Project Portfolio Management (PPM) is a strategic management practice that guides organizations in realizing their long-term investment goals by managing projects through an organized system. A systematic approach to project portfolio management provides a unique opportunity to businesses to build financial resources that are rapidly expended. Projects are managed through a series of stages with a primary focus on the resource requirements and progress of the projects. This system also takes into consideration the capacity and process improvement required for long-term project performance.
Project Portfolio Management is basically the central management of the systems, processes, and technology used by project management offices and project managers to study and overall manage currently or upcoming projects based on a number of key factors. The five key factors that are included in this process are identified risk, financial status, strategy, capability, and priority. Although most organizations have their own version of project portfolio management, most of them still lack several key elements that are necessary for managing projects. Moreover, the lack of these elements results in project failure and even more important it significantly reduces the potential for organizational growth.
The main objective of PPM is to ensure the organization's capability to realize its strategic objectives. Through the efficient use of the available resources, the achievement of strategic objectives can be realized. As part of managing projects, strategic objectives are typically long-term ones that require several years before they can be realized. Strategic objectives vary greatly and in most cases managers need to consider the possibility of revising or updating these objectives on a regular basis. In addition, most organizations lack expertise in managing projects of various sizes and complexity.
Most organizations still perform risk management activities after determining that a project is worth their investment. However, most of them still do not effectively execute the risk management practices as they are usually only performed at the planning stage. Implementation of risk management practices can significantly improve the ability of an organization to deal with unexpected events that can significantly reduce its capacity to meet its objectives. Hence, if an organization wants to utilize the benefits that it can derive from its projects, then it should endeavor to implement effective project portfolio management practices as part of its overall succession planning process.
Effective implementation of portfolio management can help an organization to address some of its biggest challenges such as increasing the sustainability of its capital budget, reducing operating costs, and meeting long-term goals. The improvement of these aspects of an organization can help it meet the long-term goals in a more efficient manner. It can also help it meet its short-term goals such as developing new skills for a certain area or creating and maintaining skilled professionals. In addition, the reduction of costs can also significantly improve the bottom line of most organizations, especially if they are able to improve the productivity of its projects.
Implementation of project portfolio management improves the performance of organizations in all these areas. These improvements can be realized by organizations that take advantage of its various advantages. However, because of the inherent complexity of its governance system, it is not always possible for organizations to improve its governance and project control systems. For this reason, it is very important for them to take the assistance of third-party consultants who can provide them with the necessary assistance to improve their governance systems and improve their visibility in the market.
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