There is increasing pressure on organizations to complete market-valuable projects that are not only expediently completed, but also on-budget and contain accurate data.Project portfolio management (PPM) is a combined system of technologies, methodologies, and processes to plan, develop, and execute organizational projects with greater efficiency and less errors than traditional approaches to project management.
Every organization has their own unique approach for conducting projects they plan to pursue and company culture to obtain organizational objectives. That being said, every organization, regardless of scale, can benefit from the use of PPM to see that goals are met, that projects are completed in an expedient fashion, by using data that is reliable and coherent.
PPM allows for the collection of every company project to be organized into a single portfolio. Projects can easily be studied and monitored for progress, and reviewed whether the project had quality execution. The end goal is to minimize the time and resources spent on each project to provide greater organizational success.
PPM combines three disciplines of organizational management:
1. General management (understanding of risks; awareness of resources)
2. Business management (maintaining that projects are in line with the overall portfolio strategy)
3. Project management (collecting, viewing, analyzing, prioritizing projects and ensuring that they meet or beat the overall goals of the company’s portfolio)
At its very core, PPM manages the steps and measures needed to curate objectives and strategies that bring about organizational success when planning and executing company projects.
The combination of the above management disciplines allows for organization to select the right projects that match the organization’s goals, and identify the top priority projects; the ones that require the most resources in order to meet or precede project deadlines.
Your portfolio is the lifeblood of your organization; the essence of why you do what you do. Implementing PPM assists your company in scheduled assessments of how well (or not) projects are contributing to your portfolio’s success, and what actions need to be taken to guarantee that each project is in line with your objectives.
Using PPMeffectively garners the following simple successes for your organization:
1. Increased customer satisfaction when deadlines are met or beat
2. Reduction in project risks to company success
3. Consistency in project organizing and prioritization
So far, we touched on the basics of what PPM is, and the basic benefits of using the PPO approach to project management. Now that you have an understanding of what PPM is and why it can benefit your organization, let us dive in deeper into how beneficial using PPM can be for your projects.
1. Project decision making made easy
The manifold benefits of collaborative project decision makingfoster the sharing of ideas that can entirely transform the way you do business. More minds working on a task at the same time produces solutions far more quickly than traditional methods of project management.
Take into account this traditional communication model:
Team members > project manager > executive
Executive > project manager > team members
Sure, this model represents how responsibility and accountability should flow in an organization, but when it comes to sharing possible solutions to solve the problems that will inevitably crop up, it is better to have multiple minds sharing thoughts on how to move the project forward.
With technology it is very easy to have an individual manager contact and collaborate with many separate team members. However, collaboration can be even further advanced when each member is able to communicate seamlessly with each other team member. This is what standard communication models look like compared to the collaborative PPM communication:
This is exactly what PPM provides in terms of collaboration. When all projects are consolidated into a single cloud-based PM software database, all parties of the project team have transparency into each other’s work. Perhaps a member of your marketing has an idea that could help out the accounting department, or a member of the design team could have a valuable idea for the marketing team.
Because of PPO’s insistence on clean data storage and availability, future decision making is performed easily based on past project data, which can be accessed by all and shared in the decision making process. Data is consolidated and available for every member to get their hands on it whenever it is needed.
Not only is collective collaboration on decision making provided by using PPO with cloud PM software easy, but so is autonomous decision making. Team members assigned tasks have access to the entire scope of the project at all times, so time is saved when they don’t need to go to their project manager and ask for advice. The information is right there in the portfolio, whether it is past data that answers a question, or is newly entered project guidance and instructions.
2. Minimizing project risks; increasing project output
Every project will involve some degree of risk, but reduced risk is far more easily obtainable when using PPM. The less risky a project is, the greater the company success rate, and more projects can be completed when deadlines are met ahead of time.
PPM allows for organizations to minimize the risks of project delays, breaks in team communication, lack of team cohesion, lack of access to tools and data, muddied understanding of project and organizational goals, and mismanagement of company resources.
The riskier a project is, the more likely it is to fail. PPM tools allow for metrics that measure risk, and demonstrate that while a project may be honorable in merit, it needs to be put on hold and sent back to the drawing board, while a less risk-ridden project can be prioritized.
