Management is, above all, a practice where art, science, and craft meet.” – Henry Mintzberg
Some things just don’t need any explanation. You know that forgetting your anniversary means trouble. You know that when your boss makes an angry beeline for your desk it’s time to duck for cover. And, most of us know what Project Management means – well loosely anyway.
Our recent blog post, Top 10 keys to Project Management success, briefly outlines what Project Management is and how an organization can effectively use Project Management to achieve its goals and objectives.
Alternatively, MPUG describes Project Management as “the science (and art) of organizing the components of a project, whether the project is the development of a new product, the launch of a new service, a marketing campaign, or even a wedding.”
But what about Project and Portfolio Management (PPM)? What exactly does it mean, and why is it such an important facet in today’s organizational context?
Project Portfolio Management (PPM)
TechTarget’s PPM article on searchcio.com defines PPM as “a formal approach that an organization can use to orchestrate, prioritize and benefit from projects.” That is, PPM is a system for managing, planning and monitoring your many different projects – your portfolio of projects. PPM does not seek to manage projects themselves, but rather “examines the risk-reward of each project, the available funds, the likelihood of a project’s duration, and the expected outcomes.”
In short, PPM is not about executing a project. It’s about carefully analyzing and deciding which particular projects you want to run, the likely interrelationships and impacts upon one another, and, importantly, how to fund them.
8 elements of a good PPM process
So what are some of the specific factors on which a thorough PPM process should evaluate project viability?
1. Initial cost or investment
For any organizational process to be a successful one, it has to be financially feasible. Project Managers need to carefully evaluate the initial cost of implementation and if the upfront cost is viable – both as a standalone initiative, and then without unreasonably detracting from the success of other projects and business operations. There are many options out there and organizations need to choose the options that suit their needs best.
2. Time to value
Once the initial cost or investment has been made, Project Managers need to accurately estimate how long it will take for the organization to see an initial return on investment (ROI) and profits beyond the initial ROI. This is a critically important factor to the success of any project planning process.
3. Expected outcomes and benefits
What are the expected outcomes and benefits from the project? Are they realistic? This is one of the key elements of a successful PPM process. Project Managers need to accurately assess and benchmark in order to both track progression towards milestone targets during project delivery, and assess performance post project delivery. Having a PPM checklist will definitely help determine the success of outcomes achieved.
4. Demand for those outcomes and benefits
Assessing costs, ROI and benefits is critical. But, what’s even more important to identify right at the onset of this process is whether there is an actual demand for the expected outcomes of a project.
For example, if the aim of a project is to manage the delivery of a new product or service, will the successful delivery of that new product or service actually address a market need or demand? You might successfully manage the development and launch of a new clothing line, but if your target audience has no interest in the style of clothes made, then what’s the point?
5. Ability to execute
Every organization has limits, be it resources, skill or expertise. The Project Manager, in collaboration with senior executives, needs to accurately determine whether the organization has the capacity to realistically execute the project – from a time, resourcing and capability perspective. Often referred to as a maturity or assessment model, understanding this – and being realistic – is vital.
Having assessed this, you need to decide whether or not to proceed with the project. If the decision is made to progress, even though certain limitations have been recognized, does it mean the project needs to be clarified as high risk? Or, does it mean you have to utilize third-party resources and expertise to get it delivered on time, on budget and to the standard expected? Many questions need to be answered.
6. Strategic alignment and clarity
Does the project in question actually align with organizational strategy and direction? If not, why is it being considered? And, are the strategic outcomes clear?
According to Milosevic and Srivannaboon’s paper, A theoretical framework for aligning project management with business strategy, “The essence of project management is to support the execution of an organization’s competitive strategy to deliver a desired outcome”. The article further states that “when organizations link their projects to their business strategy, they are better able to accomplish their organizational goals.” Hence, it is imperative that these two go hand-in-hand.
7. Risks compared to risk appetite
Risks and rewards need to be compared – do the rewards justify any risks undertaken? Do any risks identified align with your organizational risk appetite and attitude? One of our earlier pieces on Risk Attitudes discusses the various organizational mindsets when it comes to risk.
Organizations typically have Maximizer, Manager, Strategist and Pragmatist attitudes towards risk. What type of risk attitude does your organization have? How do does that attitude help to define and contextualize the perceived risks of your portfolio of projects?
8. Impact on other projects
An organization may have multiple projects running across multiple teams. Any new projects or processes should go hand-in-hand with these. Project Managers need to properly assess both expected and potential impacts on other projects within their portfolio. While a project may be independently profitable, does it impact other projects to an unacceptable level?
Benefits of PPM
While engaging in effective PPM has many benefits, here are four of the top paybacks of an effective PPM process:
1. Better decision making
A pre-determined team, led by a defined and experienced project manager, evaluating the viability and merits of all projects? I think many company heads would take that any day!
2. Maximizes resources
The centralized manner in which decisions are made via PPM not only reduces costs, but helps your organization better manage its resources. It eliminates duplication of work, while helping to manage the human resource components of projects – often the biggest cost of implementation.
3. Minimizes risks
Organizational and project risks are a fact of doing business. You cannot escape them. But, having a team carefully analyzing every project and categorizing important, and eliminating not-so-important, projects certainly helps minimize the likelihood of recurring underperformance.
4. Continuous success and executive support
An effective PPM process will not only ensure your projects are repeatedly successful, it will also enable you to garner support from top management via a demonstrable formula for project success.
Where to next?
Project Portfolio Management is critical, there’s no two ways about it. So, wouldn’t it be awesome to have a tried and tested tool, such as cammsproject, to drive your PPM process? cammsproject will not only help you effectively organize, prioritize, collaborate, track time and generate reports regarding your portfolio of project, it will even help you manage possible project risks.
cammsproject was named a 2017 FrontRunner in Project Management software by international analyst firm Gartner. Cammsproject also complies with the ISO 21500:2012 Standard, PMBOK and APM frameworks, as well as PRINCE2 and LEAN methodologies.
CAMMS is a global Enterprise Performance Management (EPM) software company dedicated to transforming organizational strategy into reality. CAMMS offers the world’s only true end-to-end, fully integrated, EPM platform.
Able to be used independently, or as part of a complete EPM platform, CAMMS is a world leader in planning and strategy, project, risk and meeting management software, as well as budgeting, workforce and analytics solutions.
Founded in 1996, CAMMS has tens of thousands of users across five continents, with offices in the UK, North America, Australia, New Zealand and Asia. For more information, visit www.cammsgroup.com