Introduction

A demand is any request for funding within an organization for a new idea / initiative, as well as additional/repeat funding requests for projects/programs already under execution. A single idea or multiple ideas can help to shape a demand.

Demand Life Cycle

Typical life cycle of a demand (for funds) is depicted in the diagram below. Demands emanate from actions required to achieve an organization’s vision / goal, get reviewed through the PPR exercise for approval & funding, and once approved for execution, are governed through Project Execution systems. In case the project requires repeat funding, it comes back for funding approval, albeit through a simpler approval process.

Demand Creation

Any organization is likely to have multiple ideas as well as planned initiatives that would serve the needs of the organization, either to meet organization planned goals / objectives or for betterment of inherent operations / functions.

Anyone within the organization can submit funding proposals to record those ideas or initiatives, with base narrative, benefits, what it means to implement the ideas / initiatives (cost, timelines, resources etc.) and other supporting material, in the form of documents or external files.

In case the funding proposal needs input or contribution from a wider set of stakeholders, they can collaborate with other stakeholders to refine their proposal. Once they are satisfied with the proposal and ready to seek funding for their proposal, they can promote the proposal to Demand (for funding) status.

Based on the nature of the idea / initiative, the demand may result in a well scoped out execution plan that can be executed in one stretch with no other dependency. This may need a onetime funding for execution and no further actions. Such demands need to be identified as Project Demands.

However, some ideas / initiatives can be large / complex to execute and hence may need stretched out time lines from conceptualization to implementation. In such cases, these demands will have to be identified as a Program Demands, with a facility to link multiple Project Demands under them.

A Program Demand needs to have its own narrative, scope, benefits articulation, program plan, cost of execution, resource needs etc. In addition, each Project Demand linked to a Program also needs to have their own narrative, scope, benefits articulation, program plan, cost of execution, resource needs etc. This is a mandatory need as at the funding approval stage, approval for some of the projects (within the program) could be phased out or denied. Program funding will be the sum of the funding received for all its constituent projects. Generic / common cost needs of a program can be planned as a PMO Project within a Program.

In case of large Programs, it is highly likely that they may get executed beyond a financial year and hence could get budget allocation across years / across portfolio planning cycles in an incremental manner. Hence, in cases where there is a funding requirement for a newly identified project within an existing program (already approved for execution) or additional funding for an existing project within the program, the demand has to be raised as Project Linked Demand.

Life cycle of any demand (new demand or demand linked to an existing program) is the same except for the Demand Review process followed for approval of funds. While new demands might go through an elaborate review process, independent panel evaluations etc., demands linked to existing programs would be reviewed based on the adherence to earlier commitments of the program with which the specific demand is linked.

Demand Review

Process by which a Portfolio Manager reviews all the demands raised in the system, short lists a few for approval and allocation of funds. 

Expect this process to happen in two distinct steps:

i)  Review of new demands, which have approached for first time funding and 

ii)  Review of demands (projects/programs) which have applied for repeat funding 

Review of New Demands

Portfolio Manager can proceed to review the demands based on the inputs provided by the demand sponsor (person who placed the demand) or can, optionally get the demands evaluated by a set of independent panelists.   This would need the portfolio manager to select a set of people, provide them access to all information on the demand, as well as administer some survey, poll etc., to get their views to validate the information provided by the demand sponsor.

Portfolio Manager can review the demands independently or can create a cluster of demands and review them together, in case they serve a common purpose.

Demand Approval

Post the ranking and review of demands, Portfolio managers can either approve, bank or reject the demands, based on the earlier analysis done. Approved demands will be allocated with budget and cleared for execution. Rejected demands will no longer be processed or used by the system. Banked demands can be optionally pulled in for the next portfolio planning & review cycle.

Approval should always be provided at the individual demand level. Even in case of demands being grouped together for scenario analysis or as part of a larger Program, approval has to be at the individual demand level and not at the program or scenario level.

Demands linked to statutory needs can be approved without any ranking and comparative analysis.