world.

In the fields where it leads – diagnostic imaging, image-guided therapy, patient monitoring and health informatics – Philips’ innovative solutions combine systems, smart devices, informatics and services, and leverage big data. That means IT is at the heart of its business. The company invests hundreds of millions of euros every year in projects to establish a shared IT backbone for the business and to drive and enable innovation.

Targeting improved agility

Philips had already restructured the way it operates, establishing six key ‘platforms’ supported by leading edge IT: Idea2Market, Market2Order, Order2Cash, Services & Solution Delivery, Digital, and Group Functions. However, this model didn’t really recognise the interdependencies between the platforms or enable easy adjustment of priorities across platforms to ensure the combined investments were having maximum impact. Each platform was being managed separately. So, although many of the company’s largest IT programmes were successful, there was no overarching data to prove the benefits and value delivered by the entire portfolio.

A new agile approach to IT portfolio management promised to address many of these issues. Yet Philips knew this would be a huge challenge. Transformation in such a large, global company with such a long heritage would require changing mindsets, recasting processes and rethinking technology. To pull it off would demand exceptional skill and deep experience. Doing this against the backdrop of the global pandemic – with international travel and, therefore, face-to-face engagement severely restricted – would only make it harder.

World-class expertise in large scale agile transformation

Enter PA. As the leading experts in agile transformation in large, complex organisations, we were the natural answer to the challenge. Our track record in this space includes delivering agile transformation for major names such as green energy producer Ørsted – where we helped them get on course to produce 99 per cent green energy by 2025 – global biopharmaceutical organisation AstraZeneca – where new agile teams are reporting delivery and quality benefits – and European technology business Arm – where we helped transform their IT function to support their growth ambitions.

Our wide experience means we have deep insights into the practical challenges of agile transformation. And while we’re experts in delivering transformation through the Scaled Agile Framework (SAFe), we also really understand how to deliver change in the real world. Importantly, this means tailoring the framework to the specific context of individual organisations.

Something else marks us out – our commitment to supporting the teams we work with in developing their own agile skills. Rather than fix problems and then disappear, we work closely with clients to share our knowledge and tools, build teams’ confidence and support their development. Part of the way we measure our success is through the journey we help our clients make.

“Because we see agile transformation as a shared endeavour, we recognise the value of clients’ insight into their own organisations,” explains Pieter Kamstra, Agile expert at PA. “To leverage this, we work as a joint team with each client, always ‘doing with’ rather than ‘doing to’.”

Our commitment to understanding a company’s specific context revealed itself even before the engagement began. At tender stage, we were the only firm of say ‘we want to evaluate first’ before submitting our proposal.

“We’ve been ambitious to make our approach to portfolio management more agile for some time,” says Koen-Jan Nieuwenhuijsen, Head of Portfolio Management at Philips. “But we were always aware of how big a challenge this would be. Almost from the moment we met the PA team, we knew these were the right people to work with to realise our ambition.”

Setting a baseline

Philips were impressed by the ideas we put forward. So, we kicked off with a one-month assessment of how the portfolio was being managed. This focused on four key areas that are at the heart of agile portfolio management:

• Portfolio flow: how major initiatives and the dependencies between them are managed through their lifecycle
• Funding and budgeting: the extent to which funding is earmarked for overall development capacity versus allocation on a project-by-project basis
• Benefits realisation: how well benefits and their impact on the business are monitored and assessed
• Reporting: whether unified reporting, enabled by automation, is in place.

We also mapped the running portfolio of more than 200 IT initiatives across the global organisation to understand their alignment with Philips’ strategic goals: better health outcomes, improved patient experience, improved staff experience and lower cost of care.

Starting the heartbeat

Next, we set up the model for the new Agile approach, identifying roles and responsibilities, setting the meeting cadence and confirming the reports and insights to be delivered.

We planned a cadence comprising a monthly deep dive into all the initiatives running across each platform (called the Platform Portfolio Sync or PPS), plus a more visionary, quarterly strategic review attended by the most senior IT stakeholders. These regular monthly and quarterly events became the beating heart of portfolio management.

“PA gave us everything we need to kickstart our agile transformation,” says Patrick van den Heijkant, Tribe Lead, Portfolio Management Processes. “The model, the toolset, the support – and a clear passion for enabling us to capitalise fully on our investment in technology and innovation.”

Think big, smart small

In preparation for the rollout, we coached the Philips’ portfolio management team in agile techniques. (This is something we continued to do over the following months, gradually moving aside so the Philips team could step into the driving seat.) Then, following our own edict to ‘think big, start small’, we piloted the new approach with the digital platform. Within four months, we were supporting the Philips team to apply agile techniques across all six platforms. We used feedback from each of the monthly PPSs to continually develop and improve the team’s capability.

“PA’s ‘think big, start small’ attitude worked really well to create momentum. They didn’t get hung up on details or allow these to impede progress. Instead, they launched the transformation at pace and never stopped moving us forward,” says Marcel Meulman, Lead of Philips Integration Office and Deputy CIO.

In the same month that agile portfolio management became the standard for the whole portfolio, we collaborated with the Philips team to run the first quarterly strategy review. The top 100 IT leaders from across Philips globally attended. We used online collaboration tools such as Miro to ensure everyone had an equal opportunity to be part of brainstorming sessions and to bring forward ideas and challenges for the portfolio.

Making the vision a reality

Less than one year on from our initial engagement, the way Philips manages its IT portfolio has drastically improved, according to the Philips platform leadership team. Integrated reporting across the IT platforms and their portfolios provides clear insight to guide decision making. Funding increasingly focuses on contribution to overall priorities, rather than individual projects. And better portfolio flow means resources are managed to optimise delivery. Meanwhile, the improved monitoring and reporting supports the leadership with a far greater understanding of the business impact of investment.

Our work will have an important impact in enabling Philips to realise its vision to help billions of people worldwide enjoy better health. “Philips’ mission and our own are perfectly in sync,” comments PA’s Pieter Kamstra. “Like PA, Philips understands the power of technology and meaningful innovation to create a positive human future.”

We continue to work with the Philips team to develop their skills in agile portfolio management. The new approach is already bringing higher satisfaction among the internal customers and recognition within Philips IT and leadership team. This has come from:

• Significantly improved transparency across platforms and portfolios achieved through changes in governance, recurring meetings and new insights,
• Stronger alignment of initiatives with strategic priorities, and
• Shorter lead times for new initiatives achieved through a solid governance heartbeat and defined process for new requests.

It’s safe to say, there’s no turning back. We’ve successfully set in motion radical change in the management of millions of euros of investment – with huge and positive implications for the people and health professionals that use Philips’ products and services. And we did it all while the pandemic reshaped lives and livelihoods across the globe.

“It’s hard to believe how far we've progressed with PA despite all the barriers posed by the pandemic,” says Koen-Jan Nieuwenhuijsen. “With PA’s support and expertise, we are far further along in implementing agile and in realising the benefits across the portfolio than we ever expected to be at this point. PA’s leadership has been instrumental and invaluable.”