Project Portfolio Management is a systematic approach to selecting--from hundreds of Project Proposals--the unique collection of projects that will provide maximum benefit to the organization.
In any organization, there are limited funds available for projects and there are limited project resources (i.e. people) available to work on projects. And each of the functional areas--often with very good reason--feels that theirs are the most important projects in the entire organization. Some tough decisions need to be made!
Choosing which projects get funded and resourced can be a politically-charged and contentious process. Understandably, it is a process which may be dreaded by many of your Executives--one which may be leaving many of your Executives frustrated with the outcome. In many cases, the Project Selection process is so hopelessly political and irrational that it is serving the personal interests of a few and not the best interests of the entire organization.
The outcome of your project selection process--the portfolio of "above-the-line" projects that you ultimately choose to fund and to resource-- quite often has been colored by some spurious and superficial factors--including:
But one might ask: "Could there be a better way? Could there be a more systematic and rational approach to Project Selection?"
An All-Too-Common Approach to Choosing Which Projects To Fund
In most organizations, there is no scarcity of Project Proposals. New ideas abound--some whimsical and ill-founded--some serious and well-thought-out. These Project Proposals must compete for funding and resources with each other--and with your current portfolio of "in-flight" projects. Lacking the ability--or the will--to make the hard decisions about project selection, some organizations fall into the "Log Jam" trap.
Thinking they will please everyone and still the angry political waters, these organizations approve just about every Project Proposal that comes along. The harsh reality (i.e. limited project funds and resources) is suspended and they proceed--foolishly, blindly--as if funding and resources really were unlimited. But there is a price to pay.
There are serious consequences when organizations "suspend reality" and fail to acknowledge their limitations. In pushing too many Project Proposals forward and in creating the "Log Jam", they insure that ALL of their In-Flight Projects will be severely slowed-down making progress by "inch-stones" rather than by "mile-stones". These organizations have successfully "sub-optimized" their entire Project Portfolio.
The Project Log Jam, Nothing Moves Forward!
The good news is that Project Portfolio Management (PPM) provides a systematic approach to making project selection decisions--an approach that weighs each project's contribution to "Strategic Value"--and then factors-in cost, risk and resource constraints. PPM allows oranizations to prioritize projects and break the Log Jam--by identifying a realistic portfolio of high-priority projects to be funded and resourced.
As shown in the illustration, PPM complements EPM in capturing value in your Project Portfolio--value that will otherwise be lost. While EPM is all about managing your in-flight projects (i.e. "Doing projects right"), PPM is all about selecting the right Project Proposals from those in your "project pipeline". PPM is about "Doing the right projects".
Capture More Value from Your Project Investments With EPM and PPM!