What is Project Portfolio Management?
Project Portfolio Management (PPM) is a management process designed to help an organization acquire and view information about all of its projects, then sort and prioritize each project according to certain criteria, such as strategic value, impact on resources, cost and so on.
What are the objectives of Project Portfolio Management?
The objectives of PPM are similar to the objectives of managing a financial portfolio:
To become conscious of all the individual listings in the portfolio
To develop a “big picture” view and a deeper understanding of the the collection as a whole.
To allow sensible sorting, adding and removing of items from the collection based on their costs, benefits and alignment with long-term strategies or goals.
To allow the portfolio owner to get the “best bang for the buck” from resources invested.
How do we start to identify our Project Portfolio?
Typically, PPM begins with the organization developing an inventory (comprehensive list) of all its projects and enough descriptive information about each to allow them to be analyzed and compared. Such descriptive information can include project name, estimated duration, estimated cost, business objective, how the project supports the organization’s overall strategies and so on. After the project inventory is created, the PPM process requires department heads or other unit leaders to examine each project and prioritize itaccording to established criteria. The overall list of projects is then considered in order to develop a well-balanced list of supported projects. Some projects will be given high priority and extensive support, some will be given moderate priority and still others will be placed on hold or dropped entirely from the list.
Finally, the project portfolio is re-evaluated by the portfolio management team on a regular basis (monthly, quarterly, etc.) to determine which projects are meeting their goals, which may need more support or which may need to be down-sized or dropped entirely. Since the circumstances of each project and the business environment can change rapidly, PPM is most effective when the portfolio is frequently revisited and actively managed by the team.
How to manage our Project Portfolio.
In order for the above PPM activities to take place, the organization must first decide who will participate as active managers of the PPM process. Typically, the PPM management team is made up of department heads from functions which generate requests for projects, provide project resources (especially team members), provide project funding, use finished project deliverables, set strategic directions and so on. After the PPM management team is established,they must agree on a set of criteria for valuing projects in order to prioritize them. Decisions based on these criteria will likely be more acceptable to everyone in the organization if the criteria have been developed with the input or review of as many stakeholders as possible from within the various functions. So typically broad, organization-wide discussions of the criteria are held before they are finalized.
Why should Project Managers care about PPM?
Project Portfolio Management and the Project Manager.
Project managers who find themselves continually frustrated by lack of resources or by other organizations stealing their resources should be especially interested in PPM. These frustrations are symptoms of an unbalanced (or unacknowledged) project portfolio. In short, the frequent complaint of “not enough resources,” is simply another way of saying that there are too many projects! And if there are too many projects, then someone should be sorting them out, prioritizing them and “killing” the projects that aren’t high priority.
Every project manager wants to have enough resources available to complete high-quality project deliverables, on-time and within budget. And every project manager wants to work on projects that are perceived to be valuable and,therefore, enjoy plenty of support throughout the organization. PPM can help project managers achieve both of these visions.
What should Project Managers do about PPM if it doesn’t exist in their Organization?
The average project manager is not in a position to implement PPM alone. Meaningful PPM cannot exist without the support and and active involvement of managers at the highest levels of the organization. But these senior managers are not likely to initiate PPM unless they are aware there is a documented need for it. So if you believe your organization could benefit by PPM, you need to first educate yourself, then build your case for PPM and finally, present this case to your senior managers.
How do we recognise if Project Portfolio Management is needed?
Look for symptoms that PPM is needed and document them. Some of these symptoms include:
Frequent difficulty finding enough people to put together a solid project team
Excessive project delays due to “not enough resources”
High turnover due to “burn out” of key project contributors because they are working on too many projects and spending too many overtime hours
Frequent change of status of projects (i.e., moving from “active” to “on hold” to “top priority” and back)
Completion of projects that, when all is said and done, don’t really meet a strategic need
Intense competition, rather than cooperation, among departments and sub-organizations when staffing and funding projects
How do we learn about Project Portfolio Management?
Some suggestions would be:
Talk to other professionals in your field and see how PPM is being applied in their companies.
Search the internet and find out more about PPM.
Examine these online articles:
Check out companies who provide PPM support services, background information and more
What evidence or documents might help the case for Project Portfolio Management?
Create “high resolution” project plans that accurately spell out, in vivid detail, the resources required to complete each task and activity
Capture the actual hours spent by all project players in completing project tasks and activities
Create summary tables showing planned and actual time spent by each person in your organization on every project to which he or she is assigned in order to demonstrate who’s overloaded
Document all incidents of resources that are “stolen” across projects, excessive overtime, large-effort-but-ultimately-useless projects, and so on.
By conducting project “post mortem” evaluations, gather information about how systematic PPM might have prevented problems and encouraged successes.
Then make your case for establishing PPM in your organization.
What can Project Portfolio Management do for us?
Effective PPM can help make a project manager’s life much easier and more professionally rewarding. More importantly, it can help an organization align its project workload to meet its strategic goals, while making the best use of limited resources.
But PPM can’t be effective without solid, well-documented project plans, accurate estimates of resource requirements and accurate information about actual resources consumed. What’s more, once the PPM is up and running, they provide the accuracy necessary for good decision-making by the PPM team.