Definitions of Project Portfolio Management main terms

What is the Agile methodology?

Often referred to as simply “Agile,” Agile methodology is a project management and product development framework. Its core focus is iterative improvement — the project team starts with a simple design and adds functionalities through short iterations (sometimes referred to as “intervals” or “sprints”) after each project phase.

Agile is most commonly deployed as a software development method, with opportunities for gradual improvement highlighted throughout a project’s lifetime. It promotes a highly collaborative atmosphere, encouraging face-to-face communication and the breaking of silos.

With this emphasis on flexibility and fluidity, agile project management methodologies are often contrasted with waterfall methodologies, which promote a linear and sequential approach.

While there is no single creator of agile methodologies, it was first outlined in 2001 by 17 software developers in the Manifesto for Agile Software Development. This is more commonly referred to as The Agile Manifesto. There are four values that are key to expressing the agile methodology.

The Agile Manifesto: What are the 4 values of agile methodology?

The Agile Manifesto outlines four values of Agile. These form the foundation of Agile and should inform project decisions.

1. Individuals and interactions over processes and tools

Agile prioritizes people over processes to eliminate rigid structures, timelines, and bottlenecks. This enables greater flexibility and a focus on communication and collaboration.

2. Working products over comprehensive documentation

Agile prioritizes the delivery of working, usable software. This ensures the creation of a tangible product alongside the opportunity to grow and develop it.

3. Customer collaboration over contract negotiation

Including customers in product development is at the core of Agile. The process should be people-centric rather than product-centric. This means that a product evolves based on user feedback rather than adhering to a detailed contractual outline.

4. Responding to change over following a project plan

The Agile methodology turns the product plan into an evolving document. The roadmap at the start of the project may look very different six months in. And this is a good thing, especially in the current volatile climate. Project teams can pivot in response to uncertain economic circumstances, resourcing issues, or increased competition.

What is scrum in agile project management?

Scrum is a type of agile, lightweight project management framework. Popular for its versatility and simplicity, it uses 30-day iterations (“sprints”) and small, self-organizing teams of 4 to 9 members to deliver functional software with the highest business value.

Each team meets daily—the daily scrum—to evaluate accomplishments since the previous meeting and to highlight obstacles that may need escalating or prioritizing.

What is kanban in agile project management?

Kanban is another framework for the Agile methodology. A Japanese word that translates as “signboard,” Kanban is characterized by the use of multi-column boards to visualize project workflows and progress. Work items are represented by cards, which can be moved along the Kanban board as progress is made.

Kanban is a simple, highly-visual system and framework that can work particularly well for remote teams, giving all team members an instant overview. In fact, many teams employ this agile framework without even realizing.

Is Agile methodology suitable for all projects?

There is no one-size-fits-all approach to developing any product or undertaking any project. Agile methodologies mainly suit complex projects, such as software development, but you can apply its principles to any project that requires flexibility and collaboration.

That said, there are some examples where other methodologies may be preferable, particularly if you have a strict deadline, work with sensitive data, or have a very large team to coordinate.

• If the project has a clear deadline and established set of requirements, it may be too rigid or inflexible to realize the benefits of agile methodologies. Instead, a more standardized approach may be better suited.
• If senior leadership is not ready for an organizational shift to Agile, or the project’s risk tolerance is too low, it may not be the right time. After all, Agile methodologies are most effective when an entire organization adopts them. It requires the right setup, clear roles and a commitment to autonomy. Ask yourself: are stakeholders interested in adopting an Agile approach? Could my project benefit from it? If so, now might be the time to build a business case for it and try it.
• If gathering ongoing feedback is challenging, other methodologies may be more suitable. If gathering ongoing feedback is challenging, other methodologies may be more suitable. For instance, in the pharmaceutical industry, where highly regulated products or sensitive data are common, Agile’s iterative feedback approach may not be practical. In such scenarios, other methods that don’t rely on frequent customer and stakeholder feedback might offer better outcomes.
• The larger the team, the more challenging the coordination with agile methodologies. After all, Agile works best with small groups collaborating seamlessly across multiple teams, as larger groups require more coordination and thus complicate the iterative process.

A dynamic PPM software solution will be able to manage multiple methodologies—Agile, Waterfall, and a hybrid approach.

What are the benefits of agile methodology in project management?

An Agile approach benefits your team, organization, and end user by empowering you to quickly develop and roll out a usable product. Then, the focus is on scalability, improvements, and developments.

1. Agility empowers teams to collaborate on common, strategic goals. The idea is to work without rigid structures and confinements. Teams communicate regularly and respond quickly to market and consumer changes, ensuring continuous improvement with every iteration of the product or project. Regular communication also reduces confusion and mitigates siloed working.
2. Agility ensures better product quality by adopting an iterative approach. Processes are assessed and improved after each phase, with the focus always on improvement.
3. Organizations can enjoy a faster time to market by prioritizing a viable product over a perfect or comprehensive one. This reduces initial costs, helps prioritize resources, and enables early intervention to mitigate risks.
4. It is an adaptable, risk-averse project methodology. With no strict deadlines on project deliverables, agile teams can respond to change quickly. Regular assessment of the product ensures issues can be remedied quickly before they may endanger the its success.
5. Agile project management enables you to design a product tailored to your audience’s needs. These methodologies rely heavily on customer feedback and input, essentially involving your users in the development process. By engaging this key stakeholder throughout, the end product will be more bespoke to their expectations and needs.
6. It is predictable and consistent. Each phase, interval, or sprint is at a fixed time period, making it easy for managers to measure performance and manage resources.

Many organizations already employ Agile principles without realizing it. To find out if your team is on the right track, check out our 5 signs you’re halfway to becoming Agile.

At Planisware, we support your Agile journey with integrated Kanban boards, sprint assignments, project roadmaps, and more, keeping all your activities organized in one place.

The classic stage-gate process has transformed how businesses approach project and product management from a long-term perspective.

But, for some businesses, a more flexible, real-time variation of the stage-gate process can be revolutionary. Introducing: Agile stage-gate.

What is the Agile stage-gate project management model?

Agile stage-gate is a project management model. It combines stage-gate’s traditional structure—consisting of five stages and four gates—with the self-organized teams and short-cycle iterations promoted by Agile methodologies.

Typically, the “stages” associated with stage-gate—for example, the Development stage—are replaced by short, time-boxed increments called “sprints,” which last between one and four weeks.

At the end of every sprint, there is a working product (a deliverable) that key decision-makers and stakeholders can review, give feedback on, or approve at various gates. This enables the business to seek feedback from customers and users more frequently and quickly than with a traditional stage-gate process. Changes can be implemented quickly, speeding up time to market and tailoring the product to the project’s strategic needs.

However, just as no two organizations’ classic stage-gate processes will look the same, Agile stage-gate can take many forms depending on the requirements and products of the organization employing it.

What are the differences between Agile stage-gate and traditional stage-gate?

Agile stage-gate shares many similarities with the classic stage-gate process: projects are still broken up into parts of a larger formalized process, and the elements of “gates” are retained. However, there are a number of qualities that distinguish Agile stage-gate from traditional stage-gate.

1. Process: In Agile stage-gate, project teams follow a traditional Scrum process, including daily scrum meetings (called “ceremonies”), a Scrum board, a sprint backlog, burndown chart, and more. Scrum is a popular lightweight, agile project management framework.

2. Focus: Project teams are dedicated to one project only and may all work together in a shared space. Comparatively, in a classic stage-gate process, it is not uncommon for teams to be appointed to several projects and distributed across different offices, cities, time zones, and beyond. Because speed is the core differentiator here, there is a clear and present need for an Agile stage-gate team to be squarely focused on the task at hand.

3. Plan: The project plan, often represented as a Gantt chart, is rarely defined in advance and, instead, takes shape as the project moves through the various sprints. For example, products are typically only 20% defined as they enter the Development stage (as opposed to 40-60% in classic stage-gate processes).

What are the differences between Agile stage-gate and Agile methodologies?

Agile stage-gate borrows heavily from Agile methodologies: short-cycle iterations are introduced, with teams managing their own workloads, creating deliverables, and garnering feedback continuously.

However, with Agile methodologies, the focus is on releasing new products and features at the end of every sprint. This differs subtly from Agile stage-gate’s sprints, which are a matter of creating tangible deliverables at each stage—deliverables that key stakeholders and decision-makers can review, provide feedback on, and approve at various gates.

In Agile stage-gate, the goal of each stage isn’t necessarily a final product, but a close-to-final deliverable that, once approved, allows the project to move forward to the next stage in the product development process.

What are the benefits of Agile stage-gate?

Agile stage-gate is highly suited to projects with changing requirements because of its flexibility, rapid approach, and incremental nature. It retains some of the structure and amplification that traditional stage-gate brings to new product development.

Innovation

Agile stage-gate deals well with uncertainty. This is because the rapid sprints through the stages allow teams to test and validate assumptions in real-time as the project progresses.

Not only does this allow for a more natural evolution of the product development process—one based on experimentation vis-à-vis target customer expectations—but it also creates an ongoing feedback and iteration loop, empowering teams to focus on delivering value to the organization and its customers.

Adaptability

Agile stage-gate deals well with changing requirements. Because it’s a more rapid approach to experimentation, testing, and development than a more classic stage-gate process, it allows teams to pinpoint potential issues or make critical changes early on.

Its general design flexibility also makes it easier for teams to pivot quickly at any stage in the process in response to real-time changes, minimizing resource strain and costs.

Accelerated development

Agile stage-gate deals well with giving teams focus. As mentioned earlier, because teams here are typically assigned to one project only, they are able to accelerate development, maintain momentum, prioritize, and respond to changes in ways that more distributed teams or teams spread across multiple projects may struggle to. This speeds up time-to-market.

As teams work intensively through the duration of a project, they are able to improve coordination and lines of communication, enhancing productivity and morale.

Commonly cited drawbacks of Agile stage-gate include challenges in managing distributed global teams and securing dedicated team members who can focus squarely on a single project. There can also be a perception that Agile stage-gate is too bureaucratic, as well as entailing too much time spent in meetings.

How to move from traditional stage-gate to Agile stage-gate

There are several ways to incorporate more agility into stage-gate. These include:

1. Introducing Agile processes

Agile project teams follow a traditional Scrum process, an iterative and incremental approach to project management. It requires daily meetings, a visual Scrum board, a sprint backlog detailing tasks, a graphical burndown chart showcasing progress, and more.

2. Aligning focus

In stage-gate, teams may take a “divide and conquer” approach, tackling several projects across different geographies. In contrast, speed is a critical differentiator when incorporating Agile. As a result, project teams are focused on one project only and work collaboratively on its completion.

3. Less rigid planning

When adopting Agile processes, project plans must be more flexible and less defined compared to stage-gate. As we mentioned earlier, only 20% of a product may have been defined before Agile development begins (as opposed to 40-60% in a traditional stage-gate process).

Introducing Agile-stage gate project management processes: an example

A typical stage-gate approach—with 5 stages and 4 gates—might look like this:

• Stage 1: Discovery and objective setting
  • Gate 1: Review objectives and ensure strategic alignment. Approve, refine, or kill before moving forward.
• Stage 2: Planning and initiation
  • Gate 2: Assess the plan and begin resource allocation. Approve, refine, or kill before moving forward.
• Stage 3: Product development
  • Gate 3: Test product based on original objectives and plans. Approve, refine, or kill before moving forward.
• Stage 4: Pilot or market testing
  • Gate 4: Final tweaks based on user feedback and time to decide if it’s ready for launch.
• Stage 5: Product launch

As you can see, this is a practical yet rigid approach, relying heavily on completion and box ticking at each stage to move forward. To introduce more flexibility, an organization might consider implementing an Agile stage-gate hybrid approach. For example, stages can be transformed into sprints, as shown here:

• Pre-sprint discovery and planning stage
  • Gate 1: Approval of backlog, initial sprint plan, stakeholders’ roles and responsibilities, and plan for future product or project iterations.
• Sprints 1-4: Product development (including testing and incremental feature updates)
  • Gate 2: Review sprint and obtain feedback. Use this insight to decide whether to continue as planned, pivot to change, or amend upcoming sprint plans. At the end of every sprint, the product is potentially shippable (even if it has not been launched to the public). Repeat this process until the final iteration of the product or project is ready.
• Final product development/launch
  • Gate 3: PMs or developers assess the “readiness” of the product or project for the market. Once approved, the launch takes place. Make further refinements if it’s not ready.
• Continuous improvement
  • Gate 4: The project team obtains user and stakeholder feedback for future product iterations. This includes continuous monitoring, developing a feedback loop, and testing performance.

