Project Portfolio Management
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Your Discipline to Ensure Project Investment Success




Project Portfolio Management for Project Selection Process


Project Portfolio Management (PPM) approach to enable the organization to efficiently and effectively evaluate, select, invest resources, 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 Project Portfolio Management  approach.  This is often due to cost concerns - which would be out-weighed by ensuring the selection of 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 software application.


As briefly described on other pages, larger project management applications, such as Microsoft Enterprise Project Management (EPM), Oracle's PPM (formerly Primavera) and Clarity, facilitate a PPM approach. There are several other software applications from smaller vendors, such as OpenAir’s Integrated PPM Suite, Micro Focus (formerly Serena Software) Portfolio Edge, Casewise’s ITA Accelerator, Planview PPM Pro 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 fundamental recommendation regarding your selection of a Project Portfolio Management software application is to follow a disciplined selection process with broad based participation and wider communication


Selection of your PPM software tool should follow these guidelines:

  • ALWAYS DO A COMPETITIVE SELECTION!
  • Base your RFI or RFP on your internal guidelines (financial, IT, and operational) and short-list based on pre-determined, quantified selection criteria.
  • Unless your organization has specific guidelines for selection of enterprise applications (e.g., must be a hosted solution, must run on Unix, must be an enterprise license, etc.) look at applications which “fit” the size of your organization. Although smaller organizations (less than 10 projects per year) may chose to implement a PPM “approach”, the cost of an in-house PPM application may be prohibitive (upwards of $1,000/seat). You have two choices: 1) explore an SaaS/”Subscription-based” service (such as Innotas or OpenAir), or 2) implement PPM using tools such as MS-Excel, MS-Project, and your current accounting application. Mid-sized organizations (with 10 to 100 or more projects each year) can benefit from the discipline of a PPM application.
  • Initially, I recommend an SaaS or Managed Services approach. The closer you get to 100 projects per year, you may re-consider the approach and bring the PPM application in-house. Larger organizations (over 100 projects per year) may have the flexibility of competitively selecting between an in-house and SaaS solution.
  • Since a Project Portfolio Management application involves ROI metrics for project selections and financial metrics to measure performance, involve members of your finance team early in the project selection process. Finance is one of your primary Stakeholders.


Because of the high visibility of project selection and success 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 multiple 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.



Difference Between PPM and a PMO

After several years of establishing PMO operations and running others previously established, I have found that a successful PMO provides:

  • Consistent, regular communications to all team members and stakeholders; and
  • Is a reliable resource to all project team members and coach/mentor to all PM’s.


Fundamentally, the PMO provides the centralized coordination of the project portfolio management discipline, rigor, and control for the organization.


So, PPM is the focus for project selection and investment alignment, while 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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