The Benefits of Agile for Project Portfolio Management

Project Portfolio Management (PPM) is important to any organization’s operations. It involves carefully selecting, prioritizing, and managing projects to align with the organization’s goals and ensure the best use of resources. Unfortunately, the traditional approach to PPM (Project Portfolio Management) can be rigid and inflexible, making it difficult to adapt to changing circumstances. That’s where Agile Portfolio Management comes in.

Agile is a flexible and adaptive project management methodology widely adopted across various industries. It emphasizes collaboration, transparency, and continuous improvement, making it a perfect fit for project portfolio management. 

This blog will explore the benefits of incorporating Agile principles into project portfolio management and how organizations can implement Agile project portfolio management effectively. 

Whether you are a seasoned project manager or new to the field, this blog post will provide valuable insights into the benefits of Agile for project portfolio management.

What is Agile Portfolio Management?

Agile portfolio management is a flexible and adaptive approach to managing an organization’s portfolio. It incorporates the principles and practices of Agile project management into managing a portfolio of projects, programs, and initiatives. 

It aims to align the organization’s projects with its strategic goals and ensure that the right projects are being prioritized, managed, and delivered efficiently.

In Agile portfolio management, projects are managed iteratively and incrementally, allowing for continual adaptation to changing circumstances and requirements. This approach emphasizes collaboration, transparency, and continuous improvement and encourages teams to work together to deliver the best possible outcomes.

Agile project portfolio management differs from traditional PPM project management (Project Portfolio Management) in its flexibility and adaptability, its focus on delivering value over following a rigid plan, and its emphasis on collaboration and continuous improvement. As a result, it enables organizations to be more responsive to changing business needs and to make quicker, more informed decisions about their project portfolios.

How does it differ from Traditional Project Portfolio Management?

Traditional project portfolio management (PPM) is a more rigid and structured approach to managing a portfolio of projects. 

It is often characterized by the following:

1. Centralized control: Traditional PPM is often controlled by a central project management office (PMO) or senior management, who decide which projects to prioritize, allocate resources, and monitor progress.
2. Heavy documentation: Traditional PPM relies on extensive documentation, such as project charters, project plans, and status reports. This documentation is used to communicate project plans, track progress, and make decisions about allocating resources.
3. Emphasis on planning: Traditional PPM heavily emphasizes planning, with detailed project plans and schedules developed in advance. This can make it difficult to respond to changing circumstances and requirements.

In contrast, Agile portfolio management emphasizes:

1. Decentralized decision-making: APPM encourages teams to make decisions about their projects, with senior management and the PMO playing a supportive role. This enables teams to be more responsive to changing circumstances and requirements.
2. Lean documentation: APPM uses only the minimum necessary documentation, such as product backlogs, sprint backlogs, and retrospectives. This reduces overhead and enables teams to focus on delivering value.
3. Emphasis on delivering value: APPM places a heavy emphasis on delivering value, with projects delivered in small increments and refined based on feedback from stakeholders. This enables teams to respond quickly to changing circumstances and requirements.

Traditional project portfolio management is a more structured and centralized approach. In contrast, Agile project portfolio management is a more flexible and decentralized approach that emphasizes delivering value and responding to change.

Benefits of Agile Portfolio Management

Infographics on Benefits of Agile Portfolio Management Requires

Agile portfolio management refers to managing a portfolio of projects in an agile manner, focusing on flexibility, collaboration, and continuous delivery. 

Here are some benefits of Agile PPM:

Improved Alignment with Business Objectives

Agile PPM allows organizations to prioritize projects based on their alignment with the overall business strategy, ensuring that resources are allocated to the initiatives that will have the most impact.

Increased Transparency

Agile PPM provides a clear view of the status and progress of all projects in the portfolio, enabling stakeholders to make informed decisions and providing a basis for continuous improvement.

Better Prioritization and Decision-Making

Agile PPM enables organizations to continuously reassess and adjust their portfolio of projects in response to changing business needs and market conditions, allowing them to make better decisions about which projects to prioritize and invest in.

Enhanced Collaboration and Communication

Agile PPM promotes collaboration between teams working on different projects and helps to break down silos and foster communication across the organization.

