Project Portfolio Management - Getting the Best Organizational Fit

The goal of Project Portfolio Management (PPM)  is about maximizing the value of business investments based on a company's strategic goals and tolerance for risk. Getting organizational buy-in is an essential part to a successful PPM program.

Why?

In addition to value maximization, lets look at other parts of the value proposition for a good PPM program

  • Standardized project development process
  • Standardized business cases
  • Improved business relationships between functional groups
  • Improved financial management
  • Improved risk management
  • Improved resource allocation
  • More agile decision-making

None of these business and organizational benefits can be realized unless the tool that you choose can get buy-in from the data providers and the ultimate decision makers. In other words, if the tool is difficult to use and understand and the ultimate outcome is a pseudo-quantitative, indefensible, non-value-maximizing portfolio, the effort will fail and few of the benefits will be realized.

A good Project Portfolio Management application will have a workflow inherent in its design that will actually facilitate the key steps of a Project Portfolio Management process such as:

  • Developing business cases for each project
  • Determining the criteria for evaluating the projects
  • Aligning the criteria with the firm's strategic goals
  • Prioritizing the projects based on value-maximization
  • Selecting projects based on value and optimal resource allocation

Therefore, a quality, value-maximizing, flexible application with a clear workflow is essential to building and sustaining Project Portfolio Management process.

But how do you move from your organization's current businesses practices to a formal Project Portfolio Management process?

First, look at your current practices. How formal is it? Are their parts that are standardized? Do different functional departments have different processes? Can they be combined and standardized?

Second, look at your current project business cases. Do they use quantitative metrics? Are they complete and comparable? Who prepares them? How are the evaluated and compared?

Third, look at how you rank your project business cases. Do you rank them based on financial metrics alone? What else is important and how could you capture that?

Fourth, look at how you select and allocate funding and resources. What are your current criteria? How often do you evaluate and reallocate?

The answers to these questions will begin to suggest the level of maturity of your current Project Portfolio Management process. If you have a fairly mature process, you may want to consider applications that have a workflow that fit your current process. If you are just starting a Project Portfolio Management process, consider the workflow around different Project Portfolio Management applications to see if it would be compatible to a future state process in your company.

If you currently have a mature Project Portfolio Management process, select an application that will fit that process as much as possible. Otherwise, look for tools with a logical workflow that you can use to build your organizational processes around. In either case, don't choose a poor non-value-maximizing application just to fit your organizational structure.

If you're looking for a Project Portfolio Management solution with state-of-the-art analytics for robust and defensible project portfolios, then click here to take a look at Optsee®, our project portfolio management tool. We have "cracked the code" of project selection by making it easy for ordinary business people to apply state-of-the art business analytics to project prioritization and portfolio optimization for results that are both understandable and defensible.

Next: The ROI of Project Portfolio Management - Is it Worth All That?

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