What is Project Portfolio Management?
In the field of project management, the term “project portfolio” refers to a set of interrelated projects. Not all businesses require the expense and complexity of project portfolios, but for those that do, a new tier of project management is needed. Just as a solitary project requires a manager with is a vital task requiring special skills, so too does the entire project portfolio. Below we will take a look at what is involved in portfolio management.
Project Portfolio Management
Project portfolio management is a newer and less established field than traditional project management, but its value is increasingly being recognized. Duncan Haughey of the British project management organization known as Project Smart writes that project portfolio management’s goal is “to optimise the results of the project portfolio to obtain benefits the organisation wants.”
It can be said that project management looks at the big picture, but project portfolio management looks at the even bigger one. For instance, a project manager needs to consider questions such as “What resources does my project need?” and “Is the project proceeding on schedule?” If the project is running smoothly, the manager is doing his or her job well, and that is the end of the story. A portfolio manager, however, must look at each of the projects in the portfolio and, with an eye on the overall goal that all the projects are working toward, ask not only, “Is this project being performed in the right way?” but also, “Is this project still the right one for us be doing?” Sometimes, even if a project is going exactly according to plan, changing external circumstances may make it advisable to alter or even eliminate it. Therefore, portfolio managers need to be able to continuously weigh the costs and benefits of each project.
Every project in the portfolio will be evaluated by the project manager at certain predetermined spots in its schedule. These spots are commonly called “gates,” since the project cannot proceed past them until portfolio manager gives his approval and opens the way for them. If the portfolio manager decides that the resources used by Project A would be more efficiently distributed projects B and C, then project A is cancelled. This prevents a great deal of wasted energy for the company.
Project Portfolio Management Software
The needs of project portfolio managers, like those of project managers, have resulted in the creation of various kinds of software. These programs provide managers with a range of tools that make the complex task of controlling a project portfolio much more feasible. They help facilitate storing and organizing data, monitoring and recording the progress of the portfolio’s projects, tracking resource needs and usage, and performing cost-benefit analyses.