They all are considered to be valuable to the corporation. But how many are either redundant, or even at odds with other projects? Are they really in sync with company strategies?
Project management theory and training has often stopped at the level of an individual project. Typical automation projects are treated as isolated events, often added to team members’ already heavy workloads. Is there ever a consideration given to each project’s place within the overall scheme of corporate projects? Are these projects really aligned with the company’s overall goals?
Project portfolio management (PPM) is a new concept that offers a methodology for helping company managers obtain a broad view of all the company’s projects. As management guru Peter Drucker once said, “Managers do things right, leaders do the right things.” Project management focuses on doing projects right while PPM focuses on doing the right projects.
Inconsistency a problem
The Center for Business Practices (www.pmsolutions.com) conducted a survey of the readers of Projects@Work magazine. It found that inconsistent approaches to managing projects (in 24 percent of organizations), difficulties in allocating resources (20 percent) and too many projects or not the right projects (17 percent) were the biggest project management problems. Projects late or over budget was low on the list of problems for these project management practitioners.
The report, “Project Management: The State of the Industry,” also revealed that most projects have a duration of less than a year, that over 95 percent of the companies use Microsoft Project, over half use consultants for project management and that project portfolio management is important to most, but of little or no importance to a quarter of the respondents.
Many companies have developed products to help managers and project teams organize, evaluate and view their project portfolios. One of the hot areas for PPM currently is in information technology (IT) departments. Other areas of the enterprise are learning the advantages, as well.
Chuck Tatham, vice president of business development for one PPM vendor, Toronto-based Changepoint, says, “PPM is hot in the IT area right now because of interest by senior corporate management. They want assurance that investment in IT is aligned with corporate strategic goals.”
PPM consists of rolling up projects into logical portfolios, Tatham explains. Managers can then see how are they progressing in such ways as timeline versus plan, budget versus plan and risk versus reward rating. With all this information, managers can evaluate which are viable. The tools enforce using consistent metrics with which to compare and contrast criteria. “In addition to IT, we’re seeing interest in new product development and new market analysis using it as a portfolio of products,” Tatham notes.
The Project Management Institute’s (PMI, www.pmi.org) PM KnowledgeWire magazine in March 2003 was devoted to PPM. It noted that PPM processes include cataloging candidate projects, developing scoring criteria so that projects may be ranked and using simulation tools for such analysis as balancing the portfolio.
Portfolio management enables decision-making based on strategic information and priorities. It should also allow better distribution of resources. A fair, well thought out scoring system for project candidates should ensure that the important projects are approved. The PMI report also notes that the system should provide a repository of project information to audit the project’s progress and facilitate organizational learning from previous strategy decisions.
To accomplish PPM, a company must have a clear strategic plan. PMI says key organizational goals, mission/vision, culture and priorities form the foundation for selecting appropriate projects.
Gary Mintchell, [email protected]