No two organizations’ implementation of Agile stage-gate will necessarily look exactly alike. But by applying the Agile methodology to classic stage-gate, you can revolutionize and optimize project and product management.

At Planisware, we can support your organization’s journey with stage-gate and Agile methodologies. Our solutions transform how you plan your projects, coordinate your teams, develop products, and deliver your mission.

A type of chart used in agile methodologies to measure the amount of work remaining against time.

A typical burn-down chart will plot outstanding work (number of features, ideal days, team days etc.) on the vertical axis, and time (days, iterations, sprints etc.) on the horizontal axis.

Burn-down charts are very useful to measure actual work progress against ideal work progress, and detect potential schedule overruns and work-pace issues early on.

see also: agile methodology, scrum

What is capacity planning?

Capacity planning, also known as capacity requirement planning (CRP), is a strategic process used to determine the resources—team members, tools, raw materials—needed for an organization to support demand for its products. Capacity planning relies on a company’s data to make informed predictions. This can include historical project data, customer behavior, and industry or market research.

The objective of capacity planning is to ensure an efficient workflow, with the right level of resources available whenever needed. It aims to minimize idle resources, overproduction, and resource or product shortages.

Types of capacity planning

Capacity planning can be broken down by resource type. Resources are anything that determines your organization’s ability to provide your product or service.

• Workforce capacity planning: Through this process, you’ll discover your team members’ skills, their availability, whether they are assigned to the right roles, and whether you need more staff. Effective workforce capacity planning helps to establish a motivated, happier workforce—one that has an appropriate workload and is assigned to tasks that best match their skills.
• Tool capacity planning: Think equipment, specialist machinery, software, digital platforms, vehicles, and transportation. This process helps to establish what tools you have available, where you need to allocate them, and what you might need to fulfill future demand. Is your tool inventory sufficient? Is it being used correctly? Is it worth the investment?
• Product capacity planning: This type of capacity planning relates to raw materials and supplies. What is available to fulfill orders and deliver finished products in a timely manner? It is particularly relevant to e-commerce businesses, retail businesses, and those in manufacturing—not necessarily those in services.

Capacity planning strategies

There are three main approaches to capacity planning: lead strategy, lag strategy, and match strategy. Each has its merits in different scenarios and conditions.

Lead strategy

This process increases capacity to match anticipated demand growth—organizations proactively acquire resources before they are needed.

Lead strategy meets customer demand immediately, providing a competitive advantage and projecting reliability and preparedness.

However, this approach increases the risk of overcapacity if demand falls short of estimates. It also incurs upfront costs that may take time to recover. Examples of lead strategy capacity planning include:

• Retailers increasing warehouse and store staffing ahead of Black Friday and Christmas
• Electric vehicle manufacturers scaling up production ahead of new government initiatives and anticipated growth in EV demand
• Hospitals building new wings or facilities in anticipation of demographic changes, such as an aging population
• Telecoms organizations laying 5G infrastructure before widespread adoption 

Lag strategy

This is the process of meeting increases (or decreases) in demand as they occur in real time—organizations procure additional resources in response to changes in customer demand or needs.

Lag strategy is characterized by reactive investment after demand is clearly known and established. This strategy minimizes risk and is suited to smaller organizations.

However, this strategy can expose a business to shortages. Lost sales and market share are inevitable if competition is able to service demand immediately. Examples of lag strategy capacity planning include:

• Cloud services providers scaling up their capacity after securing more contracts
• Retailers opening new stores in a particular region in response to growing levels of sales elsewhere in the same region
• Hospitals drafting in contracted medical specialists in the event of a particular medical event or emergency
• Telecoms organizations using “on call” engineers to respond to unpredictable outages

Match strategy

This process increases capacity as demand starts to grow. Organizations typically acquire resources in a “just-in-time” manner, so they align exactly with needs.

Capacity adjusts incrementally in small steps in response to changes in demand. By blending key elements of lead strategy and lag strategy, match strategy offers a flexible, responsive approach—many regard it as the “best of both worlds.”

However, implementing match strategy can be complex. It demands precise planning, consistent monitoring, reliable data, and a knowledge of market developments. There is potential for miscalculation—for example, demand spikes could arise and overwhelm available capacity. Examples of match strategy capacity planning include:

• Airlines gradually adding new routes, or using slightly larger planes, to accommodate passenger growth and demand on a certain routes
• Automotive manufacturers, such as Toyota, employing a “just-in-time” system to increase production lines as vehicle demand increases
• Logistics businesses expanding delivery routes in response to e-commerce trends and historical data showing growing volumes of sales in a certain region
• Coffee chains opening new outlets in a city as recent footfall data justifies expansion

Why is capacity planning important?

By aligning resources with demand, capacity planning helps project managers to anticipate bottlenecks, adapt to changing customer demands, and make informed decisions about deployment of resources. Ultimately, it keeps team members happy, keeps projects on track, and helps a business to reach its goals—this encompasses both shorter-term projects and activities and longer-term objectives.

It helps you to meet customer demand

If you don’t have the product or service your customers want, when they want it, they will take their business to a competitor.

Capacity planning helps you to avoid this, revealing how your market operates and enabling you to predict (and react to) changes in demand, potentially by increasing delivery capacity ahead of time.

It gives visibility of resource gaps

By pre-identifying the skills required for a project, you can plan forward and fill skills gaps. You can hire new team members, upskill existing staff, or upgrade specific systems. This enhanced visibility also helps to ensure skill sets align with the company’s broader objectives.

Resource shortages lead to issues, but overcapacity can be similarly problematic. Capacity planning techniques help identify underused teams and outdated skills. This enables you to make better resource decisions and adapt to future needs.

As we established, resources don’t only refer to the people in your team. It can mean the materials and equipment you need to run your business. Capacity planning allows you to track use of these types of resources—like meeting facilities, forklift trucks, hard drive storage, and software seats—and plug gaps.

It matches skills with projects

Effective capacity planning helps you to take pressure off your team and avoid job creep, which happens when there is a lack of human resources. By planning ahead, you can ensure jobs are performed by the right person or people (and at the right seniority level)—which all benefits team morale.

It improves agility and forecasting

A clear understanding of your business’s capacity enables more accurate predictions of workload, outcomes, and finances. You will be better prepared to pivot and adapt to unexpected events (like internal company changes), unforeseen circumstances (such as a competitor launching a new product), and even emergencies (to give an extreme example, a natural disaster).

Being in the habit of regular forecasting also makes future planning more accurate. Over time, gathering and analyzing your data becomes a more effective, efficient process.

It minimizes your costs

Capacity planning helps avoid overprovision (more resources than required) and underprovision (fewer resources than needed). Both of these increase risk and incur unnecessary production costs.

Capacity planning vs. production planning

Capacity planning is a strategy that looks at how it can handle future demand and adapt to change, whereas production planning focuses on the current requirements of the production process. Both sit within operations and share some similarities.

Production planning focuses on developing a plan to deliver products, goods, or services. The process started in manufacturing, but companies of many sizes, industries, and outputs have adopted it—it can benefit healthcare, retail, construction organizations, and more.

This approach ultimately defines the day-to-day activities, minimizes risks, reduces costs, and helps businesses create an efficient production process. The production planning process can be used to:

• Estimate product demand
• Identify the materials and resources required for successful delivery
• Plot out the production schedule
• Coordinate with suppliers/third parties
• Allow for quality control
• Monitor performance

Capacity planning vs. resource planning

Capacity planning considers the organization’s needs from a higher level and its ability to meet upcoming consumer demand. It is broad and strategic, considering the bigger picture at a skill set and team level, helping you to make decisions on hiring resources.

Resource planning, on the other hand, is more detailed, tactical, and granular. It focuses on allocation, coordination and scheduling of certain resources for specific activities of a project, a program, or portfolio.

At Planisware, our solutions enhance your capacity planning with data-driven analytics, real-time reporting, and advanced scenario-building. Request a demo today and start your journey towards an efficient, perfectly-planned portfolio.

See sustaining innovation

see also: disruptive innovation

related articles: dr robert cooper on innovation and the future of stage-gate, more insights by dr robert cooper on innovation and the future of stage-gate

Continuous planning is an approach to planning where static annual or bi-annual plans are replaced with a continually updated plan, which is revised every time an internal or external event (such as a shift in priorities, an unexpected delay in a given program or a change in the business environment) occurs.

Continuous planning is tightly linked with the implementation of Agile and Lean methodologies, which both advocate short, flexible plans that can be adapted to changing circumstances.

Whilst most studies focus on the team level, continuous planning has benefits at all levels of the organization, including the strategic, portfolio, and product levels.

see also: roadmapping

related articles: lean product development: resource management vs. flow efficiency, scaling agile: how to measure progress? with johanna rothman, a primer for integrated roadmapping: an interview with ken huskins, planisware enterprise demo: the case for using roadmaps

A family of lightweight computer development methods that were created to suit different types of projects depending on their size, complexity and criticality.

They rely on seven key principles: Frequent delivery (every few months), Reflective improvement (feedback based on performance), Close communication (which requires team members to be in the same room/building), Safety (of team members who are encouraged to speak freely, and of end-users when the software can affect human lives), Focus (on top priority issues, with no-interruption periods), Easy access to expert users, Automated tests and integration.

See design for X (DfX)

A set of methodologies which aim at incorporating optimizations for later stages of production, servicing or disposal of a product right at the design phase. X is a placeholder for the aspect that is being optimized for. Some examples of such methodologies include Design for Manufacturability (DfM - maximising the ease with which a product is manufactured), Design for Reliability (DfR – preventing failure of the product for a given amount of time), or Design for Logistics (DfL – minimising logistical costs).

DfX is also known as Design for eXcellence.

A type of innovation which creates new markets, or fundamentally alters the dynamic and hierarchy of an existing one by introducing unexpected creative changes in a product, service, process or technology. Often the creative change will bring simplicity (and intuitiveness), affordability, convenience or accessibility to an area where existing products or technologies are complex or expensive.

A large number of blue chip company failures have been attributed to the effects of disruptive innovation, which are all the more difficult to compensate than they are unexpected, and thus present a critical risk.

see also: sustaining innovation

related articles: dr robert cooper on innovation and the future of stage-gate, more insights by dr robert cooper on innovation and the future of stage-gate

A methodology for the development of new services, products or processes (as opposed to improving existing ones) that aims at ensuring that they achieve Six Sigma quality.

DMADV is composed of 5 distinct phases: 1) Define - the problem, the goal and the customer's needs, 2) Measure - identify the parameters that must be quantified, how to measure them, then collect the data, 3) Analyse - the options and develop design alternatives, 4) Design - the chosen alternative using results of the previous step, and 5) Verify - that the design will work in the real world, and begin production/sales.

see also: new product development, gated process, stage-gate®

A heavier agile project delivery framework focused on delivering functionalities within tight time and budget constraints, and that can be used both for software and non-IT related projects.

DSDM is built on 8 core principles that centre on delivering functionalities that correspond to actual business needs at short intervals, ensuring teams communicate clearly and are empowered to make decisions, testing early and continuously to ensure high quality, accepting and integrating change, and monitoring and documenting to ensure proper control.

Originating in US Department of Defense programs in the 1960s, earned value management (EVM) is now one of today’s most effective and popular approaches to project management. It can help project managers navigate issues relating to costs and timescales.

What is earned value management (EVM) in project management?

Earned value management is an evaluation technique for measuring and forecasting a project’s performance. Integrating the elements of time, cost, and scope to help project managers measure planned work against completed work, EVM provides insights into deviations from schedule and budget baselines.

EVM is a structured, systematic approach that aids in making informed, data-led decisions during a project lifecycle by identifying variances. It centers on comparing three core concepts:

• Earned value (EV) — The estimated monetary value of the work already performed at a specific time. It is calculated by multiplying the percentage of the project that has been completed with the project budget. For example, on a 75% complete project with a $1,000,000 budget, earned value is $750,000. EV is sometimes referred to as Budgeted Cost of Work Performed (BCWP).
• Planned value (PV) — The estimated monetary value of the work that should have been performed, if everything had happened according to plan. It is calculated by multiplying the planned percentage completion with the project budget. PV is sometimes referred to as Budgeted Cost for Work Scheduled (BCWS).
• Actual cost (AC) — The amount of money spent to perform the work that has been completed by a specific date. AC is sometimes referred to as Actual Cost of Work Performed (ACWP).

These indicators allow project managers to calculate a schedule variance (SV) and a cost variance (CV).

