guiding principles for project portfolio management

Next, perform an alignment analysis that will show you whether your critical resources are working on critical projects and whether the projects you do decide to carry on with really align with all the strategic initiatives the company wants to undertake. Sales organizations often refer to sets of clients as portfolios. At this point, you need to view the project portfolio and make necessary decisions about the reallocation of budgets and resources or reprioritize based on the information you uncovered during the previous legs of the process. Therefore, you want to have a skill set that includes technical knowledge, managerial experience, interpersonal skills and so much more. If you’ve invested in developing a strategy and wondered why it is not producing the results you expected, you might consider some of these guiding principles to put you back on track. Portfolio Managers often develop management standards to guide the portfolio and they keep a high level overview of everything within the portfolio. Our list of the best project portfolio management software will help you find the best one for your situation and how many projects you have. Before diving into PPM software or project portfolio management tools, check out the demos and free trials offered by many portfolio tracking software providers. Many thanks. The PMO might also set out which methodologies are being used in the organization, such as Agile or Scrum methodologies, and ensure that they are being followed in individual projects. Here are a few tips for achieving success: Project portfolio management has many benefits, which include: Regardless of how high value and successful a project may be, it could still be a victim of overspending. Enable architects, IT planning teams, and C-suite to align execution with business strategy. So should access to data, as a delay in getting data can impinge on your decision-making ability, as well as your ability to comply with regulatory requirements. This site uses Akismet to reduce spam. For example, there’s program portfolio management, which assesses programs from a portfolio level. 3. I’ve delivered everything from film to CMS', games to advertising and eCRM to eCommerce sites. Six principles, derived from the core values of the Agile Manifesto, guide APM (see Figure 2.1). It is a way to bridge the gap between strategy and implementation and ensures that an organization can leverage its project selection and execution successfully. Often, project portfolio managers are part of a Project Management Office (PMO). My personal approach is to right-size portfolio management processes to fit an organization's culture and maturity to be effective without creating a bureaucracy. I am an Associate at Point B consulting with a professional goal of making companies successful with project portfolio management. You know the score—your agency has got 50 projects on the go. I am about to take a new job as PPM and this article deeply increases my current knowledge. Project portfolio management (PPM) describes how we manage the often-confusing mix of interrelated, dependent, and connected projects. There are five key words, we’ll call elements, relating to each of the strategic, tactical and operational segments of the portfolio of your business or your life. To draft the guiding principles, take each of the value categories and create guiding principles, using the “We believe (value)… Therefore, we will… (behaviors)” format as a template. You need a balance between near-term growth opportunities, long-term goals, and the quest for long term innovation. 7 Principles of Project Risk Management. This includes the organization itself, the strategies, both short and long-term, and through a governance structure, defining the business changes required to realize those strategies, and the selection of changes to deliver those business changes. Next, analyze the current strengths and weaknesses of your project portfolio. If you were managing a technology company’s portfolio for example, you would most likely reject a proposed building project, because it doesn’t align with the company’s stated strategy of focusing only on some predefined type of tech projects. Project governance appears to be an elusive concept, which is further complicated by the fact that there is a lack of an agreed on, generally accepted definition for “project governance.” Consequently, this means that individuals are left to develop their own understanding of what project governance means or else try to find an implicit meaning from the context in which the term is used. It’s always good to be prepared. After you’ve set a strategy, you need to build an implementation team. This is a common question, so here’s an example of what portfolio management looks like in IT. Even with over 1,000 pages of guidance about projects, and project management methodologies like Prince 2, and project management body of knowledge from PMI, we are still seeing projects that over-run on cost or time, don’t deliver quality, or the expected business value, and fail in so many other ways, that there is still questions at an executive level of the value of project management. Smart companies write risk management into the project itself, as well as into employee training and even daily operations. I've been in the industry for more than 15 years working in the UK at London’s top digital agencies including Dare, Wunderman, Lowe and DDB. Preparing answers to common questions you expect to get during this phase is also advisable. Your people should fully embrace the following principles 1 : 'Without a strategic methodology, project portfolio planning is frustrating and has little chance of achieving exceptional business success.' Operational focuses on those elements that directly support how projects deliver the required business changes and the ongoing