What's Project Portfolio Management & Why Should Project Managers Care about It?

What is Project Portfolio Management (PPM)?



CADD Centre Training Services 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. 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 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.



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 analysed and compared. Such descriptive info can include project name, estimated duration, estimated cost, business objective, how the project supports the organization's overall strategies, and so on. These are sometimes compiled in an electronic database so they may be analysed and compared more easily.



After the project inventory is created, the Project Management process requires department heads or other unit leaders to examine each project and prioritize it according to established criteria. 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 revaluated 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.



Why Should Project Managers Care about PPM?



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 none exists in their organizations?



The average project manager is not in a position to implement PPM alone. Meaningful PPM cannot exist without the support 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. Here are some specific steps you might take:



Look for symptoms that PPM is needed and document them. Some of these symptoms include:



• Frequent difficulties 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.





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