• Schedule variance (SV) — Calculated by EV - PV. It is the difference between progress planned to make and the actual progress made.
• Cost variance (CV) — Calculated by EV - AC. It is the difference between planned budgets and the actual amounts spent.

Schedule performance index (SPI) and cost performance index (CPI) are popular alternatives to SV and CV. These values can be easily compared across projects.

• Schedule performance index (SPI) — Calculated by EV ÷ PV. SPI over 1.00 means a project is ahead of schedule; CPI lower than 1.00 means the project is behind schedule.
• Cost performance index (CPI) — Calculated by EV ÷ AC. CPI over 1.00 means a project is spending less than forecast; CPI lower than 1.00 means the project is currently over budget.

Earned value management systems (EVMS) are used to refer to software, processes, and solutions that use EVM methods.

The benefits of earned value management

By using progress so far to forecast future performance, EVM can be a powerful predictive tool. It is now considered a best practice, helping project managers to continually evaluate the health of a project and make necessary adjustments.

The US Departments of Defense and Energy, NASA, the FAA, and other technology-related agencies have adopted EVM as a central tool for the management and performance measurement of their procurement programs—it is actually a requirement of the US government.

• Accurate forecasting: EVM is an objective way of measuring the performance of a project against a baseline. Since past performance is the best indicator of future success, EVM gives you a clear view of how potentially high-risk programs are performing.
• Identification of issues: As it is scheduled-focused and data-driven, EVM empowers project managers to proactively intervene in a timely manner — for example by managing expectations, tweaking project scope or securing more resources. It also helps project managers to focus on the issues that have the most impact.
• Accountability: The entire principle of EVM is measuring and benchmarking against a pre-agreed plan, making for better cost and schedule control. It promotes greater project visibility, transparency, and accountability by delivering clear data based on schedule, budget, and work.
• Scalability: EVM can provide valuable insights for projects of varying size, scope, duration, and complexity, including at the portfolio level. 

To reap these benefits, good data is crucial—time must be invested in defining the project baseline (schedule, cost and scope).

Integrating strategic portfolio management (SPM) with traditional EVM can bring further benefits to your projects. Discover more by downloading our eBook, The Future of Earned Value Management with SPM.

At Planisware, our solutions help you to transform how you plan your projects, coordinate your teams, develop products and deliver your organization’s mission.

A set of tools and processes used to plan and control a project or a program using earned value management methods.

For an EVMS to be effective, it needs to integrate the management of costs, schedule and work scope, establish a baseline plan against which progress of the project or program will be measured, and apply earned value management methods to monitor the project, alert to issues and help implement corrective or mitigation actions.

Reference documents for the constitution of an EVMS are ANSI/EIA Standard 748 in the United States, DIN 69901 in Germany and BS6079 in the United Kingdom.

What is an Earned Value Management System (EVMS)?

To implement Earned Value Management (EVM) in an organisation, you need a system that will provide the data, structure, standardisation and calculation methods necessary to compute and monitor the different elements of EVM.

An EVMS therefore is a system that provides the necessary integration between costs, schedule and work scope together with the tools to plan and manage them, establish baselines, track the different cost and performance indicators, and perform analyses and forecasts based on the accumulated data.

Characteristics of an EVMS

To be effective, an EVMS must (among other things) combine the following characteristics:

• Ability to plan the whole project/program work scope from inception to completion
• (1) Allow and facilitate the breaking down of the work scope into units of work that can (2) be assigned to people or organisations, (3) identify and track significant dependencies between these units, and (4) relate them to time-phased budgets
• Objectively and meaningfully measure project/program work progress
• Work at an appropriate level of detail for tracking project/program data: not so broad that the data becomes meaningless, not so detailed that tracking work progress requires too considerable amounts of time
• Allow for prompt implementation of corrective or mitigation actions

EVM Standards and Guidelines

Image

The scope of data and processes required to implement EVM means that no two companies will have the same tools and setup.
To help organisations design and implement an effective EVMS, several standards have been published, the most well know of which is ANSI/EIA Standard 748 in the United States. ANSI-748 lays down 32 guidelines, grouped under 5 umbrella topics, that cover the whole of the EVM calculation and monitoring process.

Other project or program management standards include sections on EVM such as DIN 69901 in Germany and BS6079 in the United Kingdom.
Certain government contracts may require the contractor to obtain certification/validation of its EVMS, either by dedicated government agencies such as the Defence Contractors Management Agency (DCMA), other third-parties, or self/peer review, depending on the agency overseeing the contract.
Planisware includes out of the box all the elements required to build a compliant EVMS, and several of our clients have successfully obtained DCMA certification with Planisware as an essential system.

Further reading

• Planisware’s fully integrated Earned Value Management features in action
• Glossary of Earned Value Management
• An EVM Cheat Sheet

Very few companies boast the kind of resources to engage in every viable project proposal that they identify.

So, a key question of project portfolio management (PPM) is: given my limited investment budget, how do I select the projects that generate the most value for my organization?

The efficient frontier theory aims at answering that question.

What is the efficient frontier?

The efficient frontier is a concept that represents the project portfolio—that is, a selection of potential projects—offering the highest expected return for a given level of investment.

You may see it referred to as the Markowitz efficient frontier—the method was first theorized by Harry Markowitz in the 1950s. It is a foundation of modern portfolio theory, used as a framework for assembling a portfolio so that expected returns are optimized for the resources invested.

The efficient frontier, therefore, represents portfolios that maximize value for the costs they incur. As well as PPM, it can be applied to financial investment portfolios.

Visualizing the efficient frontier

The efficient frontier is a graphical representation that assesses portfolios by comparing theoretical value (y-axis) versus cost (x-axis). It is always a curved line—as costs are increased, the increased value eventually becomes relatively smaller and returns start to diminish.

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According to Markowitz, an optimal portfolio—one that comprises the efficient frontier—should be a balance between acceptable risk and return, sitting on or above the efficient frontier.

Portfolios that fall below or to the right of the efficient frontier line are “suboptimal”: that is, the value the portfolio returns is not justified by its level of investment or risk.

Each organization will have a different way of scoring value. It can be estimated using historical performance data, but it does not have to be strictly financial: the scoring model may factor in intangible benefits. Value may correspond to the strategic goals of the organization.

As such, no two efficient frontiers will be the same. It differs for each organization based on industry and the number of projects in the portfolio.

In this video, Dr Michael M. Menke, a portfolio management expert, offers his quick perspective on what the efficient frontier is in the context of portfolio management.

What are the benefits of the efficient frontier in PPM?

The efficient frontier helps project and product portfolio managers to discover the best selection of investments for maximizing portfolio value, while minimizing risk. In recent decades, it has gained favor over traditional project prioritization techniques for several reasons:

It gives comparative insights for resource allocation

The efficient frontier allows you to compare your portfolio with what is deemed “optimal.” It helps portfolio managers to identify the minimum investment required to achieve a certain return, to identify overspend, and to identify whether value is being left on the table.

After plotting your portfolio, you may discover that, for the same budget, you could generate greater returns—or you may discover the value you’re currently seeing could be achieved at a lower investment.

Ultimately, these insights can give you guidance on how to best deploy limited resources. 

It offers a visual approach for decisionmaking

The graphical nature of the efficient frontier helps to create a different perspective, enabling managers and decision-makers to understand the relationship between the value created by the portfolio and the costs incurred.

By promoting informed cost-value optimization in decision-making, the efficient frontier helps everyone better understand the trade-offs involved in choices made.

It’s suitable for a range of complex business models

The efficient frontier builds the optimal portfolio before the projects are started. This makes it particularly useful for business models where projects require very large investments (especially at the beginning of the program), where the benefits will be realized several years down the road, and where projects are seldom killed.

This particularly applies to R&D teams in pharmaceutical and biotech, healthcare and medical devices, aerospace and defense, and the chemical industry.

To dive deeper on the benefits, don’t miss our webinar, The Best (Possible) Product Portfolio. In it, Dr. Richard Bayney—President & Founder of PPVC, a leading PPM consulting boutique—explains his technique for maximizing portfolio value along the efficient frontier.

Do your project portfolios measure up the efficient frontier? Planisware’s leading PPM solutions help you to maximize value for your organization. Start your journey towards a fully-optimized project portfolio—request a demo today.

Since the publication of the Agile manifesto in 2001, Agile methodologies have transformed the ability of organizations to meet demand for new products quickly, dynamically, and flexibly.

With the emphasis on rapid feedback and incremental improvement, it’s easy to see why these methods have gained favor over sequential and linear practices like Waterfall. In the pursuit of a competitive advantage, expanding agility is a key objective of many organizations.

However, Agile methodologies were initially designed with smaller-sized teams in mind—they are not particularly suited to enterprise-sized organizations. Implementing Agile approaches in organizations composed of hundreds or thousands of team members can present several obstacles.

Introducing: enterprise agile frameworks.

What is an enterprise agile framework?

Enterprise agile frameworks seek to answer the question of how to apply Agile approaches (such as Scrum, ExtremeProgramming, and Kanban) to organizations that have hundreds of teams, teams-of-teams, or even teams-of-teams-of-teams.

Enterprise agile frameworks help large organizations to scale Agile principles, practices, and ways of thinking across many departments. They provide guidance on managing dependencies, alignment with organizational goals, cross-team collaboration, and the delivery of value.

In particular, these frameworks address the specific challenges of managing a large number of Agile large-size teams, offering structure and guidance to help scale Agile to meet business needs and realize its benefits.

The benefits of scaling Agile to enterprise level

In order to preserve (and grow) market share, all businesses need to innovate, adapt, and promote digital transformation. New products need to be rolled out and existing products need to be improved. For this, modern businesses need flexible, nimble teams at an organizational level to stay competitive.

As well as improving operational and delivery processes, Agile methodologies promote strategic ways of thinking and alignment with business needs and goals. The overall result: a more productive, efficient, collaborative organizational culture and a better work environment.

That said, implementing Agile methodologies at an enterprise level raises a host of questions and challenges. Enterprise agile frameworks became necessary because classic (or first-generation) Agile methodologies do not tackle the question of how to scale Agile and realize these benefits. 

What are the challenges of scaling Agile?

The move to an enterprise-level agile framework can represent a profound shift in company culture and ways of thinking. Those going through the process should be braced for a number of issues:

• Visibility: How do you keep track of the work-in-progress of hundreds of small teams, and the way their work combines into features, when the teams are largely autonomous and self-organized? How do you get a sense of schedule or cost?
• Coordination: How do you get teams of hundreds of people to communicate and coordinate their work in such a way as to deliver the features for which they are responsible, with an acceptable level of quality, and in a reliable manner?
• Alignment: How do you make sure that these autonomous and self-organized teams all work in the right direction to further your strategic goals?
• Learning: How do you “clone” the success of one team to other teams?
• Understanding: How does an organization with a more traditional, linear approach comprehend (and commit to) the Agile mindset of continuous improvement?
• Risk-management: How do you ensure that failure does not take down the whole organization?

Types and examples of enterprise agile frameworks

There are three preeminent enterprise agile frameworks for helping organizations navigate the challenges of implementing and extending agile beyond individual teams: Scaled Agile Framework (SAFe), Large-Scale Scrum (LeSS), and Disciplined Agile Delivery (DaD). Many of these frameworks share overlapping principles and practices.

Scaled Agile Framework (SAFe)

SAFe was developed by Scaled Agile, Inc in 2011. It is a body of knowledge on collaboration, quality, alignment, and leadership. SAFe follows Agile’s key concepts for rapid delivery throughout project lifecycles, while providing more support for larger teams.

SAFe is a structured, prescriptive, governance-focused approach that promotes alignment between disparate teams, improving collaboration, flexibility, and predictability. One key feature is Agile Release Trains (ARTs)—these are cross-functional teams of experts, aligned to a common vision, that work together over the long term to meet a single goal and achieve deliverables.

There are a number of configurations for SAFe to suit different types of organization: Essential, Large Solution, Portfolio, or Full. Essential SAFe is a lighter configuration that works well for small-medium businesses, while powerhouse organizations with global, cross-functional teams will be more suited to Full SAFe.

We’ve written in more detail about SAFe here: its core values and principles, different configurations, real-world case studies, and considerations for implementing it at your organization.

Large-Scale Scrum (LeSS)

This framework takes the basics of Scrum—a lightweight, simple, agile project management framework characterized by 30-day iterations (called “Sprints”)—and adds multiple cross-functional teams. It suits organizations wanting to remain close to Scrum practices.

