In most organizations, there is usually more project work than resources to get the work done. The problem isn’t procuring projects or even the execution and delivery of those projects. The problem is the lack of a Project Portfolio Management (PPM) process. PPM not only helps ensure projects align with the organization’s business strategy and objectives but also maximizes project return on investment.
According to the Project Management Institute, Project Portfolio Management is “the continuous process of selecting and managing the optimum set of project-oriented initiatives that deliver the maximum business value or return on investment.”
Let’s break that down.
A “continuous process” is a process that is duplicable, repeatable, and scalable. Time-consuming manual processes or tasks are none of these.
“Selecting and managing” refers to identifying and prioritizing project opportunities that align with strategic objectives. It’s also managing them efficiently and effectively so that leaders are confident they’re investing in the right projects that support corporate strategies like digital transformation.
The “optimum set of project-oriented initiatives” is about finding the right mix or the right balance of projects that reduces the chances for project failures while maximizing project return on investment.
The “maximum business value or return on investment” is the money part. It’s the revenue generated by the management of the project-oriented initiatives. Some will say it’s the most important part. However, if you don’t execute and deliver on the continuous process of selecting and managing an optimum set of project-oriented initiatives, then the return on investment is harder, albeit impossible, to achieve.
So how do you execute and deliver on all these parts? For starters, you implement a Project Portfolio Management process as part of your business strategy. With a PPM process, organizations can better manage their project initiatives and facilitate better strategic decision-making. There are several stages to the PPM process, but let’s focus on three key areas.
Rank, Score, Prioritize Projects
If you’re not ranking, scoring, or somehow prioritizing your projects then you’re missing a critical step in the Project Portfolio Management process. In fact, you’re not managing your project portfolio at all.
Every organization utilizing a Project Portfolio Management process has some sort of project ranking, scoring, or prioritization system in place. That’s because PPM ensures that an organization can leverage its project selection and execution success. However, if you’re not prioritizing then you’re not leveraging your project selection.
The prioritization stage enables organizations to evaluate projects which in turn improves operational efficiency, reduces redundancies, and, ultimately, ensures projects align with strategic objectives.
According to Antonio Nieto-Rodriguez, a leading expert in project management and strategy implementation, “companies that start prioritizing can experience significant reductions in costs as less-vital activities are cut and duplicated efforts are consolidated.”
Leaders who clearly signal their intent about what matters takes the guesswork out of prioritization. The prioritization criteria should be based on the organization’s strategic objectives while maintaining a balanced risk profile. It helps organizations to identify which projects to fund and ensures its people are working on the highest priorities. Without prioritization how do you know which projects to allocate your time, money, and people to?
Set Up a PMO Shop
A Project Management Office (PMO) sets, maintains, and ensures best-practice standards for project management across the organization. With a PMO, an organization can better manage their project inventory and prioritization of those projects. Once an organization knows which projects to work on, a standardized project management methodology ensures everything goes right – on time, on budget, and all in the same way.
According to Gartner, by 2023, 80% of organizations will have an enterprise project, program or product management office (EPMO) focused on integrating digital products and programs. Digital transformation is everywhere, and it is the driving force behind most project initiatives turning ideas into actual products and services. With an abundance of project initiatives, an EPMO and PMO will help standardize how they are executed. It enables the sharing of resources, methodologies, tools, and techniques for project success.
With respect to implementing a PPM process as a best practice, organizations with an established PMO can expect their PMO to help with:Recommending the selection, termination, or initiation of project initiatives
- Ensuring the project portfolio remains aligned with strategic objectives
- Defining a Project Portfolio Management methodology, best practices, and standards
Ultimately, the purpose of the PMO is about strategy execution and delivering results while a PPM process ensures alignment with business strategy and delivery of business value.
Invest in a PPM Tool
Organizations stand to gain greater visibility into their portfolio of projects and improve their decision-making with a Project Portfolio Management platform. Additionally, organizations can expect to:
- Quickly identify which projects are not contributing to strategic objectives
- Make decisions on factors like resource utilization easier with access to metrics on past projects
- Execute on more projects and reduce project failure rates with better planning capabilities
- Gain greater insights on project artifacts and reduce administrative tasks with access to real-time data
In an age where digital transformation is inevitable, and speed and continuous delivery are the hallmarks of a successful project, a Project Portfolio Management platform (i.e., ServiceNow) will be essential. A PPM platform enhances an organization’s efficiency and effectiveness. It provides organizations with the functionality needed to more accurately plan their projects resulting in overall increased business value.
However, it’s important to remember that Project Portfolio Management is a methodology and not just about a platform. Organizations need to first understand the principles of the PPM process and then embed the use of a platform into that process.
Conclusion – How Crossfuze Can Help
Project Portfolio Management can help organizations make decisions on which projects to allocate resources (time, money, people) to with greater visibility into which projects align with business strategy. And with a PPM platform, organizations can make better, faster decisions that positively impact their return on investment.
Crossfuze helps organizations design their PPM methodology in a way that aligns with and enhances their strategic business priorities. With Crossfuze’s years of PPM process experience, Project Portfolio Management has become one of their core competencies. And as a Gold ServiceNow Partner, organizations can be assured they’ll receive a best-in-class PPM solution designed to elevate their Project Portfolio Management process and maximize time-to-value.
For more information about advancing the maturity of your PPM initiatives, reach out to Crossfuze at LetsTalk@crossfuze.com.