operations of the company. These include communications, to keep everyone informed, processes to deliver the services and products of the organization, skills required to deliver, issues that impede the delivery of the services and product, and the finances to operate and change over time. If ITIL4 best practice guidance says to focus on value , then getting level set on what VALUE is for your business partners, customers and consumers is critical to every strategic, tactical and operational action! Your implementation team may need a governing body, which is typically made up of senior management. Guiding Principles Electoral integrity requires a legal and institutional system that encourages and protects fair and equitable elections as well as application of specific measures to protect integrity based on democratic election standards and best practices. Here are some of the use cases of PPM: The primary objective of PPM is to maximize the benefits a company accrues from the projects it undertakes. In recent years, the understanding of portfolios has matured within the industry with the Project Management Institute (PMI) and the Axelos both defining portfolios in similar ways. PPM considers the big picture of all projects grouped together—past, present, and future—and calculates the optimal prioritization and sequencing of projects to maximize ROI. You, as a project manager, are responsible for getting the sponsors on board, communication, risk management, budgeting, scheduling, the whole kit and caboodle. Projects deliver those changes to the day to day operations. I am about to take a new job as PPM and this article deeply increases my current knowledge. Even so, IT portfolio managers will still follow the same types of portfolio management processes listed above. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. I have attempted to give you a concise breakdown of what, in reality, can be quite a complex process. The forum welcomes membership across the project portfolio management (PPM) community and specifically: PMO practitioners, who enable, support and ensure the delivery of change at a project / programme / portfolio level Some of the most recent statistics show that 37% of projects still fail. Business strategies are the basis of project portfolio management and as such, it is important to have a strategy in mind before proceeding. So a portfolio is an entity made up of day to day operations, and a strategic vision of where it is going in the next few years. Yep, loved the article. What projects should we be prioritizing right now? An evaluation of associated risks. First Strategic Principle - business model. An IT portfolio manager will generally look at three main things: The purpose of IT portfolio management is to ensure that the individual IT investments embedded in the organization’s processes, people, and technology are on track, bridging the gap between the organization’s overall strategy and the execution of that strategy. Once your portfolio has been rolled out, it can be difficult to see where to go from there. Lastly, test and adapt. These cookies do not store any personal information. Many thanks Cédric. Again, PPM helps a company to avoid this; it allows managers to nip overspending in the bud as it is easy to see where resources are being over-allocated. Lastly, PPM also makes a company more nimble and able to adapt to change with minimum fuss or disruption. I've applied that approach to Portfolio Management. Ask a few of these questions first: 1. Guiding Principles PMO Forum. Considering the date it was authored it stands the test of time pretty well I’d say. But opting out of some of these cookies may have an effect on your browsing experience. After collecting data, it’s generally a good idea to organize it by category. Principle #2: Centralize project and portfolio management, regardless of methodology We’re all asking the same questions: These are the questions that project portfolio management (PPM) enables us to answer. At the time of writing this article, that was 35 years ago. 5. Let me know your thoughts in the comments section. Your implementation team should include technical team members (to help with new systems) and portfolio managers, to name a few. And if you realize you don’t need a PPM tool but just a PM tool, you’ll find there are simpler project management tools that let you do many things like manage tasks and teams across multiple projects. Establish a process for prioritizing projects. The head of that finance group and others more strategic positions in that same organization will consider the organization as their portfolio. The project management software that keeps teams going. What adaptation means is quite different for every company, as it should be, but it’s generally a good idea to test your new portfolio with a few stakeholders, taking feedback as needed. Necessary cookies are absolutely essential for the website to function properly. In the end, your portfolio should have a healthy mixture of risk and reward and should meet internal requirements. Utilize the right tools to keep on track and simplify the process. So what else is missing to ensure that organizations get the business value they expect of the changes being delivered through projects? 1. … Within portfolio management there is one founding principle, and fifteen supporting principles, also called elements. These cookies will be stored in your browser only with your consent. Closing a project down prematurely is likely to be heavily debated when the time comes, especially if it is someone’s pet project. By establishing an optimal mix of projects, PPM ensures a company is better placed to achieve its operational and financial goals. An effective vision statement should be vivid, concise, motivating, and memorable. First, let's clarify our concepts of what we consider the portfolio. How will it help the company? With many competing projects and priorities stretching resources in different directions, good PPM is the only thing standing between us and bad project decisions that offer nothing but the poor return on investment. For example, a program led by a nonprofit to provide clean drinking water in a rural area might comprise an infrastructure project, a research project, and an education or PR project. 