Projects take time and resources to complete. We all know that time and resources are limited. The purpose of project portfolio management (PPM) is to not succumb to the unrealistic expectation that every initiative that is presented to the company can be undertaken.
There are a lot of reasons why projects that may not be in the overall best interest of the company are under consideration. For example, it may be that a certain project is a pet project of one of the executives. Or, it could be a commitment that a salesperson made to a client in the hopes of garnering additional business. These projects may support an individual’s personal agenda, but not necessarily tie into the overall strategy of the company.
In answering the question about what is project portfolio management, there are 3 main purposes that project portfolio management serves:
There’s nothing more wasteful than working on a project that has nothing to do with the short-term or long-term strategy of the company. How can this happen within a company? What likely occurred is that at some point a particular project was aligned with corporate strategy. Corporate strategy then shifted and somebody forgot to tell the poor souls who were working on this project that the project is longer needed or relevant. It’s hard to believe that this happens, but it does – and it typically occurs during times of restructuring the company, or mergers with another company.
Project portfolio management prevents this type of disconnect from occurring. PPM remains in sync with corporate strategy and ensures that each project supports the company’s direction. It looks at each project from a few different angles and answers the questions of whether this project supports the current strategy of the company, is tied into long-term growth, or if it’s just a bad egg.
Tough decisions need to be made for those projects that are not supporting corporate direction. They need to be cut from the roster in order to free up time and resources for those project that do support the overall direction of the company.
Project portfolio management also supports resource assignment and prioritization. Now that the list of projects has been culled through, you are left with a list of projects that still can’t all be done at the same time.
It’s part of the responsibility of the PPM to determine which projects are the most important and then assign resources accordingly. Keep this in mind if it is your responsibility to assign resources across different projects.
Shared resources seldom work very well, and yet this is becoming increasingly common with the increase in project-based work. Now, one resource is split across multiple projects, multiple project managers, and/or even multiple departments in a company. This can be a recipe for disaster as one group is going to have needs that get in the way of another group, causing frustration and stress for the shared resource and contention between project managers.
While it’s preferable to keep each resource assigned to one project, one project manager, or at least staying within their own department, this is not always reality. Use an online resource planning and scheduling tool that gives you visibility across projects throughout the organization, so you can accurately assess who is available and who isn’t.
The final purpose when answering the question of ‘what is project portfolio management’, is to manage the resources that have been deployed across the various projects. This is where common sense project management comes into play.
It’s now that this common sense project management rolls up information from multiple sources. There’s more of a big picture perspective as the individual projects are aggregated into an overall view of how these projects are performing within the company. This is where the rubber meets the road when it comes to the ROI of the projects that have been selected.
The company’s upper management is going to want to have a regular snapshot of how their portfolio of projects is performing. This could be compared to the quarterly statement you receive that lets you know how your investments performed over the past quarter. You’ll have to work with your management team and determine the frequency of these updates. A good rule of thumb is to provide this type of information at least monthly and more frequently if needed.
What is project portfolio management? It’s the ability to choose, prioritize, execute, and report out on those projects that directly support the corporate strategy. It ensures that the ladder that everyone is working so diligently to climb, is not leaning against the wrong wall. Think about the project portfolio in a similar manner as your personal investment portfolio. You are looking for the right balance of risk/return that will help you meet your long-term goals.
Adopting project portfolio management in your organization will help reach that proper balance!
If you need to manage your project portfolio, then you need to have an online software suite of features powerful enough to scale from project to portfolio. ProjectManager.com allows you to monitor resources across all your projects, in real time, with instant dashboards and custom reports.