Project Portfolio Management for Enterprises: Everything You Need to Know
As organizations grow bigger, it becomes challenging to align projects with business objectives. Business leaders & PMOs require two critical things to be successful. Firstly, they need to properly align their resources and projects with their strategic priorities. Secondly, they need up-to-date data on project performance for on-the-fly course corrections while continuing to support their existing project execution systems.
There is all the execution data from the various systems used by the organization, but leaders lack visibility into the priority of the project, how much the spending should be & there is no aggregated view across the portfolio. The fragmentation of the data causes a lot of issues. Leaders don’t know what to prioritize, if they are really on budget, and they cannot understand the existing situation enough for effective planning.
To solve these challenges, organizations need a way to bring together all their disparate project and resource data spread across multiple systems used by different teams and departments. That is where project portfolio management comes into play.
Understanding Project Portfolio Management (PPM)
In simple terms, portfolio management is a larger scale application of project management. Where they differ is that portfolio management is concerned with the larger picture. PPM involves the management of some projects in an enterprise under the umbrella of a particular portfolio. PPM allows enterprises to strategically manage projects, resources, budgets and other factors to ensure that projects are not only executed successfully but more importantly, contribute to the overall business objectives.
The Objectives of Project Portfolio Management for Enterprises
As firms grow, they begin to experience a number of issues around their projects. Some of those issues are as follows.
- Difficulty in mapping and prioritizing projects that align with the organization’s strategic goals
- Lack of real-time project portfolio data due to multiple project execution systems
- A large number of projects that cannot deliver value
- Resource conflicts caused by overallocation of resources to projects simultaneously
- Bottlenecks and project delays caused by conflicts around resources and budgets
- Massive delays for projects resulting in delayed ROI and uncollected revenue
For portfolio managers, the objective is to determine what works and what does not. That way, the enterprise can streamline their efforts into projects that actually benefit them instead of wasting time and resources on unworthy ones, thereby improving the bottom line and overcoming the above challenges.
Project portfolio management for enterprises helps to evaluate and manage several projects by grouping them into portfolios. Then, enterprises can analyze these portfolios to check their overall effectiveness and align them with the strategic objectives of the organization. This data-driven process allows enterprises to determine whether a project is worth pursuing.
Portfolio managers regularly review their portfolios and trim down any project that does not meet determined criteria. They examine budget spends, the value of each project, the ROI that a project can generate, and the resource requirements to make a decision. These analyses and decisions must be made in real-time. To support this process, you should invest in enterprise project portfolio management tools that offer real-time visibility into all project and business data.
The Project Portfolio Management Process
The PPM process can be broken down into five major steps which bring about high-level alignment of projects and business objectives.
1. Determine Business Goals
To select the right projects for the enterprise, all teams must be on the same page. To do so, it is important to create a strategy roadmap that clearly defines business objectives and priorities. Organizations can have any number of long-term business objectives. For some enterprises, increasing their market share is of paramount importance while for others it might be to open new branch offices in a different country.
No matter what the enterprise goals are, it is essential that all stakeholders are aware of them. Building a roadmap for these goals ensures that all managers, executives and resources know what is expected of them and how they can all collaborate to achieve those goals.
2. Gather Project Data
It is important to gather all data around ongoing projects as well as those that are in the incoming pipeline. This data will answer critical questions like:
- Number of ongoing projects
- Number of upcoming projects
- Projects aligned to strategic goals
- Total costs
- Projected ROI
- Estimates vs. Actuals
- Resource requirements
Currently, many organizations use a lot of different project execution systems which make it harder to get all the information as mentioned above. With the right PPM tool, it becomes easier to collect all of the above information under one single central location. Centralizing the data also makes it easier for portfolio managers, project managers, and other stakeholders to gain complete real-time visibility and control into the entire portfolio.
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3. Evaluate All Projects
Once all relevant information has been collected, enterprises can start evaluating the projects. Reviewing the portfolio allows you to discover and eliminate obvious issues such as duplication, interdependencies, resource conflicts, and high-risk projects.