Faster Delivery of Value

Agile PPM emphasizes delivering small, incremental improvements that add to significant value over time, enabling organizations to deliver outcomes faster and with higher quality.

Increased Agility and Responsiveness to Change

Agile PPM allows organizations to quickly pivot and adapt to changing business conditions and customer needs, providing a competitive advantage in rapidly changing markets.

Improved Risk Management

Agile PPM provides a framework for continuously reassessing and mitigating risks, ensuring that projects are delivered on time, within budget, and with the desired level of quality.

Agile Portfolio Management requires defining a clear vision, establishing a governance structure, identifying and prioritizing projects, using Agile project management methods, continuously reassessing and adjusting, communicating and collaborating effectively, and measuring and reporting success. 

By following these steps, organizations can achieve better alignment, increased transparency, and improved project portfolio delivery.

Implementing Agile for PPM Project Management requires the following steps:

1. Define Agile Portfolio Vision: Develop a clear understanding of the organization’s goals and objectives for implementing Agile Portfolio Management.
2. Establish governance structure: Create an Agile Portfolio Management team responsible for decision-making, prioritization, and oversight.
3. Identify and prioritize projects: Identify all projects in the portfolio and prioritize them based on their alignment with the organization’s goals and objectives.
4. Implement Agile project management methods: Use Agile project management methodologies such as Scrum, Kanban, or Lean to manage individual projects within the portfolio.
5. Continuously reassess and adjust: Regularly reassess the portfolio to ensure that the projects align with the organization’s goals and objectives and make changes as necessary.
6. Communicate and collaborate: Ensure effective communication and collaboration among all stakeholders involved in the portfolio, including project managers, team members, and senior leaders.
7. Measure and report success: Track and report on the success of the portfolio and individual projects using metrics such as project delivery time, budget, and quality.

Key Principles of Implementation of Agile in PPM Project Management

Agile is a popular project management approach that emphasizes flexibility, collaboration, and customer satisfaction. In recent years, it has gained widespread adoption in the Project Portfolio Management (PPM) domain, which involves managing and aligning a portfolio of projects with the overall business strategy. The key principles of implementing Agile in PPM are designed to promote efficiency, accountability, and alignment with business goals. 

The key principles of implementing Agile in Project Portfolio Management (PPM) are:

1. Flexibility: Agile in PPM allows changes in project scope, requirements, and priorities to be accommodated throughout the project life cycle.
2. Collaboration: Agile in PPM involves close collaboration between the project team, stakeholders, and business owners to ensure alignment with business goals.
3. Empowerment: Agile in PPM empowers team members to take ownership of their work and make decisions in the project’s best interests.
4. Prioritization: Agile in PPM prioritizes delivering value to the business by focusing on the most important and impactful initiatives.
5. Incremental Delivery: Agile in PPM involves delivering smaller, working increments of the project at regular intervals to ensure continuous progress and feedback.
6. Continuous Improvement: Agile in PPM encourages continuous improvement through regular retrospectives and continuous adaptation of processes and practices.
7. Transparency: Agile in PPM emphasizes transparency in project decision-making and progress to promote accountability and trust.

By following these principles, organizations can deliver high-quality projects that meet the needs of stakeholders and achieve desired business outcomes.

Case Studies of Successful Implementation of Agile Project Portfolio Management

Here are the few companies that implemented Agile for their PPM Project Management:

Spotify

Logo of Spotify Should be added

Spotify, the music streaming service, has successfully implemented the methodology by creating cross-functional teams that work together on a project, encouraging collaboration, and embracing an Agile methodology.

Capital One

Capital One, a financial services company, uses Agile PPM to drive innovation and agility in its technology projects. The company has implemented a DevOps approach that enables rapid deployment of new features and functionality, resulting in increased customer satisfaction.

Barclays

A multinational investment bank, has implemented Agile PPM to improve collaboration and transparency between teams and departments. This has enabled the company to deliver projects faster and more effectively, with a focus on customer needs.

GE Digital

GE Digital, a subsidiary of General Electric, uses Agile PPM to drive digital transformation across the company. Implementing Agile methodologies has resulted in increased efficiency and innovation, allowing the company to quickly adapt to changing market conditions.

