Let Project Portfolio start working for project, and project for you!
Lets start with project...meaning of the project, in simple words, is a planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations.
Moreover, projects add value to the organizations, as they not only mean business, but executing projects effectively helps organizations gain recognition and reputation. Organizations also endow effort, time, finances and different types of resources for execution of their projects.
That is the reason why many organizations believe in delivering projects through their well-planned, self-defined and structured project management, where they identify the different phases of the projects, list of activities to be carried out within each phase, limitations. Organizations also weave project life-cycles depending on their classification of projects, major or minor.
The simple definition to realize importance of project is that projects are executed to achieve a specific goal. This goal may be for its clientele or for the organization itself. If project is executed loosely, you may not achieve goal in the desirable way. To achieve efficient execution of projects, organizations have project management or as they may realize it through their dedicated group or department commonly named project management office.
But can project management translate an organization's business strategy? Answer is No! Then who? Answer is Project Portfolio Management!
I have worked on developing various programme management framework for clients across various domains, and I realize clients, even internal resources are usually confused between what project, portfolio or programme (some call it 'program' as well) is or for them, or if they are all the same!
But that’s not true! These are three different verticals and they have different functions to perform. You may have a well-defined project management in place, but it is always going to assist you in delivering a single project. Project management will define the best practices to assist you develop a plan and timeline to deliver specific set of deliverable defined for a project.
But is project management all what organizations need? Rather, let me ask is your organization doing just one project a year? You have multiple projects, and what about handling them, who is going to handle them? Project management will help you deliver each of those multiple projects, but what about managing those multiple projects? For this aspect you have Progamme Management.
Programme Management helps managing several related projects, often with the intention of improving an organization's performance. In practice multiple projects, span functions within an organisation, includes business elements (set of projects makes a programme).
But again, what if an undertaken project is not aligned with the organization’s strategies or does not make use of its core competencies, ultimately resulting in poor returns. What if the projects are overlapping and organization finds itself in a pool of resource crunch, despite having adequate resources?
Take a simple example of tubes, metros or commuter trains. Consider train as a project, which is well - executed, follows signals from starting point to its destination and has an efficient driver (project manager). But your train is not the only train in the system. There are multiple trains (projects) operating at a quick pace as they have to meet their defined timeline. They require the railway track, platforms for commuters to get in and out (resources), and all these trains share the same amount of resources!
If these trains are not managed efficiently and effectively, trains may end up being at the wrong terminal at the same time. Not just that, this may cause major accidents with trains being on the same track (projects to be delivered on the same date), and exhausting of resources (SME required for 2 projects at the same time)! It will be a chaos!
Therefore, as it is important to manage projects for the organizations, they also need to manage the portfolio of projects. Portfolio of projects will ensure a central repository or database consisting of projects in pipeline, current and projects that were executed in the past.
This will assist in strategizing delivery of projects based on the business strategy, assessing and managing the projects in a collective manner with the following:
Determining whether (and how) a set of projects can be executed by the organization with finite set of resources in a specified time. Business Benefit is estimating and selecting capital investment projects with strategic plan;
Efficient and effective utilization of organization’s resources including financials, inventory of project assets (servers, workstations etc), human resources etc. Business benefit also extends to realizing annual resource allocation, resource utilization during adverse impact minimal or nil exhaustion of resources;
Planning and prioritization of any new all-of-a-sudden project requirements, new and amending regulatory demands, or requirement of enhancements;
Proactive risk assessment of project related risks. But caution – this depends on how you develop your risk assessment methodology, your focuses. Do they include quality or information security or both or what?
Project Portfolio Management will create a balanced platform of projects by categorizing, sorting and prioritizing based on identified criteria. Organizations may identify these criterions from business context, to utilization of resources, expenditures, financial profit cost centers, etc.
Look at this below picture, Project Portfolio always sits up in the hierarchy when it comes to effective handling of projects, as it is responsible to provide input for annual business strategy to organizations and also ensures that the organization’s strategy is not compromised by the execution of projects.
If organizations are conforming to certain ISO certifications, Project portfolio also turns vital now, as it advocates top management leadership and business alignment.
But key to a successful Project Portfolio Management is to define and set priorities through an intent of:
Achieving appropriate business value optimization for the organization;
Considering risk recognition and mitigation is equal to reward;
Conducting periodic reviews of the portfolio with top management understanding the concerns or issues through a bottom’s up approach
Remember - A project is complete when Project portfolio starts working for project, and project starts working for you!