Become Proficient in Project Portfolio Management

1.  Introduction

Project Portfolio Management (PPM) is a process for selecting, prioritizing, and managing an organization’s projects to achieve strategic objectives. In today’s business environment, where companies face intense competition and rapid change, PPM has become an essential tool for aligning projects with organizational goals and ensuring that resources are allocated effectively. PPM enables organizations to evaluate and select projects based on their strategic value, prioritize projects based on their potential return on investment, and manage project portfolios to maximize value and minimize risk.

PPM helps organizations to optimize their project portfolios by balancing the allocation of resources, the risk of projects, and the potential benefits to the organization. This article will explore the key aspects of project portfolio management, including portfolio mapping, portfolio governance, portfolio analysis, portfolio prioritization, portfolio execution, portfolio risk, and portfolio performance. By understanding these aspects of PPM, organizations can make better decisions, achieve better results, and ultimately improve their overall performance

2.  Portfolio Mapping

Project mapping is the process of identifying, categorizing, and organizing an organization’s projects and programs to create a comprehensive view of the project portfolio. The goal of project mapping is to understand the current state of the portfolio, identify gaps, overlaps, and redundancies, and determine the portfolio’s alignment with the company’s strategic objectives and priorities.

To map the project portfolio, it is important to first identify all projects and programs within the organization. These projects and programs should be organized in a way that provides a comprehensive view of the portfolio, such as by business unit, customer segment, or project status. Once the projects and programs have been identified, it is important to add various attributes to the portfolio that provide a detailed understanding of the projects and the overall portfolio.

Some common attributes that can be added to the portfolio include project status, resource requirements, strategic alignment, risk level, potential impact, project complexity, expected ROI, criticality, dependencies, and project owner. By adding these and other attributes to the portfolio, organizations can gain a more comprehensive understanding of the portfolio and make more informed decisions about resource allocation, project prioritization, and risk management.

Overall, project mapping is a critical step in the project portfolio management process. It provides a comprehensive view of the project portfolio, enables organizations to align their projects with their strategic objectives, optimize their resource allocation, and improve their overall project performance. By mapping the project portfolio and analyzing its attributes, organizations can make better decisions and achieve better results.

3.  Portfolio Governance 

Project portfolio governance is the process of overseeing and managing an organization’s project portfolio to ensure that it is aligned with the company’s strategic objectives, managed efficiently, and optimized for performance. Effective project portfolio governance requires a structured and collaborative approach that involves all stakeholders in the project portfolio management process.

The first step in project portfolio governance is to establish a project portfolio governance framework. This framework should define the roles and responsibilities of all stakeholders involved in the project portfolio management process, as well as the processes and procedures for managing the project portfolio. The framework should also include a set of metrics for measuring the performance of the project portfolio, such as return on investment (ROI), project completion rate, and customer satisfaction.

Once the governance framework has been established, the next step is to identify the governance bodies that will oversee the project portfolio. These governance bodies can include a portfolio steering committee, a project review board, and a project management office (PMO). The portfolio steering committee provides high-level oversight and guidance for the project portfolio, while the project review board is responsible for reviewing and approving individual projects. The PMO provides operational support and guidance for project managers and project teams.

To ensure that the project portfolio is aligned with the company’s strategic objectives, it is important to establish a process for reviewing and prioritizing projects. This process should consider the strategic objectives and priorities of the company, as well as the resources available for project investment. It should also consider the potential risks and rewards associated with each project.

Finally, to ensure that the project portfolio is optimized for performance, it is important to establish a process for monitoring and measuring the performance of the portfolio. This process should include regular reviews of the portfolio’s performance against the established metrics, as well as ongoing analysis and evaluation of the portfolio’s risks and opportunities.

Overall, effective project portfolio governance is essential for ensuring that the project portfolio is aligned with the company’s strategic objectives, managed efficiently, and optimized for performance. By establishing a structured and collaborative approach to project portfolio governance, organizations can make better decisions, achieve better results, and improve their overall performance.