The next part of this step is to conduct a deeper analysis of the projects to determine how many of them are aligned with the strategic goals and the probability of a successful outcome. It is also important to understand the implications of the projects on resources and budgets. Enterprises should also focus on standardizing the project evaluation criteria and methodologies. They must also work to create strategies for risk and change management.
4. Develop the Portfolio
Once the projects are ready, you can consolidate them into separate portfolios. The aim should be to develop a well-rounded portfolio that not only satisfies internal requirements of the enterprise but also offers a healthy risk-reward balance. This is also the step where enterprises should define key management processes such as reporting structures and work breakdown structures.
In addition to the above, enterprises and services firms should now be considering the adoption of a dedicated project portfolio management solution if they haven’t done so already. A PPM tool can support the activities around PPM while providing managers with complete visibility around project metrics, resourcing and other critical details.
5. Monitor and Adapt
Once the portfolio is ready and the projects begin to move, enterprises must start monitoring the portfolio. Portfolio managers must track performance of the entire portfolio and recalibrate as the need arises. They may need to reallocate resources, re-scope the project, and make other changes on the fly. Managers must be on the lookout for short-term as well as well as long-term opportunities for refining and improving the PPM strategy.
Choosing the Right Project Portfolio Management Software
For firms, PPM helps prioritize the right projects that add value to the organization and improve the bottom line. With the right enterprise project portfolio management tools, you can do that and more at a faster pace. Polaris PPM, the world’s first self-driving PPM, was created to solve the unique challenges around project portfolio management for service organizations and enterprises. Here are some of the capabilities offered by Polaris PPM.
Visibility Across the Entire Project Portfolio
Polaris MissionControl offers managers a high-level view of the organization’s strategic objectives across their project portfolio. While the view can be customized to suit the role, it operates off a shared data platform which eliminates data silos and ensures harmony across all teams.
Monitor Portfolio Performance
Polaris PPM allows projects to be grouped under portfolios for easy tracking of all metrics and performance. You gain complete transparency around details such as priorities, project deliveries, resources, costs, and more. Easily align all projects to your strategy and get a unified view of the entire project portfolio.
Ensure Global Governance
With Polaris PPM, enterprises can easily define their methodology for managing projects, portfolios and resources. They can assign strategy and risk scores for portfolio prioritization. It is also easy to ensure standardization of formats, processes, workflows and data across the organization so that everyone is on the same page. This ensures consistency in project execution.
Real-Time Portfolio Management with SmartBeats
The Polaris SmartBeats system is capable of automatically harvesting data from all users and systems across the organization to provide real-time visibility into the portfolio. Polaris even provides alerts for portfolio risks, allowing managers to proactively take the necessary steps to stay on track.
Intelligent Resource Management with Smartmatch
Resource allocation is no longer a major timesink with the help of the Smartmatch system in Polaris PPM. Smartmatch is an intelligent resource recommendation engine powered by AI. It helps managers to get up-to-date information on all resources, including their current tasks, their skills, and other details. It also does the heavy lifting by recommending the most ideal resource for any task or project requirement. Polaris PPM also offers resourcing workflows to streamline collaboration between project managers and resource managers.
Track Budget vs Actuals
Make better informed decisions around costing for the portfolio with the help of centralized insights into project budgets, status and WIP. Polaris allows you to set, track, and manage all your critical portfolio metrics in real-time such as hours, costs, priority, progress and more. Streamline all allocations including internal chargebacks, CapEx, OpEx, R&D costs and more.
Accurate Time Tracking
With Polaris PPM, enterprises can capture all time and expense details accurately to support project management and billing. With approval workflows and validation rules, it is easy to ensure that the data captured is error-free.
Project portfolio management is the key to making smarter business decisions. It helps deal with risks while ensuring faster project turnaround times by streamlining and standardizing the processes involved. With PPM, you can increase project success rates and support the long-term objectives of the organization. Of course, the right enterprise project portfolio management tools like Polaris PPM will help in making the fullest use of the benefits of portfolio management.