Frank WintersPhotographer and ConservationistSandwich, Ma, United States
In your experience, what are the benefits of Project Portfolio Management (PPM)? If you have a moment to spare, please let us know benefits you've realized or negative results that you've seen or experienced from PPM. Is PPM just another buzzword or can it deliver tangible benefits? What do you think?
Mark Price PerryBusiness Driven PMO Evangelist| BOT InternationalOrlando, Fl, United States
Dear Kathy, you are right on track. The main purpose of portfolio management is to make better investment decisions. There are some very good posts on this subject and Frank Winters has an excellent article per the following link to the Gantthead articles page: http://www.gantthead.com/article.cfm?ID=222787 I would add that there is no one correct model for structuring or balancing the portfolio. Some organizations align the portfolio mix to the strategic objectives of the business, others may prefer to balance the portfolio using a risk/return approach setting objectives for the portfolio mix, etc. How does PPM work? Well, much like a financial portfolio, the goals for the project portfolio need to be defined. This definition includes strategic alignment to the business, establishing measurable objectives to be achieved, and execution of the PPM management process by which the portfolio is managed. At a high level, the PPM process is somewhat similar from one organization to another and is tool or application independent. However, large, complex organizations often face organizational control and reporting challenges that require a PPM application to accurately and consistently report "the returns". Also, just as an aside, many organizations employ portfolio management to achieve "balancing". That is, if the organization pursues only projects with good returns, then they might soon be missing out on "R&D" or "investment" projects that have no immediate return but that are strategic to the business and portfolio. Many organizations have a portion of their portfolio earmarked for such "seeding" projects. Hope this helps. -- Mark Perry, VP Customer Care, BOT International Saving Changes...
Frank WintersPhotographer and ConservationistSandwich, Ma, United States
Hi Mark, Kathy and everybody.
Mark thanks for your reply -- I could not have said it better. And thanks for the reference to the original article that started the discussion.
I have not posted to this discussion recently because I'm both traveling and down with the flu.
I'll chime in in a couple of days.
Best Regards,
Frank Saving Changes...
Kathryn SchwalbeProfessor Emeritus, Publisher and author| Augsburg CollegeSouth Haven, MN, United States
Thanks, Mark. I did look back at the article you referenced, and that's what prompted my questions. The definition in that article makes it sound like all projects fit into one portfolio for an entire organization. If you can reference some more good info, especially on different ways to implement portfolio project management, that'd be great. I'm still not clear if one project can fit under more than one portfolio. It seems like it could if you're trying to analyze projects in different ways. Saving Changes...
Mark Price PerryBusiness Driven PMO Evangelist| BOT InternationalOrlando, Fl, United States
Hi Kathy, there are some excellent fee based articles on PPM from Gartner Group and others. And you might try a google search on "project portfolio management ppt", a number of very good presentations pop right up. Not that this is the only approach, but in our PPM process we only have a project exist once in the portfolio and we treat the portfolio as all of the active projects. Otherwise, you might end up with mtulple portfolios or sub-portfolios and projects appearing in more than one place resulting in analysis exceptions and considerations. We do employ multiple views of the portfolio such as a risk/return view, a business alignment view, a maintenance/growth/transform view, etc. and sub-views such as all of the "high return / low risk" projects by strategic business alignment, etc. If you would like, I would be happy to have a quick chat with you offline. The Gantthead department heads and team of gurus (Michael Wood, Frank Winters, etc.) are also extremely knowledgeable and great to talk too. Perhaps if I knew a little more, I could comment more effectively. Please do feel free to look me up or let us know how we can contact you. Cheers. -- Mark Perry, VP of Customer Care, BOT International Saving Changes...