4.  Portfolio Analysis 

Project portfolio analysis is the process of reviewing and evaluating the project portfolio to identify patterns, trends, and areas for improvement. The analysis should be aligned with the company’s strategic objectives and priorities and should use a combination of evaluation criteria to assess the portfolio.

One evaluation criterion to consider is balance. A well-balanced portfolio should have a mix of high-risk, high-reward projects, as well as lower-risk, more predictable projects. It should also be balanced in terms of resource allocation, ensuring that resources are not overly concentrated in one area of the portfolio. Another criterion to consider is execution methods. It is important to evaluate the execution methods used for the projects in the portfolio, such as Agile or Waterfall, to identify areas where improvements can be made in the project management approach.

Innovation is another evaluation criterion that can be used to assess the portfolio. This criterion measures the extent to which the portfolio includes projects that are innovative and have the potential to create new opportunities for the organization. Customer impact is another important criterion that evaluates how well the portfolio aligns with customer needs and expectations and how the portfolio can create value for the customer.

Another important criterion to consider is strategic sufficiency. This criterion measures whether the portfolio has enough value to meet the company’s future strategic objectives and top-down targets. S-curves can be a valuable tool for displaying the strategic sufficiency of the portfolio. S-curves plot the cumulative value of the portfolio against time, and can help identify whether the portfolio has sufficient value to meet the company’s future objectives.

In addition to these evaluation criteria, heatmaps can be a useful tool for visualizing and analyzing the project portfolio. Heatmaps can be used to represent the attributes of the portfolio, such as strategic alignment, resource requirements, risk level, and potential impact. The heatmap can be organized by category, such as by project type, business unit, or customer segment. By reviewing the heatmap, project managers and stakeholders can quickly identify patterns and trends in the portfolio and make informed decisions about the allocation of resources and the management of risk.

Overall, project portfolio analysis is a critical step in the project portfolio management process. By using a combination of evaluation criteria, S-curves, and heatmaps, organizations can gain a more comprehensive understanding of the portfolio and make more informed decisions about resource allocation, project prioritization, and risk management. This analysis can help organizations to optimize the project portfolio, improve performance, and achieve better results.

5. Portfolio Prioritisation

Project portfolio prioritization is the process of evaluating and ranking projects in the portfolio to determine which projects should be executed first. There are several methods that can be used to prioritize projects, including combining the evaluation criteria using filters, as well as other evaluation approaches. Additionally, there are several project prioritization methods that can be used, such as:

• Weighted Shortest Job First (WSJF): This method used in Scaled Agile Framework (SAFe) prioritizes projects based on their economic value, time criticality, risk reduction or opportunity enablement, and job size.
• Moscow: This method involves prioritizing projects based on whether they are must-haves, should-haves, could-haves, or won’t-haves. This helps to focus on the essential and most important projects first.
• Kano Model: This method involves categorizing projects into three categories: must-haves, performance attributes, and delighters. This helps to prioritize projects based on their potential to create customer satisfaction.
• Value vs. Complexity: This method involves evaluating the potential value and complexity of each project in the portfolio. Projects with high potential value and low complexity are given a higher priority.
• Cost of Delay: This method involves evaluating the potential cost of delaying each project in the portfolio. Projects with a high cost of delay are given a higher priority.
• Business Value Based Prioritization: This method involves prioritizing projects based on their business value. Business value can be determined by the potential revenue impact, competitive advantage, cost savings, or strategic alignment.
• Bubble Chart Prioritization: This method involves creating a bubble chart with the X-axis representing business value and the Y-axis representing project cost. The size of the bubble represents the size of the project. This helps to prioritize projects based on their potential business value and cost.
• Buy-a-Feature: This method involves presenting a list of potential projects to stakeholders and asking them to “buy” the projects they feel are most important. This helps to prioritize projects based on stakeholder input.
• Nominal Group Technique: This method involves bringing together a group of stakeholders to evaluate and prioritize projects. Each stakeholder ranks the projects based on a set of criteria, and the results are combined to determine the project priorities.
• Top-Down Prioritization: This method involves starting with the company’s top-down priorities and using those priorities to guide the prioritization of projects.