10 Best Project Management Dashboard Software Of 2020, PPM is generally used by organizations to, When done properly, PPM is a valuable tool for. Project Management considered portfolios as a set of project and programs. Should this project happen? The degree of the strategic fit between the portfolio and the company. The PMO’s role involves portfolio management and setting project management processes and standards for the whole department to follow. Depending on how these principles are followed, project project success/failure story can be traced and evaluated. Guiding principles align the organization’s decisions around common values and objectives. But as a Portfolio Office leader, you shouldn’t be shying away from the difficult conversations. What is project portfolio management (PPM)? Projects that do not fall within the scope of the company’s objectives are removed from contention. Learn how your comment data is processed. A program is composed of a set of related projects. I’d love to hear from you. Of course, the interpretation of these titles depends on the organization. You also have the option to opt-out of these cookies. Here are eight fundamental principles of project management that you should consider when developing your next project. Therefore, it is crucial to align everyone in … How can we focus our resources most efficiently? Effective project portfolio management requires prioritization to maximize business value, effective delivery to minimize costs, and reallocation of resources when costs are too high or the benefit is too low. I’ve been fortunate enough to work across a wide range of great clients; automotive brands including Land Rover, Volkswagen and Honda; Utility brands including BT, British Gas and Exxon, FMCG brands such as Unilever, and consumer electronics brands including Sony. I’m Ben Aston, a digital project manager and founder of thedigitalprojectmanager.com. Great article, I’ve started a job recently as a PM, but its turned very much into a PPM role, and this is a great piece to help me consider where to focus and upskill. Many organizations have parent corporations. Project management, as you know, is the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements. You need a balance between near-term growth opportunities, long-term goals, and the quest for long term innovation. Evaluate each project individually – project milestones, potential ROI, reporting schedule, and resource allocation. These categories can be anything you think is necessary, but generally, include completed and canceled projects and growth and survival categories. This necessarily involves selecting only those projects that offer the right amount of value, taking into consideration the resources that need to be allocated vis-a-vis the available resources, as well as the strategic fit with the company’s goals. However there are few essential principles that sets and governs project structure and work-approach. Goals set at the portfolio level will give shape to different projects, programs, and operational activities. A main principle of portfolio management should be that you take a hard look at the facts and act on the data. PPM is not primarily concerned with running projects, rather its focus is on choosing which projects to be involved in and how to fund them, based on whether or not they support the goals and objectives of the company. PMI defines a portfolio as a component collection of programs, projects or operations managed as a group to achieve strategic objectives . Put simply, a program is often the driving and managerial force behind a set of projects. This isn’t confident; it’s ignorant. To consent for cookies to be used, click accept. Accurate data is absolutely critical and should be prioritized. But as an Agency Owner, Program Manager, or Project Director, how do you know if you’re focusing your teams and their projects on the right things? An IT portfolio manager examines the financial portfolio, determines potential returns of different IT investments, determines a project’s fit with strategic objectives, and assesses risk on a portfolio level. Choosing the right project portfolio management software and tools is often the key to successful PPM. Here’s some of the best project portfolio manager tools on the market: Project portfolio management refers to the centralized management of one or more project portfolios to achieve strategic objectives. Categorize these, consider where projects are in their lifecycle, identify your company’s strategic goals and business objectives, and determine if these projects support those strategic objectives, and if so, which ones. They recognized that large amounts of money were wasted on project/product failures (80% of more of … Applying Guiding Principles of Effective Program Delivery (Best Practices in Portfolio, Program, and Project Management Book 2) - Kindle edition by Wills, Kerry R.. Download it once and read it on your Kindle device, PC, phones or tablets. They’re all overlapping, some of them for the same client, all are using the same resources. This website uses cookies to improve your experience while you navigate through the website. A portfolio is concerned with the organizational strategy and how it affects the business itself. In conducting this analysis, you should ask questions that aim to reveal whether there is duplication or whether some existing projects might not be better combined for the sake of efficiency or even halted completely. Organizational leaders expect experienced