Project Portfolio Management: A Complete Guide
March 18th, 2021 in Project Management
What is Project Portfolio Management?
Project Portfolio Management (PPM) is a big picture view of all projects grouped together. PPM uses cross-comparisons of inter-related projects from past, present, and future to calculate the optimal prioritization and sequencing of the projects to maximize the return on investment.
Why is it important
Project Portfolio Management is the centralized management of all project portfolios to achieve strategic objectives by leveraging past knowledge to increase efficiency, bridge gaps between strategy and implementation, as well as execute projects successfully.
Project portfolio management answers common project questions like:
- Are we working on the right project at the right time?
- Do we have the resources to take on a project?
- How are our current projects performing?
- Can we take on another project?
- What risks arise from certain projects?
Project portfolio management has many benefits as well, which include
- Better decision making
- Decrease overspending
- Increase efficiencies
- The ability to prioritize high-value projects
Some specific instances where Project portfolio management can be used are:
- PPM is often used by organizations to identify the return of investment on a project. It allows companies to reference past data for similar or relative projects to highlight areas of risks, or projects with higher rates of return for time investment.
- PPM is a valuable tool to bring all stakeholders in an organization together, as it helps them understand the tasks at hand, mitigate risks, decrease possible areas of friction, and increase transparency.
- Simply put Portfolio Project Management is to maximize efficiency and lower risks in projects.
Project Management vs Portfolio Management
Project Management is defined with a beginning and an end, a scope, and resources. As well the Project manager focuses on planning and managing individual projects, such as reporting, risks, and resources.
Portfolio management is a collection of projects grouped together in a centralized management platform to achieve a larger overarching goal.
Having a collective view of all ongoing projects with high-level information is key for Project Portfolio Management. The image above is an example of this view.
Project Portfolio Management Software
When looking at Software for Project Portfolio Management some of the larger things you need to look for are:
- The capability to track project portfolios
- Data tracking for logged hours
- Active budget tracking
- Resource planning, such as team member availability
- Easy to use lines of communication directly associated with the task at hand
For this, we would recommend Slenke, as it’s able to manage your entire portfolio, track all data with ongoing projects with an easy-to-use user interface where all users can communicate seamlessly with each other.
For our complete list of top project management software check out our blog post here: https://slenke.com/blog/best-project-management-software/
Establish a Strategy
The Project Portfolio Management process
Create and establish a strategy
- Identify all projects currently in the pipeline, as well as potential projects, then categorize them and consider where they are in their lifecycle. From there identify your company’s strategic goals and overall business objectives and determine if these projects support those objectives.
- Having a business strategy is the basis of project portfolio management, so it’s important to have a strategy outlined before moving forward.
- Once you have a strategy you then will need to assemble an implementation team. Implementation teams should have technical team members for new systems, portfolio managers, and a governing body with senior members.
- The next step is to assess the current strengths and weaknesses of your project portfolio by evaluating each project individually with project milestones, the potential return on investment, reporting schedule, and resource allocation.
- When assessing the data you should look for potential overlap and opportunities to combine existing projects. Another area that should be assessed in areas of risk, and reward from projects.
The next step will be to perform an alignment analysis, and that will show you whether your critical resources are working on critical projects and if other projects are worth carrying based on your strategic initiatives. Some guiding principles are:
- The degree of the fit between portfolio and company objective.
- A balance between short-term opportunities and long-term opportunities.
- The probability that the end product will deliver the expected return.
- An evaluation of associated risks based on internal and external factors, availability of internal resources, and potential technology risks.
Manage your priorities and time
- Once you have thoroughly evaluated your resources in the previous step you now want to view the project portfolio and make necessary decisions about potential budget reallocation, and resources to prioritize the high-value projects based on the information uncovered in the previous steps of the process.
- Some projects may need to be rescheduled, but ensure the rescheduling risk aligns with your overall strategy. As well ensure communication with your teams prior to making final decisions for larger changes.
Test, and adapt
- There is no guarantee that your PPM process will be flawless the first time around, and you shouldn’t expect it to be. Refined processes come with trial and error, and it is important to be adaptive so that you can make changes to your process in real-time.
Tips for success
Once you have rolled out your PPM Strategy it can be difficult to know what to expect, so here are a few tips for success:
- Identify associated risks, and the remediation strategies, ensure this is a priority
- Simplify time & task management for team members
- Data accuracy is critical, ensure you have proper systems in place that are recording data accurately.
- Don’t micromanage
- Don’t be afraid to cancel projects if they no longer align with your company strategy
Project Portfolio Management (PPM) is the combination and analysis of all previous, ongoing, and future projects within the organization, and it is key for long-term company growth.
Success in Project Portfolio Management lies in proper tracking of data, communication, collaboration, and analysis of data.
We hope this guide will be of good use, and if you are interested in more Slenke content don’t forget to subscribe to our blog to keep up to date with Slenke news and more insightful resources for project management.