The focus, instead, is on the whole product, rather than one team’s individual role. Teams work in one sprint model, with one product owner, but have daily Scrum meetings within their dedicated teams, so it works optimally when all teams are working on the same product, not necessarily for a team scaling across a large portfolio.

One feature of LeSS is Product Backlog Refinement—these are more infrequent meetings to determine and align priorities. LeSS Huge is a scaled-up adaptation of LeSS, and can involve thousands of product developers working on a project.

Disciplined Agile Delivery (DaD)

Also referred to as Disciplined Agile (DA), DaD is particularly suitable for more mature organizations who are already familiar with Agile principles. It does not offer a huge amount of prescriptive teaching, but rather lightweight guidance for orchestrating a large, distant team.

DaD is a toolkit approach that emphasizes guided continuous improvement. It focuses on flexibility and customization to suit the needs of the organization.

Other enterprise agile frameworks

SAFe, LeSS, and DaD frameworks account for the majority of Agile adoptions at enterprise level, but there are a number of other popular frameworks, including:

• Scrum@Scale (S@S): Created by Jeff Sutherland, S@S addresses the issues of volume, speed, delivery, and communication when implementing Agile. The focus is on transparency, inspection, and adaptation. Unlike most other enterprise agile frameworks, S@S emphasizes minimum bureaucracy with only a few governing bodies. The aim: faster decisionmaking and delivery.
• Nexus: Like LeSS and S@S, Nexus builds on Scrum practices. The methodology allows for three to nine Scrum teams working under one product owner with a single product backlog. One feature is an overarching “Nexus integration team” who ensures every sprint and team delivers value.
• Kanban Maturity Model (KMM): Also known as “Enterprise Kanban,” KMM helps organizations to gradually improve their agility using Kanban’s agile principles. It has seven maturity levels, starting at Level 0 (Oblivious) through to Level 6 (Built for Survival). It can help an organization identify where it currently stands and then guide them on a structured journey of maturity.

As we mentioned, many elements of these frameworks are shared and overlapping. By nature, these frameworks are dynamic, flexible, and able to be modified to suit you. 

Enterprise agile frameworks: criticism

Not all experts agree on the necessity for a distinct framework for Agile to be applied to the enterprise.

Quite a number argue that “scaling Agile” is just a different way of applying Agile principles to development issues. For them, enterprise agile frameworks show a fundamental lack of understanding of the Agile philosophy, and introduce unnecessary rigidities and complexity in product development processes.

Instead, these critics advocate returning to the fundamental principles of Agile and recasting “scaling Agile” issues in terms of those principles. Then, you work on each one in small increments—in a similar way to incrementally improving the processes of a small Agile team.

Choosing the right agile framework for your enterprise organization

Almost all businesses can benefit from scaling Agile, but no two journeys towards agility are the same and there is no one-size-fits-all approach. When choosing a framework, consider your maturity level, objectives, industry, and product lines/portfolios. It’s always possible to conduct small-scale pilots before rolling a framework out across the entire organization.

For inspiration, it might be helpful to take a look at some examples of organizations who have scaled Agile methodologies to an enterprise level—and you’ll find plenty of them in our customer stories hub. We have also detailed several successful Agile transitions in our guide to SAFe.

Becoming agile is a continuous process, and you need the right tools in place. If you’re looking to bring the benefits of agility—rapid feedback, quick response to change, incremental development—to your large organization, Planisware is a Scaled Agile Partner platform.

We can help you navigate these challenges and successfully implement Agile at scale. Start your journey to enterprise-level agility—request a demo today.

See project management office (PMO)

Related articles: building an effective enterprise portfolio management process

See project management office (PMO)

Related articles: building an effective enterprise portfolio management process

What is enterprise project portfolio management (EPPM)?

EPPM is a higher-level, more integrated type of project portfolio management (or product portfolio management). It involves breaking an enterprise organization’s strategy and operations into smaller initiatives or groups—often called portfolios. Stakeholders across several teams, departments, and locations will have visibility of these initiatives. They can then assign, complete, and review them accordingly.

EPPM takes a holistic, overarching view of managing all the projects and investments a business is undertaking simultaneously. For example, a company may have new product portfolios, cost-saving project portfolios, in-market product portfolios, and technology portfolios. Because EPPM operates at an enterprise level, it encompasses all—or at least the majority—of these different portfolios.

What are the key elements of EPPM?

While every project, portfolio, and department has unique requirements, EPPM ensures everything is working to support broader business goals. It focuses on delivery and alignment with the organization’s strategic objectives. Key elements of the EPPM approach include:

• A well-defined strategy that communicates corporate objectives, budget prioritization, standardized project and proposal evaluations, and more.
• Project and financial forecasting, including projecting ROI
• Cost reduction by eliminating duplicate efforts, streamlining execution, tracking progress, and monitoring cost and revenue
• Cross-functional resource prioritization and dependency planning to improve productivity
• Business intelligence and analytics to inform decisions
• Implementation of agile and “always improving” culture

Successful EPPM provides businesses with effective frameworks and standards to create a centralized and comparable view of all projects across different portfolios and divisions. It integrates people and activities at an enterprise level to generate business value.

What types of organizations are suited to EPPM?

Because of the challenges that EPPM aims to solve, it is suited to large, complex organizations with sophisticated requirements and diverse portfolios of projects. It can be particularly helpful for those in volatile industries where risk mitigation is a key consideration and products are ever-changing.

A good example includes life sciences and pharmaceuticals, where NPD is characterized by strict regulatory requirements and high research and development (R&D) costs.

Aerospace and defense—where large-scale projects require long development cycles, stringent compliance, and significant investment in advanced technologies—is another.

Organizations in the engineering and construction sectors can also benefit from EPPM. It is a sector with operations subject to long timelines, regulatory compliance, and significant capital expenditure and investment.

What are the benefits of EPPM?

Put simply, enterprise project portfolio management enables organizations to manage and oversee many project portfolios simultaneously from a higher level, providing:

• Real-time, accurate data that informs decision-making and empowers you to prioritize projects
• A centralized view of the needs and requirements of the whole company, promoting strategic alignment and scalability
• Better insight and tools to manage budgets, resources, assignments, and capacity
• Visibility of potential delays, risks, or duplicate tasks
• Information required to understand revenue attribution of projects and communicate with stakeholders
   

The enterprise portfolio management office (EPMO): roles and responsibilities

The EPMO is a senior leadership team overseeing the EPPM process. More centralized and geared towards strategic objectives and alignment than a typical PMO, the EPMO coordinates at the enterprise level.

The EPMO maintains a high-level view of all projects, ensuring that business outcomes align with its key objectives and that value and benefits are realized. It is concerned with overarching portfolio visibility, strategic alignment, resource optimization, and performance tracking. Some of the critical responsibilities might include:

• A leader, “head,” or director of EPPM oversees the entire approach. This will include implementing best practices, setting goals, and ensuring activities align with business objectives.
• Portfolio managers are in charge of one specific portfolio. Their role will include project selection and prioritization, resource allocation, and more.
• Project managers are leaders of individual projects or tasks within a portfolio. They are responsible for project execution and success.

EPMO members may also be members of the C-suite, but every business is different, and in turn, so is every EPMO. More responsibilities of the leader of an EPMO can include:

• Portfolio governance
• Project forecasting to determine success or failure
• Tracking projects against objectives and KPIs
• Ensuring an understanding of priorities based on broader business goals
• Improving the visibility of projects across the entire organization
• Facilitating communication
• Providing accessible, accurate data to inform business decisions
• Building and promoting agility across the enterprise

What’s the difference between EPPM and PPM?

Traditional project portfolio management (PPM) focuses on project delivery at a business level, but EPPM takes a top-down approach. Rather than overseeing one portfolio of projects within one specific area of the business, all of which share a similar goal or outcome, EPPM refers to managing a business’s entire suite of project portfolios simultaneously.

For example, larger enterprise organizations may have company-wide digital transformation projects and new product development split between business-to-business (B2B) and government ICPs. It can therefore be challenging to see, measure, and track the business impact of very different projects when assessed in silos. EPPM allows leaders to connect dots across the entire organization, gaining clear insights into progress and blockers.

This way, key decision-makers can accurately oversee multiple initiatives in the context of the enterprise and make better-informed decisions.

EPPM tools and software

Modern EPPM involves the comprehensive, real-time collection of data and is most often discussed in relation to the strategic use of integrated PPM tools. These are software suites that provide comprehensive visibility of resources, progress, and objectives across an organization from a high-level, global standpoint.

By consolidating and centralizing large quantities of data about interdependent projects, programs, and tasks in a single, enterprise-wide system, EPPM tools create a single source of truth across all project portfolios, minimizing the risk of errors and discrepancies. They help project managers understand the dependencies between projects and coordinate all resources across the business.

For a real-world example, check out how Johnson & Johnson created a single source of truth for their strategic portfolio management practices.

Ultimately, EPPM tools enable enterprise organizations to save money, reduce risks, minimize human error, and speed up digital transformation. They help to ensure that projects are completed at the enterprise level, within time and budget. The clarity and visibility they provide, particularly to senior leaders, C-Level stakeholders, and executives, can guide decision-making regarding budget and resources to maximize profitability, helping organizations stay agile.

Most project management software and tools improve the handling of single projects, focusing on individuals and resources. Essentially, they’re not designed for efficiently overseeing multiple  complex projects throughout  their lifecycle–an issue that EPPM software aims to solve.

Features and capabilities

EPPM tools help with every aspect of managing, running, coordinating, and prioritizing a collection of projects, programs, portfolios, and initiatives. They cover the entire range of project management activities and capabilities, from goal setting to performance reporting.

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Resource management

EPPM tools help ensure resources—financial, technical, and human—are allocated and distributed in the most optimal way to maximize portfolio value and ensure the business prioritizes the highest-value projects.

These tools have capacity planning features, which help decision-makers to anticipate bottlenecks or space capacity across certain roles, skills, and departments. The software can be integrated with other systems and solutions as part of a fully-connected ecosystem.

Financial oversight and reporting

EPPM tools have sophisticated reporting and analytics capabilities. Drill-down features and configurable, customizable dashboards give dynamic visualization of data across a project, program, or portfolio, helping with forecasting and evaluation of revenues, ROI, and profitability. Armed with these powerful, real-time insights, EPPM tools empower leaders to identify issues before they become critical.

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Risk management

EPPM tools help organizations identify risks early and implement necessary mitigation strategies. The aforementioned financial insights, along with automated risk-driven detection and analysis, help project managers gauge confidence levels for (and the viability of) projects.

Many also have dynamic and advanced “what-if” scenario-building capabilities, allowing decision-makers to model certain actions and evaluate impact and risk.

Strategic management and alignment

EPPM tools help leaders identify those projects that best align with an organization’s broader goals and objectives. Real-time insights enable leaders to track progress and adapt if necessary.

They can also flexibly facilitate a range of project management methodologies and their frameworks. Organizations may employ traditional, sequential methodologies like waterfall or agile methodologies, like Scrum and Kanban—possibly a mixture of both. Fully scalable, these tools can also grow with the organization without the need for wholesale changes or investment.

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Scenario comparison in Planisware.

Collaboration and support

A fully-integrated EPPM solution—with a single source of truth—can break down silos, minimize errors, and promote communication, collaboration, and transparency.

Additionally, most modern EPPM tools are cloud-based, negating the need for physical on-site servers, firewalls, and shared databases. This enables virtual and disparate teams to access the same information in real time, regardless of location, keeping teams aligned and engaged throughout the lifetime of projects.

Adopting EPPM software for the first time inevitably raises many questions. These tools come with a vendor commitment to offer deployment support and end-user training. Responsive, ongoing human support, from a partner with a history of successful implementations, helps smooth the deployment process.

Trusted by global organizations, Planisware is a leading solution for maximizing the value of projects, programs, and portfolios at an enterprise level. Start your organization’s journey to a more mature, optimized, integrated, and profit-driving strategy—request a demo today.

One of the first Agile software development methods, which emphasizes excellence of development skills over complex project management.

In XP, twelve technical practices based on the values of communication, simplicity, feedback and courage structure short iterations focused on the delivery of high-quality products. The customer is highly involved in the definition and prioritization of the functionalities (story cards) to be developed, while the small (12 people or less) self directed and closely integrated development team uses continuous testing and planning, and short feedback loops to deliver shippable software at very short intervals (1 to 4 weeks).

see also: agile methodology, scrum, feature driven development, dynamic systems development method, crystal methodologies, lean software development

An Agile software development method suitable for larger scale projects (allows multiple teams to work in parallel) which uses features as basic unit of work and very short iterations.

