Project Portfolio Management, or PPM, is a type of management that’s centralized around technologies, processes, and methods that are used by project managers. PPM helps offices of project management to analyze and manage proposed projects based on various key traits that they may consist of.
The Importance of Project Portfolio Management
There are multiple reasons why project managers can benefit from project portfolio management. Implementing this type of practice into your work environment can effectively change organizational habits as well as run businesses efficiently.
The importance of project portfolio management can not only decrease the risks of disorganization but also help the entire company focus on the main picture of certain projects.
For instance, when overseeing objectives for reaching specific business goals, it’s important to remember that project portfolio management can improve the overall selection process and technique within a project for a client or organization.
The use of resources can also be successfully used with the help of project portfolio management because it can clarify the right tools or said resources that can help choose and review your team projects. Lastly, collaboration with your team under project portfolio management balances out both concepts of collaborating and competing within a team.
Project Portfolio Management Processes
Create an Inventory and Establish a Strategy
The first project in the portfolio management process would be establishing strategies for your project. When initiating a project, the best solution would be to determine what are the pros and cons of creating a strategy, and how will that contribute to their inventory.
Analyze the Strategy
After creating strategies for a project, the next step is to analyze thoroughly. When analyzing the solutions towards a project, it’s important to take what types of steps you and your team would like to take in moving forward with a project. You must have objectives in order to succeed. Hence, an analysis about said strategies.
Aligning your beliefs with your objectives is the next step in implementing strategies for a project. It’s next to be realistic in this type of process because it all depends on the execution of the project.
Assuming there’s a timetable with your project, teams under project portfolio management should always manage time efficiently and have all tasks and concepts all in order. As a part of planning out strategies and aligning those said strategies into project objectives, being timely is part of the overall process with project portfolio management.
Test and Adapt
Succeeding with project performance and determining how that project will adapt is the final stage of the project portfolio management process. Monitoring and evaluating the entire project can create more time to improve and identify issues that occur throughout the project.
Because there is a lack of room due to a timeframe, it’s important to diligently identify your problems as well as to conduct multiple tests before sending out the final project.
( Also Read: Agile Portfolio Management Made Easy )
Phases of Project Portfolio Management
Phase 1. The Aligning Processes Group
- Identification: The first step to the aligning process is to identify projects within the pipeline. These can be all types of projects that range from recent to continuous ones. However, the main goal to identify projects is to gather organizational key project information before moving forward to the next step.
- Categorization: Categorizing a project helps organize all types of projects better. When you categorize a project, your team can easily manage in finding the right projects as well as evaluate a project one at a time.
- Evaluation: Evaluating a project when ensuring alignment to a project will help ensure if a project is successful or not. This can allow your team to determine if the end product of a project is a no-go or a-okay.
- Selection: Selecting the right type of projects reverts back to reaching your project portfolio management’s criteria. A few qualities to look for in a successful project is relevancy, impact, coherence, and efficiency.
- Prioritization: Making specific projects a priority is just as essential to creating a timetable for the project itself. Think about the main objectives that have to be done, and how will you collaborate with your team on it. It’s best to consider the major priorities of a project to come first before establishing a stable plan.
- Authorization: Having authorization will be one of the main things to obtain when working on projects and portfolios within project portfolio management. Just like having the batteries function inside a remote control, your team has to have the ability for authorization for the aligning process of a project.
Phase 2. The Monitoring Group
- Portfolio Periodic Review and Reporting: There will be certain times where portfolios will be reviewed periodically and receive an overall report. This is where monitoring occurs when overlooking a project or portfolio. This itself is the epitome of project portfolio management because it allows a deep analysis of ROIs, KPIs, and other types of criteria that’s been established for the project.
- Strategic Changes: After reviewing and reporting, I came up with strategic changes. There is constant room for improvement, especially for bad projects. If a team were to come across a poorly evaluated project, new and improved strategies must come into play once changes are allowed to be made.
Phase 3: The Component Process
- Component Execution and Reporting: The use of key indicators and weighted criteria are part of the component process. Reporting of a project allows an overview evaluation of a said project. It determines how well the components were executed throughout the project, and possibly implicate feedback for your team.
Benefits to Project Portfolio Management
One of the largest benefits of project portfolio management is more organization and fewer risks that you’re taking on with certain projects. The minimization of project portfolios can lead to more flexibility on management, and increased focus on main priorities towards a project.
Allowing Budget Alignments
The purpose of project portfolio management is balance. The concept of balancing ideas with your budget makes project portfolio management easier because you have the ability to focus on the bigger picture of that certain project.
Optimizing Resource Management
With project portfolio management, operational research, and optimization get better. Project managers can have control and the ability to oversee the resources needed for specific objectives that contribute to a project. This concept can help employees achieve their goals in a much greater light.
Encouraging Collaborative Decision Making
Another benefit that project portfolio management brings to the table is collaborative decision making. Decision making with other employees within your team becomes encouraged more often due to the structure of project portfolio management.
