What is Project Portfolio Management?
Project Portfolio Management is a process that helps organizations maintain a balanced mix of new and old projects. Project Portfolio Management is all about how to manage different projects in your portfolio. Project Portfolio Management is the perfect way to identify, create, and maintain projects in your workflow. This can be done by building your portfolio with self-descriptive project titles, which are connected to each other by nicely designed theme pages. This will enable you to keep all of the individual pieces of the puzzle together so that you don’t have any confusion about what you’ve done and where it fits into your project progression.
Project Portfolio Management is an application of project management to the capital investment concept of portfolio theory, which manages multiple projects simultaneously. Portfolio theory states that the optimal size of a project portfolio is small rather than large, because this allows for diversification. A selection process should be used to eliminate projects that are not likely to succeed. As more projects are eliminated, the likelihood that any given one will succeed increases substantially. This technique is known as “portfolio optimization”. The result of this process is then updated on a regular basis, using the data collected during the process, to identify new opportunities for alternative project investments.
Managing projects requires a number of important skills such as:
1) Understanding how to work across boundaries.
2) Understanding how to make trade-offs between competing priorities.
3) Understanding how to create and communicate clear goals for activities.
The underlying objective of managing projects is to minimize the costs and risks involved in successfully delivering solutions. The information provided in this article will allow you to take a proactive approach to managing your projects. However, there are no perfect answers in project management. This article will license you to understand the issues surrounding project portfolio management so that you can develop your own ideas on how to implement a solid project portfolio management process.
A portfolio is made up of multiple projects. The manager of the portfolio uses it to manage all the money, resources, and time involved in project scope, schedule, and budget. The manager must consider the type of customer for each project, taking different objectives. For each project, the Manager must understand if they are internal or external customers. For example: internal customers are people who use the product or service delivered by that project output but are not patrons of that specific product or service.
Project portfolio management is important to organizations because it overcomes the disadvantages of managing only one project at a time. As you manage multiple projects, it is easy to lose sight of upcoming projects that will be delivered in the future. A portfolio allows you to take a broader view of your project delivery capabilities. The underlying objective of managing multiple projects is to minimize the costs and risks involved in successfully delivering solutions.
To be successful, you must use your resources effectively through portfolio management. This means that you must be able to allocate resources to projects when they are needed. Project Portfolio Management provides the ability to take a broader view of your project delivery capabilities. The underlying objective of managing multiple projects is to minimize the costs and risks involved in successfully delivering solutions.
Benefits of Project Portfolio Management
A key benefit of Project Portfolio Management is enabling companies attain higher levels of success and aligning their success with the organization’s broad goals whether long or short. Other benefits include:
Clarity of purpose and big-picture thinking: Project Portfolio Management allows management teams have a 360 degree view of a project allowing them understand the role of the project they are handling in the broader goal of the organization. It provides a high level of detail and clarity and allows team members work in alignment with the broader vision and mission of the organization they work for.
Improved capacity planning and resource management. With clarity and holistic view of the project comes better planning capacities and by implication, better overall resource management. The PMO with with better clarity is able to align the project with the broad company goals and save considerable resources with better allocation of resources throughout the estimated lifetime of the project.
Higher degrees of productivity. Project portfolio Management grants PMOs deep insight and PMO’s that succeed in communicating the importance and overall role of the project to team members such that they realize they understand their critical role in birthing the success of the project and the organization’s overall goals, are likely to work even harder and ensure better quality deliveries.
Increased agility. Greater alignment of individual projects with broader company vision and goals allows PMO’s room for flexibility as they can foresee individual roles of smaller projects in the broader scheme of things. Project portfolio management enhances change management.
Improved ROI. Through ts attributes of clarity, better resource management, increased quality of team delivery, agility and change management, Project Portfolio Management increases the return on investment of projects and creates overall positive growth for organizations.
Despite the listed benefits of Project Portfolio Management, PPM in itself will not necessarily ensure that your portfolio is balanced although Balanced portfolio management is vital for successful project portfolio management. A balanced portfolio provides enough critical mass for future success, but not so much that it becomes an impediment. Project portfolios should include both new initiatives along with programs based on existing products and services. While business owners can handle some aspects of PPM with relative ease, some level of external expertise may be required to help create a balance in an organization’s projects. Fintalent, the hiring and collaboration platform for tier-1 Strategy and M&A professionals always provides a steady stream of top tier Project Management Consultants that can help an organization navigate all of the minefields of Project Management and ensure the organizations broader goals are attained.