According to the Project Management Institute, “Project portfolio management is the centralised management of one or more portfolios that enable executive management to meet organisational goals and objectives through efficient decision-making on portfolios, projects, programs, and operations.”
A successful project portfolio management framework includes:
- Identifying and evaluating potential projects
- Approving future projects
- Assigning project managers to the approved projects
- Including them in the overall portfolio
- Sharing assets
- Optimal resource management
Project portfolio management (PPM) is used by project managers and PMOs as a method for analysing any prospective initiatives. Data consolidation, pipeline forecasting and real-time information all contribute to PPM’s unified management strategy which focuses on having any projects in an organisation worked on under one governing structure.
Reportedly, organisations that choose PPM are more likely to have personnel assigned to the right activities with appropriate resources flowing towards the appropriate projects at the correct moments. Furthermore, this strategy optimises the scheduling of tasks, materials and personnel.
A PPM tool combines all the methodologies and processes with all required project artefacts in one place distributed among all relevant managers for an optimised decision-making process.
In this post, let’s look at the advantages of having a PPM tool in an organisation:
– Alignment business strategy & project goals
The core aim of any business is to fulfil its strategic and short-term goals. Thus, project managers need to guarantee that projects are in line with the firm’s strategy and plans. If this alignment doesn’t occur, it can cause an overload of work, the misuse of resources, and the misuse of employees’ efforts.
Without this connection to long-term objectives, the project portfolio would have no awareness of the entity’s needs. A PPM tool gives a firm vision of the business strategy broken down into connected project goals.
– A justified project selection process
Companies often have an unclear selection criterion when deciding on new projects, making it difficult to assess whether the project would be in line with the company strategy. To help sort through their portfolio of potential projects, organisations apply Project Portfolio Management (PPM). PPM forms a well-defined framework for selection and provides managers with a model to choose the right project.
By using ranking methods, scoring models, and other heuristic strategies, PPM tools allow companies to make a go/no-go decision based on well-defined criteria that maximises value for the organisation.
– Better decision-making
In addition to bringing consistency to how organisations evaluate projects qualitatively and quantitatively, PPM tools assist organisations in being more objective when evaluating and prioritising projects. Portfolio management provides insight into past project metrics such as project costs, profitability, duration, quality, and resource usage, both from a strategic and tactical perspective.
– Continuous improvement
Through the centralisation of project governance, organisations can see what’s working and what’s not across all projects. That allows PPM officials to identify areas for improvement.
– Enterprise Resource Management
Project portfolio management (PPM) can help organisations become more efficient in how they deliver projects. This is because repeatable processes are being used, meaning teams no longer spend time judging which approaches are best for each new project, nor do they need to familiarise employees with unfamiliar processes.
Through regular use of the PPM-endorsed options, the project teams gain greater proficiency in them, bringing further gains to the project delivery function.
– Adherence to project budget and timelines
The dangers of overspending and delays are real, but advanced PPM tools offer several preventive measures. Intuitive reports proffer an overview of actual or forecasted deviations from the plan.
Business intelligence provides real-time updates to take corrective action in time. Further, these reports factor in past successes and current scope to mitigate undue expenses on projects. Finally, they can also significantly reduce the project delivery timeline.
– Risk management
Despite its negative connotations, the risk is often unavoidable. To keep project delivery on track, you need to consider alternatives through an effective risk management plan, according to the likelihood, type, and impact of different risks.
By minimising risks, you avoid miscalculating gross efforts required for current and upcoming projects. Budgets are stretched and resources are delayed by project revisions. Using PPM, you can detect budget deviations in real-time, reducing financial risks after a project begins.
It contains standardised project management methods and processes centred around a dependable framework. Using PPM’s estimation tools, your project management office can identify wayward projects based on costs versus benefits.
– Increased ROI
ROI is the revenue/profit generated through project deployment. Companies strive to increase returns, and with portfolio management tools and training, it is possible to bolster project success rates and make cost-saving decisions.
A PPM enables organisations to identify broader company objectives, optimise resource management, boost productivity levels and increase agility. This means that investing in projects is more likely to result in a positive return on investment, putting businesses in good stead for the future.
Furthermore, PPM helps to minimise costs associated with resourcing; businesses can predict shortfalls and hire cost-effective global resources ensuring they have the right personnel for upcoming projects.
– Sharing best practices and creating assets
Effective portfolio management gathers information from past project initiatives that delivered business value and align with the organisation’s long-term goals. By analysing the probability of similar projects flowing in the pipeline, you can prepare your resources for the appropriate training and briefing.
Leverage PPM tools to streamline your projects and boost success rates
PPM tools are vital for modern businesses, as they help them achieve their strategic goals. They enable better decision-making, resource allocation, and risk management, and provide a holistic approach to project management.
By aligning projects with business objectives, selecting the most rational ones, and fostering a culture of shared insights, PPM tools improve efficiency and generate significant returns on investment.
So, consider implementing a PPM tool implemented in your organisation.