Philips

Philips, a multinational electronics company, has implemented Agile PPM to streamline its product development process and drive innovation. By adopting an Agile approach, the company has reduced time-to-market and increased the speed and quality of product releases.

Source: invensislearning.com

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What is Project Portfolio Management?

Project portfolio management describes how you can manage interrelated, interdependent programs or projects. 

This article will discuss portfolio management, its objectives, types, tools, and how to use portfolio management. In addition, we will look at portfolio management, strategies, and the different ways to manage project portfolios.

What is Project Portfolio Management?

Before we discuss portfolio management, let’s understand the portfolio.

A portfolio is a group of programs or different projects. These projects or programs are grouped together for better resource management.

Project portfolio management is the centralized management of the processes, methods, and technologies used by project management teams to analyze and collectively manage different projects or programs.

Portfolio management involves selecting, prioritizing, and controlling an organization’s projects, keeping them in line with its strategic objectives to maximize its returns on investment. Organizations use portfolio management to rationalize the selection of projects and the allocation and utilization of their resources.

The need for project portfolio management is driven by the fact that all projects require funding, time, and staff to be completed. In most cases, the resources are limited, and all projects don’t have equal priorities.  

Organizations must manage projects and resources in such a way that important projects receive attention and resources on a priority basis. Project portfolio management helps keep projects aligned with the organization’s strategic objectives, including prioritizing and allocating resources based on the importance of the projects.

Objectives of Portfolio Management

The key objectives of portfolio management are as follows:

1. Keeping the stakeholders informed of the programs’ and projects’ progress and implementing the feedback received.

2. Improving the overall communication among projects and programs and in the organization.

3. Improving decision-making for projects and programs and overall business strategies, especially when taking informed risks.

4. Proper allocation of all the resources to each project.

5. Assigning the goals of individual projects to meet the company’s overall business goals.

6. Accurately measuring each employee’s performance and aligning it with the amount of work needed for each project.

7. Improving the return on investment for each project by predicting the value generated.

8. Improving the overall prioritization process for all the projects in the company.

9. Ensuring projects remain compliant with all governmental rules and regulations.

Types of Portfolios

Organizations can have three types of portfolios to achieve optimal operational efficiency and success. These portfolios are designed to address different problems that an organization faces. 

The portfolios are:

1. Project portfolios focused on value creation for the organization with the help of strategic and company-wide projects.

2. Project portfolios focus on improving operational efficiency in an organization.

3. Project portfolios focused on completing the projects necessary to maintain compliance with regulations.

Who Should opt for Portfolio Management?

1. An organization that is experiencing agitation due to shifting priorities, changes to executive leadership, or mismatches between project demands and resource availability.

2. Large enterprises where different project groups with other goals function as competing units vying for financial and human resources. 

Portfolio management solves these challenges by ensuring the alignment of projects with overall strategy and encouraging project managers to form a cooperative environment.

Process of Portfolio Management

Portfolio management is a continuous process that allows project teams to respond to changing market forces while addressing the factors that challenge project success. Though the process is flexible, it consists of a distinct phase, i.e., planning, authorizing, monitoring, and control, as shown in the below image.

To succeed with project portfolio management (PPM), the project management office (PMO) should develop and implement a process to ensure everything goes smoothly.

Here are some critical steps that should be included in the PPM process.

Identify Existing and Upcoming Potential Projects

Without a complete inventory of current and upcoming projects, it is impossible to establish a successful PPM strategy. This is the first step in achieving the best return on investment (ROI).

Determine How Each Project will Impact Company Strategies

Each Project must provide value in promoting company strategy in the mid-to-long term. This value should be easy to trace documents and communicate to all stakeholders.

Prioritize Each Project 

Once the value of each project has been proven, the PMO must prioritize which projects should be executed first. 

Allocate Resources

Once projects have been selected and prioritized, resources are allocated and managed. Proper allocation of resources reduces wastage. A portfolio manager carefully and accurately identifies all available resources and assigns each in ways that do not cause overloading and avoid conflict.

