Project portfolio management (PPM) is a management of one or more portfolios of projects to realize organizational strategic plans. Through PPM, organizations can control and organize all projects from conceptualization and choice to delivery and assessment. While the number and scale of projects continue to grow and become more intricate, PPM enables visibility, control, and analysis for achieving the highest ROI.
The use of project portfolio management
Portfolio management is a strategic proficiency that is valuable in organizations of all varieties to help to connect project execution with an organization’s strategy. Some key applications and benefits of well-executed PPM practices include:Some key applications and benefits of well-executed PPM practices include:
– Strategic alignment – As for PPM it evaluates proposed and ongoing projects and assigns each based on certain parameters such as ROI, resources needed, risks, and strategic importance of projects to align the portfolio with organizational goals. This leads to the planning of funding for the right projects at appropriate level of funding.
– Reporting and control – PPM manages the projects and enforces the use of processes, templates and standards to meet objectives. This governance assists organizations to modify approved project scope and resources, if necessary.
– Resource management – Having project spectra concentrated in the PPM system, one can effectively manage shared resources between units. It helps to allocate and plan the capacities in the most effective manner which would otherwise be perhaps impossible.
– Portfolio balance – When all the projects are viewed at once, it is possible to bring the overall portfolio within the risk tolerance or other profile, apart from looking at the projects one by one.
– Performance management – PPM standards carry out an important role in managing project accountability and offering senior leadership insight into performance.
The Effects of project portfolio management
To sum up, the introduction of PPM can have a significant influence on different functions in an enterprise. The approach delivers a range of benefits including:The approach delivers a range of benefits including:
– Financial – maximum return on investment and reduced instances of delivery failure due to enhanced planning, resource management and project portfolio choices. PPM also helps one to establish accurate budgets in the long-run.
– Productivity – Reduction of overlap, more defined goals, and increased cooperation from a consolidated project portfolio view results in quicker delivery of activities.
– Risk reduction – The systematic appraisal of many projects enables the effective assessment of the program’s potential bottlenecks, vulnerable areas, and resource limitations, thereby minimizing program risk.
– Strategic realization – A broader defined portfolio of better aligned programs enables to mitigate ad-hoc delivery and focus on long-term business benefits.
Challenges and Considerations
While delivering substantial advantages, project portfolio management also brings some key challenges organizations should address including:While delivering substantial advantages, project portfolio management also brings some key challenges organizations should address including:
– Lack of preliminary resource commitment – Processes, templates, and software features need plenty of executive patronage, human resources, and capital. It is with most costs that one has to wait for sometime before being compensated for his or her effort.
– Project portfolio management – Transitioning from silo-based, tribal or ad-hoc project delivery to centralized portfolio management is a major change management exercise across units, functions and leadership levels.
– Sustenance: PPM requires active involvement from everyone across the enterprise to provide updated information, appraise projects, maintain compliance with the standards and provide relevant information to the decision-makers.
The Future of project portfolio management
Project portfolio management continues to evolve as more sophisticated techniques and technologies augment existing PPM capabilities:Project portfolio management continues to evolve as more sophisticated techniques and technologies augment existing PPM capabilities:
– Budgeting and scheduling – Portfolio, project, resource and milestone data collection allows for the accurate estimation of time, costs, risks and value based on tools such as machine learning.
– Technology – New technologies such as robotic process automation are gradually entering the PPM space to help in automating routine tasks such as data collection, reporting, and project tracking in order to allow more effective use of resources.
– Better fit and connectivity – Continued platform development enables PPM systems to include more tightly integrated processes for strategy management, idea generation, work and resource management and delivery analysis systems.
Conclusion
As organizations continue to be pressured to deliver greater value across their business portfolios more quickly, project portfolio management has emerged as a critical business capability vital to competing for tomorrow. Structured PPM techniques enable businesses to effectively choose and allocate resources to the most valuable initiatives, manage their execution, and assess their results in the context of planned goals. With ongoing innovations in the use of analytics and automation in the PPM platforms, project portfolio management solidifies its position as a key enabler of an organization’s delivery capabilities.
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