Project Portfolio Management (PPM)

Published by under Portfolio Management

A Project Portfolio Management (PPM) refers to set of procedure or methods used for analyzing and collectively managing a group of projects (current or proposed) depending on the various key characteristics. It is widely used by project managers and project management organizations.

The basic objective of Project Portfolio Management is the determination of the optimal mix and proper sequencing of proposed projects in order to achieve the overall goals of organization.

It takes into account various factors such as business strategy goals, hard economic measures or technical strategy goals.

Project Portfolio Management (PPM) The project portfolio management involves the analysis of various attributes of projects as mentioned below.

· Project’s total expected cost

· Consumption of scarce resources

· Expected timeline

· Schedule of investment

· Expected nature

· Magnitude of benefits

· Timing of benefits to be realized

· Relationship or inter-dependencies with other projects

There are various vendors of PPM software that highlight ability of their products to treat projects as part of entire investment portfolio. PPM focuses on management of project portfolio as an informal approach for project investment decision making.

There are various PPM tools that enable companies in managing the continuous flow of projects from beginning of concept to its completion. There are many PPM tools and methods that provide techniques and technologies for allowing improvement, visibility, measurement and standardization of process.

Decision Trees

One of the popular PPM tools is decision trees with decision nodes that allow multiple options and enable the project managers to optimize project against a constraint.

Decision centric view

A decision centric view is an approach for including uncertainty and risk in portfolio optimization. There are five key decisions that are made while taking decision centric view of the project portfolio optimization process.

· Decision D1: It includes making decisions about strategic initiatives, benefits, and resource limitation criteria that are used for portfolio ranking and project filtering.

· Decision D2: It includes making decisions about criteria that are important to achieve.

· Decision D3: It includes making decisions regarding the project ideas that can be developed into business cases.

· Decision D4: It includes making decisions about the Business Cases that should be considered as element of the portfolio.

· Decision D5: It includes making decisions about the projects that should be funded.

Resource allocation

Resource allocation makes up a significant constituent of PPM. The available resources of a company is evaluated for its capability to fulfil the demands of project once it is determined that project or projects meet defined objectives. The resource allocation can be done effectively by funding resource commitments, funding the skills available in the resource pool and understanding of existing labour. The project investment must be made in projects where the required resources are available during a particular time period.

Pipeline Management

Pipeline Management involves the determination of various ways for executing a set of projects

in the portfolio in a specified time; given there are only finite development resources in the organisation. The pipeline management relies on the ability of the project managers to measure the planned allocation of development resources as per the strategic plan.

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