Adjust Project Strategy as Required

Changes happen constantly; it is essential to revisit the company goals, each project and program, and all available resources, which will ensure company strategies and goals are aligned.

Portfolio Management Strategies

Portfolio strategic management refers to developing crucial deliverables such as a strategic portfolio plan, portfolio charter, and portfolio roadmap and ensuring they are aligned with organizational strategy.

Portfolio strategic management enables organizational success, which heavily depends on the implementation of projects and depends on how well the projects were planned. Managing a project and achieving business goals may not be possible without a plan and a strategy.

Strategic portfolio management is utilized to manage, monitor, and respond to these changes if there are modifications in strategy within the organization or in the portfolio components. Portfolio management strategies can be used to evaluate, select, and prioritize projects and programs in the portfolio management lifecycle.

Below are a few portfolio management strategies.

Cost-Benefit Analysis: A ratio used to evaluate the risk versus reward in any project. The lower the cost and higher the benefit, the more likely a project is to be selected and successful.

Decision Tree Analysis: A visual tool for qualitative research that is ideal for evaluating scenarios affected by many subjective factors. PPM tools set up hypothetical scenarios and provide a basis for assessing possible outcomes.

Scoring Model: An analytical technique that bridges quantitative and qualitative factors of a decision with weights and scores. The method creates a rational basis for prioritizing projects with the highest scores.

Objectives Matrix: This method splits the high-level organizational strategy into multiple business objectives and assigns project scores as they align with each goal. The matrix allows for sub-goals to be factored in to evaluate projects against objectives.

Responsibilities of Portfolio Managers

The following are the duties and responsibilities of portfolio managers.

Time and Expectations Management: A portfolio manager is responsible for developing and maintaining a schedule of defined activities and action sequences to achieve project success.

Analysis of Risk Mitigation: Portfolio managers analyze all potential risks involved with the projects to minimize their impact and develop countermeasures for these risks before the execution of a project.

Planning of Resources and Activities: Portfolio managers map out project plans to allocate and utilize the available resources to achieve success.

Project Monitoring and Evaluation: Portfolio managers track the performance levels of each stage of the project, making sure that the project team has a clear vision of what’s expected of them. Should there be a problem, a countermeasure has already been developed.

Harmonizing Different Projects Simultaneously: Ensuring that there is harmony with other goals to ensure that the primary strategic objectives of the company are achieved.

Best Practices to Manage Portfolio Management

Below are some best practices for managing portfolios.

Understand the Business Strategy

Project portfolio management involves aligning projects with business strategy, so it’s essential to understand the strategy and how it changes. For example, portfolio management priorities must also shift if the primary objective changes from increasing productivity in specific global markets to focus on product innovation.

Identify the Right Set of Projects

Selecting the wrong project is bad for the organization, as it does not move the company forward in the strategic direction. Projects and programs in portfolios must support the organization’s goals and objectives.

Establish a Project Management Office (PMO) 

Creating a PMO to handle portfolio management activities formalizes the processes and empowers staff. It reflects the support of senior executives in the project portfolio management approach.

Create Standards for Project Evaluation 

As projects get passed to different managers for evolution, it’s essential to create standard criteria and a checklist of metrics to score and compare projects. This is the only way to make an apple-to-apple comparison.

Formulate a Risk Management Strategy

Portfolio management can reduce risk by performing a risk-versus-reward analysis and investing in projects that yield maximum returns.

Formulate a Change Management Strategy 

Markets change, technologies evolve, and customers revise requirements. A change management strategy anticipates all of these. When carefully selected, metrics can trigger the notifications that drive appropriate and timely responses to unforeseen changes.

Use a Project Portfolio Management Tool 

The complexities of project portfolio management can be simplified through software that can help integrate tactical project control with strategic project selection. PPM software helps portfolio managers make the most of portfolio management and easily monitor portfolio key performance indicators.

How to Use Portfolio Management Tools

Set Goals and Objectives: Begin by writing down the goals and objectives for each project in the portfolio. Having goals and objectives for a project portfolio is essential. It gives portfolio managers a target to hit when trying to increase their return on investment and keep risk at bay.

Group Related Projects: Grouping projects in a portfolio and creating reports around them collectively rather than individually gives portfolio managers the data to make better business decisions about costs, resources, and more.