By using one or a combination of these methods, organizations can prioritize the projects in the portfolio and make informed decisions about resource allocation and project management. These methods can also help organizations to optimize the project portfolio and achieve better results. The project portfolio should be continuously reviewed and re-prioritized as needed to ensure that it remains aligned with the company’s strategic objectives and priorities

6.  Portfolio Resourcing

Resource management is a critical aspect of project portfolio management, as organizations typically have limited capacity for projects, and need to ensure that resources are allocated effectively. Here are some considerations to keep in mind when managing resources in a project portfolio:

1. Define Resource Needs: During the project planning phase, the project team should define the resources needed to complete the project, including human resources, equipment, and materials.
2. Estimate Resource Availability: The project team should estimate the availability of resources needed to complete the project, taking into account other projects in the portfolio, as well as any external factors that could impact resource availability.
3. Resource Allocation: The project team should allocate resources to each project in the portfolio, taking into account the project priority, resource availability, and other factors.
4. Resource Utilization: Throughout the project, the team should monitor resource utilization, to ensure that resources are being used effectively, and to identify any potential issues or risks.
5. Capacity Planning: Capacity planning involves evaluating the resource capacity of the organization and determining if it is sufficient to meet the demand for the projects in the portfolio. If capacity is not sufficient, the organization may need to reprioritize or delay projects, or consider outsourcing or hiring additional resources.

In addition to these considerations, project portfolio management software can be used to help manage resources more effectively. This type of software can help project managers to track resource availability, allocate resources to projects, and monitor resource utilization across the portfolio.

By effectively managing resources, organizations can ensure that they are using their resources in the most efficient way possible, and that they are able to deliver projects on time and within budget. This can help to maximize the value delivered by the portfolio, and to support the overall strategic objectives of the organization.

7.  Portfolio Execution

Portfolio execution is a critical component of project portfolio management and involves the actual implementation of the projects in the portfolio. This phase is important for ensuring that the projects are delivered on time, within budget, and to the required level of quality. The approach to portfolio execution can vary depending on whether a waterfall or agile methodology is being used.

Waterfall Portfolio Execution: In the waterfall methodology, portfolio execution typically involves a linear, sequential process. The key stages of portfolio execution in a waterfall approach are:

1. Project Initiation: During this phase, the project is defined and initiated, and the objectives, scope, and deliverables are established.
2. Planning: In this stage, a detailed project plan is developed, including a work breakdown structure, project timeline, resource requirements, and budget.
3. Execution: During the execution phase, the project team carries out the tasks and activities outlined in the project plan, in the order they were defined.
4. Monitoring and Control: Throughout the execution phase, the project team monitors the progress of the project, tracks against the plan, identifies any issues or risks, and takes corrective action as needed.
5. Closure: Once the project has been completed, the project team conducts a post-project review to identify any lessons learned and ensure that all project deliverables have been completed and handed over to the customer.

Agile Portfolio Execution: In contrast to the linear process of waterfall, agile portfolio execution is characterized by a flexible, iterative approach. The key stages of portfolio execution in an agile approach are:

1. Sprint Execution: The agile team works in sprints, or short cycles of work, to develop and deliver functionality in small, incremental stages.
2. Daily Stand-Ups: The team holds daily stand-up meetings to align on the work that is being done, address any issues or obstacles, and ensure that progress is being made towards the sprint goals.
3. Sprint Review: At the end of each sprint, the team holds a review to evaluate the work completed during the sprint, identify opportunities for improvement, and determine next steps.
4. Sprint Retrospective: The team conducts a retrospective to reflect on the sprint, identify areas for improvement, and make changes to the process or approach as needed.
5. Increment Release: Once all the sprints have been completed, the final increment is released, which includes all the features and functionality developed during the project.

Regardless of the methodology being used, successful portfolio execution requires effective communication, collaboration, and risk management. This includes establishing regular communication channels between team members and stakeholders, addressing any issues or risks that arise in a timely manner, and ensuring that the team is aligned on the project goals and priorities. Additionally, it is important to use tools and techniques such as project management software, Kanban boards, and burndown charts to help track progress and identify potential issues. By effectively executing projects in the portfolio, the organization can ensure that it is delivering value to its customers and meeting its strategic objectives.

