Project portfolio management (PPM) refers to a process used by project managers and project management organizations (PMO’s) to analyze the potential return on a doing a project. By organizing and consolidating every piece of data regarding proposed and current projects, project portfolio managers provide forecasting and business analysis for companies looking to invest in new projects.
Project portfolio management gives organizations and managers the ability to see the big picture.
Taking risks is an inherent part of business. However, when taking a risk it is important to remember, the bigger the risk does not always equal the bigger reward. Risk vs. reward all boils down to smart decision making.
The project portfolio management process helps companies predict the outcome and plan for projects that will offer the best results. It highlights questions such as:
Project portfolio management helps companies break down every detail of a proposed project – budgets, resources, tasks, timelines and goals. Using in-depth analysis of proposed projects, weighed against current projects, a company can define what risks offer the most rewards.
Using key indicators that illustrate costs versus returns, organizations are able to determine whether a project should go forward. This allows for the creation of fluid and replicable workflows that ensure efficiency and optimal team performance.
By using PPM, project managers and PMOs have a global view of each project. When every element of a project is presented as whole, problems can be predicted before they ever occur.
The PPM process gives organizations the foresight to identify potential risks and put the necessary measures in place. This helps a company proactively manage risks, allowing teams to realistically estimate potential delays and put into place measures to prevent or mitigate those risks, should they prove to be unavoidable. Risk mitigation can entail:
At the most basic level, PPM and project management differ by number of projects. Project management looks to focus on an individual project’s road to completion, whereas project portfolio management takes into consideration every project or potential project and its viability to meeting overall business goals.
A smarter approach views project portfolio management as the process which lays the foundation for more efficient project management.
Here are a few ways in which project portfolio management helps support the fundamentals of project management.
Effective PPM helps project management become an easier road to travel. When used in tangent, they are invaluable to a organization.
Project portfolio management lays down a methodology used to predict potential problems, review progress towards operational goals, manage budgets and stakeholder concerns. Allowing project managers to then follow up with precision execution.
Project portfolio management gives companies a “bird’s eye” view of upcoming, current and past projects. By seeing the big picture of how a proposed project will fit into the goals and objectives of the organization, companies can make better decisions on what projects to choose and what initiatives will create the most return.
Project portfolio management helps leadership plan projects and predict outcomes. To effectively plan, PMO’s use project portfolio management tools such as project portfolio management software, scenario analysis tools and good old-fashioned spreadsheets, in addition to other software tools used by project managers.
Though there are many types of project portfolio management tools, the best ones:
Outlined are a few of the benefits that come with using project portfolio management software.
Enterprise means one resource with multiple functionalities that can be used across the entire business spectrum.
Most PPM tools are created as enterprise software, decreasing the reliance on multiple applications that can increase overhead and confuse workflows. As an enterprise solution, this usually means you do not have to be an Information Technology whiz to figure how they work. These tools incorporate simple functionality like the “drag and drop” and do their best to organize information in ways that seem intuitive to most users.
Often businesses and organizations who take on multiple projects have employees and team members working remotely. When you have various team members working from multiple locations, effective communication can be difficult.
The best PPM tools are accessible online, eliminating communication barriers.
When communication is streamlined through one central hub you can:
A good PPM tool should offer robust reporting options. Report data provides executives and managers perspective that allows them to predict what projects may require excessive resources by highlighting active projects or circumstances that may act as impediments to organizational goals.
PPM reporting tools also allow companies to actively monitor every facet of the organization’s current and potential projects, including budgeting, forecasting and risk/reward analysis.
Individual project budgets may go over, but effective use of PPM tools may help a company see the potential impacts to other projects and determine whether going forward with a project that is already over budget will pose a problem in terms of multiplied financial overages in other areas. When projects fall behind, leadership has the ability to stifle the potential ripple effect using project portfolio management techniques.
Reporting makes for factual and informed project portfolio management that in turn helps set expectations within the company regarding what projects should, and should not, go forward.