Project Portfolio Management (PPM) is the most powerful method to implement the company’s goals and strategies, prioritizing the different requirements and plans, and providing the right financial and human resources.
Why project portfolio management?
There seems to be too many projects, unclear project goals, and understaffed departments everywhere and in every company. Also, the product life cycle is getting shorter and shorter, with the result that ever faster and more flexible results are a competitive requirement.
As a result, the tool: “project portfolio management” is becoming increasingly important today.
Projects fail when the result is unusable, work and effort are doubled or wasted, or failures and defects occur. This leads to the demotivation of employees and a waste of funds.
Who should manage portfolio management?
Anyone can manage portfolio management, which can ensure that colleagues work together towards the agreed goals. The structure can be top-down or bottom-up. However, the highest level of management is usually not sufficiently detailed, and the simple employee will hardly have a strong enough voice to make him or herself heard. Therefore, middle management is best positioned to take on the role of PPM.
Practical first steps to start with project portfolio management
The basic requirement of PPM is to first identify the strategic goals of the company. Only as a second step should the processes be designed and implemented as simply as possible. The goal is for everyone to know what he/she must do and when.
Characteristic of a simple process
The initialization of a project must be possible from any hierarchical position and the prioritization must be easy to understand. The decision with its justification must be communicated openly, so that it remains understandable why certain projects are implemented and others not. As a result, everyone feels involved, and political games are largely excluded.
Adaptation of project portfolio management to changes
In order to be able to react quickly and correctly to changes, a regular review of the portfolio and the processes must be planned. Suitable for this are the peers, who are also the decision makers within the processes and the portfolio.
Reasons against project portfolio management
The reason why PPM is practiced in very few companies is explained by time and available resources. On the one hand, there is always too little time to put projects and strategies on the right path, paradoxically to save time. On the other hand, the introduction of PPM requires the profile of a person who has enough leadership skills and reputation in the company to persuade others.
The question is often asked whether the administrative effort is worthwhile compared to the expected success to be achieved. What is the cost/benefit of improved project target quality versus additional effort in the analysis phase both in terms of content and in terms of the environment?
According to my experience, the success is not only obvious, but even obviously measurable. In the past, we have had projects or new launches without much planning or analytical effort, which has certainly led to a quick but very unsatisfactory introduction.
In the analysis phase, fewer resources are often more. A few specialists work out the detailed concept with all its milestones and risks, so that no major surprises can be experienced in the implementation.
What is important for project management also applies to project portfolio management. Here, the risk of waste of resources is even higher, if one thinks of many contradictory projects that can no longer be controlled in a company of a certain size without uniform management. Even though corporate communications should be excellent, the paths from top management to individual employees are always too far to ensure the implementation of the desired business strategy.
Basically, it is right that portfolio management should not only be reconciled with corporate strategies but should even be based on them. Therefore, the development of the strategic goals is rightly the first step in the introduction of a project portfolio.
The main success criteria in the introduction of project portfolio management are:
• the absolute desire and support of senior management to work according to the guidelines of project portfolio management
• simple and easy processes that everyone sticks to
No department or employee wants to be overly controlled or supervised. No divisional manager likes to see their department intervened in the interests of the outside world.
However, multi-sectoral projects or projects from different sectors should be brought into line with the business.
To master these different interests requires on the one hand, a binding decision of the upper management, simple and meaningful processes, as well as a lot of communication and willingness to cooperate, because ultimately it is about the achievement of a common goal: the entrepreneurial success.