How does strategic portfolio management relate to project management

Forgot your password? Increasing organizational agility with proven project management best practices Thomas Martin, Senior Consultant, next level consulting. The last years have seen an increase in the speed and amount change often described as VUCA: volatility, uncertainty, complexity, and ambiguity. Organizations have responded in various ways: saving cost, increasing innovation, and digitalizing operations. The underlying cause of the accelerating change is the fourth industrial revolution 4IR. Through the combination of technologies like Digitalization, AI, robotics, IoT, 3D printing, and blockchain integrated on platforms and exploited by ecosystems the 4IR promises abundant possibilities and automation potentials never seen before.

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Content:

• What is Portfolio Management?
• Everything You Need to Know About Enterprise Portfolio Management
• The 6 Parts of Project Portfolio Management
• The Definitive Guide to Project Portfolio Management
• What is Portfolio Managment?
• Strategic Portfolio Management: Enabling Successful Business Outcomes
• What’s the Difference Between Project, Portfolio, and Program Management?
• Project Portfolio Management (PPM): Key Elements, Benefits and Best Practices

What is Portfolio Management?

Strategy is a pattern in a stream of decisions. Modern, agile organizations are constantly looking for innovative ways to improve processes and optimize their resources, so it is crucial that projects are well-managed and timeous. While most projects are temporary and unique, portfolios tend to be ongoing initiatives that involve cohesive and strategic objectives.

A project manager will look at the requirements of an individual task or objective. On the other hand, portfolio managers assess all programs and projects, to help prioritize work and ensure the benefits realization.

The relationship between project, program, and portfolio management is best understood by defining what the function of each part is.

It is clear from this explanation that project management vs portfolio management cannot be discussed without understanding program management. Essentially, projects fit into larger programs that, in turn, fit into larger portfolios. When considering the different parts of project management, the project aspect is at the bottom of the pyramid of the hierarchy.

It is described as a temporary undertaking that creates a unique service , product, or result. Once the objective of this project is reached, that project no longer exists. The purpose of project management is to manage a project in order to achieve its objectives efficiently and effectively.

This process entails starting the project, creating a plan of action, implementation it, and controlling the activities for the duration of its lifecycle. The final point would be to close the project. In essence, project management is spearheaded by a project manager and involves applying skills, knowledge, and techniques to meet the objectives.

A program sits in the middle of the pyramid and is a collection of related projects that are strategically coordinated. This is done collectively, to enjoy the control and benefits that are non-existent if those projects were to be managed individually. All programs are managed under program management. This is the centralized coordinated management of a program where strategic objectives are met through the management of interrelated or similar projects collectively to achieve a specific result.

Program management is effective as it optimizes the use of resources amongst multiple projects. By doing this, it reduces friction and enhances the performance of the organization.

A by-product of this approach is better coordination and communication amongst projects. A portfolio can be described as a collection of projects or programs that may or may not be related to each other. A portfolio can contain multiple projects or programs that are dissimilar. All portfolios are managed under portfolio management with a centralized system of management. This is particularly helpful in identifying, prioritizing, and authorizing different programs or projects, helping the organization meet its strategic objectives.

This person is tasked with setting the priorities of projects and programs, based on the predetermined objectives of the organization.

These priorities are determined by the benefit they provide to the organization. With portfolio management, resources are allocated and used optimally among the many different programs or projects. There is also improved communication and coordination amongst projects and programs, including a reduction in conflicts. Based on the various roles, we can begin to understand the differences. Portfolio management provides the highest level of overview for both projects and programs while providing deep insight into resource and budget allocation along with ongoing benefits management.

Portfolio management is crucial in providing insight into future projects, as it uncovers where smarter investments can be made while also identifying gaps in current activities that have the potential to hinder future ones. The success of the corporate strategy relies on new projects and programs. Our state-of-the-art software will help you to operationalize your strategy and enable agile project portfolio prioritization throughout the entire lifecycle — essentially making your life a whole lot easier!

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Everything You Need to Know About Enterprise Portfolio Management

A portfolio is simply a generic term for a grouping of things. Depending on the context and industry, it can be a collection of assets, products, investments, or other items. A portfolio in project management refers to a grouping of projects, and programs. It can also include other project-related activities and responsibilities. The purpose of a portfolio is to establish centralized management and oversight for many projects and programs.

