Introduction

In this article we will introduce the discipline of PPM or Project Portfolio Management, its benefits to the enterprise, and major functions and processes that underlie the PPM discipline. PPM is an extension of the Project Management discipline in that it covers the entire enterprise. So, while the Project Management function focuses on making each project successful by focusing on each project’s activities and deliverables, the PPM discipline focuses on managing project portfolios of the enterprise along with all projects that are within each portfolio. A portfolio is a collection of projects and programs. PPM processes cover a much broader lifecycle of all the projects and programs that are part of the portfolio. So, PPM tracks projects from the very beginning, i.e. from idea conception when the project doesn’t even exist as a formal entity, through formal project definition and budget approvals, and then on to project execution and delivery of business outcomes. To contrast with Project Management, PPM is about two things. The first has to do with selecting the “right” projects for the organization. This means selecting only those requested initiatives and projects that are aligned to the objectives and goals of the organization and therefore are expected to provide benefits and positive ROI to the enterprise. The second characteristics of the PPM discipline is that it ensures that the selected projects are done “right” in that the organization gets its ROI from the investment that it has committed for those projects. In doing so, the PPM relies on the PM discipline to ensure that the projects are done “right”.

Two Dimensions of the PPM Discipline

To continue focusing on these two aspects of PPM, let’s first explore what does “selecting the right projects” mean for the organization. Selecting the “right” projects means the following:

• It means that a proper project intake process exists in the organization that ensures the capture and inclusion of all types of ideas that are a good potential to become projects. This means that the organization has an adequate process in place to encourage ideas in the organization and to facilitate bringing them to a platform where all ideas can be reviewed and evaluated based on their merits and potential benefits to the enterprise.
• Selecting the right projects also means that the organization has a process in place to ensure that a proper business case is prepared for each of the ideas and initiatives that are recommended by different staff in the organization so they can be evaluated for potential selection. To evaluate them adequately, an organization usually has defined criteria to filter out high potential projects. This ensures that the proposed ideas and initiatives are aligned with an organization’s goals and objectives and not being pushed by the select few individuals in power.
• Selecting and working on the right projects also means that projects are continuously scrutinized for their viability throughout their lifecycle (and not just in the beginning) to ensure that they continue to stay viable and useful for the organization. This is especially true for projects that although may have seemed beneficial when they were authorized initially but later after they were initiated, they lost their usefulness due to changing organization and market conditions or other factors. This ongoing evaluation can be done during a project’s stage gate reviews or through other similar controlled checkpoints in a project.

PgMP Framework for Program Management

Next, let’s look at what does “doing projects right mean. This has to do with ensuring that once the right projects are selected, that appropriate project management practices are followed to ensure the successful execution and completion of those projects within the constraints. To ensure successful execution and completion of projects, an organization follows best practices and methodologies such as those based on PMI (PMBOK), PRINCE2, or following agile methodologies such as Scrum, XP, and others.

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Business Benefits of PPM

 

Next, let’s review some of the benefits of following a PPM discipline within an organization.

