16 Apr Top Three Benefits of Portfolio Management
Project Portfolio Management (PPM) bridges the gap between strategy and implementation to ensure that an organization can leverage projects to reach specific goals and outcomes. Organizations use PPM to identify which projects are the best investment at a given time based on the resources and risk involved.
How is PPM different than traditional project management?
Despite similar names, project portfolio management and project management are entirely different. Project management is the practice of initiating, planning, executing, controlling, and completing the work to achieve specific goals and meet particular success criteria at the specified time. In project portfolio management, the keyword is portfolio. PPM isn’t tasked with everyday project execution but instead focuses on the strategic decision process regarding them – which to fund and execute based on high-level project data. From a PPM perspective, projects are evaluated as to whether there are enough resources and whether they support the overall goals and objectives of the company. Projects that fall out of the strategic scope are removed, while others are green-lighted.
As a Project Portfolio Manager working in a technology company, you would likely reject a proposal to design a new children’s toy as it wouldn’t align with the company’s strategy and investment plan. Implementing PPM helps to ensure projects meet predefined criteria to enhance current investments.
What are some of the benefits?
- Improved Decision Making – PPM puts the tools in your hand allowing you to make strategic decisions that drive your business. With in-depth data, project insights, and previous project metrics, you can predict future outcomes when evaluating projects. Once you better understand your current project portfolio, you can identify which projects aren’t contributing to organizational objectives/goals. PPM allows you to stay on top of projects and only invest in the projects that drive results.
- Enhanced Communication and Data Management – With many companies using multiple tools, project planning and reporting is often disjointed. Reports and status updates involve a request to the project manager. The data is commonly out-of-date and metrics vary from project to project leading to project conflicts and inconsistencies. Transparency is critical for making informed decisions. With PPM, managers can access real-time data, giving them the insights they need to complete their work. Gone are the days of project status meetings. Centralized data allows for enhanced insight into projects and real-time team collaboration. Furthermore, managers can decrease their administrative tasks by 25% with a PPM tool.
- Increased Project Success – Project Portfolio Management provides organizations with the tools they need to to plan projects based on resource capacity, strategic alignment accurately, and forecasted costs – ultimately resulting in increased value to the organization. The Project Management Institute has found that PPM tools enable organizations to execute 30% more projects and reduce project failure rates by up to 60%.
Start bridging the gaps between your project teams by viewing our on-demand webcast on Agile Portfolio Management.