Project selection leadership is required in a Project Portfolio Management (PPM) approach to effectively enable the organization to evaluate, select, initiate and manage projects. The PPM approach brings a discipline to the collection of projects or programs in order to facilitate more effective project management to meet specific strategic business objectives.
Typically, smaller companies do not use a PPM approach. This is often due to cost concerns - which would be out-weighed by selecting the "right" projects. Likewise, some larger companies chose not to use a PPM approach, again it is usually a financial decision. Due to the number of project investments, implementing a PPM approach in a larger company, often requires the selection and implementation of a PPM application.
As briefly described on other pages, larger project management applications, such as Microsoft Enterprise Project Management (EPM), Primavera and Clarity, facilitate a PPM approach. There are several other software applications from smaller vendors, such as OpenAir’s Integrated PPM Suite, Serena Software’s Portfolio Edge, Casewise’s ITA Accelerator , Innotas’ PPM software as a service (SaaS) solution, and others.
Although I am able to provide a recommendation based on your project volume and business requirements, my recommendation regarding a PPM application is to follow a disciplined selection process. Selection of your PPM software tool should follow these guidelines:
Because of the high visibility of projects in a PPM environment, your Leadership skills will be in more demand during project selection. If you are the PPM “Leader”, you will be interacting with your Senior Management Team on a regular basis. Your leadership qualities will need to extend across functional teams – to Finance, HR, Operations, and into the Executive Offices. You will need a thorough understanding of your organization’s business plan and objectives; financial metrics; resource utilization targets; cost accounting and time tracking; and revenue recognition practices – in other words, a more “strategic” understanding than with typical project management.
After several years of establishing PMO operations and running others previously established, I have found that a successful PMO provides:
Fundamentally, the PMO provides the centralized coordination of the project management discipline, rigor, and control for the organization.
While PPM is the focus for project selection and investment, the PMO is the focus for project planning, resource utilization, training, project performance, monitoring, controls, reporting, and the liaison between business governance teams and project governance.
Unlike a PPM approach, there may be minimal relationship between the various projects and programs managed by the PMO. In some organizations, the PMO has delegated authority and is a key decision-maker on each project. In other organizations, the PMO is simply a monitoring and reporting vehicle to senior management on project progress and performance.
I have observed and participated in successful implementations of a PMO in a PPM environment. Implemented together, the PMO provides structure and the PPM approach provides the strategic perspective for project selection and involvement of the senior business management team.
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