Being able to select and complete projects efficiently and effectively requires the right tools and the right people at the right time. Project Portfolio Management, or PPM, works to bring these elements into proper alignment with the objectives of the organization. PPM encompasses the leading processes and best practices that enable a business to oversee its projects as an aligned portfolio rather than managing projects independently of each other. Without the proper framework, on the other hand, it’s easy to let things slip into a state of inefficiency, resulting in increased costs and project delays. Successful Project Portfolio Management provides numerous benefits. If your organization is not managing its projects as purposefully as possible, you could be inadvertently passing these benefits up and putting the future of the enterprise at risk.
The Top Benefits of a Strategic PPM Strategy
A well-managed Project Portfolio Management strategy can provide an organization with a significant benefits, including the following:
- Selection of projects that support organizational goals
- Eliminate projects that are at cross-purposes to strategic intent
- Increased efficiency of resources and an increase in project cycle time
- Ability to quickly adapt the portfolio to changing business needs
- Increased collaboration and innovation via transparency of the portfolio’s health
- More efficient and organized decision making
How to Tell Whether Your PPM is at Risk
Every organization has a project portfolio, regardless of whether it has a set structure to manage that portfolio or gain insights about its effectiveness, ROI, benefits realization, strategic alignment and risk. Assessing the existing and potential risks within your portfolio can provide a management team with the necessary context for decision-making and allocating resources including people, materials and funding. This is especially important when projects are approved that support strategic initiatives but entail a higher level of risk. If you have concerns about your organization’s PPM and the risk of any particular projects within the portfolio, there are a couple of questions you should be asking:
- How are the various risks within this project portfolio mitigated?
- What is the overall risk level of the portfolio, or of a particular area of the portfolio?
If you and your team can’t easily determine the answers to these questions, or if you find that there is an unacceptable level of risk in your portfolio that can’t be quickly mitigated, your next step should be to develop a more strategic PPM program.
What a Strategic PPM Program Looks Like
In order to develop an effective Project Portfolio Management strategy, you must gain critical insight into the current state of your project portfolio and determine the pain points that need to be fixed in order to get to your desired future state. If your business is adding unnecessary or overly complex processes to the project lifecycle, for example, it will decrease value and raise the cost of project delivery. For most enterprises, the primary objective of a PPM strategy is to ensure the approved projects are delivering the value at the agreed to cost and within the expected timeframe. Other important objectives include:
- Ensuring comprehensive oversight of the project portfolio by senior management members
- Increasing the visibility and consistency of the Demand Management processes
- Regularly reviewing the portfolio and re-aligning it as business needs dictate
Ultimately, the goal of your project portfolio management strategy should be to align your business objectives with the tools, processes and potential of the projects and programs within your portfolio. It’s always a good idea to stop and examine the effectiveness of your PPM strategy, assess the tools you have available, update your tools and resources when necessary and look to the future. Achieving long-term success and increased value from your ongoing portfolio of projects is much more important than implementing any short-term, stop-gap solutions. A business is only as good as the products or services it provides, and successfully completing projects is the only way to get those products and services to the market in a timely manner without sacrificing their quality.
With all the risks that come with an ineffective Project Portfolio Management strategy, you can’t afford not to make this a top priority today, and every day as your enterprise moves forward.