There is increasing pressure on organizations to complete market-valuable projects that are not only expediently completed, but also on-budget and contain accurate data. Project portfolio management (PPM) is a combined system of technologies, methodologies, and processes to plan, develop, and execute organizational projects with greater efficiency and fewer errors than traditional approaches to project management.
The primary goal of PPM is to align projects and programs with the strategic objectives and priorities of the organization to achieve optimal results.
PPM allows for the collection of every company project to be organized into a single portfolio. Projects can easily be studied and monitored for progress and reviewed whether the project had quality execution. The end goal is to minimize the time and resources spent on each project to provide greater organizational success.
PPM combines three disciplines of organizational management:
1. General management (understanding of risks; awareness of resources)
2. Business management (maintaining that projects are in line with the overall portfolio strategy)
3. Project management (collecting, viewing, analyzing, prioritizing projects and ensuring that they meet or beat the overall goals of the company’s portfolio)
At its very core, PPM manages the steps and measures needed to curate objectives and strategies that bring about organizational success when planning and executing company projects.
The combination of the above management disciplines allows for an organization to select the right projects that match the organization’s goals and identify the top priority projects; the ones that require the most resources to meet or precede project deadlines.
Your portfolio is the lifeblood of your organization; the essence of why you do what you do. Implementing PPM assists your company in scheduled assessments of how well (or not) projects are contributing to your portfolio’s success, and what actions need to be taken to guarantee that each project is in line with your objectives.
Using PPMeffectively garners the following simple successes for your organization:
1. Increased customer satisfaction when deadlines are met or beat
2. Reduction in project risks to company success
3. Consistency in project organizing and prioritization
So far, we touched on the basics of what PPM is, and the basic benefits of using the PPO approach to project management. Now that you have an understanding of what PPM is and why it can benefit your organization, let us dive deeper into how beneficial using PPM can be for your projects.
1. “Portfolio Management simplifies project decision-making
The manifold benefits of collaborative project decision-making foster the sharing of ideas that can entirely transform the way you do business. More minds working on a task at the same time produce solutions far more quickly than traditional methods of project management.
Take into account this traditional communication model:
Team members > project manager > executive
Executive > Project manager > Team members
Sure, this model represents how responsibility and accountability should flow in an organization, but when it comes to sharing possible solutions to solve the problems that will inevitably crop up, it is better to have multiple minds sharing thoughts on how to move the project forward.
With technology, it is very easy to have an individual manager contact and collaborate with many separate team members. However, collaboration can be even further advanced when each member can communicate seamlessly with other team members. This is what standard communication models look like compared to collaborative PPM communication:
This is exactly what PPM provides in terms of collaboration. When all projects are consolidated into a single cloud-based PM software database, all parties of the project team have transparency into each other’s work. Perhaps a member of your marketing has an idea that could help out the accounting department or a member of the design team could have a valuable idea for the marketing team.
Because of PPO’s insistence on clean data storage and availability, future decision-making is performed easily based on past project data, which can be accessed by all and shared in the decision-making process. Data is consolidated and available for every member to get their hands on whenever it is needed.
PPO and cloud PM software simplify collaborative decision-making and empower autonomous decision-making. Team members, with access to the project’s entire scope, save time by not needing constant guidance from their project manager.
2. PPM reduces project risks and enhances project productivity
Every project will involve some degree of risk, but the reduced risk is far more easily obtainable when using PPM. The less risky a project is, the greater the company’s success rate and more projects can be completed when deadlines are met ahead of time.
PPM allows organizations to minimize the risks of project delays, breaks in team communication, lack of team cohesion, lack of access to tools and data, muddied understanding of the project and organizational goals, and mismanagement of company resources.
The riskier a project is, the more likely it is to fail. PPM tools allow for metrics that measure risk and demonstrate that while a project may be honorable in merit, it needs to be put on hold and sent back to the drawing board, while a less risk-ridden project can be prioritized.
Organizations using Project Portfolio Management achieve a 60% higher project success rate and handle 30% more projects. Birdview PSA Project Portfolio Management Software provides tools for assessing project risks, ensuring strategic alignment, managing resources, staying within budget, and enhancing overall project completion.
3. Utilizing Project Portfolio Management minimizes project overruns
Seasoned executives and project managers understand the challenges of overspending and resource over-utilization. PPM effectively reduces, and in some cases eliminates, overspending by utilizing estimation tools.
Common factors contributing to overspending, such as poor cost estimation, are swiftly addressed with PPM estimation tools.
These tools consider past project successes and current project scope, making overspending a thing of the past.
4. Project Portfolio Management reduces project completion time
Before adopting project portfolio management (PPM), team members often ask, ‘What should I be doing next?’ PPM helps circumvent such queries, saving precious time, especially during complex projects. With PPM, project managers can reduce project turnaround time by an average of 10%.
Whether a project is short or long-term, PPM technology enables the scheduling and assignment of tasks to team members, eliminating guesswork. The standardized workflow and governance introduced by PPM also streamline subsequent projects, saving time on planning and preparation
5. PPM decreases duplicative or low-value projects while increasing the overall value of the portfolio.
Consolidating forecasted projects into a single database through Project Portfolio Management (PPM) enables executives and project managers to assess the overall landscape.
PPM tools help identify overlapping or low-value projects, ensuring the portfolio prioritizes high-value, strategic initiatives aligned with the organization’s goals. PPM specialists monitor for redundancies and optimize resource use.
Using PPM tools to rank projects based on ROI, scalability, costs, and timelines ensures informed decision-making for project prioritization, postponement, or removal. PPM technology facilitates visible prioritization of projects with the highest ROI.”
6. Make the most of your resources with Project Portfolio Management
Piggybacking on the benefits we discussed earlier, project portfolio management allows you to make the most of what costs your project the most: your human resources. Having a centralized portfolio database allows project managers to monitor project progress, and see who on the team is the best at doing what.
If a team member misses a deadline, or voices that they are struggling with a task, guesswork is taken out of the equation, as all tasks are readily visible. This also applies to when a team member is paced to finish their tasks ahead of schedule. Managers can observe their team’s talents and have an increased awareness of future task deployment. Everyone has strengths and weaknesses, and these become abundantly apparent when using PPM.
PPM saves on the frustration that comes from mismatched task assignments and allows you to keep a database of your human resources skills and deficiencies, affording even greater project success.
What types of companies and teams benefit from project portfolio management?
Project portfolio management is essential for companies handling multiple concurrent projects, including:
Is Project Portfolio Management right for you?
In short: absolutely. Portfolio visibility is becoming essential in today’s rapidly developing, IT-based project management landscape. We hope that we have made the case in this article for how highly beneficial implementing PPM for your project management is.
Not only does project portfolio management allow your management team to have an all-encompassing eye over project development, but tasks are assigned and completed with greater efficiency.
Using PPM allows you to harness every potential boon to project execution and completion. Happy hunting for your ideal PPM vendor!