What is Project Portfolio Management?

Project Portfolio Management is about more than running multipleprojects. Each portfolio of projects needs to be assessed in terms ofits business value and adherence to strategy. The portfolio should bedesigned to achieve a defined business objective or benefit. ProjectManagement guru Bob Buttrick put it well when he said; "Directing theindividual project correctly will ensure it is done right. Directing'all the projects' successfully will ensure we are doing the rightprojects."

While at individual project level it is important to know how eachproject is performing, the impact of each project on the portfolio isjust as important. The following questions should be asked:

• Does each project contribute to the overall achievement of the portfolio?
• How well is each project performing?
• Will any project have a negative impact on other projects to come?
• What projects in the portfolio are dependent on others?
• Will the successful delivery of all projects deliver the desired objective or benefit?

Working at portfolio level is about working with summary or keydata. It is important to avoid information overload. The detail of eachproject should be kept at the project team level, administered by theindividual project managers. Key information should be rolled up andpresented at each level within the organisation as appropriate. Atexecutive, VP level you are likely to be providing a summary ofperformance, progress, a measurement of estimates against actuals andcosts.

Within almost all portfolio management systems there is a projectevaluation process. This process is used to evaluate the projects atvarious points during their lifecycle. At the beginning of each stage,often called a 'gate,' the responsible party evaluates the businesscase, asking whether it is still relevant and able to deliver thedefined organisational objectives. If the answer is no, then theproject should be stopped. This way the organisation can ensure thatthey stay focussed on delivering a strategy, goal or other definedbenefit and that resources are deployed where they will offer the bestreturn.

When selecting a portfolio management tool, organisations should usecriteria based on identified needs and organisational objectives. It isadvisable to start small, introducing aspects of portfolio managementone element at a time. Many commercial tools can seem overwhelming atfirst, simply because of the amount of functionality they offer.

These are the key features of a portfolio management system:

• Project evaluation process or methodology
• Cost and benefits measurement
• Progress reporting
• Communication of key project data e.g. executive dashboard
• Resource planning
• Cost and benefits tracking

6:30 AM - 4/10/2008 - comments {0} - post comment