John SchlichterFounder| OPM Experts LLC http://opmexperts.comAtlanta, Ga, United States
The Project Management Institute offers definitions for "portfolio" and "portfolio management." A portfolio is "a collection of projects and/or programs and other work grouped togetherto facilitate effective management of that work to meet strategic business objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related." Portfolio management is "the selection and support of projects or program investments. These investments in projects and programs are guided by the organization's strategic plan and available resources." In PMI's OPM3 Standard, more than 20 pages describe portfolio management processes. For example, one of the Portfolio Initiating Processes is Portfolio Scope Initiation, according to PMI's OPM3. Inputs include a description of the organization's objective function (meant here in economic terms as the structural decision to optimize profits or optimize revenue), a strategic plan, and historical information. Tool and techniques for this process include project and program selection methods, scoring methods, techniques like NPV or ROI, and expert judgement. Process controls include financial expectations or constraints, risk tolerance, business goals, investment decisions, and executive oversight. Outputs of the Portfolio Scope Initiation process include a portfolio charter, identification and assignment of a Portfolio Leader, a decision regarding the project mix, and identification of constraints and assumptions. OPM3 describes many portfolio management processes like this. The attached article is a perspective of portfolio management vis-a-vis OPM3. Regards, John Schlichter, former PMI OPM3 Program Manager, current President of OPM Experts, LLC [email protected] 1.404.252.4299 Saving Changes...
John SchlichterFounder| OPM Experts LLC http://opmexperts.comAtlanta, Ga, United States
You may be interested in a related posting elsewhere in these discussions: http://www.gantthead.com/discussions/discu...iner.cfm?ID=710 It is about portfolio management processes versus tools. We describe the typical approach to implementing project portfolio managment, and we offer an alternative approach, which happens to be the typical steps in reverse. This posting offers more questions than answers in order to make you think, but very good answers exist for all of these questions. We offer some checklists as well. Enjoy.
Saving Changes...
My experience is specifically with IT PMOs (inside and outside of the IT department). I don't think this is just a buzzword since "PPM" has been around since the 60's and "IT PPM" has been implemented by IT consulting companies since the late 90s. The benefits of an IT PMO go beyond visibility and communication - they can also provide measurable cost savings, higher project success rates, and healthier project staff morale. But to achieve such results requires an IT PMO engage in project support, as well as portfolio control tasks.
The primary goals of of an IT PMO should be to first establish a project management support culture at the portfolio level. This can be done by implementing old-school concepts of Architecture, Asset, Resource, and Knowledge management; as well as, training and methodology implementations amongst the project management and intitiative submission (sponsors) staff. Governance of the IT PMO can fit inside the IT department or outside of it - there are benefits and drawbacks to each.
Then once PMs and project sponsors see true value to them from the existance of a PMO, then Portfolio Control principles can be implemented successfully through tools such as Primavera, Mercury, ProSight, etc. Without visible support from the IT PMO, portfolio control tasking/reporting will degrade into the garbage in/garbage out death-spiral so many PMOs have experience.
There can be multiple portfolios that map to different substrategies of a company. This can be refered to also as project siloing. These portfolios, or silo sets, tend to be defined by a set of metrics that map to a strategic framework, such as balanced scorecard. Submitted initiatives and on-going projects should all be subjected to the same portfolio/metric rigor.
Now, should there be separate PMOs? This also depends on the current strategy of the company - a growth oriented company tends to distribute governance out to Strategic Business Units (SBUs). In this case, SBU-specific PMOs would be valid. Just be sure to keep a centralized PMO in place to coordinate, communicate, control and support.
For more details, check out my new book, "IT Project Portfolio Management" by Artech House Publishers. Saving Changes...
Frank WintersPhotographer and ConservationistSandwich, Ma, United States
Thanks to everyone who has contributed to this discussion so far. Very thoughtful questions and comments from all.
I'm about to write my next article in the series so I'll be brief here (don't want to repeat myself if I can avoid it!)
One thought comes to mind as I read this thread and as I read other articles on the subject of PPM --
I see PPM as a separable discipline and way of approaching some aspects of project management. It can be a toolset as well if an organization takes it that far. But I don't see PPM as synonymous with project management nor do I see program management in that way. These are three different but closely related disciplines.
One goal I have regarding writing about PPM or any of the three is to write about them in a way that identifies what makes, PPM say, unique. A few years ago I tried to do that re: PMO when I was the head of the PMO department.
Watch for my next article and let me know if I've met my objective regarding PPM.
Best Wishes,
Frank
Saving Changes...
John SchlichterFounder| OPM Experts LLC http://opmexperts.comAtlanta, Ga, United States
(1) Uniform method of dealing with project selection
(2) Better control over what projects are started
(3) Easier to know when to kill projects
(4) Better risk management
(5) Improves buy in from management
(6) You finally know all the "projects" you are running. A client of ours thought they had 30 projects active when in fact they discovered nearly 65 once they had implemented out tool and catalogued them all.