The 6 Parts of Project Portfolio Management

If you are leading a PMO or undertaking a PMO role, you need to know where to focus and how to operate so as to clearly demonstrate the value you deliver to your organization so that you can preserve your role and, perhaps, your career. In many organizations, setting up a Portfolio Management function to seems to follow a very predicatable path. Unfortunately, too often newly created PMO's set themselves up for the inevitable sad ending simply because much of the information, guidance and tools provided to support PMOs is either irrelevant, misfocused or just plain wrong. The reason for that is because, they aredriven by a perpective created by and for project people. It assumes that portfolio management is just about scaling-up the project delivery and cost management processes to be bigger and more complex - to cover the whole enterprise. Project Portfolio Management is seen as a superset of projects and programs. Indeed, the common way this is represented is as pyramid diagram with projects at the bottom and portfolios at the top.

The Definitive Guide to Project Portfolio Management

Many IT organizations lack adequate governance resulting in sub-optimal realization of business benefits. These organizations lack a framework to prioritize IT investments resulting in diminished confidence in the eyes of senior executives including Chief Executive Officer or the Chief Financial Officer. However, by managing IT investments as a portfolio of financial investments, risk and returns could be optimized, and assets could be allocated. IT Portfolio management is more applicable to larger IT organizations since in smaller organizations, its concerns might be generalized into IT planning and IT governance as a whole.

What is Portfolio Managment?

Each portfolio of projects needs to be assessed on its business value and adherence to business strategy. To be successful with project portfolio management, you should select and initiate projects based on your organizational capabilities and goals. To do this, you should have a systematic method and decision process. A good way to start is with your current projects by gathering a Project Inventory. Examples of information you will want to capture are the goal of the project, project dates, resources being allocated to the project by role and other criteria, the risk of the project may be as simple as High, Medium, or Low ; the expected return of the project, and who benefits from the project alignment to strategy or customer. You will also want to Score and Categorize Your Projects.

Strategic Portfolio Management: Enabling Successful Business Outcomes

The Project Management Institute PMI defines a portfolio as a collection of projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives. Portfolio Management, then, is the discipline of managing this portfolio to achieve organizational goals. The components of the portfolio can be projects , programs series of projects managed jointly or even other portfolios. They can also have operational components, that is, ongoing maintenance of an asset that has no defined end point. This is one of the main differences between portfolios and programs.

What’s the Difference Between Project, Portfolio, and Program Management?

Executive management struggles to prioritize projects, allocate resources, and achieve optimal efficiency. This is where project portfolio management PPM comes to the rescue. Project portfolio management PPM is a strategy that evaluates potential projects by their prospective successes and risks, then designates staff, resources, and timelines in a way that maximizes organizational performance.

Project Portfolio Management (PPM): Key Elements, Benefits and Best Practices

By Don Creswell 4 min read. Principles of Strategic Portfolio Management. Strategic Portfolio Management. Economic: Decisions in this area underpin strategy and relate to what: selecting the most promising projects in which to invest, allocating resources, and developing a balanced risk-vs.

A portfolio of projects is simply a set of projects that are managed together in order to achieve strategic goals or benefits. Unlike individual projects, which are defined by specific deliverables, a portfolio supports the strategic directions of the enterprise or business function. Grouping multiple, interrelated initiatives into portfolios makes it possible to optimize the allocation, the prioritization, and the scheduling of resources across multiple projects against the financial and strategic goals of the organization. As the discipline focuses on managing collections of interconnected and interdependent projects, it requires coordinating multiple initiatives which share productive, financial, and human resources. Portfolio Managers need to make sure they understand the various projects under their purview with focus on connections and dependencies. The Project Portfolio Management process is designed to help PMOs determine the best way to sequence, arrange, and prioritize a mix of projects in order to generate synergies and improve execution efficiency, to diversify risk, and to better align project-related activities with the strategic and tactical goals of the organization.

Strategy is making trade-offs in competing. The essence of strategy is choosing what not to do. Effective project management and execution start with choosing the right projects. While you might not have control over which projects your organization pursues, you do need to understand why your organization chooses to invest in particular projects so that you can effectively manage your projects and contribute to decisions about how to develop and, if necessary, terminate a project.