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.