Business benefits of instituting a PPM discipline in organizations

• PPC provides a platform for strategy execution – We know that a good strategy without an effective execution framework is of little use. As projects and programs are the vehicles that an organization uses to execute its strategy, a PPM framework and discipline provides that unified platform to execute an organization’s strategy. Through that framework, PPM ensures that not only those projects are selected and executed that are aligned to the organization’s strategy but also measures the delivered value of that strategy.
• PPC measures the aggregate returns of the portfolio – A PPM framework encourages grouping of projects into specific portfolios (e.g. IT infrastructure projects, new development projects, process improvement projects, maintenance, and so on) so that the collective ROI of the portfolio and other aggregate values can be measured. For example, if an organization finds that its investment in one portfolio is not yielding appropriate returns, it may decide to shift its funding from that portfolio to others to fund the initiatives that fall under the other portfolios. The portfolio approach also allows organizations to monitor and mitigate risks at an overall portfolio level rather than at individual project levels. This is especially useful when certain risks are common across projects.
• PPM facilitates a demand capture process – Many organizations don’t have a formal demand capture process as a result of which important projects sometimes don’t surface on the radar due to political issues and other organizational bureaucracies. The PPM process ensures that all demand is captured even at lower levels of the organization after which an objective PPM evaluation process pushes the important projects to the top for consideration. This process therefore ensures that innovations and ideas are also captured for potential evaluation.
• PPM provides a holistic view to control project investments throughout the lifecycle – A PPM approach by design allows the review of all aspects of a project from idea inception to project closeout. This view ensures a continued monitoring of the project’s investments throughout its lifecycle to ensure maximizing benefits realization for the organization. A centralized framework along with a PPM tool allows all organization participants to have access to all aspects of project data and insights that makes it much easier for decision making for people from the C-suite to the PM levels and others.
• PPM facilitates balancing of organizational demand and capacity – As the PPM discipline provides a holistic governance mechanism for an organization’s portfolios and projects, it also facilitates the balancing of the incoming demand of projects and in-progress projects against available resources. This allows the organizations to make project decisions and to reallocate resources based on an organization’s priorities. This visibility on resources and project priorities also allows the organization to assign critical resources that are in high demand to higher priority projects. The PPM process therefore allows the organization to get a better view of resource allocation, resource availability, and assigning them to the best projects based on need, criticality, and skills.
• PPM provides a process for project prioritization – One of the common problems in organizations is that political forces sometimes influence project selection and prioritization rather than basing it on the merits and business value. A PPM drive project scoring mechanism ensures that objective measures are considered in such decisions rather than basing it on political and other non-value added factors.

 

Major PPM Functions

 

So, to summarize, a PPM framework or a tool contains the following functions:

• Capacity and demand management – This provides demand and capacity visibility to an organization to allow them to work on the right projects an assign the best possible resources.
• Project evaluation – This allows project evaluation by assigning certain weights and constructing an appropriate project profile to allow for organizational consideration.
• Project prioritization – Based on the assigned weights and other criteria, this PPM function allows prioritization of various projects that are under consideration. This prioritization can be based on the weights assigned during the evaluation phase and also on availability of critical resources required to execute those projects.
• Resource visibility across the organization – The PPM framework provides charts and visibility across all projects in a given portfolio. This allows the organization to make the right decisions regarding project resourcing.
• Benefits and ROI measurement – Most PPM framework tools allow for various types of calculations to help assess a project’s returns for the organization.
• Ability to plug in with popular software development tools and ERP tools – Some PPM tools can connect to development tools related to both waterfall and Agile that allows sharing of information regarding project status, resource visibility, benefits visibility, etc. Others that have billing and invoicing functions in projects allow interfaces with financial ERP systems.
• Reporting automation – Ability to provide automated dashboards and in-depth reporting capabilities that allows for enhanced project and portfolio status visualization facilitating effective decisions making. It also allows integration with industry standard Business Intelligence tools (e.g. Cognos) that helps organizations get deeper insights from the project information and repository.

 

Tools for PPM

There are many PPM tools in the market. With the advancement of cloud computing these solutions are available as on premise, hosted, or as SaaS options. More recently, the SaaS solutions are increasingly becoming popular due to their affordable pricing plans and also due to ease of deployment and maintenance. Over the past few years, the PPM tools have also matured to effectively bridge the gap between an organization’s strategies and projects that are under execution. As PPM tools can vary in their features and functions and also in their ability to plug-in with other tools, an enterprise should evaluate these tools in the context of their overall planned PPM journey. Some of the more popular tools in this context are as follows:

 

• Microsoft Project & Portfolio Management (PPM)
• Oracle’s Primavera P6 Enterprise Project Portfolio Management
• CA Technologies Project & Portfolio Management
• LiquidPlanner
• Innotas
• PlanView
• Planisware
• Hewlett Packard Enterprise
• Software AG
• ChangePoint
• Clarizen
• Workfront
• Upland Software
• etc.

 

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