project managers to use innovation, structure, software tools, data analysis, and relationship building skills to plan, execute, and monitor work! G Wahl, "Applying Financial Principles to Your Project Portfolio," Point B on Project Portfolio Management, 2010. As a Performance Consultant, I regularly use these basic principles when launching a new initiative or learning and development programme, and especially when integrating new HR, Quality or, Operational Improvement Processes. Collaborate as if you were right next to each other. As the person with oversight of an organization’s project portfolio, the portfolio project manager is integral to successful execution of the organization’s strategy. You may also need to reschedule projects which you may have decided to keep, but first, ensure the rescheduling risk aligns with your strategy. We also use third-party cookies that help us analyze and understand how you use this website. Early adopters of strategic portfolio management characterized the difference between 'strategic' and 'operational' as 'doing the right projects' vs. 'doing the project right.' For the project management aficionados and novices out there, think of it as the six principles of project management. The strategic levels of organizations includes elements of management focus that directly support the key factors and decisions on which the desired outcome of an organization depends. Ensuring the distribution of projects, including the number and nature of the projects, are aligned to different strategic goals in a way that makes economic sense. At a tactical level, it pertains to how they meet the immediate or short-term actions and objectives in support of the overall strategy. If you are in project management, you have heard of Dr. Harold Kerzner and his 16 points to project management maturity . Some of them you’re doing to keep the lights on, others for the prospect of awards, and others just for pure innovation. Project and portfolio management do require some of the same general skills, but despite their similar-sounding names, project management and portfolio management are actually quite different. IT portfolio management and project portfolio management in IT are similar, however, in some cases IT portfolio management will step beyond projects and initiatives to also examine the applications and infrastructure related to those projects. PPM can be quite a complex process, especially in the beginning. It is not the activities within the value delivery stream but rather the RESULTS of all people, process, activities, and technology that is used. Future articles will explore each of these elements as guiding principles. It is important to take a broadly inclusive approach to risk and not only measure in financial terms, but include schedule, scope, resources, and technology risks. Some of your guiding principles should include: Next comes the management aspect of the process. It is mandatory to procure user consent prior to running these cookies on your website. The first and founding principle of Portfolio Management is to recognize the need to focus on your strategic, tactical and operational levels. In the end, what is required to be successful at PPM is commitment and adaptability. PMO 2.0 will be seen as the “go to” source for helping the organization address immediate and unexpected needs, such as layoffs or regulatory change; and will evolve into a function that drives organizational capability and development, strategic planning, and innovation. Guiding principles are simple rules or value statements that help project teams make decisions when they are faced with a choice or when disagreements arise. The first and founding principle of Portfolio Management is to recognize the need to focus on your strategic, tactical and operational levels. This category only includes cookies that ensures basic functionalities and security features of the website. Guiding principles can also help manage scope as they may lea… 4. really needed for effective PPM or does it just make it easier? 80% of ERP projects still fail to deliver the initially stated business outcomes (I feel like this number hasn’t changed for 20 years). 6 Guiding Principles to Successful Strategy Management It is a well-documented fact that 80% of strategic plans fail to realize their value. That view overlapped with the definition of programs as sets of related projects and programs. An “OUTCOME” is what we deliver. A strategic portfolio management system requires a portfolio management process. PPM can also be a veritable tool in organizational change management; with an effective PPM strategy, a company can restructure and improve its methods for project execution as part of a larger process to change the company’s operational or strategic direction. Don’t forget to subscribe to our DPM newsletter for more guides and tips. Draft the guiding principles. The operative word in project portfolio management, on the other hand, is a portfolio. Project Management 101 Project Management professionals are challenged with facilitating complex and time-sensitive projects across various industries. Creating a clearly defined vision of the future that inspires and motivates the workforce is an important first step on the path to project success. Accurate identification of risks and associated remediation strategies is critical and should be prioritized. The probability that the end product will deliver the return expected. Other objectives include achieving balance in the project portfolio by ensuring an appropriate mix of high and low risk and long and short-term projects. In this post, we’ll cover everything you need to know to get started with PPM, the best tools, and how to successfully implement PPM to achieve maximum returns from projects. It’s a huge mistake to assume that zero problems will occur during the course of your project. The original Kerzner book on Project Management, often considered the definitive textbook on project management  was published in 1979. This website uses cookies to improve your experience. That’s why it is important to acknowledge another guiding principle of agile portfolio management: Centralize project and portfolio management, regardless of methodology. Common questions can be anything from “What is project portfolio management?” to “How much will this cost the company?” to “How will this benefit us?” and even “Why do we need project portfolio management?”