An FDD project starts with the creation of a model (domain), which is broken down into features that can each be implemented in less than 2 weeks (usually 1 to 3 days). Each feature will then be planned, designed and built following an iterative and incremental process. Progress of the project is monitored through a central colour-coded feature list, and the object model is updated with each iteration.

In a gated process, a project is broken down into smaller stages or phases, each delimited by a gate. At each of these gates, the project decision-makers meet to review the project and decide, based on specific criteria and the information available at the time, whether to continue, stop, hold, recycle or modify it.

A classic three-phase project would include (1) Specification discovery, (2) Development / prototyping, and (3) Testing / validation. To each of these gates corresponds one or several deliverables.

Gated process are often used in new product development (NPD) projects where they provide structure and allow early termination of low value projects.

see also: stage-gate®, new product development

related articles: planisware enterprise demo: combining agile and stage-gate for new product development

In its strictest sense, the process of generating, developing and communicating ideas.
In the context of PPM, ideation takes a broader meaning and includes the processes of evaluating, comparing and selecting ideas, and the grouping and merging these ideas into new project proposals, or extensions of existing projects.

Ideation plays a key strategic role in ppm, as it powers an organisation's innovation capacity, and thus conditions the sustainability and renewal of its portfolio(s) over time. The ideation management process can also determine the success or failure of a project, as empirical studies show that errors at the conception stage have the most sustainable impact.

The application of lean management principles and techniques to software development. LSD is generally considered part of the family of agile approaches, and often used in combination with one or several other methods.

LSD is founded on principles of simplicity and economy (eliminate waste, deliver fast), global and integrated view of the project (build integrity and quality in, optimize the whole), continuous learning and improvement (using short iterations, continuous testing and team and user feedback), reducing uncertainty risks (by delaying commitment and integrating feedback quickly), and valuing people (by empowering team members and giving a central place to the customer).

A business exercise which aims at looking at the organisation and its environment beyond the usual short and mid-term future to identify opportunities and threats, areas of growth and expansion, how constraints may evolve, and prepare for potential disruptions.

Long-range planning is carried out at the strategic level and mostly relies on forecasts extrapolated from current conditions and trends.

see also: roadmapping

related articles: planisware enterprise demo: the case for using roadmaps, a primer for integrated roadmapping: an interview with ken huskins

The process of developing a new product, service, technology or process (or innovating on an existing one), from the initial idea to its launch.

Classically, NPD can be divided into 6 stages, each with a deliverable and often a gate: Idea screening (selection of the most promising ideas), Concept testing (feasibility and market study, identification of prospective users and testing of the concept), Business Analysis (will this product be profitable?), Prototype testing, Product implementation, and Launch.

see also: product lifecycle management, gated process, stage-gate®, dmadv methodology

related articles: planisware enterprise demo: building an innovation strategy into your product portfolio

The former name of the Planisware solution, today OPX2 is now referred as Planisware Enterprise. The change came in the year 2009 with the publication of the 5th version of the solution.

Initially, the name OPX2 was chosen during the initial development of the solution within Thales. In 1996, however a spin-off is decided and Planisware is created. At the time, the initial team decided to keep the name of the solution, as it was already known by a few customers.

However, by 2009, with Planisware increasingly successful on a variety of international markets, it was decided to align the name of the solution with the name of the company. In addition, many customers at the time were already referring to the solution by the name of the company, thus making the rationale for the shift even more obvious.

Initial development of the Planisware Enterprise solution

In the 90s, Planisware debuted OPX2, a revolutionary enterprise project portfolio management software designed to enable comprehensive vision and control over the entire organizational portfolio. From the very beginning, OPX2 offered unparalleled configurability and scale-up capabilities.

Throughout the years, OPX2 software rapidly evolved - expanding in both its operational as well as strategic portfolio and decision support capabilities, adding capabilities to address specific business needs, and incorporating industry leading practices, all while maintaining an intuitive interface.

What is PACE® methodology?

PACE® stands for Product And Cycle-time Excellence®. It is a gated methodology for streamlining the development of new products and services. The process was first outlined by Michael McGrath, an expert and thought leader on product development and strategy.

McGrath founded PRTM, a management-consulting firm in the technology industry which is now a subsidiary of PwC. In the late 1980s, he created PRTM’s product development practice and began developing what would later be known as the PACE® process.

The principles of PACE® are outlined in McGrath’s book, Setting the PACE in Product Development (1996), considered the definitive original text on the process. The aim of the book is to show “efficiently organize people, resources and processes to dramatically improve financial results, strategic positions, internal morale and customer satisfaction.”

The various techniques espoused by PACE® aim to “integrate vital company-wide functions, engaging the entire company and focusing its collective energy on strategically and financially important goals”.

Features of the PACE® model include integrated, cross-functional teams and a structured, gated process for NPD. The objective is to encourage collaboration, identify bottlenecks and inefficiencies, streamline resource use, and enhance product quality.

These ideas were elaborated on and refined in a later book by McGrath, Next Generation Product Development (2004), which provides further insights on reducing cycle times and boosting R&D productivity.

PACE® has since been adopted by some of the largest technology companies as a method of improving R&D processes and accelerating time-to-market.

Note: The acronym PACE is also often used to refer to various other methodologies, but they should not be confused. Examples include Prepare, Analyze, Communicate, Execute (a communication methodology) and Primary, Alternate, Contingency, Emergency (a data management methodology).

The 7 elements in PACE® methodology

PACE® methodology is a structured, phase-based approach that relies on seven interrelated elements to ensure project success and minimize time-to-market. The elements in the methodology can be divided into two groups—four elements at the project management level, which include a:

• Gated NPD process
• Small cross-functional Core Team, empowered to make all decisions about the project
• Structured development process, ensuring consistency
• Efficient use of development tools and techniques

And three elements at the program/portfolio level, which involve a:

• Product strategy process that guides product development decisions
• Comprehensive approach to technology management, including planning, oversight, and alignment with business goals
• Pipeline management framework for project prioritization, resource management, and aligning capabilities with project needs

Further reading:

• New product development
• Gated process

Related articles:

• Webinar: the best (possible) product portfolio
• Webinar: measuring product development productivity and performance
• Planisware enterprise demo: combining agile and stage-gate for new product development

Calculating how long a project may take and what kind of investment may be required is one of the most fundamental tasks of any project manager. In some instances, parametric estimating can be an effective project planning technique.

What is parametric estimating?

Parametric estimating is a statistics-based method used to calculate the cost, duration, and resources necessary to complete a project, a portion of a project, or a task.

Valued for its accuracy and reliability, it is particularly popular for project planning in the life sciences and construction and engineering.

Parametric estimation: how it works

The person in charge of the estimates will model (or describe) the project using a set of algorithms. These algorithms come from two primary sources: historical data (derived from analysis of past projects) and parametric rates (published by specialized organizations).

Parametric estimating allows project managers to produce estimates with varying levels of detail. There are two types:

• Deterministic estimates: These are based on parametric scaling. This kind of estimate is a single number showing the resources needed for your project—usually time or cost.
• Probabilistic estimates: This shows a range of possible outcomes, based on a probability density curve with three benchmarks: pessimistic (worst–case scenario), most likely (the cost or time estimate with the highest probability), and optimistic (best–case scenario).

Parametric estimating formula

Project managers can calculate simple parametric estimates using this formula:

E_parametric = A_old / P_old x P_curr

• E_parametic is the parametric estimate
• A_old is the actual result from a historical project
• P_old is the parameter value from a historical project
• P_curr is the parameter value from the current project

To give an example, say it took 50 hours to paint a house that has 1,000 square feet of walls. The current project has 1,500 square feet of walls. The total effort for this task will be:

E_parametric = (50 / 1,000) x 1,500

This works out at 75 hours.

For another example involving a wind farm project, check out our presentation,  Parametric Estimation in a Nutshell. We also discuss how to score parametric estimation and how to start building a parametric estimating model.

Of course, most projects will be far more complex and extensive than the house painting and wind farm project examples. Parametric estimating, particularly for large projects, often involves developing sophisticated models for estimating costs and durations. These models can require frequent backtesting against your actuals to determine their accuracy.

When to use parametric estimating

Parametric estimating is particularly useful in the early stages of projects and works best for tasks that have tangible deliverables and are often repeated, with little variability. A smaller degree of variability makes it easier to identify an equation to model the task.

To work properly, you need to be able to quantify your parameters into units, such as time or currency. Parametric estimation also relies on the availability of historical data from past projects.

To understand parametric estimating, it may be helpful to compare it to another popular method: analogous estimating.

Parametric estimating vs. analogous estimating

Both parametric and analogous estimating use historical data to construct the estimates, but the process they each use to perform the calculations are different.

Parametric estimating creates estimates of a project’s cost or duration by analyzing statistical relationships between historical data and variables. Analogous estimating, on the other hand, calculates these estimates by comparing a historical project to the current project—it simply takes values from previous projects with a similar scope. This explains its root word, “analogy.”

Parametric is equation-based and algorithmic. It is considered more reliable but requires detailed historical data. It’s preferred in instances where high levels of accuracy are required. Analogous estimating is useful where such information is limited—for example, in the early stages of a project. It is more top-down and typically less accurate.

The two can be used in conjunction when historical or public data is not available for a specific task.

Benefits of parametric estimating

Parametric estimating is a powerful analytical technique: it produces accurate estimates and gives project managers high levels of confidence and clarity about whether a project is worth going ahead with. It lends credibility to any estimates, which helps with stakeholder buy-in.

• Evidence-based: Parametric estimation uses actual historical data or industry standards—it is quantitative, based on experience, and takes into account a large number of factors. It gives project managers accurate cost and time values.
• Standardized: Parametric estimation has a centralized, standard definition of how to produce estimates—algorithms are used across projects. The calculation method will be the same, meaning they are easily repeatable with the same level of quality.
• Adjustable: Parametric estimation requires low levels of effort to keep estimates up to date. If generated through an advanced PPM solution, new sets of estimates can be created almost immediately.

Downsides to parametric estimating can include the time and effort required upfront to build the algorithm—it demands a detailed analysis of all elements that contribute towards a forecast and all possible combinations, so as to make the right equations available.

What’s more, parametric estimating is only as good as the data used to power it. Availability and quality of data can impact your estimates. Equations for activities can only be determined if there is a sufficient base of experience for that activity, and equations will need to change if market conditions change.

Planisware’s solutions are trusted by global organizations to bring clarity, certainty, and accuracy to project planning. Take a look at some success stories from our clients across construction and engineering, government, life sciences, and more.

To see exactly how Planisware’s industry-leading features can transform how you plan your projects, request a demo today. 

Can refer to:

• project portfolio management
• product portfolio management
• project and portfolio management

A component of a company’s overall strategy that sets the direction and parameters of its innovation and new product development efforts. The product innovation strategy is one of the four components of the Innovation Diamond.

An umbrella term that designates the process of managing, from an engineering perspective, a product from the initial idea, its design, development and manufacturing right to its end of life.

PLM is often considered one of the four strategic pillars of modern businesses together with Enterprise Resource Planning (ERP), Supply Chain Management (SCM) and Customer Relationship Management (CRM), and should be integrated with these other pillars for maximum effect.

PLM can be divided into three main phases that align with the maturity of the product: New Product Development, Sustaining, and End of Life Management.

see also: new product development

Is composed of all of a company’s products, from innovations under development to legacy products ready to be retired. It may include several categories or types of product, different product lines and individual products.

A product portfolio provides executives with an overall picture of the market positions both present and projected of each product, and allows them to manage them as a coherent entity.

The most widely-known method for evaluating products as part of a portfolio is the BCG matrix which plots them according to the market growth rate and their relative market share. The resulting matrix provides a photography of each products maturity and profitability.

see also: product portfolio management

related articles: planisware enterprise demo: building an innovation strategy into your product portfolio

A series of tools, methodologies and strategies to analyse, prioritize and manage the elements in a product portfolio.

Product portfolio management allows decision-makers to allocate resources optimally between the different products, identify areas of potential improvement, balance the product mix to ensure profitability and sustainability, and maintain alignment between the company’s products and strategy.

related articles: planisware enterprise demo: building an innovation strategy into your product portfolio, planisware enterprise demo: managing high-tech/it products

A group of related projects and activities that are managed together to reach a larger, overarching set of objectives.

Classic examples include the development of a new line of cars, where the range = the program (e.g. the Ford Focus), and the model = the project (e.g. the Ford Focus Zetec Navigator); or the launch of a new airplane (the program), where each feature or system will be a project.