Cross-project dependencies are a key consideration in portfolio execution, regardless of whether a waterfall or agile methodology is being used. Here is a more detailed overview of how cross-project dependencies are managed in each approach:

Waterfall Portfolio Execution: In the waterfall methodology, cross-project dependencies are typically managed through a rigorous planning and control process. The key steps involved in managing cross-project dependencies in a waterfall approach are:

1. Identifying Dependencies: During the project planning phase, the project team identifies all cross-project dependencies and documents them in the project plan.
2. Sequencing Tasks: The project team sequences tasks and activities to ensure that they are completed in the correct order and that cross-project dependencies are managed effectively.
3. Developing Contingency Plans: The project team develops contingency plans for managing any potential risks associated with cross-project dependencies.
4. Monitoring Progress: Throughout the project, the team monitors progress against the plan, identifies any issues or risks that arise, and takes corrective action as needed.

Scaled Agile Portfolio Execution: In the Scaled Agile Framework (SAFe), cross-project dependencies are managed through a set of practices called “Program Execution.” The key steps involved in managing cross-project dependencies in SAFe are:

1. Establishing Agile Release Trains (ARTs): ARTs are the primary construct in SAFe for organizing Agile teams and coordinating their work. ARTs are cross-functional teams that include all the roles necessary to deliver a solution, such as developers, testers, architects, and business analysts.
2. Developing a Program Backlog: The Program Backlog is a prioritized list of features and requirements for the program. The Program Backlog is dynamic and constantly evolving throughout the program as new information is learned and priorities change.
3. Defining Iterations: Iterations are timeboxed periods of work during which the Agile teams work to deliver a potentially shippable increment of the solution. In SAFe, iterations are typically 2-4 weeks long.
4. Conducting Program Increment (PI) Planning: PI Planning is a collaborative event in which all the Agile teams within an ART come together to plan the work for the upcoming Program Increment. PI Planning helps to ensure that all the teams are aligned on the program goals and priorities, and that cross-team dependencies are identified and managed.
5. Using Kanban Boards: Kanban boards are used to visualize the flow of work and help to manage cross-team dependencies. Teams can use the boards to identify blockers and manage the flow of work across the program.
6. Conducting System Demos: At the end of each Program Increment, a system demo is held to demonstrate the functionality developed by all the Agile teams working on the program. This helps to ensure that cross-team dependencies are identified and managed effectively.

By following these practices, both waterfall and agile methodologies can help to ensure that cross-project dependencies are managed effectively, and that projects in the portfolio are executed in a coordinated and efficient manner.

The decision to use a waterfall or agile approach for project execution depends on a number of factors, including the project’s size and complexity, the level of uncertainty or risk involved, and the company’s culture and preferences. Here are some considerations to keep in mind when deciding whether to use a waterfall or agile approach:

Waterfall Approach:

• Large, complex projects with well-defined requirements and a clear end goal are often better suited for a waterfall approach.
• Projects with a low level of uncertainty or risk may be more easily managed with a waterfall approach.
• Waterfall is often used when the project is clearly defined, with a fixed scope, timeline, and budget.
• A company with a more hierarchical structure and a preference for top-down control may find the waterfall approach more suitable.

Agile Approach:

• Projects with a high level of uncertainty or risk are often better suited for an agile approach, where the project plan can be adapted to changes as they arise.
• Agile is often used when the project requires a more flexible, iterative approach to development, and the final outcome is less clearly defined.
• Agile is often used when the project needs to be delivered quickly and continuously, with a focus on delivering value to the customer.
• A company with a more collaborative culture and a preference for bottom-up decision-making may find the agile approach more suitable.

Ultimately, the decision to use a waterfall or agile approach for project execution should be based on a careful assessment of the project requirements, constraints, and risks, as well as the company’s culture and preferences. It is important to weigh the pros and cons of each approach and choose the one that is best suited for the specific project and company context.

