21 Sep 2020, 05:01
What is Project Portfolio Management (PPM)
Project Portfolio Management (PPM) is a process to analyze the potential return within the portfolio of projects, that most of the larger companies have. It is set up to identify, prioritize, authorize, control, and manage new initiatives such as new projects or programs. This also entails all of the related activities. The goal of PPM is to make sure that the afore mentioned projects/programs are set-up and completed as efficiently as possible, with regards to the available resources. More importantly it evaluates which current and proposed initiatives contribute the most to reaching your company goals, and gives those initiatives the highest priority.
Project Portfolio management consists of:
- Time management
- Time management requires the planning, scheduling, monitoring and controlling of both the primary and secondary project activities.
- Resource management
- Resource management is making the most efficient use of resources, such as people, equipment, finances and space.
- Demand management
- Demand management is used to forecast, plan and manage the demand for products and services.
- Project and program management
- Project and program management means to coordinate both the individual tasks as well as the coordination of related projects.
- Financial management
- Financial management means planning, organizing, directing and controlling the financial aspects of new initiatives.
- Risk management
- Risk management is a continuous process that registers and defines risks, to control impact in a negative sense, or maximize opportunities in the positive sense.
What is the difference between Project Management en PPM?
Most companies will say that they apply PPM. This stems from the fact that Project Portfolio Management and Project management are often used synonymously, which is a misconception.
The main difference between the two, is the scope. Project management focuses on a single project, whereas project portfolio management takes all new initiatives into account. It is a method which operates from a strategic standpoint and has a focus on the overall business goals, rather than focusing on the operational excellence of a singular project. PPM thus focuses on the big picture.
What are the benefits of Project Portfolio Management?
There are several aspects why project portfolio management, as a method, can benefit your organization.
If you look at the “human” side, everyone involved with the new initiatives benefits. Executives and stakeholder have much more insight, know with whom they can coordinate or communicate, and are given both reliable and constant feedback. This also applies to project managers, and team members, who get a far better view of where they stand, and what they need to accomplish.
If you look at the strategic value, if executed correctly, it makes sure:
- You invest in the right projects
- The collaboration between project teams improves
- You always keep an eye on the bigger picture, or long term road map
- The available resources are used optimally
- The project data is more accurate
- You have to think about, and continuously reevaluate, your business goals
- Risks are minimized
- The return on investment of every single project in your portfolio turns out higher