IT Jargon Explained
Project Portfolio Management (PPM) is a strategic process that organisations use to manage, prioritise, and execute projects.
Inefficient project management can cost organisations hundreds of billions of dollars per year. And while there are many factors that can contribute to loss of project budget, one of the main ways is very early on – by funding the wrong initiatives. Projects with low benefits and high risks are not only costly, but they can thwart innovation and progress on organisational goals.
Today, many organisations are adopting project portfolio management (PPM), a strategic approach to project and resource management at the enterprise level. PPM allows organisations to analyse current and prospective project requests, identify the projects that best advance their strategic objectives, efficiently deploy assets and allocate resources to the top projects, and increase cross-project visibility within the organisation.
Practical Demo: Extending ITSM to Project and Portfolio Management
Project Portfolio Management (PPM) is a strategic process that organisations use to manage, prioritise, and execute projects. It involves analysing the potential benefits, risks, and resources required for each project, and then selecting and prioritising projects based on their alignment with overall business objectives. PPM also includes ongoing monitoring and evaluation of projects to ensure that they remain on track and deliver the intended benefits. Ultimately, PPM helps organisations optimise their project investments and achieve their strategic goals.
Related: More IT Jargon Explained
Effective PPM first starts with an understanding of how project management works at the organisational level. Projects, programmes, and portfolios form an organisational hierarchy of initiatives at an organisation. Let’s walk through each one.
IT deployments are typically project-oriented and revolve around the successful deployment of specific services, initiatives, or products that satisfy a business need. Project managers are responsible for clarifying the objectives of a project, breaking the project into work-streams, and assigning work to their teams, planning and tracking project timelines and milestones, monitoring the project's risk profile, managing interpersonal relationships and conflict, and ensuring that the project satisfies its financial, timing, and business objectives.
A programme is a group of related projects that work together to fulfil the same strategic objective or business benefit. Programme managers are typically in charge of several projects at once, but from a higher-level perspective. They may spend less time ensuring the success of each individual project and more time ensuring that the overall strategic objectives of the business are being met by the sum of the results of all projects in the programme. Programme managers may oversee a group of project managers that are assigned to the specific projects that they control.
At the top of the hierarchy are portfolios. A portfolio contains several programmes, often each having its own programme manager, and each containing several projects that may have project managers assigned to them. Project portfolio management can be done by one person, or by a Project Management Office (PMO), a whole department whose goal is to identify and allocate resources toward the projects and programmes that best satisfy the organisation's strategic objectives.
Learn More: Real‑time Project Portfolio Management
To effectively allocate resources, PPMs use expertise, technology, and specialised methods to determine the viability, efficiency, and impact of prospective projects and projects in the current portfolio. Project portfolio managers look at projects and ask the following questions:
These ideas capture the general inquiries associated with a successful PPM analysis of a project, but the analysis can be much more detailed when organisational objectives are clearly defined which drives a common set of weighted criteria for assessing the viability and impact of projects.
Through these assessments, organisations can prioritise the projects that provide the greatest benefit and avoid projects that are high-risk, too costly, or don't align to company objectives when completed.
A major struggle for large organisations is a lack of visibility between and across project teams. High-level managers cannot efficiently allocate resources in the form of human or physical capital without specific information about the needs of each department. PPM solutions provide intuitive dashboards where executives can track project progress across the organisation in real-time.
Enhanced project visibility allows better project monitoring across the organisation and can help managers address potential sources of delays before they balloon into critical failures.
Cross-project visibility is crucial for the effective allocation of resources by the PMO and by managers themselves. When PMO executives lack visibility of ongoing projects throughout an organisation, they often assign too many low-impact projects to teams that already have too many projects. This is especially the case when there is no accessible framework for evaluating the impact and viability of projects and determining what resources are available to complete them.
Implementing too many unimportant projects leads to a situation where team members are overworked and overextended—they're involved in too many projects that don't matter, and without clear priorities that align with organisational objectives, their success, and the success of the company, is essentially left up to chance. PPM software helps ensure that organisational resources are allocated efficiently to projects that have a real impact.
When project managers or programme managers are asked to implement projects without input from a PPM, the drive for success that exists across departments in an organisation can sometimes become its own worst enemy. Without adequate cross-project visibility, it is impossible for managers in separate departments to contextualise the organisational impact of their separate project loads.
As a result, organisational objectives are swept aside and forgotten, and the company gets bogged down with too many managers working towards their department's goals, but not efficiently and in unison with other groups. PPM should drive collaboration between groups by unifying the organisation under a set of clearly defined strategic objectives and coordinating resource allocation between projects to best achieve those objectives.
With a fully implemented PPM system, department leaders and programme managers who want to undertake new projects or recruit new resources for their team can submit their project requests to the PMO office for review. This ensures that any new initiatives that the organisation choose to fund have been properly assessed for their risk and benefits, and can either be rejected, or approved and prioritised appropriately.
PPM opens the door for organisations to accept more project proposals from their leading managers, prioritise the best ideas, and move forward with projects that have the largest possible impact.
At its core, project portfolio management is all about efficiently deploying resources between departments, programmes, and projects in a way that best serves the organisation's overall strategic objectives. Effective portfolio managers use a balanced scorecard to evaluate projects for risk, benefits, and cost, then assign resources to those projects that promise to deliver the greatest overall benefit to the organisation. PPM is also a tracking methodology that is used to measure the ongoing status of projects, preventing delays, and avoiding missteps on the path to project delivery.
Ultimately, PPM is about producing better project outcomes. And every organisation can benefit from this.
See how you can give users consistently great experiences while improving service and outcomes across your organisation with Ivanti.