8. Portfolio Change Management

Change management is important on both the project and portfolio level. At the project level, change management is focused on managing the impact of changes to the project scope, requirements, or schedule. On the portfolio level, change management is focused on managing the impact of changes to the overall portfolio, such as changes to the strategic direction of the organization, changes to resource availability, or changes to the market or competitive landscape.

Systemic change management, also known as organizational change management, is a holistic approach to managing change that takes into account the people, processes, and systems that are impacted by the change. This approach recognizes that change is not just a technical process, but also involves the human and cultural aspects of an organization.

In the context of project portfolio management, systemic change management involves a number of key considerations, including:

1. Communication: Effective communication is critical to managing change on the portfolio level. This includes communicating changes in strategy or direction, changes to the portfolio of projects, and changes to resource availability or allocation.
2. Stakeholder Engagement: Engaging stakeholders in the change process is important to ensure that they understand the rationale behind the changes, and to gain their buy-in and support.
3. Risk Management: Managing risks associated with changes to the portfolio is important to ensure that the organization is able to adapt to changing circumstances and remain competitive.
4. Governance: Effective portfolio governance is important to ensure that changes to the portfolio are aligned with the strategic objectives of the organization, and that risks are managed effectively.
5. Culture: The culture of an organization plays an important role in managing change. In order to successfully implement change on the portfolio level, it is important to foster a culture that is open to change, and that values innovation, flexibility, and adaptability.

By taking a systemic approach to change management on the portfolio level, organizations can better manage the impact of changes to the portfolio, and ensure that they are able to adapt to changing circumstances and remain competitive.

9. Portfolio Risk  

Portfolio risk management is an essential part of project portfolio management, as it helps organizations to identify and manage risks that could impact the portfolio. Here are some key considerations for portfolio risk management:

1. Risk Identification: The first step in portfolio risk management is to identify all potential risks that could impact the portfolio, including risks related to individual projects, as well as risks related to the portfolio as a whole. This can be done through a risk assessment process, which typically involves identifying potential risks, evaluating the likelihood and impact of each risk, and prioritizing risks based on their level of importance.
2. Risk Mitigation: Once risks have been identified, the next step is to develop a risk mitigation plan. This plan should outline the steps that will be taken to mitigate each risk, as well as the resources that will be required to implement these steps. Mitigation strategies may include transferring the risk to another party, reducing the likelihood or impact of the risk, or accepting the risk.
3. Risk Monitoring: Once the risk mitigation plan has been developed, it is important to monitor risks on an ongoing basis to ensure that the mitigation strategies are effective. This involves tracking the status of each risk, and taking corrective action if necessary.
4. Contingency Planning: Even with effective risk management strategies in place, it is still possible that risks will materialize. To prepare for this, it is important to develop a contingency plan that outlines the steps that will be taken in the event that a risk does materialize. Contingency planning should include a clear plan of action, as well as the resources that will be required to implement this plan.
5. Risk Reporting: Finally, it is important to report on risks to key stakeholders, including senior management, project sponsors, and other relevant parties. Risk reporting should include a clear description of the risks, the mitigation strategies that are in place, and the status of each risk.

By effectively managing risks in the project portfolio, organizations can reduce the likelihood of unexpected events that could impact the portfolio, and ensure that projects are delivered on time and within budget. Additionally, effective risk management can help to build stakeholder confidence in the portfolio, and support the overall strategic objectives of the organization.

here is a growing recognition of the need for pro-silience in portfolio risk management. Pro-silience is a concept that focuses on building resilience in the face of uncertainty, rather than simply trying to minimize or avoid risk.

In the context of portfolio risk management, pro-silience involves taking a more adaptive approach to risk management, which involves constantly monitoring and responding to changes in the portfolio environment, as well as building the organizational capacity to be able to respond to new risks and uncertainties as they arise.

