Project portfolio management helps project leaders and offices to analyze and also manage existing or proposed projects collectively, according to various characteristics. The primary objective of project portfolio management is to ensure the optimal combination of resources and activities scheduling to facilitate the making of financial and operational goals. And still honor the constraints arising from the strategic objectives and external factors of the business.
This article explains what project portfolio management is, the professionals who use it, ways it can be of use to business, as well as critical tips for reaping maximum benefits from it.
What Is Project Portfolio Management
Project portfolio management entails doing the right things right. In this context, things refer to work efforts, projects, as well as programs. Work efforts include tasks and activities related to business operations. According to PMI (Project Management Institute), a project is a temporary endeavor for creating a unique product/service.
A program, on the other hand, entails a group of related projects that are managed in an organized way to obtain the level of control and benefits that would not otherwise be available if you were to manage these projects separately. Programs may also include components of related work that are not within the scope of the discrete projects in a given program.
Doing the right things means prioritizing and choosing projects and programs to help in the realization of organizational objectives. Doing things right demands the delivery of high-quality programs and projects.
Who Uses Project Portfolio Management?
Project Portfolio Management is especially useful to firms which have many investments, and therefore, require enhanced governance and execution. Only three organizational groups are concerned about PPM, namely, the executives, the managers, and the project teams. The executive category is made up of the senior-most leaders and the portfolio managers. They have the responsibility of setting strategy and directing the company to meet its goals. In many instances, a portfolio manager works in collaboration with the executives.
The list of managers includes project managers, resource managers, and project management office. They help in the planning and successful implementation of the programs and projects. Lastly, the project teams are the people required to perform tasks and generate deliverables in the projects.
Ways in Which Project Portfolio Management Can Help Your Business
The process of portfolio management helps to ensure that an organization or division uses its scarce resources on the most valuable projects and programs. Practicing PPM across the entire company goes a long way in helping to ensure that only the most important work is approved and managed in all the departments. Your business will reap tremendous benefits such as:
- Higher performance of the portfolio through disciplined and corrective management action for all the non-compliant programs and projects in the organization;
- Thanks to consistency witnessed in the management processes, you will experience lower costs;
- PPM allows early detection of problematic programs and projects;
- PPM fosters an environment that allows collaborative and fruitful decision making;
- It helps to minimize the risks associated with individual projects regarding the business impact;
- It ensures optimal use of the human resources which leads to increased efficiency;
- It is an incredible way of proving the importance of project management office to the stakeholders, using the terms they value and can associate with.;
- Project portfolio management helps to guarantee both short-term and long-term success of project initiatives.
3 Tips for Realizing Optimal Benefits from PPM
1. Professionals Need to Understand What PPM is – and isn’t
PPM professionals should not view it from one perspective. They must look at the projects and programs as an aggregate, in light of other programs and the general connection strategy. These distinctions are particularly crucial to resource managers such as the chief financial officers. Aspects such as strategic business units, P$Ls and the individual projects and programs will have several overseers. However, the CFO is usually responsible for giving projects and programs a critical and objective look. He determines what is sensible – with respect to organizational capabilities, financial feasibility, strategic fit, as well as the firm’s ability to absorb change.
2. Make No Mistake in Micromanaging Projects and Programs
Do not take action without the right knowledge. Encourage decision making when there is enough, and sufficiently detailed strategy with a clear criterion. The presence of clear metrics and applying them in a standardized manner reduces the complexity associated with making a decision about strategy. You will experience minimal challenges when judging between success and failure. Micro-monitoring entails focusing on the right things, while according them a suitable level of involvement, knowing to distinguish between meddling and keeping vigilance, and most importantly being read to act only when a need arises.
3. Successful PPM Requires You to Redefine Failure and Success
It entails analyzing the results with the strategy in mind. You should have the courage to either delay or cancel programs and projects when it is the most proper thing to do. Firms that have mature project portfolio management processes have systems in place for guiding decisions on these issues. One of the things that could lead to cancellation of a project is if it is no longer in line with the strategy owing to changes in priorities, expectations, and focus. It explains why PPM should be an integrated, as well as routine part of both business management, and strategic orientation.
Drawing to a Close
A tool used by company executives, managers and project teams, PPM is highly important for the successful implementation and management of projects and programs. It simplifies decision making, permits early identification of troubled programs, and also lowers costs significantly.
The collective handling of projects and programs delivers optimal utilization of human resources which in turn leads to efficiency. Having a clear understanding of what PPM is being able to micro-monitor, rather than micro-manage. Redefining failure and success will help you take full advantage of project portfolio management. A business that has not incorporated project portfolio management in its operations is missing out a lot on the above advantages.
What do you think about Project Portfolio Management? Is is suitable for your business? Let us know your experience by commenting below!
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