Project Portfolio Management

Organizations today have a more Project oriented focus than never before. Project Management Institute (PMI) defines the following – "A project is a temporary endeavor undertaken to create a unique product, service or result." Streamlining any temporary (duration could vary from 1 month to 15 years) work into a project focused mentality has the benefits of imparting mission based corporate objectives to the project team members. Also, because of a variety of reasons, primarily like targeted focus and corporate visibility, projects are very likely to achieve completion within the stipulated timelines and meeting the desired objectives.

Given the benefits and prevalence of Project based work and teams, it is a necessary evolution towards incorporating a Enterprise Project Portfolio Management System. Here, corporate projects are managed like a financial portfolio, where the relative cost/benefit analysis along with a host of attributes, to name a few like business alignment, criticality, competitor advantage, customer delight, etc. are weighed meticulously against each other to aid decision-making. This decision-making encompasses all stages of a Project Lifecycle like starting a new project, fast-tracking or slowing down a project, stopping a project or converting project deliverables to an operational aspect of the organization.

The greatest benefits of project portfolio management are that organizations better align their projects to business strategy and that they now work on the right projects and get the project executed right. The more mature the organization, the more benefits the organization can realize due to their project portfolio management practices. These benefits can be summarized as:
• Better aligning projects to corporate strategy
• Working on the right projects
• Executing work on projects right
• Allocating resources optimally
• Killing poor projects
• Spending as a proper balance of strategic & tactical priorities
• Eliminating project redundancies
• Increased cost savings
• Increased profits
• Managing gaps in corporate portfolio

Establishing a Project Management Office (PMO) is the cornerstone of any Project Portfolio Management Initiative. The PMO is responsible for ensuring that all projects undertaken within the enterprise meet all the corporate guidelines, meet any corporate expectations and continue to deliver value to the business. The PMO should undertake a periodic reassessment of the Project Portfolio, which is analogous to the way a Financial Manager would monitor an active financial stock or bond portfolio. What-if scenarios can be formulated to identify any potential threats or opportunities within an organizational project context.

Having a Project Portfolio Management framework in place within an organization is a business imperative that can no longer be ignored within the context of fast changing business realities. Given that the long-term benefits far outweigh the short-term overheads involved only makes a stronger business argument for a management system whose time has come.