Organisations face a real dilemma. They invest in multiple projects across their organisation but accept that not all projects will deliver as promised. What is going wrong?
Unfortunately many organisations have lots of great ideas and projects to deliver them, but have limited resources, rationed by how much time is in a day and must tackle constant change. Senior management want the business to be successful, but faced with these challenges they risk too many projects not being delivered and therefore wasting money and resources.
This is where Project Portfolio Management (PPM) comes into play. PPM attempts to address issues of resource allocation, e.g., money, time, people, capacity, etc.
PPM is a method (along with tools and techniques) for analysing and collectively managing a group of current or proposed projects based on numerous strategic characteristics. It enables the organisations to make tough decisions, such as “which projects do we invest in to be successful (and over what timeframe)?” Management can determine the optimum mix and sequence of projects, both current and proposed, to achieve the utmost success against the organisation’s overall objectives.
Kendall and Rollins (2003) identify four generic problems associated with the absence of PPM: too many projects; projects that do not add value; projects that aren’t linked to strategy; and an unbalanced portfolio.
In order to alleviate these problems PPM is based on rigorous facts. These facts are required in order to make the right decisions. For instance, as changes and issues arise to projects in the portfolio, assessments can be made and decisions made that impact one or more project.
So what are the benefits of PPM, generally these are:
- More of the “right” programmes and projects are undertaken (those that offer more financial benefits and greater contribution to strategic objectives and business priorities)
- Fewer of the “wrong” projects started
- No projects duplicating deliverables
- More efficient utilisation of resources
- More effective project implementation (through active management of the project pipeline, project dependencies/interdependencies, and constraints)
- Greater benefits realisation
- Improved accountability
- Improved ability to adher to corporate governance