What is the goal of a project portfolio manager? As a project manager, your focus is on one task – deliver the project on time and within budget! Senior managers often have another focus – how is the organization performing?
Projects are key to meeting strategic goals and delivering real business value. Project portfolio management, the management of multiple projects, allows organizations to select the right projects and maximize the impact of each project.
What is Project Portfolio Management?
A project is a temporary endeavor with a defined beginning and end, scope, and assigned resources.
Organizations often use a portfolio, a collection of projects, to plan, resource, and manage work.
Project portfolio management thus refers to “the centralized management of one or more project portfolios to achieve strategic objectives”.
Projects are often connected in some way – budget, resources, or outputs. Rather than manage projects individually, project portfolio management looks at all projects across all departments.
PPM ensures all approved and ongoing projects meet agreed objectives and are managed to deliver results. It’s about doing the right projects at the right time in a standardized way.
Key to PPM is strategy, a direction set for the future of the organization.
The strategy outlines the goals and actions undertaken to reach this new desired state. Reaching these goals requires resource management, quick responses to opportunities, and improving performance.
Once the strategy is agreed upon, organizations use projects to start delivering on key requirements and milestones. Selecting the right project is critical to long-term success. Every approved project must contribute to larger goals and add value.
Project portfolio management helps organizations to answer questions such as:
- Are we making good decisions about projects?
- Are we working on the right projects?
- What should our teams work on instead?
- How are projects currently performing?
- How do we improve resource management?
- Can we run multiple projects at the same time?
- Are teams working on similar projects?
- Will our projects meet key strategic goals?
- Do we have a mix of short and long-term projects?
Answering these questions helps organizations to predict project outcomes and manage risks.
Unlike a project, a portfolio is not defined by a start or end state. Instead, new projects replace completed projects.
An organization can have one overall portfolio or several portfolios for different areas of the business such as IT or Marketing.
PPM increases visibility into progress and surfaces data about past performance. This information allows senior management to make informed decisions when approving projects, and also identify projects that should be stopped.
The Project Portfolio Manager
What does a project portfolio manager do and what are the goals of a project manager?
A project manager is typically concerned with individual projects. A project portfolio manager is concerned with all projects within the organization. A project portfolio manager focuses on improving project execution and delivering the expected business value from the portfolio.
Key responsibilities include:
- Project request management
- Resource allocation and management
- Risk management
- Identifying and reducing inefficiencies
- Liaising with senior stakeholder
- Change management
- Tracking the business value of projects.
Project portfolio managers ask key questions of projects such as:
- Does each project contribute to the overall achievement of the portfolio?
- How well is each project performing?
- Are any projects dependent on each other?
- Will any project negatively impact on other projects in the pipeline?
- Will the successful delivery of all projects produce the desired objective or benefit?
- Are resources/budgets available to start a new project?
- Is there a similar project in the portfolio to use as a template?
- Are the stakeholder’s expectations realistic?
- Is everyone in the organization familiar with our strategic goals?
- Are available resources used effectively?
- Is it easy to get the right project information to inform decision making?
12 Benefits of Project Portfolio Management
The PMI reports that organizations with mature PPM processes completed 35% more of their projects successfully, wasting less time and money.
Organizations can use PPM to:
- Introduce a systematic approach to project request management and governance.
- Improve visibility with standardized project processes and cross-project reporting.
- Enhance collaboration with tools, templates, and a clear understanding of project goals.
- Create mature risk management processes at the portfolio level.
- Engage stakeholders with real-time reports to support decision-making.
- Enable transparency and accountability with defined processes and strategic goals.
- Increase the business value delivered by projects.
- Track, allocate, and optimize project resources throughout the organization.
- Improve decision-making with easier access to project data across the portfolio.
- Align senior management and teams around strategic goals.
- Deliver continuous improvement and evolution of project management processes
- Attract, recruit, retain, and develop talent.
Poorly implemented PPM, or even a lack of PPM processes, severely reduces organizational ability to deliver desired outcomes.
In fact, research indicates that only 21% of projects are consistently delivering business value.
Among the consequences of poor or absent PPM are:
- Weak governance structures, which mean business executives are not sure which projects to approve and why.
- Organizations attempting to complete more projects than they have capacity for.
- Bad projects taking precedence over good projects.
- Poor visibility into performance.
- Excessive project delays due to insufficient resources.
- High turnover due to burnout as contributors are working on too many projects.
- Frequent changes in project status (i.e., moving from “active” to “on hold” to “top priority” and back).
- Completion of projects that don’t really meet a strategic need.
- Intense internal competition for resources, reducing collaboration and cooperation.
Project Portfolio Management Tools
In your project management journey, you will likely come at a juncture where you need to pick the project portfolio management (PPM) tool that is right for your projects, teams, and organization.
Choosing the right project management tool will define how you fast or slow you can move towards project management success. While it will take some experimentation in trying and implementing a new PPM solution, you need not hit in the dark. You can assess factors such as your business and strategic goals, the nature and size of your projects, what works best for your project teams, and what platform you wish to use to set up your PPM tool. If your project teams are already familiar with the platform you wish to introduce the PPM solution on, then it’s clearly a win-win for everyone!
For Microsoft 365 users, BrightWork offers the BrightWork 365 project portfolio management solution to help you manage projects and project portfolios of all scale. With BrightWork 365, leverage the best of your existing Microsoft 365 ecosystem and use the right familiar apps for the right project management processes. Choose from the ready-to-use project management templates to suit the nature and complexity level of your projects and configure them as your projects and processes need to evolve.
More on driving project portfolio optimization with Microsoft 365.
With BrightWork 365 built on the Microsoft platform, you get access to the Power Platfrom, Power Apps, Teams, and more. From automating your PPM processes such as project intake with Power Automate to creating interactive and engaging project reports for your project stakeholders using Power BI, there’s a whole range of tools and apps that you can leverage on Microsoft 365, using the BrightWork 365 tool.
More on implementing Project Portfolio Management with Microsoft 365.
Manage Project Portfolios with Microsoft 365
Collaborate from anywhere with BrightWork 365 and Microsoft Teams.
In a competitive environment, businesses must do more with less. Projects are critical to delivering the solutions and innovations organizations require to move forward.
Without an overarching structure, projects often fail, wasting limited resources. With a focus on long-term strategic goals, project portfolio management ensures project success.
Editor’s Note: This post was originally published in July 2017 and has been updated for freshness, accuracy, and comprehensiveness.