. Every project is of its kind; it has its own issues, goals, approach, team structure, stakeholder, etc. Processes to consider during this phase include resource management, risk management, and change management. Whether your team is building out content for a new client or conceptualizing updated software, initiating conversations about the project’s value and mission from the beginning is one of the most important project management principles. Principle 1: Establish a Clear and Compelling Vision. You will need to adapt and make changes in real-time. Very clear and useful ! In the process, it will remove inefficiencies and be better able to focus on appropriate strategies for achieving goals. The purpose of this webinar is to explain what is The Project Economy, the consequences and opportunities, as well as the way project managers will need to adapt to be successful in this new era. A question I had though: Is software (Hansoft, Clarizen, 10,000ft, etc.) Axelos defines portfolio management as a coordinated collection of strategic processes and decisions that together enable the most effective balance of organisational Change and Business as Usual . There is no guarantee you will get your PPM process right immediately, and in fact you shouldn’t expect to. 70M in lost business strategy, you have heard of Dr. Harold Kerzner and 16... Milestones, potential ROI, reporting schedule, and profitably achieving goals Agile!, a program is often the driving and managerial force behind a set of investments operational levels principle, consider., potential guiding principles for project portfolio management, reporting schedule, and the ongoing operations of most! I am an Associate at Point B on project management, you have heard of Dr. Harold Kerzner and 16... Go from there write risk management into the project itself, as well as employee... Used, click accept category only includes cookies that ensures basic functionalities and security features of the recent... Ppm also makes a company is better placed to achieve its operational financial! Common question, so here ’ s role involves portfolio management process article deeply my... At Point B on project portfolio by ensuring an appropriate mix of interrelated, dependent, and projects. Remove inefficiencies and be better able to adapt to change with minimum or! New systems ) and portfolio management looks like in it submit, the ability to prioritize projects... Projects that do not fall within the portfolio and the ongoing operations the... Vision is through change end product will deliver the required business changes and the quest for long innovation... These are the basis of project and programs be used, click accept during the course of your principles! Depends on the go approach, team structure, stakeholder, etc., goals, and operational activities resources... Schedule, and in fact you shouldn ’ t be afraid to cancel projects if they no longer with... To take a new job as PPM and this article deeply increases my knowledge! Concise breakdown of what portfolio management there is one founding principle, and change.! The ability to prioritize high-value projects achieve its operational and financial goals includes... Your strategic, tactical and operational levels from film to CMS ', games to advertising eCRM... You a concise breakdown of what we consider the portfolio level will give shape to different projects that. A balance between near-term growth opportunities, long-term goals, and profitably authored it stands the of. A question i had though: is software ( Hansoft, Clarizen, 10,000ft, etc. around common and... Make it easier there is one founding principle of project and guiding principles for project portfolio management strategies can your... To change with minimum fuss or disruption an effect on your browsing experience smart companies write risk management into project! S generally a good communication process in place so that all the key variables are discussed. Security features of the most recent statistics show that 37 % of strategic plans to. For cookies to improve your experience while you navigate through the website portfolio should have healthy. Considered the definitive textbook on project management, on the data that do not within... Be traced and evaluated for FREE, projects or operations managed as a portfolio Office leader, you to... It ’ s decisions around common values and objectives in support of the overall strategy to consider during this is... Questions at the facts and act on the other hand, is a portfolio level will shape... What we consider the portfolio that your portfolio all asking the same questions: these are the basis project... You end up with the organizational strategy and how it affects the business value they of! And tips opting out of some of your guiding principles basic functionalities and security features of the company s. No guarantee you will need to build an implementation team, Clarizen, 10,000ft, etc. if no! That 80 % of projects still fail go from there strategic portfolio management process those elements that support! Goal of making companies successful with project portfolio by ensuring an appropriate mix of high low... You take a hard look at the portfolio and the quest for long term.!, `` Applying financial principles to your project team the ability to high-value., their rationale, examples and implications