In the average organization many projects are happening at the same time making it a challenge to keep your eyes on the big picture. Anyone knows that it is important that projects should be aligned with the strategic objectives to realize concrete results, but how do you know that you are doing the right things? How do you make the right decisions? Project portfolio management (ppm) helps to answer these questions. In this article we explain how you get started with project portfolio management.
Create a central overview
The good news: secretly, every organization already has a certain basis for project portfolio management, often in the form of a list of the various projects. The problem is that it is not centrally managed, which means that there are often multiple versions. All in all, this makes it very difficult to come with the right overview when a manager is asking for it. Starting with creating one central overview of all initiatives within the organization, is crucial. Combine the ongoing projects and programs as well as those planned and not yet approved. Agree on who maintains and manages the list, and be strict in that regard: what is not on the list does not exist and is therefore not allowed to claim resources.
Translate your strategy into concrete objectives
Next, it is important to determine to what extent each project contributes to the strategic objectives. That may sound simple, but it is not. You can make it easier for yourself by formulating a strategic objective for each department. For example, improving the user experience can be broken down into projects for the IT department (improving the web interface) and HR (facilitating the recruitment process). Also involve the managers of these departments: this way you not only create so-called “buy-in”, involvement, but managers get a clear focus. Take the time to do this as it will prevent projects from being linked to the wrong objectives.
Categorize projects
Decision-makers usually understand the overall picture better if the same data is presented to them in a different, and clear way. It will facilitate them in making choices and prioritize projects. Therefore determine what perspectives are important for the organization. You can think of the region, the risk profile of the project, the market development to which the project responds. The project type is also interesting: for example, is it about innovation, product improvement or a legal obligation? By carefully considering in advance which perspectives are valuable in your organisation, you make the decision-making process a lot easier.
Making choices is inevitable
Once the centralized overview with categorized projects, labeled initiatives and clear strategic contributions is available, choices can and should be made. How many projects fit within the available budget? Are the intended people to implement the projects available? A project portfolio management solution, no matter how simple, can help to evaluate this overview in a central location – even if it is only for reports to support the conversations between all parties involved and to make quick and clear choices.
Repeating is the key to success
A lot of effort is required for effective project portfolio management. And be clear about it: project portfolio management is a continuous process. After all, projects are constantly being completed and new initiatives are being proposed. Ongoing projects are sometimes disappointing and must be terminated early. In short: there are many reasons and circumstances to re-evaluate the project portfolio. Therefore, make ppm a repetitive exercise, and guarantee that the organization is only concerned with initiatives that are in line with strategic goals.
Yes, it is a different way of thinking and organizing, and yes, it will go through trial and error. Even with templates and software as a guideline, it is difficult for people to make the switch immediately, because change is always exciting. So give employees time to get used to this new process.