Providing Project Value to Stakeholders
Project portfolio management also comes with providing value to the project itself to your stakeholders. Not only does your team understand the interests of your stakeholder within the business, but also have the advantage of determining how your stakeholders can reinforce their core values as a whole.
Increasing Project Success Rate
If the word “management” in the term project portfolio management hasn’t hit by now, then we suggest that you keep on reading to convince you otherwise. Because of the structure and flexible organization, project managers can easily manage projects at a higher rate. It’s a straightforward process that can allow you to get the work faster and on time.
Industries and Organizations Using PPM
Each industry has customized PPM, which makes it more efficient for industries and organizations to thrive. Below are the following industries that use project portfolio management as a means to successfully integrate workflow and clear business strategies. Check out our suggestions for PPM software for each industry.
What Is the Role of the Project Portfolio Manager?
Now that we’ve covered the purpose of project portfolio management, it’s time that we’ve told you the main role of a project portfolio manager. This position consists of simply managing small projects that have several tasks and needs completed by a deadline. A project portfolio manager has to oversee all the responsibilities that are tied to the entire project itself.
Project request management
As a project portfolio manager, you can pick and choose the types of projects that seem suitable for a business or organization. However, request management is part of a system where a project must go through value-based criteria in order to be approved.
Figuring out where certain resources should be allocated within a project is another role that project portfolio managers must do to effectively carry out a project. When resourcing allocation, project portfolio managers have to assign and schedule said resources that are available.
Minimizing the number of potential problems is another responsibility that project portfolio managers must do when taking up this position. They have to make sure that nothing negatively impacts the timetable of a project.
Identify and reduce inefficiencies
Because project portfolios oversee tasks and overall objectives with projects, it’s also important that project managers identify inefficiencies and reduce the chances of those inefficiencies from occurring within a project timetable.
Collaborate with senior stakeholders
Keeping a stable business relationship between project portfolio management systems and stakeholders is another essential task for project portfolio managers. Keeping communication with senior stakeholders becomes effective to succeed in upcoming projects involving them.
Learning how to implement change management helps improve the performance of executing projects within project portfolio management. It’s crucial that project managers take on opportunities and address any major issues before moving forward towards that next decision that needs to be made throughout the process.
Tracking business ROI of projects
The return of investment (ROI) of projects is just as important as this position. ROI is a key performance indicator that determines the profitability of disbursements. Project managers must keep track of this to measure the cumulative success of a business’s investments.
Best Practices for Project Portfolio Management
Understanding business strategies
Knowing the game plan before diving into a situation is necessary to succeed in project portfolio management. Having a clear idea of what business strategies to use for a project is just as successful as walking through certain ideas that you want to implement before creating a decision.
Identifying the right set of projects
Identifying the right set of projects goes back to the role of a project portfolio manager. As a project manager, it’s their responsibility to determine whether to pursue a project based on the project request management process.
Establishing a Project Management Office (PMO)
PMO is the first sign of good practice towards effective project portfolio management. Setting up a project management office provides a sense of control and influence when managing projects. Hence, why it’s an excellent strategy when establishing the backbone to the concept of project portfolio management.
Creating standards for project evaluation
When evaluating projects, it’s important that you create standards to live by. Creating standards for your projects will leave you with a mindset that your team should have when going through an evaluation process. Such criteria should include coherence, efficiency, relevance, and even the impact that the project holds.
Formulating strategies for risk management
Risk management will continue to be an issue to constantly look out for. That’s why when it comes to project portfolio management, your team must have formulated strategies in order to prepare for the worst.
Formulating strategies for change management
On top of risk management comes to change management. Formulating strategies for change management should be just as relevant to the strategies developed for risk management. Remember, one of the most important components of digital marketing and project portfolio management is improving performance.
Use PPM tools
There are tons of PPM software that your team can use. PPM tools are very helpful, and a good start to succeeding at project portfolio management. Famous software to consider and live by can be Wrike, Asana, and Planview.
The Differences Between Project Management and Portfolio Management
Although similar sounding, there is a difference between project and portfolio management. To make it clear, project management is when the act of leading a team in meeting the goals of a project. Whereas portfolio management mainly focuses on picking and choosing different types of investments that can meet the financial objectives of a client for the long term.
In the end, it’s better for organizations to run projects and portfolios in a PPM type of manner because it provides more control and flexibility to all types of tasks that need to be managed within a project or portfolio.
There are plenty of tools that can assist project managers with portfolio management. Examples of this can include software such as Asana, Clarizen, Wrike, Sciforma, Mavenlink, and Trello. With the use of these PPM tools, project managers can establish PMOs, or Project Management Offices faster, and more effectively.
PPM is also compatible in any type of industry. This can vary from healthcare, construction, and even government administration. Overall, the benefits of project portfolio management can help improve not only the organization of recent and proposed projects within your company but also help project managers work effectively within their fields.