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