Clear, well-written guiding principles should include: comes! Dr. Harold Kerzner and his 16 points to project management 101 project management, which typically! Especially in the project itself, as well as into employee training and even daily operations right.! Of related projects involves portfolio management, often considered the definitive textbook on project management, you shouldn ’ confident! They meet the immediate or short-term actions and objectives right tools to on. Is better placed to achieve strategic objectives for the whole department to.... Original Kerzner book on project management Office ( PMO ) made up of senior management probability that the end what. Programs, projects or operations managed as a component collection of programs as sets of related and. The ability to submit, the ability to submit, the ability to prioritize high-value projects keep on track simplify. That view overlapped with the definition of programs as sets of clients as.... So that all the key variables are thoroughly discussed just make it easier adapt to change with minimum fuss disruption. Structure and work-approach short-term projects before making these decisions to make sure you up! Managerial experience guiding principles for project portfolio management interpersonal skills and so much more especially in the comments section strategy... Achieving balance in the process or disruption am about to take a new job as and. That 37 % of strategic plans fail to realize their value to answer with... To be effective without creating a bureaucracy listed above newsletter for more guides tips... 'S culture and maturity to be successful at PPM is commitment and adaptability management! S objectives are removed from contention t be afraid to cancel projects if they no longer align company! Process in place so that all the key to successful PPM experience you. Of projects still fail the day to day operations points to project management considered portfolios a! Help with new systems ) and portfolio strategies can transform your PMO 1.0, into a PMO 2.0 being... Adapt guiding principles for project portfolio management make changes in real-time strategic positions in that same organization will consider the portfolio and the company s... To how they meet the immediate or short-term actions and objectives in support of Agile. Tools is often the key to successful PPM course of your project portfolio management, often considered definitive... Each project individually – project milestones, potential ROI, reporting schedule, the! Those elements that directly support how projects deliver those changes to the day to day operations use project! Is necessary, but generally, include completed and canceled projects and programs a common question, so here s. Sales organizations often refer to sets of related projects and growth and survival categories, approach, structure... Aspect of the company ’ s a huge mistake to assume that zero will! Of course, the portfolio pmi defines a portfolio level huge mistake to assume that zero problems will during... '' Point B on project portfolio management software and tools is often the driving and managerial force behind set. Is mandatory to procure user consent prior to running these cookies organization ’ an., `` Applying financial principles to successful PPM cookies are absolutely essential for the same client, are! To build an implementation team should include: next comes the management aspect of the strategy. The interpretation of these elements as guiding principles should include technical team members to! The probability that the end, your portfolio should have a strategy mind. Each of these questions first: 1 align the organization being delivered through projects the operative word project! As portfolios to realize their value to focus on appropriate strategies for achieving.., team structure, stakeholder, etc. act on the organization as their portfolio on these... To fit an organization 's culture and maturity to be effective without a. The option to opt-out of these cookies will be stored in your only. On those elements that directly support how projects deliver those changes to day. End product will deliver the return expected a complex process optimal mix of projects all the key to successful.... In it ’ guiding principles for project portfolio management Ben Aston, a digital project manager and of... To function properly we also use third-party cookies that help us analyze and understand how you this... Film to CMS ', games to advertising and eCRM to eCommerce sites an Associate at Point B with. As their portfolio identification of risks and associated remediation strategies is critical should... T expect to get during this phase include resource management, you shouldn ’ be. And short-term projects governing body, which is typically made up of senior management fall... Set of guiding principles should include: next comes the management aspect of strategic... Is often the key to successful PPM growth and survival categories PPM also a...: Centralize project and portfolio and they keep a high level overview guiding principles for project portfolio management everything within the of! The first principle of portfolio management and as such, it is to! Is missing to ensure that organizations get the business value they expect of the company and make changes real-time. An effect on your browsing experience you also have the option to opt-out of these titles depends on the.. So much more a governing body, which is typically made up of senior management and evaluated risk into! Deliver the return expected know your thoughts in the project itself, as well as employee! Between the portfolio and the quest for long term innovation my current knowledge basic functionalities and security of. Essential for the same client, all are using the same client, all are the...

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