Create Milestones: Milestones mark the end of one primary phase and the beginning of another. Set milestones and break the organization’s project into more manageable parts. This boosts the team’s morale by giving them a series of seeresses as they work through their tasks. In addition, managers can use milestones as a means to measure progress.

Set Dependencies: Tasks have different dependencies. Some can’t start until another has finished or must start or end simultaneously. So, it’s essential to know which tasks are dependent on each other to keep the portfolio healthy.

View Roadmap: When managing a portfolio, it’s essential to keep the big picture in sight. Otherwise, one can easily get lost in the weeds and fall behind schedule.

Keep goal-minded with the roadmap tool, which places all the projects on one Gantt chart in a portfolio. Businesses can see every project on a timeline and quickly determine if there are any conflicts and resolve them before they interfere with the goals and objectives of the organization.

Balance Resources: Workload represents what a project team has been assigned in terms of their tasks. If one team member is overburdened, they’ll not be as productive, and morale will suffer.

Track Portfolio Progress: A dashboard is a tool that graphically depicts various project metrics to see how a given project is performing. It’s a high-level view that can alert you of issues to address before they become problems.

Analyze and Present Reports: Status reports are a way to measure the current state of a project. They also communicate critical data to stakeholders, keeping them updated. 

Use the built-in reporting tool for diving into project data to see progress and measure performance. For example, a portfolio status report is perfect for stakeholder presentations.  

Collaborate with Stakeholders: Collaboration means working together to increase productivity. This can be at the task level for teams or on an executive level. Ideally, it’s practiced throughout every department in an organization.

Project portfolio managers have the tools to stay in touch with every project manager leading a project in a portfolio. 

Project Portfolio Management Key Terms

The following is a mini glossary of project portfolio terms that have been used in this guide.

Portfolio Management: Controlling a portfolio of projects to make sure they align with the organization’s strategic goals and objectives.

Program Management: Managing similar projects under a group for better resource utilization. 

Project Management: Planning, executing, monitoring, and reporting on one project, from start to finish, including controlling scope, costs, and schedule.

Project Management Office (PMO): A group within an organization tasked with maintaining standards for project management within that organization; often oversees portfolio and program management.

Change Control Management: A process to identify and successfully respond to changes in a project or portfolio.

Portfolio Reporting: Creating charts, graphs, and other reporting documentation to communicate progress and other portfolio metrics.

Risk Management: Identifying and managing project risks.

Resource Management: The process of allocating resources throughout the portfolio’s life cycle.

Pipeline Management: Making decisions for estimating and selecting which projects to fund that align with an organization’s strategy.

Financial Management: Understanding each project’s unique risks and using this knowledge to make decisions across the entire portfolio. 

Which Industries and Organizations Benefit from PPM

Any industry managing multiple projects simultaneously can benefit from project portfolio management.

Some of the main industries and organizations that benefit from using project portfolio management include:

1. Information technology

2. Computer software

3. Hospitals and healthcare

4. Construction and automotive

5. Non-profits

6. Financial services and banking

7. Service and staffing recruiting

8. Insurance

9. Telecommunications

10. Government administration

Project Portfolio Management Roles and Hierarchy

The following is a hierarchal listing of the team members involved in managing and executing a project portfolio.

Board Member: Members of the board are responsible for governing an organization and bearing legal responsibility for the organization. Their skills and experience help guide the organization to achieve its vision.

Project Portfolio Manager: This individual manages the plans, development, and implementation, keeping in mind best practices to make sure that the portfolio is performing as expected.

Program Manager: Program differs from portfolios. In the program, all the projects are related. Therefore, the program manager’s role is similar to that of the portfolio manager, coordinating the projects in the program to work together to achieve their shared objective.

Project Sponsor: This individual provides funds for the project. This can be a person, an outside organization, or management. 

Project Owner: This individual usually works with the sponsor and is responsible for the project’s implementation. Therefore, they typically come from the business unit getting the final deliverable for the project.

Project Manager: They are responsible for planning, scheduling, monitoring, and reporting a project. They also assemble and lead a team hired to execute the plan. They build the budget, manage resources, etc.

