Definition of project portfolio management
Project portfolio management (PPM) is a process by which an organization’s projects are evaluated and executed to ensure strategic alignment with business goals. PPM provides executives, project managers, team members and stakeholders with a holistic view of their projects, including how they fit into the organization’s guidelines and strategy, thereby giving an overview of the returns and the potential risks involved.
Under the PPM, projects are grouped into programs according to their relevance and similarities. These programs and their respective projects should be part of a portfolio strategy undertaken by the Project Management Office (PMO) to achieve the overall objectives of the company. In this way, PPM does more than just align projects with business strategy; it provides a means of aligning an organization’s approach to project management, including all project policies and processes, with its objectives.
The advantages of PPM
Project portfolio management enables organizations to achieve higher success rates by aligning them with medium and long term business goals. The PPM also generates the following positive results:
Clarity of the objective and overall vision: PPM enables team members not only to execute at a detailed level, but also to understand and visualize how project, program and portfolio management relates to an organization’s vision and mission. By linking each step and task of the project to the larger goals of the organization, PPM promotes a holistic vision.
Improved capacity planning and resource management. A large part of capacity planning and resource management depends on how your PMO executes its strategy and links the use of resources to business objectives. Wasted resources are among the biggest problems companies face when it comes to navigating the scope of a project. PPM reduces the risk of wasted resources by ensuring that resources are allocated according to priority and are effectively sequenced and wisely used to achieve intended goals.
Higher degrees of productivity. PMOs that explain why project tasks are vital to creating value are more likely to increase productivity. Employees who understand their role in achieving bigger goals tend to work harder and pay attention to the quality of their deliverables.
Increased agility. By aligning project activities with strategy, businesses become more agile, making it easier to manage change and adapt as opportunities and obstacles arise.
ROI improved. By helping to clarify business goals, improving resource management, and increasing productivity and agility, PPM dramatically improves the return on investment (ROI) of any project. With PPM, investments in projects are more likely to pay off and put businesses on a better footing for the future.
Project portfolio management software
The right tools are essential for success with PPM, and the following are some of the best. Each offers features such as easy-to-access dashboards, portfolio management, project planning, requirements management, collaboration, budget and issue management, task management, and job tracking. ‘state.
- Clarizen one is a project and portfolio management solution for large IT and professional service organizations.
- Mavenlink is best suited for small and large professional service companies, especially in industries such as marketing, advertising, public relations, architecture, engineering, IT services, management consulting and education .
- monday.com is a scalable project portfolio management tool designed for teams of over 200 users.
- ProjectManager.com works well for managers and teams across industries and is available in four levels (Staff, Teams, Company, and Enterprise).
- Target process is a business planning solution that works well for medium to large businesses.
Steps in the project portfolio management process
To be successful with PPM, PMOs need to develop and implement a process to ensure that everything goes well and as planned. Here are some key steps that should be included in the PPM process.
- Identify all existing and potential projects. Without a complete inventory of current and upcoming projects, it is virtually impossible to establish a successful PPM strategy. This is the first step in getting the best return on your investment.
- Determine the impact of each project on the business strategy. Each project must bring a clear value in the pursuit of the company’s strategy in the medium and long term. This value should be easy to trace, document and communicate to all stakeholders.
- Prioritize each project. Once the value of the projects has been substantiated, the PMO should prioritize which projects should be executed in which order and why. They ‘why’ is crucial. Not understanding why one project takes priority over others can be costly if sequencing is turned off.
- Allocate resources. Once the projects have been selected and prioritized, the resources must be allocated and managed. The allocation reduces the risk of wasted resources. Carefully and accurately identify all available resources and allocate each in a way that does not cause overload or potential conflicts.
- Adjust the project strategy as needed. Because change is constant, it’s important to review company goals, every project within every program, and all available resources to ensure alignment with strategy.
Good PPM practices
Best practices can not only increase the likelihood of PPM success, but also provide businesses with assurances about the value of each project when trying to identify which projects to undertake. Here are some key best practices for doing PPM well.
- Identify and solicit the participation of all potential stakeholders. From the management team to front-line employees, full participation is essential to ensure that all angles have been covered. Often times, a few key stakeholders that got overlooked could have saved businesses time, frustration, and wasted resources.
- Slow things down. Planning for success takes time. Making sure all the bases are covered from the start goes a long way in reducing stress, waste, and partial or complete failures down the road.
- Identify the best methods, techniques, technologies and resources. Call on experts inside and outside your organization to help you develop the best methods, techniques, technologies and resources necessary to increase your chances of success. Recognize and recognize the strengths, weaknesses, opportunities and threats of your business by performing a SWOT analysis.
- Document everything. Careful and complete documentation avoids misunderstandings and misinterpretations.
- Communicate everything on time. There is no benefit in having a plan or documenting everything if no one knows it. There is also no advantage in giving information to the wrong people, or not in time. Make sure you get the information you need to the right stakeholders in a timely manner.
Key PPM frameworks
Frameworks can have a positive impact on your PPM strategy and execution. The most common PPM frameworks are as follows.
- A more committed and efficient organization around value flows
- The ability to select the right initiatives, based on a rolling forecast
- The ability to create and maintain meaningful oversight
- Higher degrees of transparency of work items and resources
- The ability to continuously orient value and metrics in smaller increments
Prince2: Developed in the UK, Prince2 (Projects in a Controlled Environment) focuses on business cases rather than projects. Prince2 works well in companies with a defined PMO and where the emphasis is on breaking down a project into more manageable and controllable steps. This framework can be used at any level and is more often used in large organizations. Prince2 is considered easy to learn and use, even for those with limited experience.
PMBOK: Body of knowledge in project management, developed by the Project management institute (PMI), is considered the gold standard for project managers. PMBOK takes a knowledge-based approach that relies heavily on the experience and knowledge of the project manager. It has a strong documentation focus and works well if your organization prefers to leave most of the decision making to trained professionals within the PMO.
Certification in project portfolio management
PMI is the gold standard for globally recognized project, program and portfolio certifications. They offer a Portfolio Management Professional (PfMP) diploma, providing “advanced skills in the coordinated management of one or more portfolios to achieve strategic objectives”.
Certification requires a minimum of eight years of professional business experience and a high school diploma (high school diploma, associate’s degree or global equivalent) with 10,500 hours of portfolio management experience; or four-year degree (bachelor’s or global equivalent) and 6,000 hours of portfolio management experience.
Project portfolio management training
PMI also offers a list of organizations which it approved to provide training in project, program and portfolio management.