Project Portfolio Management (PPM) is more than managing multiple projects. A PPM solution provides centralized visibility into the entire project portfolio to help planning and scheduling teams identify the most suitable approach to deliver projects and programs. A successful Project Portfolio Management solution consists of three fundamental components that must be implemented in adherence to business value and strategy.
1 – Project Selection
To be successful with project portfolio management, you should select and initiate projects based on your organizational capabilities and goals. To do this, you should have a systematic method and decision process.
A good way to start is by gathering a Project Inventory of current projects. Here are some examples of information you will want to capture. You will want to capture the goal of the project, project dates, resources being allocated to the project by role and other criteria, the risk of the project (may be as simple as High, Medium, or Low), the expected return of the project, and who benefits from the project.
You will also want to Score and Categorize Your Projects. To do this, identify logical criteria for scoring and categorizing projects (e.g., strategy alignment, limiting risk, increasing efficiency, increasing sales, reducing expenses or process steps, Benefits/Feasibility, legal, regulatory, security, etc.). Set up a scoring mechanism for each project based on the criteria (Note: The scoring range will be agreed on for each criterion, and each person can score projects based on their biases). Aggregate or average the scores from all individuals to develop a score for each criterion for each project.
Once completed, you will gather your project inventory, including the scores, along with current and forecast costs (for new projects, use expected costs). List your projects by rank order based on scores and put a line under the project sum equaling your total available portfolio budget (Note: Rank may not be based on score alone. Modify your total budget based on any contingency funds you hold). Projects above the line can be initiated or are already in progress. Projects below the line are held in reserve should you kill or cancel other projects or come up with more money.
2 – Project Resources
No company has the resources to meet all of its business needs in the best of times and, even more, critical when times are tough. PPM gives you visibility into resource availability and allocation across your project portfolio. By ranking and prioritizing projects, you’ll be able to allocate resources strategically and maximize project delivery.
To be successful with project portfolio management, you should know where your people are working and what more can be done with available capacity. You don’t have to have sophisticated tools to track your resources. Still, you do need standard methods for the definition of resource information (location, department, division, etc.), competencies (skills and levels), where the resource is currently being allocated (both project and non-project), and resource development opportunities.
Define your resources using the above information and more if needed. Establish each resource’s available capacity to work based on their project focus and the resource calendar. You will then inventory your Total Resource Capacity (TRC) by resource and aggregate individual resource capacity by role (Note: If a resource has multiple roles, you will have to define how to split out their TRC by role). For each resource, sum up their total allocation to current projects. This is their Project Allocated Capacity (PAC). You can do the same for each role across all active or proposed projects. Finally, you can compute the Total Available Capacity (TAC) by computing TAC = TRC – PAC. Do this for both resources and roles over time. You’ll be able to forecast the availability of resources for future projects by capacity and role needed.
3 – Project Information
Project portfolio management relies heavily on the accessibility and accuracy of information. You should have standard procedures, applications, and training for effectively sharing relevant information to drive portfolio analysis, decision-making, goal setting, project status, prioritization/ranking, and consumed and available resource capacity.
Throughout the project lifecycle, from intake to closeout, communicate risks, issues, decisions, changes, lessons learned, and actions taken and document the reasoning for each. Set up logs for each project to track the information and make the information available to all stakeholders.
Successful PPM relies on these three fundamental components and must be managed according to business value and strategy. When implementing a Project Portfolio Management solution, remember that change should be managed at both the organizational and project levels. Corporate change management (organizational change) discussion may be a great way to introduce a PPM solution and get everyone on board.
Learn more: 5 Major Benefits of Implementing a Project Portfolio Management Solution
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