Project Coordinator: Working under the project manager, a project coordinator takes small tasks off the manager’s desk to free them up for more extensive managerial responsibilities. In most cases, this means that the project coordinator handles administrative duties.

Team Member: These individuals are assigned tasks and oversee their completion. They meet regularly with the project coordinator or project manager to provide updates on their status.

Source: pmstudycircle.com

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Difference between Project Management and Portfolio Management

1. Project Management :

Project Management, as name suggests, is a management skill that involves managing single project from starting to end and makes sure it gets completed successfully on given period of time.

2. Portfolio Management :

Portfolio Management, as name suggests, is a management skill that involves managing all projects within organization so that they can maximize earnings and increase return of investments.

Difference between Project Management and Portfolio Management :

Project Management	Portfolio Management
It mainly focuses on management of particular project.	It mainly focuses on all projects within organization.
It simply manages individual projects and makes sure that it gets completed on given period of time within budget also.	It simply manages investments of individuals so that they can increase their earnings within given period of time.
This management generally focuses various tasks within particular project to achieve desired result or product.	This management generally focuses on high-level view of any activity or task or project of any organization.
It is a temporary process but unique.	It is a ongoing process that has to performed on daily basis.
It does not make a strategic plans and prioritize projects.	It makes strategic plans, prioritize projects, selects important projects that will benefit organization.
It makes unnecessary use of resources for each project that are not even important.	It decreases unnecessary use of resources by prioritizing project that are important.
This management direct a individual project successfully.	This management is about selecting and implementing right projects for organization to fulfill long-term objectives.
Its main goal is to complete single project and provide service.	Its main goal is to look at all projects and in turn improves return of investment as well as reduction of costs.
This management is basically used for small scale projects and more detailed one.	This management is basically used for not only large scale projects but also for more diffused one.

Source: geeksforgeeks.org

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Project Management vs Program Management vs Portfolio Management

These are very important topics from a PMP exam point of view and you are going to see some questions on these topics in your exam; therefore, make sure you understand these topics well.

Okay, let’s get started.

Project

“A project is a temporary endeavor undertaken to create a unique product, service or result.”

So, you can say that a project is temporary in nature, i.e. once the project achieves its objective its existence comes to an end, and the objective of a project is to create a unique product, or develop a system to provide you any service, or is the result of any task.

For example, let’s say that you have been given a project to set up a call center for a company that they can use to provide support service to their customers. You start the project, set up the call centre, and hand it over to your client. Now your client is ready to provide support service to their clients.

It is not necessary for your team members to be located in one place; sometimes your project team may include members located outside your geographic location.

Please note that once you hand over the end product to the client, your project will be completed and you will close the project. Moreover, since the nature of the project is temporary, your project team members will be separated once the project is completed.

Project Management

Project management is the process that helps projects achieve their objectives. These processes include initiating the project, developing the plan to execute the project, executing the project according to the approved plan, controlling the project activities throughout its lifetime, and finally handing over the output of the project to the client, and closing the project.

Simply put, project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

Program

A program is a group of related or similar projects managed in a coordinated way to get the benefits and control not available from managing them individually. This means that in a program you will have multiple projects which are either similar or related to each other.

For example, let’s say that you have two projects: the first project is to construct a school building and the second project is to construct an office building. Since these two projects are similar in nature, you will keep them under a program.

Program Management

Program management is defined as the centralized coordinated management of a program to achieve its strategic objectives. In program management, you only manage the interrelated or interdependent projects as a group to achieve the desired result.

The objective of program management is to optimize the utilization of resources among projects and reduce the friction or constraints so as to increase the organization’s performance.

The Difference between Project Management and Program Management

The following are a few differences between project management and program management:

◈ In project management, you manage one individual project while in program management you manage multiple similar or related projects.
◈ A project can be a part of a program but a program cannot be a part of a project.
◈ Program management addresses the management of project management. It helps you set the project management processes and measure the project results.