A program is focused on a tactical goal, on how the projects are carried out. By contrast the portfolio is concerned with strategic goals: which projects and programs to carry out, who should get priority for resources etc.

see also: project portfolio

What is a Project Management Office (PMO)?

A Project Management Office (PMO) is a unit or department that standardizes project management processes and helps share resources, best practices, tools, and techniques across the company.

Depending on its maturity, the PMO can provide simple support services (administrative support and sharing of best practices), expertise on crucial project performance elements and metrics (e.g., estimations, scheduling, risk management, and quality assurance), and act as a consultant/advisor to project managers (including issues relating to HR). At its most advanced, a PMO can play a crucial role in strategic and performance-related decision-making.

What are PMO Roles and Responsibilities?

A PMO is made up of various team members, all with their specific roles and responsibilities. Job titles, key responsibilities, and number of members will vary from business to business, but may include:

• A leader, ‘head’, or director of the PMO is in charge of the entire function. They are responsible for sharing and encouraging best practices, setting clear objectives, and ensuring projects always support broader business goals.
• Portfolio managers oversee one distinct portfolio. They must prioritize tasks, allocate resources, and support the execution of the projects within their portfolio.
• Project managers lead individual projects or a small number of related projects within the same portfolio. Their role includes bringing the project to fruition, working within budget, and meeting the specified deadline.

Some of the more general roles and responsibilities of the PMO include but are not limited to:

Standardization of the Project Management Process

PMOs standardize methods, processes, tools, and templates across the businesses. By developing and implementing a ‘standard’ way of working, projects and tasks are more comparable to each other and easier to deploy across the organization. PMOs are also responsible for showing employees/staff how to use or adhere to these standards correctly.

Support Project Implementation

The PMO must lead project implementation and manage all the moving parts, including:

• Problem-solving issues like capacity planning and resource allocation
• Selecting the proper project methodology and building business cases for projects
• Facilitating communication and collaboration to ensure everyone's on the right page
• Providing accurate real-time data to empower stakeholders to make the best possible decisions and create a single source of truth
• Mentoring and training project managers to ensure they have the right skills

Provide a Consolidated View of All Projects

PMOs must bridge the gap between projects and their stakeholders with thorough reports, tailored dashboards, and a consolidated view of all projects. This means your PMO must:

• Develop and track Key Performance Indicators (KPIs)
• Manage and communicate budgets, forecasts, actuals, and margins
• Consolidate all information and build a project dashboard designed for stakeholders
• Provide essential, real-time data for any project reporting

Strategic Portfolio Management and Governance

Strategic Portfolio Management ****(SPM) aligns your project execution with your company’s strategic vision. The PMO’s role is to narrow down projects and prioritize them based on the organization’s overarching goals. This will include developing business cases, assessing the cost/benefit ratio, and completing risk assessments.

What is the Role of the PMO vs PM?

A Project Manager (PM) manages individual projects and their day-to-day running. Conversely, a PMO is often a whole team that operates at a high level and supports the project managers in meeting business goals, optimizing time, prioritizing projects based on business needs, providing a centralized view of all company information, and more.

A Project Management Officer, then, is a critical part of the project management office of an in-house team. Their role is administrative and technical, ensuring projects are complete, accurate, on time, and within budget and scope.

What is a Digital PMO?

A digital PMO is a system or tool that standardizes and digitizes a business’s processes, projects, and data. It performs the tasks of a PMO or project manager. Benefits include real-time data, reduced human error, the ability to schedule projects in advance, digitized workflows, enhanced productivity, and eliminating repetitive or manual tasks.

What are PMO OKRs?

Objectives and Key Results (OKRs) are tangible outcomes that PMOs put in place to measure and track the success of a portfolio of projects. A PMO should set an objective for each portfolio and identify the key results they or the team must achieve to meet it. OKRs will, of course, depend on the nature of the portfolio. Some examples of the types of OKRs that PMOs might set are:

• Project execution OKRs, such as improving resource utilization, developing standardization, and increasing efficiency.
• Financial OKRs, based on performance, budgets, ROI, and cost-effectiveness.
• Growth and innovation OKRs, which focus on product launches, continuous learning and development, and adaptability.
• Product Management OKRs, such as understanding end users better or improving product performance.

OKRs must be very specific and include a measurable element. For example, if the portfolio’s objective is to gain a better understanding of end users, then key results may consist of:

1. Conduct one customer survey per quarter to gain valuable insight, aiming for 40% total participation.
2. Create a suite of buyer personas in Q1 based on quantitative existing customer data and qualitative customer success team data.

This structure enables more effective success tracking of projects and portfolios.

What are PMO Processes?

Every business is different; thus, every PMO’s processes are, too. Some examples of processes your PMO may define and standardize are:

• Resource allocation
• Prioritization
• Risk assessment
• Budgeting
• Reporting and ROI
• Project feedback and changes

What are the Different Types of PMO Structures?

These structures define the characteristics and level of control each PMO has. These are the most common PMO classifications, though there are others.

The Supportive PMO

The supportive model provides “a consultative role to projects” and works best for organizations with low project management maturity. This role includes registering products and resources, standardizing tools, and supporting the wider PPM team(s).

The controlling PMO

The controlling model ensures compliance, data quality, and validating stages within the project lifecycle. This model is suitable for organizations with a higher level of project management maturity or who already have the supportive model.

The directive PMO

The directive model heavily controls resource and project management and oversees project/program/product managers. Organizations with a higher level of maturity or that already have the supportive or directive model in place will benefit from the directive PMO model.

There are many things to consider before selecting a PMO. If it doesn’t align with your business objectives, you can course-correct and find a model that suits you better.

Several factors will influence the right type of PMO for you. These include:

• Industry
• Organization size
• Existing PMO Structure and Maturity
• Anticipated PMO Function

Our eBook dives deeper into the multiple considerations involved in selecting a PMO type, but these are a few examples of types of PMOs and the PMO structure they might adhere to.

• A Business Unit PMO that delivers training and resources to a specific division will suit a Supportive structure.
• A Strategic PMO that aligns project deliverables with business goals may assume a Controlling function.
• A PMO that closely controls budgeting manages project leads, and defines and deploys data quality processes will likely perform a Directive role.

What are PMO Skills?

There are several skills an effective PMO must have. Communication, people management skills, and technological know-how are vital to success. They must clearly understand the business and its goals and have a centralized view of all ongoing projects. This will help them prioritize projects, allocate resources and budget, and effectively report — all critical PMO skills.

What are PMO Standards?

Standardization is a key benefit of PPM. Your PMO will establish and implement best practices — and then promote them throughout the organization. Essentially, they must develop or identify an effective ‘way of doing things’, which is rolled out organization-wide. These standards may include:

• Templates and documents such as project proposals, reports, briefing forms, etc.
• Frameworks and methodologies such as the PMO model the business opts for and the approach for identifying and managing risks.
• Establishing the decision-makers for projects, teams, and the broader business to develop a smooth and trusted approval process.
• Training staff using the same resources, tools, and best practices to ensure consistency and ease of future collaboration.

If you are looking for a way to manage multiple projects better, we can help. Get in touch.

Related articles: building an effective enterprise portfolio management process

What is a project portfolio?

A project portfolio is a set of project proposals, projects, programs, sub-portfolios, and operations managed together to achieve an organization's strategic objectives.

For instance, a company in the energy sector might have a business objective to reduce carbon emissions. The corresponding project portfolio would only include projects aligned with this objective. It could consist of sub-portfolios such as Improving the Efficiency of Solar Energy Production or Streamlining Transport Routes.

Defining project portfolios allows project-rich organizations to gain an overall perspective on their current and future projects. It also enables them to prioritize allocating investment and resources to projects most likely to help them achieve their strategic objectives.

A project portfolio might be grouped around:

• Geographical location of the projects
• Specific business objectives
• Specific capabilities (IT, HR, engineering, manufacturing)
• Target audience (employees, customer segments, suppliers)

It is necessary for most large enterprises due to the volume of projects running simultaneously. Take PepsiCo, for example, and their several-thousand-strong project innovation agenda.

But project portfolios can also benefit medium-sized organizations with ambitious growth objectives. For example, a domestic energy sector challenger may have an objective to grow their market share. The organization might set up a project portfolio that aligns with this goal, including “optimizing the digital customer journey” and “creating a referral program.”

A project portfolio has a number of key functions:

• Project prioritization: Evaluating, analyzing, and selecting projects based on a wide range of criteria, including ROI, risk, resources, and alignment.
• Resource management: Assigning and allocating money, time, and human resources within the portfolio in the most optimal way to drive value.
• Performance tracking: Monitoring KPIs and reporting as projects progress, informing ongoing decisionmaking.
• Risk management: Identifying risks that may negatively impact multiple projects or the organization’s strategic aims.
• Strategic alignment: Ensuring all projects within a portfolio are geared towards wider, long-term objectives.

What is the difference between a project and a project portfolio?

In simple terms, a project is a single series of tasks carried out over a predefined timeline with a clear, intentional goal (or goals). Projects within organizations can be limited to one team or department, but they usually require skillsets from multiple teams to complete.

A project portfolio, on the other hand, is a group of projects selected for their strategic value to an organization. The projects will have a clear link that connects them and will be managed together to maximize their efficiency and ROI.

Project portfolio management

The responsibility of managing the project portfolios—project portfolio management (PPM)—typically lies with the project management office (PMO). PPM refers to the ongoing processes involved in analyzing, prioritizing, and overseeing these projects to ensure maximum value of a project portfolio—that is, ensuring strategic alignment, optimized resource allocation, and effective risk management.

The PPM technology stack often centers around a powerful project and portfolio management tool that can provide visibility and access to all key stakeholders.

Creating and managing a project portfolio

Managing a project portfolio involves several processes:

• Identification: Identifying all potential projects and gathering data on objectives and outcomes.
• Evaluation: Analyzing each project based on criteria, such as strategic alignment.
• Prioritization: Determining the order in which projects happen.
• Resource management: Allocating budget, human resources, and equipment to each project in the portfolio.
• Ongoing monitoring: Tracking and reporting on progress of each project, with regular reviews to ensure strategic alignment.

Prioritizing your project portfolio

A project portfolio should always be prioritized based on an organization’s strategic objectives. Think of it like buying property in Monopoly. If your strategic objective is earning the most money before the game ends, you will want to prioritize locations with higher rent.

Questions that can help prioritize a project portfolio include:

• If this project is delivered successfully, what is its minimum impact on KPIs?
• Do competitors’ projects threaten the organization’s strategic objectives?
• How much risk is associated with the project, and what is the current tolerance for risk?
• Are enough resources available to deliver the maximum value of the project?

The process of deciding which projects are included in a project portfolio may involve these steps:

1. Understanding the overall business objectives.
2. Defining the role of this project portfolio, aligned with business objectives.
3. Creating a set of inclusion criteria for the project portfolio. If you develop a project portfolio for new product innovation, you would only have projects with new products as an outcome.
4. Speaking to project managers (PMs) and stakeholders (such as department heads, finance teams, or executive leadership) to source current projects and ideas.
5. Analyzing the strategic value of relevant projects and comparing the results to inclusion criteria.

How many projects are in a project portfolio?

There is no magic number of projects to include in a project portfolio. The size of a project portfolio will depend on several factors that are unique to every organization:

• How many resources do you have? Successful project portfolios require excellent management, and individual projects need teams to deliver them. Resource requirements need to be scoped and agreed upon upfront with department or business unit leaders.
• How much risk can your organization take on? The more projects in a portfolio, the higher the potential for risks. Scheduling, dependencies, and communication are just some risks that need to be analyzed before adding more projects to a portfolio.
• What are the current business priorities? Not all projects contribute equally to an organization’s strategic goals. Before projects are added to a project portfolio, they need a strong business case, including predicted outcomes and associated costs.
• What are your project management capabilities? Has your organization already adopted a Project Portfolio Management mindset? If you are in the early stages of securing buy-in for project management transformation or building the capabilities of your PMO, consider how ready your PMs are to transition to this new approach.

Project portfolio templates, formats, and samples

PPM software solutions provide a suite of tools and templates that simplify and accelerate the entire process of managing a project portfolio, from project prioritization to resource allocation and risk management.

For example, scenario comparison and optimization features help you to streamline prioritization decision-making by creating comparisons between varying, complex projects using quantitative data from previous projects.

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Scenario comparison using Planisware

These solutions also centralize your data and create a single source of truth. Intuitive dashboards give real-time visibility, providing PMOs with a range of information which empowers them to make the correct strategic calls about the project portfolio.

