‘I don’t understand, why aren’t these projects delivering as they promised?’ This familiar cry has been heard from many business leaders and project managers. The solution is Project Portfolio Management (PPM), a holistic management strategy used to align an organization’s software, portfolios, and project for analysis and collaboration. PPM streamlines and optimizes management activities to facilitate and fulfill successful business and technical objectives. It about doing the RIGHT work. If you are not implementing the RIGHT projects and work to meet strategic objectives, the value you are bringing to the business may be much smaller than its potential.
A recent study conducted by PM Solutions concluded that “firms at higher level of PPM capability more often saw 25% or greater ROI from implementing PPM processes.” For the average business, PPM may be a process well beyond their organizational maturity; however, it is a major component that should not be overlooked, in order to increase the probability of reaching your business objectives. Though, you don’t need to implement PPM at the enterprise level to see its benefits; an implementation on department or individual level can yield the same benefits as well.
Following these key processes will help you and your organization to a comprehensive Project Portfolio Management:
1. Capture Portfolio Items
Establishing what you are going to manage is the first and most important step of portfolio management. You need to have an overview of the extent and variety of existing and potential work, and how it maps into the organization’s overall strategy.
2. Portfolio Management
Evaluate and validate all the value propositions and/or business cases of the identified opportunities. This review will lead to the selection of work that you actually expect to conduct during the ensuing period.
3. Portfolio Planning
Linking strategy to project prioritization and balancing an organization’s portfolio to achieve the optimal benefit value are the most fundamental practices of PPM. Please note some of these benefits may not necessarily be identifiable in financial terms and you will need to apply subjective judgment.
4. Project Management
This is a process for approving and funding the project business plan, allocating resources and scheduling projects. Funding and resource allocation will be based on the identified priority of the projects.
5. Portfolio Report and Improvements
Report on how the overall portfolio is progressing, what results are being achieved, and what the overall portfolio picture looks like. Over the longer term, continue to assess the effectiveness of the portfolio process and propose changes to improve the whole cycle in the future based on these results.
It is important to emphasize that all these processes described above do not necessarily have to be strictly sequential. This is an iterative exercise, so please exercise as to how far you go with each step and in what order, to make the whole approach work together. Mature organization, for example, may introduce additional steps into the approach.