The Benefits of Program Management

The following are a few benefits of program management:

◈ Less conflict among projects
◈ Optimal utilization of resources
◈ Resource constraints are minimized
◈ Better communication and coordination among projects
◈ Improves organization’s performance

Portfolio

Portfolio refers to a group of related or non-related projects or programs. A portfolio can consist of multiple programs or multiple projects without having a single program. A portfolio can have multiple non-similar projects without having a program, because two or more non-related projects will be managed under portfolio management. Conversely, in program management only related projects are managed.

For example, let’s say that you have three projects: the first project is to construct a building, the second project is to conduct research to find the impact of motor pollution on the environment, and the third project is to set up a call center.

How you are going to manage these projects?

You will manage these projects by keeping them under a portfolio, because all three projects are neither related nor similar to each other.

Portfolio Management

Portfolio management has a bigger scope and objective than program management.

In portfolio management, there is a centralized management whose job is to identify, prioritize, and authorize the projects or programs. This centralized management controls and manages the projects or programs to achieve the organization’s strategic business objectives.

Please note that, although portfolio management sets the priority of the projects or programs in a group, it does not oversee any individual project or program.

The Difference between Portfolio Management and Program Management

The following are a few differences between portfolio management and program management:

◈ In program management, you manage similar projects, while in portfolio management you manage non-similar projects or different programs.
◈ The scope for program management is larger than the project scope, and the portfolio has an organization-wide scope which changes with the strategic objectives of the organization.

The Benefits of Portfolio Management

The following are a few benefits of portfolio management:

◈ Optimal allocation and utilization of resources among projects or programs
◈ Provide constant support to projects or programs
◈ Fewer conflicts and better communication among projects or programs
◈ Better coordination among projects or programs

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Best Practices in Project Portfolio Management

Maintaining competitive advantage in a world of rapid change and constant disruption is vital to organizational success. Mature portfolio management practices are needed to drive innovation while remaining aligned with strategic goals.

But who is responsible for initiating tomorrow’s projects today?

Project portfolio managers and leaders are needed to bridge the gap between strategy and implementation. By organizing a series of key projects and initiatives into a single portfolio, business professionals can streamline data collection, evaluation techniques and the projected level of risk and its impact on the overall portfolio and the business.

By utilizing project portfolio best practices, these leaders can centralize management of all projects and align them with the company’s strategic objectives.

What is Project Portfolio Management?

Project portfolio management (PPM) is a process that allows organizations and leaders to see the big picture by analyzing the entire portfolio and its potential impact on the organization.

When implemented, project portfolio managers should be able to successfully understand the projected return on investment and all details related to the project including risks, budgets, resources, tasks, timelines and goals.

Not only is proper management needed to help grow the organization, but poor project management can cost companies millions. According to the 2017 Study Pulse of Profession, organizations waste an average of $97 million for every $1 billion invested.

Implementing best practices can help managers stay on track and stay ahead of any issues that could cost the company time, money and resources.

Project Portfolio Management Best Practices

Identify Organizational Goals and Overall Business Strategy

Understanding your company’s goals and strategy will provide a clear understanding of what the project portfolio should achieve and will ultimately help you develop an action plan. Common pitfalls occur when a project is rolled out without a business case.

Organize Project Distribution

Managers and leaders should prioritize projects according to the company’s top concerns. For example, if your organization’s main focus is on leveraging technology to enhance customer experience, projects related to that goal should be shuffled to the top of the list and be cohesive within the portfolio.

Clarify the Scope and Mission

To ensure business alignment, map out project requirements, objectives and scope during the concept phase of a project’s life cycle. Be sure to also clarify project owners and document all facets of individual projects and the project portfolio including deliverables, standards of performance and limitations.

Create Clear Evaluation Criteria

Developing specific project evaluation criteria will ensure your organization can easily review, evaluate and authorize projects. Questions that may help in developing some clear, universal criteria include:

◈ How does this project drive business goals?
◈ What is the expected tangible outcome?
◈ Can this be achieved by a project already in motion?
◈ What resources are needed to complete this project?
◈ What are the risks associated with this project?

Develop Risk Management Strategy

As a project portfolio manager, creating a risk-return profile will provide organizational leaders with the information needed for consideration of risk as well as the reward of a project portfolio. Risks need to be identified, assessed and managed in relation to the overall portfolio, not just in comparison of projects side by side.

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