What is a project portfolio matrix?

A project portfolio matrix is a visual framework used by PMs or PMOs. It can be used to map out the potential value of projects compared to the technical complexity (and, therefore, level of investment) required to complete them. A project portfolio matrix can also be an effective way to visually communicate the status of projects within a portfolio to executive stakeholders.

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Project portfolio examples

A few simplified examples illustrate how project portfolios exist across all settings and industries.

• Consumer goods: A snack foods manufacturer may have the objective to improve packaging sustainability and create a project portfolio along these lines—an example of a sub-portfolio may be Replace Single-use Plastics in Product Lines. Within this sub-portfolio, there may be a project called Develop Biodegradable Materials for Protein Bar Wrappers.
• Education: A school wanting to enhance student engagement through technology may create a project portfolio for this objective. Sub-portfolios may be called Introduce Interactive E-learning Platforms. A project may include Invest in Game-based E-learning Math Platforms.
• Financial services: A consumer bank with the aim to enhance digital banking capabilities may create a project portfolio aligned with this goal, with a sub-portfolio such as Improve Mobile App Functionality. A specific project within this sub-portfolio could include Add Budgeting Feature.
• Government: A government department aiming to improve green public transportation infrastructure may have sub-portfolios like Introduce Electric Bus Fleets. A project within this may be called Pilot Electric Bus Program in City Hub.
• Hospitality: A hotel wanting to encourage repeat bookings may have a sub-portfolio such as Use AI to Improve Guest Experience—a more specific project being Roll Out AI Food Recommendation Feature.
• Oil and gas: Within a project portfolio supporting an objective to transition to renewable energy sources, sub-portfolios might include Expanding Offshore Wind Capacity. An example of a project within this sub-portfolio could be Construct a Fifty MW Offshore Wind Farm.
• Pharmaceutical: A manufacturer aiming to boost drug development may have a sub-portfolio called Establish Partnerships with New Biotech Organizations, with a more specific project example being Partner with Canadian Gene Therapy Startup.

As a project-rich organization serving over 200 countries, PepsiCo is a standout real-world example of project portfolios in action. Their approach is to “think globally, act locally”—they strategically segment their $86 billion global portfolio around different need states, demand spaces, and consumer cohorts to drive innovation.

A global leader in life sciences and healthcare innovation, Johnson & Johnson is another business whose surgical, orthopedic, and interventional solutions meet the varied and diverse needs of their customers. They harness a wealth of consumer data to manage a wide-ranging medical device project portfolio.

Ford is another example of an organization with a global portfolio of technology development projects, spanning electric vehicles, advanced safety technologies, and autonomous driving research.
 

If you’re ready to unlock strategic value for your organization through PPM, Planisware is the key.

Trusted by over 800,000 global users at organizations of all sizes and industries, our leading PPM software solutions can transform how you plan your project portfolios.

Book a demo with one of our experts today and start your organization’s journey toward streamlined project portfolio management.

What is Project Portfolio Management (PPM)?

Project Portfolio Management (PPM) is a series of tools, methodologies, and strategies to analyze, prioritize, and manage the elements of a project portfolio. Its purpose is to predict issues, track progress toward operational goals, and manage budgets.

PPM aims to evaluate projects as accurately as possible to assess their strategic importance, the relative use of resources, and actual/projected profitability, and make corresponding allocation and go/kill decisions.

Furthermore, it aims to group and sequence projects in a way that:

• Ensures the optimal use of existing resources
• Leverages common work products and processes
• Balances risk, costs, and constraints
• Anticipates capacity and resource needs
• Meets strategic objectives

What are the Different Types of PPM?

Every organization will deploy PPM in different ways and for different reasons. The type of PPM you choose will vary depending on the size of your business, the initiatives that matter most to you, your industry, and so on. There are many types of PPM that a company can adopt. These include but are not limited to:

Strategic Portfolio Management (SPM)

SPM connects a project portfolio’s execution to the organization’s vision. This includes making strategic decisions about the portfolio — what to prioritize, how significant a project is, and its impact on broader business goals. Effective SPM ensures investments and resources focus on the initiatives that drive your strategy forward, even as it evolves.

Agile PPM & Agility at Scale

In fast-paced, fast-growing, and evolving organizations, flexibility is vital. Agile PPM is defined by its responsiveness to change while continuing to ensure project efficiency and relevancy. This type of PPM is best suited to a company with an agile culture. It is most effective when paired with a Lean PPM approach — which centers around waste reduction and resource utilization.

Governance-based PPM

No matter how well-connected your teams and departments are, individuals will always have a unique way of working. When managing projects, a lack of standardization can slow things down, cause confusion, and waste resources. Governence-based PPM refers to developing standardized processes, practices, and templates that everyone in the organization must follow. This ensures consistency, improves comparability, and helps create a more integrated business.

Financial PPM

Financial PPM refers to prioritizing projects that deliver the highest return on investment (ROI). This approach ensures every portfolio is cost-effective, so it is particularly beneficial for any business that relies heavily on financial impact for its decision-making.

What are Project Portfolio Management Tools?

Project Portfolio Management software refers to the digital tools that enable Project Management Office (PMOs) to do their jobs more effectively. They work by creating a central hub for all project data, which everyone in the business can access. This provides team members and stakeholders with real-time, accurate business data.

The tool or platform will feature a project management dashboard, which visually represents this data. Platforms will vary, but dashboards will include project status, finance and budget metrics, schedules and timelines, and more.

Planisware, for example, is a cloud solution PMOs use to strategize, plan, and deliver projects, programs, and products.

What are the Benefits of PPM?

Implementing PPM into your business presents you with multiple benefits, including:

• You have a centralized view of current and future projects.
• Stakeholders can identify and eliminate duplicate tasks and share best practices.
• Teams are more likely to complete projects on time, in scope, and within budget - with minimized risk.
• Leadership can make informed and data-driven decisions about whether to continue or kill projects.
• You have real-time insights into costs, return on investment (ROI), and more.
• Better alignment and prioritization of projects with the overarching business plan.
• Accurate and fair resource allocation.

Why is Project Portfolio Management Important?

With a Project Portfolio Management Office (PPMO) and high-quality, adaptable PPM software, you can identify needs across the whole company, consolidate ideas, prioritize projects, and better manage tasks, time, resources, budget, and capacity. This increased visibility of projects provides business leaders with real-time, accurate data such as revenue attribution, time allocation, and more. PPM helps future-proof your organization and ensure projects support the broader goals.

What are Some Project Portfolio Management Roles and Responsibilities?

PPM plays many roles and has several responsibilities in every business. This includes analyzing projects to ensure success, prioritizing high-value projects, and qualifying or validating projects where necessary. Other PPM roles and responsibilities include but are not limited to:

• Ensuring all projects reflect the business strategy
• Identifying and implementing an appropriate project management methodology to suit the project at hand, such as Agile or Waterfall
• Creating a standardized approach to streamline projects within a portfolio
• Managing, anticipating, and forecasting costs to maximize project/portfolio ROI
• Developing a centralized view of all projects that everyone can access
• Identifying and consolidating projects, their characteristics, and their teams
• Defining and presenting financial and resource constraints
• Prioritizing tasks and allocating resources effectively
• Deploying resources such as time, budget, and team members to specific projects
• Facilitating cross-team communication
• Monitor and track key performance indicators (KPIs)
• Measure project impact in real-time and provide accurate, reliable project reporting

If you are looking for a way to better manage multiple projects, we can help. Get in touch.

related articles: planisware enterprise demo: project selection & portfolio optimization

A project that is still in the planning stage, that hasn't been yet staffed or started. Project proposals also include any idea projects and idea campaigns, ie projects or campaigns whose aim is to generate new ideas for future projects.

See project management office (PMO)

related articles: building an effective enterprise portfolio management process

What is resource management?

In the context of PPM, resource management is a set of tools, strategies, and techniques used to plan, schedule and allocate resources within a project, program, or portfolio. It is an ongoing process of estimating, procuring, and deploying resources effectively and appropriately throughout its lifecycle, in order to drive maximum value for an organization.

Whereas capacity planning is concerned with the organization as a whole and considers resources from a high-level point of view, resource management handles resources more actively and with more granularity within a smaller perimeter (a project, a program, or a portfolio). It requires an on-demand, real-time overview of resources—workforce skills, budget, inventory, technical infrastructure, and production resources.

The aim of resource management is to choose the optimal number of resources to meet requirements of a project, and ensure these are spent as efficiently as possible—after all, resources are shared and can be valuable elsewhere in the organization.

Effective resource management requires transparency over all of these finite resources. Rather than allocating them randomly or arbitrarily, they should be deployed in the most strategic, effective, and economical way for the organization. Essentially, effective resource management means allocating resources to the right initiatives, with the aim of avoiding project failure, delay, or overspend.

Resource management requires an understanding of demand, capacity, corporate strategy, timings, and the skills available across the organization.

Types of resources in project management

Anything that helps you to complete a project, program, or portfolio can be classified as a resource. This commonly includes:

• People: Team members, employees, contractors, consultants, and vendors.
• Time: Time available to complete the project.
• Finance: Project budget and funding.
• Physical: Inventory, equipment, raw materials, offices, workspace, and warehouses.
• Technical: Software, tools, automated processes, data,and project timelines.

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What are the benefits of resource management?

Good resource management means estimating, planning, and deploying resources judiciously. It increases the likelihood that projects are completed on time, within budget, and to a high standard.

• Project efficiency and outcomes: Underallocation of resources is the most obvious and most common cause of project failure and missed milestones. Projects that have an optimized allocation of resources are most likely to succeed, avoid bottlenecks, and minimize wasted resources (such as an overallocation of resources.)
• Scheduling and prioritization: Good resource management requires real-time insights into resource availability, allowing for smarter, proactive decisions about staffing and skills on certain projects—including whether to accept or reject new projects. It allows for prioritization of projects that deliver the most value and competitive advantage.
• Employee morale: Effective resource management means that team members have clarity about their roles. They will be allocated to the right tasks for their abilities, have the correct tools, and will not be over-utilized. This all means they are more likely to feel valued and supported—and less likely to feel stressed or frustrated.
• Setting expectations: Clear transparency into timelines, employee workload, budgets, and deliverables allows managers to set expectations for delivery to stakeholders and give clear, consistent updates on the progress of a project, program, or portfolio.
• Customer satisfaction: Because skillful resource management means that projects are fulfilled on-time, on-budget, and to a high standard, the customer typically enjoys a superior end product.

Effective resource management can be challenging. It is a continuous process, and managing multiple, dynamic projects means that resource requirements can change quickly. This can require regular adjustment or reallocation to keep a project or program on track. Resource management also requires a good understanding of the project’s requirements and skillsets of the team members.

Planisware’s intuitive, clear dashboards and innovative, industry-leading tools help you to manage and plan resources across your entire organization, revolutionizing your PPM processes. Learn more about our products and request a demo today.

A visual planning technique which aims at building a big-picture view of a complex subject, starting with the long-term need, and working backwards to map all the possible ways to respond to that need.

The very flexible nature of roadmapping means that no two roadmaps will be the same, though they will generally share similar components such as long and short term needs, change drivers, internal and external constraints, and performance targets.

Roadmapping is particularly useful when a company (or an industry) is facing rapid technological change, disruptive competition, and cross-industry partnerships, as it helps visualise the objective alongside all the critical factors that may influence the end result, and allows for more effective, business aligned decision-making.

See also: technology roadmap

related articles: planisware enterprise demo: the case for using roadmaps, a primer for integrated roadmapping: an interview with ken huskins

A lightweight agile project management framework very popular due to its simplicity and flexibility, and often used in conjunction with other methods as it does not prescribe any technical practices.

Scrum uses 30-day iterations (called “Sprints”) and small (4 to 9 members) self-organising teams to deliver functional software with the highest business value. Before a sprint, the team members choose and review the backlog items that need to be implemented (the Sprint Backlog). During the sprint, each team meets daily to discuss what was accomplished since the previous meeting and any roadblocks that should be escalated or managed in priority (the daily Scrum). Once the sprint backlog is depleted and a new release can be produced, management closes development and the team perform the testing, documentation and training necessary.

A management framework, originally invented by Motorola, that aims at maximizing the quality of an organisation's end products by identifying and eliminating sources of defects and reducing variability, until processes produce less than 3.4 defects per million opportunities for deviation.

Six Sigma uses statistical methods and the DMAIC / DMADV methodologies to systematically analyse and improve existing or new processes.