Organizations that use PM software for PPM have a 60% higher project success rate than those that don’t use PPM, and are able to accomplish 30% more projects in general. The sooner you can complete more projects, and with a lower rate of failed project attempts, the better. The tools available in PPM allow for executives and project managers to assign values measuring a project’s risks, and also ensure strategic alignment, the capacity of project resources, staying within portfolio budget, and enhance project completion as a whole.
3. Reduction of overspending on projects
As every seasoned executive and project manager is aware, overspending and over-utilization of resources happens sometimes. However, PPM reduces (if not eliminates in some cases) overspending. Even the most successful project delivery can sometimes have been overspent upon, so it is wise to exploit the PPM toolkit to reduce overspending across the board.
More often than not, projects fall victim to overspending due to poor cost estimation, which are swiftly mitigated by using PPM estimation tools. There are other factors that can cause project overspending, such as mismanaged resource allocation or miscommunicated project scheduling, but the most common spending monkey-wrench is estimation during project planning.
PPM tools have estimation metric tools that factor in past project successes and the scope of the current project, helping make overspending on projects a headache of the past.
4. Shorter project completion time
Before using project portfolio management for your projects, it is likely that you’ve heard a team member ask you in the past “So, what should I be doing next?” As an executive or project manager, you’ve probably become so used to hearing similar phrases that you expect them to happen daily. However, this can be entirely circumvented, and save you precious time, especially over the course of an intensive, complex project. PPM allows project managers to reduce project turn time by an average of 10%.
Whether a project is short or long-term, team members are going to be required to complete task after task. The benefit of PPM technology for reducing completion time is that tasks can be scheduled and assigned to each individual team member, taking the guess work of what they should be doing after they complete each task. Also, after PPM is implemented, the standardization of workflow and governance is used for the following project, saving on time spent on planning and preparing for the project
5. Reduction of redundant and/or low-value projects; increasing the portfolio value
The consolidation of all forecasted projects into a single database allows executives and project managers to not only see the bigger picture, but inspect whether there is any overlapping projects, or projects that are low-value compared to others.
Project portfolios should only contain high-value, strategic and organization-aligned projects that are not wasting company time on doing redundant work. In a pre-PPM world, redundancies happened (or still happen if you are not using PPM yet) with a higher level of frequency, wasting not only time but valuable resources. Have a PPM specialist in place, tasked to monitor and identify if any items in your portfolio will end up needing to head back to the project planning stage, because they will end up requiring work that another project will already address.
In order to have the most profitable project portfolio, use PPM tools to rank and evaluate projects based on their ROI, scalability, estimated costs, expected timelines, and other variables that score how valuable a project is. Executives can then make an informed decision (and a collaborative one, as we mentioned earlier) on which projects to select as priority, valuable endeavors, which to put on the back burner or schedule for later, and which to entirely delete from the portfolio.
You should be doing the work first that has the highest ROI, and PPM technology makes this readily visible to the team.
6. Making the most of your human resources
Piggybacking on the benefits we discussed earlier, project portfolio management allows you to make the most of what costs your project the most: your human resources. Having a centralized portfolio database allows project managers to monitor project progress, and see who on the team is the best at doing what.
If a team member misses a deadline, or voices that they are struggling with a task, guesswork is taken out of the equation, as all tasks are readily visible. This also applies to when a team member is paced to finish their tasks ahead of schedule. Managers can observe their team’s talents, and have an increased awareness for future task deployment. Everyone has strengths and weaknesses, and these become abundantly apparent when using PPM.
PPM saves on the frustration that comes from mismatched task assignment, and allows you to keep a database of your human resources’ skills and deficiencies, affording even greater project success.
Is Project Portfolio Management right for you?
In short: absolutely. Portfolio visibility is becoming an essential in today’s rapidly developing, IT-based project management landscape. We hope that we have made the case in this article for how highly beneficial implementing PPM for your project management. Not only does project portfolio management allow your management team to have an all-encompassing eye over project development, but tasks are assigned and completed with greater efficiency because they are deployed to the right people on your team, year after year. Using PPM allows you to harness every potential boon to project execution and completion. Happy hunting for your ideal PPM vendor!