Project Portfolio Management (PPM) is a management process designed to help an organization acquire and view information about all of its projects, then sort and prioritize each project according to certain criteria, such as strategic value, impact on resources, cost, and so on. The objectives of PPM are similar to the objectives of managing a financial portfolio: 1) To become conscious of all the individual listings in the portfolio 2) To develop a "big picture" view and a deeper understanding of the the collection as a whole. 3) To allow sensible sorting, adding, and removing of items from the collection based on their costs, benefits, and alignment with long-term strategies or goals. 4) To allow the portfolio owner to get the "best bang for the buck" from resources invested.
Typically, PPM begins with the organization developing an inventory (comprehensive list) of all its projects and enough descriptive information about each to allow them to be analyzed and compared. Such descriptive info can include project name, estimated duration, estimated cost, business objective, how the project supports the organization's overall strategies, and so on. These are sometimes compiled in an electronic database so they may be analyzed and compared more easily.
After the project inventory is created, the PPM process requires department heads or other unit leaders to examine each project and prioritize it according to established criteria.** The overall list of projects is then considered in order to develop a well-balanced list of supported projects. Some projects will be given high priority and extensive support, some will be given moderate priority, and still others will be placed on hold or dropped entirely from the list.
Finally, the project portfolio is reevaluated by the portfolio management team on a regular basis (monthly, quarterly, etc.) to determine which projects are meeting their goals, which may need more support, or which may need to be down-sized or dropped entirely. Since the circumstances of each project and the business environment can change rapidly, PPM is most effective when the portfolio is frequently revisited and actively managed by the team.
In order for the above PPM activities to take place, the organization must first decide who will participate as active managers of the PPM process. Typically, the PPM management team is made up of department heads from sub-organizations which generate requests for projects, provide project resources (especially team members), provide project funding, use finished project deliverables, set strategic directions, and so on. After the PPM management team is established, they must agree on a set of criteria for valuing projects in order to prioritize them. Decisions based on these criteria will likely be more acceptable to everyone in the organization if the criteria have been developed with the input or review of as many stakeholders as possible from within the various sub-organizations. So typically broad, organization-wide discussions of the criteria are held before they are finalized. Read More...
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