With the framework's increasing popularity, the expression "Six Sigma" also evolved to designate a business philosophy focused on meeting customer needs, and sustaining and developing the organization's products and processes using a disciplined data-driven approach to improvement.

see also: dmadv methodology

Choosing the right project management methodology can be challenging. As a structured, robust framework that’s particularly popular for managing project risk, is the stage-gate process right for your project and organization?

What is the stage-gate process in project management?

Stage-gate, also known as phase-gate, is a project management model that uses a five-step process with four review points to guide a project from conception to completion. Under this methodology, a project is broken down into five management sections, called “stages” or “phases,” with “gates” between them—hence “stage-gate.”

Gates are decision points where stakeholders must review the previous stage’s success and decide whether to continue to the next stage, modify the project, or stop the project altogether. This is commonly known as the “go/kill decision.” The decision to continue, adjust or end the project is a key feature of the stage-gate process.

Each stage (or phase) consists of activities—the work that must be done—and an integrated analysis of them, resulting in the creation of deliverables. A typical breakdown of these stages might look like:

1. Ideation or discovery: Brainstorming sessions to generate initial ideas. You’ll define the concept and what you’re trying to achieve or accomplish.
2. Business case: Defining stakeholders and project objectives, and compiling research to justify them. 
3. Development: designing and creating deliverables, such as a product or campaign. Wider teams may get involved, and the project starts to take real shape.
4. Testing: Validating of the prototype to ensure the product meets your stated goals and quality levels, and that it’s compliant with regulations and industry standards. The product will be tested out with smaller groups to gather feedback and identify bugs or necessary tweaks.
5. Launch: Making and signing off on finishing touches before delivering the end product to its end user or audience

These stages are typically customized depending on the organization, but the principles of stage-gate remain the same. It does share some similarities with waterfall methodology, which also has a linear process with stages following sequentially.

The review gate in the stage-gate process

Between each stage (or phase), there’s a “gate” which connects them—this is an essential step in the stage-gate process, also known as the review. It can be thought of as a boundary or progress checkpoint between each stage. Here, stakeholders and project teams must make decisions about progress.

The subject during each gate depends on the stage that it follows. For example, after the first stage, the gate will discuss the feasibility and quality of the project ideas that have been generated. 

While the activities in the gate can be customized for each organization, questions may typically relate to profitability, resources, and goals. What is needed to move the project forward? What criteria will be used to judge success?

Each gate comprises one or more deliverables (resulting from the stage it closes) and criteria (usually both financial and qualitative, organized on a scorecard). Together, these result in an output or decision—typically go, adjust, or kill. 

The review gate between each stage ensures consistent project evaluation. This minimizes risk, increases visibility, and helps project teams align strategically.

What are the benefits of stage-gate in project management?

Stage-gate is a simple and adaptable project management methodology. One of its most championed benefits is its prevention of project risk in potentially chaotic new product development projects, which can often involve large, cross-functional remote teams. Other benefits include:

• Risk mitigation — By establishing times for review throughout the project at each gate, stage-gate promotes information-led decision making. Teams can review where more rewarding opportunities may lie, avoiding budget blowouts.
• Project success — By taking a step back at each stage and regularly seeing the bigger picture, stage-gate can bring discipline to your project execution, minimizing errors and ensuring no steps get missed. Timelines, deliverables, criteria, and outcomes are kept in clear view, with products at their best before launch. 
• Resource management — With its in-built review gates, the project team can be shuffled around if required. This minimizes wasted resources, streamlining projects.
• Increased transparency — Exhaustive documentation, regular reviews, and clarity on project timelines and progress ensure that responsibility is clear and all team members are on the same page, boosting confidence and cohesion.
• Collaboration — By emphasizing a structural approach, stage-gate can facilitate more effective communication between large teams across multiple departments or locations.

Which businesses and projects are suited to the stage-gate process?

Any growing businesses in need of a reliable, robust, and fuss-free process can benefit from using stage-gate. As a highly structured approach, it is particularly popular with larger enterprise organizations, who often have multidisciplinary teams, disparate departments, and numerous stakeholders.

Stage-gate can help to structure and speed up new product development projects, software launches, and organization-wide changes, benefitting those with cross-functional projects and high-growth objectives. Stage-gate is a popular methodology for products that need to be at their best before launch, and it is particularly apt wherever there are many moving parts. 

However, the natural innovation process is not a linear one. Thus, stage-gate can often be too structured for fast-paced and evolving projects. That’s where agile methodologies can come in. They allow for change at any stage in the project — the team starts with a simple project outline and develops functionalities in later versions (called iterations).

Stage-gate process vs agile methodology: what’s the difference?

With stage-gate, the entire project is covered. Teams complete each step before moving forward, using a five-step process. Work to be completed and evaluated is defined at each stage—a gate that must be passed before moving on. There is significant upfront planning, with validation at specific stages.

Agile also splits a project into stages, called sprints. Agile prioritizes the delivery of a shippable prototype product after every iteration, which can be tested with a customer as soon as possible. It aims to involve the user throughout, delivering products incrementally by measuring feedback and satisfaction as the project progresses.

So, with stage-gate, the product is typically well-defined at the outset, but with Agile, the product can evolve and adapt throughout the project. stage-gate emphasizes a large multidisciplinary team, exhaustive documentation and a business case; Agile is typically characterized by a smaller technical team, individual interactions, and openness to change.

Though at first glance these two methodologies can seem diametrically opposed, a hybrid approach does also exist.

Agile stage-gate: the best of both worlds?

Agile and stage-gate methodologies can actually be used harmoniously—introducing Agile stage-gate. This approach—an evolution of stage-gate—pairs stage-gate’s classic structured approach with the agility of Agile’s self-organized teams and focus on delivery. Agile stage-gate includes shorter cycle iterations, inviting testing and customer feedback during each stage/phase.

“SAFe” milestones in stage-gate project management

Scaled Agile Framework (“SAFe”) is a popular and comprehensive project management approach. It is a set of structured workflow patterns that helps large organizations adopt and then scale agile project management methodologies.

As a framework, it includes several milestones to aid and speed up product development, promoting collaboration, alignment and delivery across many teams. A milestone is a specific, significant stage of a project, used to track progress towards a goal. In SAFe, the main 3 types of milestones are:

• Program Increment (PI) milestones: At the start of each project or program segment (called an increment), teams must come together to set goals, plan upcoming work, and prioritize activities. Project teams must repeat this process approximately every 8–12 weeks to prepare for the next iteration.
• Fixed-date milestones: These are non-negotiable dates and times that will impact your project. These are pivotal events or periods in your project development timeline, influenced by external factors or third parties.
• Learning milestones: When the opportunity to learn presents itself, project teams must take it. Agile methodologies focus on continuous development. So, feedback and insight from customers, users, and stakeholders is vital.

Whilst more associated with agile methodologies than stage-gate methodologies, SAFe milestones can benefit both approaches. This is because businesses can deploy Agile and stage-gate in harmony, as touched on earlier.

At Planisware, our solutions can help you incorporate the best of stage-gate and agile methodologies to transform how you plan your projects, coordinate your teams, develop products, and deliver your organization’s mission.

The star schema consists of one or more fact tables referencing any number of dimension tables. It is the simplest style of data mart schema and is the approach most widely used to develop data warehouses and dimensional data marts.

What is Strategic Portfolio Management (SPM)?

Strategic Portfolio Management (SPM) is a set of processes and business capabilities that aid in selecting the right investments to meet strategic goals. SPM is conducted at the top executive level of the organization.

SPM is about articulating a global, enterprise-wide strategy with its associated goals and expected outcomes. It aims to continuously deliver through projects, products, and services that transform the organization in the desired direction.

The term “Investments” in the context of SPM refers to many actions that touch on many business aspects. Some examples include:

• Large-scale business projects (such as exploring a new market or investing in a significant new product development project)
• Major transformation projects (such as digitization of a significant part of the business)
• Major financial decisions (such as share buyback programs)

SPM has close ties to PPM and Project Management but at a much broader scope. SPM is becoming popular due to the need for more organizations to reinvent themselves in the face of disruptions.

What is the Difference Between PPM and SPM?

Project Portfolio Management (PPM) has been used for over two decades, but a newer model is emerging. Strategic Portfolio Management (SPM) is gaining popularity in larger organizations with ambitious goals. So, what is the difference?

Defining PPM

PPM allows businesses to centralize project management and align all projects and portfolios with broader objectives and goals. It refers to the tools, methods, and strategies used to manage a specific project portfolio, which includes overseeing several connected projects with a shared goal or outcome. PPM helps businesses streamline and optimize project delivery, as well as assess the value of individual projects and entire portfolios to the organization using real-time data.

Defining SPM

SPM’s key differentiator to PPM is its top-down approach and focus on enterprise-wide strategy-to-execution alignment and adaptation. In a 2017 report, Forrester Research introduced Strategic Portfolio Management (SPM) to the landscape. The difference lies in the modern need for digital transformation, agility, and a ‘single source of truth’ — which SPM presents to its users. This makes it suitable for large businesses and those looking to grow fast, scale at pace, or undertake many high-stakes projects at once.

How Does Strategic Portfolio Management Help Governance?

Governance describes the processes, practices, and people that have authority over and are accountable for business decisions. This includes standardizing processes, defining roles and responsibilities, and assigning key decision-makers for final approval. SPM provides a framework for standardizing, measuring, and reporting on projects, ensuring they relate to the company’s broader strategic goals.

Effective SPM supports governance by streamlining and centralizing all projects at an enterprise level. This ensures that everyone and every task is working towards the organization’s strategic goals. With standardized practices, methods, and templates in place, governance becomes more straightforward thanks to easier decision-making, clearer accountability, greater transparency, and more.

What is the Role of a Strategic Portfolio Manager?

A Strategic Portfolio Manager plays several crucial roles in a business. There will likely be some overlap with PPM. However, SPM takes a higher-level approach, more focused on connecting activities, tasks, and portfolios to business outcomes. The role includes but is not limited to:

• Aligning projects with strategic goals
• Identifying risks to the business, finances, and timelines
• Providing information to solve issues
• Ensuring teams complete high-priority projects first
• Managing and allocating resources
• Reporting on, predicting, and managing budget and finance
• Increasing project visibility and creating a ‘single source of truth’
• Gathering and utilizing data to make better business decisions

What Are the Benefits of SPM?

SPM helps businesses ensure that organizational goals are the focus of projects and portfolios, emphasizing the significance of strategic alignment. This higher-level approach presents many benefits, including but not limited to:

• Better communication between teams, stakeholders, and the enterprise as a whole
• Prioritizing projects that better align with the business’s strategic goals
• Enhanced project ROI thanks to more centralized goals, objectives, and key results
• Increased adaptability and clear visibility of when it’s time to kill a project
• Accurate, real-time data to measure project success
• Easier prioritization of projects and, in turn, resource allocation
• A clear and centralized view of all information, projects, tasks, and budgets
• Enterprise-wide standardization of processes and templates

If you are looking for a way to manage multiple projects better, we can help. Get in touch.

A type of innovation in which sometimes small, sometimes larger creative features or evolutions are integrated to existing products, services, technologies or processes on an ongoing basis.

Sustaining innovation is an enterprise-level strategy that requires placing customer value at the top of the company’s priorities (and thus move other priorities such as shareholder value further down). It often will influence  – sometimes significantly – the organisation’s managerial culture and processes.

Unlike disruptive innovation, sustaining innovation does not fundamentally alter the industry’s dynamic or upset its hierarchy.

see also: disruptive innovation

related articles: planisware enterprise demo: building an innovation strategy into your product portfolio

A type of roadmap that centres on a new product, process or an emerging technology.

Technology roadmaps are particularly useful to identify how incremental changes in current technologies may snowball into new products with a potential to disrupt existing markets, or where critical technology gaps (and opportunities for R&D investments) exist. They help develop a consensus about what current and future needs might be and what will be needed to satisfy them, and spot areas where combining R&D efforts could yield proportionally better, more effective results.

see also: roadmapping, long-range planning

related articles: planisware enterprise demo: the case for using roadmaps

A product development methodology in which a project is broken into phases that follow each other sequentially in a steady flow downwards.

The classic sequence is composed of 5 broad phases: Analysis (or requirements gathering), Design, Implementation, Testing, and Maintenance, each ending with a checkpoint and deliverables.

Unlike the agile methodology, a project cannot move to the next phase until the current one is complete, and it is not possible to make changes to a previous step without starting the whole project from scratch. Each step is meticulously documented, which ensures continuity of the project if the team members change, and the overall process provides a structured approach that helps create from the start a clear image of what the end product will look like.