Here are some key considerations for building pro-silience in portfolio risk management:

1. Scenario Planning: One way to build pro-silience is to engage in scenario planning. This involves developing a range of possible scenarios that could impact the portfolio, and then developing strategies for responding to each scenario.
2. Flexibility: Building flexibility into the portfolio is also key to pro-silience. This may involve having a mix of short-term and long-term projects, or building in contingencies for unexpected events.
3. Collaborative Risk Management: Pro-silience involves engaging all stakeholders in risk management, including both internal and external stakeholders. This may involve engaging with suppliers, partners, and customers to identify potential risks and develop strategies for mitigating these risks.
4. Continuous Improvement: Pro-silience involves a continuous improvement approach to risk management, in which the organization is constantly learning and adapting to new risks and uncertainties.
5. Data Analytics: Finally, pro-silience involves using data analytics to identify emerging risks and to develop predictive models for future risks. This can help the organization to be more proactive in managing risks and building resilience.

By building pro-silience into portfolio risk management, organizations can be better prepared to deal with uncertainty and to adapt to changing circumstances. This can help to ensure that the portfolio remains aligned with the overall strategic objectives of the organization, and that risks are managed in a proactive and adaptive manner.

10. Portfolio Innovation 

Innovation is a critical component of project portfolio management, as it can help organizations stay competitive and adapt to changing market conditions. To promote innovation in the portfolio, it is important to have a clear innovation strategy that identifies the types of innovation that the organization is focused on and the resources that will be allocated to support these efforts. The portfolio should be evaluated regularly to identify potential areas for innovation, and innovative ideas should be generated through brainstorming sessions, idea challenges, and open innovation platforms. Once innovative project ideas have been generated, it is important to prioritize them within the portfolio and allocate the necessary resources to support them. It is also important to manage risks associated with innovation in the portfolio. However, it is important to note that overly strict governance and approval processes can stifle innovation and creativity, and organizations should aim to strike a balance between risk management and fostering a culture of innovation within the portfolio.

 11. Portfolio Performance

Portfolio performance and reporting is a critical component of project portfolio management, as it provides stakeholders with insight into the status of the portfolio, and helps to ensure that the portfolio is aligned with the overall strategic objectives of the organization.

Here are some key considerations for portfolio performance and reporting:

1. Performance Metrics: The first step in portfolio performance and reporting is to identify the performance metrics that will be used to evaluate the portfolio. This may include metrics related to project completion, financial performance, or strategic alignment.
2. Data Collection and Analysis: Once performance metrics have been identified, it is important to collect and analyze data related to these metrics. This may involve tracking project progress, financial data, or other key performance indicators.
3. Reporting: Once data has been collected and analyzed, it is important to report on portfolio performance to key stakeholders, including senior management, project sponsors, and other relevant parties. Reporting should be timely, accurate, and aligned with the overall strategic objectives of the organization.
4. Portfolio Reviews: In addition to regular reporting, it is important to conduct periodic portfolio reviews to assess portfolio performance and to identify opportunities for improvement. These reviews may involve evaluating individual projects within the portfolio, as well as the overall performance of the portfolio as a whole.
5. Continuous Improvement: Finally, it is important to use performance data and feedback from stakeholders to drive continuous improvement in the portfolio. This may involve making changes to individual projects within the portfolio, or adjusting the overall portfolio strategy to better align with the needs of the organization.

By effectively managing portfolio performance and reporting, organizations can ensure that the portfolio is aligned with the overall strategic objectives of the organization, and that risks are managed effectively. Additionally, effective performance management can help to build stakeholder confidence in the portfolio, and support the overall success of the organization.

12. Conclusion 

In conclusion, project portfolio management is a critical process that enables organizations to manage multiple projects and initiatives, while ensuring that they are aligned with the overall strategic objectives of the organization. By mapping the portfolio, establishing governance, analyzing and prioritizing projects, executing them with the right methodology, managing risks and reporting on performance, organizations can successfully manage their project portfolios and drive innovation and growth.

It is important to note that project portfolio management cannot be done in a silo. The interplay between project portfolio management, product portfolio management, capability management, talent management, and other key business functions is critical to consider. By taking a holistic approach to portfolio management, organizations can ensure that their portfolios are aligned with the overall strategic objectives of the organization, and that they are well-positioned to respond to changing market conditions and emerging opportunities.

Ultimately, successful project portfolio management requires a combination of sound strategy, effective governance, innovative thinking, and strong execution. By focusing on these key areas, organizations can drive value from their portfolios, and achieve their overall business objectives.