A Brief Introduction to Project Portfolio Management
Project portfolio management (PPM) is not to be confused with project management. PPM is the management of a portfolio of projects from which an organization wants to choose the most valuable, whereas project management is the management of the execution of projects. Regardless of where projects come to a company from, they are all interconnected within an organization due to the shared resources, budget, time, an risks. Project portfolio managers analyze all of these factors to select the projects that most closely align with an organization’s strategy.
Project Portfolio Management vs. Project Management
PPM is the practice of strategically managing numerous different, but interconnected, projects at a time. Project portfolio managers look at a portfolio of current and future projects as an investment portfolio, in other words they need to choose the right projects at the right time in order to maximize the company’s use of resources and achieve the organization’s financial and strategic goals.
A project portfolio manager needs to look at the bigger picture to determine which combination of projects will be the most effective use of the organization’s resources. They then assign the chosen projects to a project management office or project managers, who worry about the actual implementation and delivery of the projects.
When projects land in the laps of project managers, then it is up to them to actually use and manage the organization’s resources to get the projects done on time, within budget, and meet client expectations. Project managers are responsible for planning and managing the execution of the projects, rather than the strategic part of choosing which projects an organization takes on.
How Does PPM Help Organizations?
Project portfolio management arose as a solution to organizations having limited resources and having to choose between which projects to take on. When people are working on the wrong projects or on too many projects at once, it is difficult for a company to stay on track with its strategic and financial goals.
This is where PPM comes in to save the day by looking at all of the available projects and weighing them against one another to choose the best mix of projects in order to meet the company’s short and long-term objectives and goals. PPM is basically the middleman between the strategic planning of an organization and the execution of projects. Project portfolio managers ensure that the organization chooses projects that align with their strategy and that they will actually be able to deliver with the resources that are available.
Benefits of Using PPM
- Increased success in project delivery
- Faster delivery of projects
- Higher productivity within an organization
- Execution of projects aligns with company strategy
- High-value projects are prioritized
- Helps avoid overspending and overallocation of resources
- Companies are able to restructure and adapt better
So there you have it, a brief introduction to project portfolio management. PPM is a powerful tool that organizations can implement to select the most high-value projects, maximize resources, and achieve their strategic goals. It differs from project management which is only concerned with the delivery of projects that have already been determined to be of value to an organization.