Many companies work on more than one product. Usually, these products contain big pieces of work that are divided into smaller, more manageable chunks, often called projects. Each manager deals with more than one project, so it’s no wonder they group it into portfolios. A project portfolio is one of the most important things and, if properly managed, can make your work much simpler.
Project Portfolio – definition
Project portfolio contains other processes, procedures, and programs within itself. These elements are managed and financially optimized together. Usually, a project portfolio is managed at an organizational or functional level. Importantly, the portfolio is a typical strategic tool with no specific goals. It serves as an optimizing and prioritizing tool for managers, who can oversee the projects the teams are working on.
Project Portfolio Management
According to Project Management Institute, Project Portfolio Management focuses on doing the right projects at the right time by selecting and managing projects as a portfolio of investments. It requires completely different techniques and perspectives.
Importantly, good portfolio management increases business value by aligning projects with an organization’s strategic direction, making the best use of limited resources, and building synergies between projects. Unfortunately, organizations often do portfolio management poorly. As a result, they fail to deliver strategic results, because they attempt the wrong projects or can’t say “no” to too many projects, states the paper’s author.
Project Portfolio Management – benefits
Why is Project Portfolio Management so important? Well, good PPM leads to:
- Investments are based on effective criteria.
- Becoming more assertive, learning to say “no” to some projects.
- Aligns strategy and execution.
- Strong long-term executive participation.
- Presents a broader picture.
- Simplicity and transparency in processes.
- Faster time to market.
- Higher productivity.
- Less chaos.
- Implemented strategy.
Project Portfolio Management – example
Want to see a good example of Project Portfolio Management’s importance? Read our Metapack Case Study! From there, you will learn how Metapack benefits mostly from teams’ work alignment and roadmapping. The main BigPicture feature they use is the Gantt module. Providing a visual representation of the delivery plan supports the company’s roadmap conversations and offers self-service opportunities to the whole organization. It is thanks to these aspects, that Metapack has early access to future risks and difficulties, can prepare for them in advance, and plan the portfolio accordingly across both Product and Engineering functions.
The Project Portfolio Management Process
As the PMI paper states, the project portfolio management process can be divided into the following steps:
Project Portfolio Manager – duties
The project portfolio manager’s duties are much more than just simply supervising the project’s progress. It’s also about mentoring, selecting, and asserting that each project brings business value to the stakeholders and isn’t only about burning through the company’s budget. The other competencies, according to Project Management, are:
- Determining various project mixes to meet business objectives.
- Keeping the project groups in balance in both the short and long term.
- Constant tracking of projects and their progress, as well as their implementation.
- Assessing portfolio performance and looking for methods for improvement.
- Evaluating existing opportunities against the portfolio.
- Analyzing, evaluating, and comparing the organization’s capacity in terms of implementation.
- Aiding in the decision-making to the people in charge of different levels of management.
Project Portfolio Management and Project Management – main differences
Program vs. Portfolio – definition
According to Northeastern University, a program is a group of projects that are similar or related to one another, and which are often managed and coordinated as a group instead of independently. Meanwhile, Portfolio is a group of different programs and/or projects within the same organization, which may be related or unrelated to one another.
Project Portfolio Management in 5 steps
- Set goals for your business – strategy is the key. Gather every information you have, set the OKR (Objective Key Results) and KPI (Key Performance Indicators) with stakeholders and team members you want to reach.
- Analyze – check for weaknesses and strengths within your portfolio, assess the risks and opportunities, as well as point out the business value.
- Align – check, if everyone is on the same page – both stakeholders and team members. Moreover, make sure that resources are properly allocated within the portfolio. Importantly, properly does not mean equaly – some projects need more budgeting, some less.
- Manage – keep an eye on the workflow, check the progress and, most importantly, kill the projects that bode ill. One of the key features of good management is saying “no” to the things that bring no business value.
- Adapt – one of the main advantages of the Agile approach is the ability to react almost immediately, instead of waiting for the next step and fixing the mistakes that happened previously. Project Portfolio Management won’t be top-notch in its first iteration, instead, you must edit and correct your steps to find the optimal way of doing things within the portfolio.
Successful Project Portfolio Management – tips
According to Oxygy, there are five elements to achieve success with your PPM:
- Create transparency enabling visualization of not only short-term but also mid-and long-term goals.
- Implement separate processes for strategic and operational project portfolio management.
- Make the benefits management process shape the organization.
- Support the implementation of agile practices at all levels and functions.
- Use portfolio management to monetize your current and future digital assets.
Project Portfolio management software to the rescue
PPM Software is a way to help you organize your portfolio in the digital age. This software, like BigPicture, helps you optimize your work, boost results, and save precious time. Your product, project, and portfolio management (PPM) will become much easier, making room for soft aspects of management. Fewer sheets, more talks.
PPM Software – two different kinds
Both software types have their pros and cons. Desktop software is more reliable in terms of internet connectivity – in case of network problems, it still will be standing. Online software, on the other hand, can be used basically anywhere where the working Wi-Fi is – its biggest weakness is its biggest advantage. The distributed team can work efficiently with online software.
Good PPM Software – main traits
- Gantt Chart – a timeless classic of every planning.
- Reporting – to create reports for stakeholders.
- Dependencies – presenting the way tasks and issues are interconnected.
- Hybrid management – to be available to manage Classic (Waterfall), Hybrid, and Agile initiatives.
- Automated schedule – to see the available manpower is a simple thing, like automated updates about employees’ days off, that can save a lot of time and trouble.
PPM Software example – BigPicture
You can manage your portfolio with just a pen and paper, but with contemporary technology’s complexity that would be a quite challenging task. Fortunately, you can use the proper management software and benefit from these digital tools. Like BigPicture, described in the video below:
Who is who in Project Portfolio Management?
Main benefits of using PPM
Basically, every organization big enough to contain complicated cross-relations within itself benefits from a good PPM. Also, startups and smaller companies, and teams that plan to scale themselves up will benefit from PPM, as they grow more complex in terms of structure. Every digital business will also need PPM in some aspects, as most digital services and companies contain more than one project or product.
Managing a Project Portfolio – Step By Step
- Take calculated risks – risk management is a crucial talent of a good Portfolio Manager. You must know when it’s worth it and when to let go.
- Understand risks – tackle the risky tasks, that bring the biggest business value possible.
- Mitigate unnecessary risks – always think about failure and how can you diminish its effects on your portfolio. Damage control is necessary when taking risks.
How Project Portfolio Management tackles business challenges?
First and foremost, PPM tackles the lack of transparency. Good PPM allows every interested party to stay informed about portfolio risks, visions, and goals. This, of course, means better budgetary spending between projects and products. Finally, PPM allows companies to shift into more data-oriented work, that is efficient, less expensive, and answers to market demands better.
Choose the Right PPM Tool
Looking for proper PPM software? Try BigPicture. With BigPicture, you can build any portfolio structure, including sub-portfolios, programs, projects, stages, requirement areas, and more. Regardless of methodology, you can easily optimize your work and track progress on both high and granular levels.
BigPicture fully supports hybrid workplaces – you can plan for multiple teams and on multiple levels, whatever your preferred agile framework is. The app supports Scrum, SAFe®, LeSS, and more, allowing you to work on a level of various timeboxes, such as iterations, Program Increments, or whatever meets your unique requirements.
Feel interested? Try the free trial today!