Why should you have Project Portfolio Management (PPM) software?
This guide will discuss the components of the Project Portfolio Management process and the benefit to your organization.
Organizations using PPM tools (vs. organizations not using PPM tools) are:
- 44% more likely to complete projects on time or early
- 38% more likely to complete projects on budget
- 52% more likely to hit the expected ROI
Project Portfolio Management ensures that an organization can leverage its project selection and execution success. It refers to the centralized management of one or more project portfolios to achieve strategic objectives. Portfolio management is a way to bridge the gap between strategy and implementation.
What is Project Portfolio Management?
Project Portfolio Management (PPM) is the centralized management of the processes, methods, and technologies used by project managers and project management offices (PMOs) to analyze and collectively manage current or proposed projects based on numerous key characteristics.
Project Prioritization is the first component of a Project Portfolio Management process. It allows your organization to focus on those projects that deliver the most value.
By identifying the best projects for business goals, time, money, and resources can be effectively deployed. Your Project Prioritization framework should be “data driven” to be objective and scalable. It should support the concepts of Governance and Transparency.
A robust methodology is desirable to support any number of definitions of “value”. For some, value is determined by increasing revenue. For others, value means reducing cost. A third measure of value could be a project that meets a qualitative goal such as “going green”.
A robust Project Prioritization process will allow you to answer:
- Who submitted this project and what is its purpose?
- How do I compare these projects?
- Which strategic goal does this project support?
- Why was my project not approved?
- If I have limited resources, do I cancel any of my projects? Which projects?
- Do I hire additional resources for my project backlog?
The IT Project Prioritization process consists of the following steps (even if you are not in IT, these steps are still relevant):
- Project Intake
- Project Scoring
- Project Selection
A PPM solution will contain a Project Prioritization template to capture or create data for each of step of the process.
Read our blog post on how to implement an effective Project Prioritization process here.
Resource Management is efficiently and effectively using your organization’s budget, inventory, personnel and information technology (IT).
Once initiatives are prioritized or selected, the next step in your Project Portfolio Management process is to assign resources to projects.
PPM enables you to determine resource allocation using a top-down approach – either at the portfolio or organizational level. You can effectively perform tasks such as assigning resource availability, aligning skills to projects, and resource leveling.
Increased visibility enables proactive management of resource schedules, which allows you to identify potential issues weeks or months in advance.
There are 3 important ways that Project Portfolio Management optimizes deployment of personnel:
- Resource Scheduling
- Skills Management
- Resource Leveling
Read our blog post on how to improve your Resource Management process here.
The PPM process should provide an aggregate portfolio view of all project plans for big picture analysis. Project Portfolio Management software should also offer visibility into data at the project level.
Good project-level management allows the editing of individual project plans and visualization of work breakdown structure for each initiative.
Project-level management within the overall PPM process effectively handles problems and identifies patterns with issue tracking to ensure timeliness of portfolio goals.
Because Project Management workflow classifies and tracks projects, it allows you to answer:
- How many initiatives have been requested for funding?
- How many projects are waiting for scoring?
- How many projects are active?
- Which projects have been archived?
A Project Management/Portfolio Management process should provision for the following capabilities:
- Project Workflows
- Project Plans
- Work Breakdown Structure
- Issue Tracking
Read our blog post on how Project Portfolio Management (PPM) improves Project Management here.
Project Portfolio Reporting
An effective Project Portfolio Management process generates volumes of data about every aspect of projects within the portfolio. Your PPM software should make this information available via on-demand dashboards and push notifications.
Gathering and analyzing project data over time and across the portfolio supports hindsight analysis – the measure of how well a project did in meeting its goals. Affect future project success with a clear understanding of past performance.
Project Portfolio Reporting answers questions such as:
- Are we going to meet our strategic goals? Why not?
- What is the ROI on our portfolio?
- Should we invest more money into capital projects?
- Which department requested the most projects?
Project Portfolio Reporting provides the right information to the right people:
- IT executives – CIO, VP IT, Director of IT
- PMO staff and PPM Directors
- Project Managers
Project Portfolio Reporting includes:
- Metrics and KPIs
- Hindsight Analysis
- Project Budgets
- Project Scoring
- User Access
Read our blog post on how Project Portfolio Reporting can transform your business here.
Organizations that use Project Portfolio Management benefit from:
- Identifying the “best” projects for the organization (Project Prioritization)
- Effective use of the most precious things in any company – people and time (Resource Management)
- Ensuring that projects are done on budget and on time (Project Management)
- Providing the right information to the right person at the right time (Reporting)
Click here to download the Definitive Guide To Project Portfolio Management.