What is Project Portfolio Management? At its most fundamental it is a process that is used to align the projects that an organization wants to achieve with the resources (human capital, financial, technological) available to implement those projects. But aligning projects and resources is a difficult balancing act.
Project Portfolio Management is not a temporary endeavour; it is a process that continues as long as the organization continues, and because of this portfolio management becomes “a true measure of an organization’s intent, direction and progress.” (The Project Management Institute, 2008)
But this on-going nature means you have to manage your portfolio of projects in a constantly changing technical and business environment; estimating project costs and durations with little or no foundation for the estimates, approving new projects and cancelling or pausing existing projects, all while furthering organizational goals and strategy. Essentially, you must predict the future.
So how do you know which projects deserve your organization’s limited budget and staff? Do you simply create an annual list of prioritized projects using your best guesses about organizational need and direction and the current business and technical environment? What if you guess wrong?
Here are some useful tips to get you started and increase your chances of success:
A prioritized list of projects is not an IT portfolio: Instead the portfolio manager should use a master schedule for projects, with start and end dates.
Develop a system for analysing the business value of projects: This means objectively assessing projects along at least 3 dimensions – Financial, Strategic, Technology. We have an upcoming blog article on how to do this so we won’t go into that now.
Annual planning is not enough: The master schedule requires reliable cost, benefit and duration estimates before a project can be added, and a monthly or quarterly planning cycle is needed to make these evaluations.
Use shorter project cycles / iterations: Organizations always have problems digesting big multiyear projects. Breaking a project down into a number of clearly defined phases each of which delivers measurable business value allows you to stay focused and respond to changes in the business environment. Agile Project Management is really helpful here – check out our blog for more information on this.
Apply a “fully staffed” requirement: Meaning no project is added to the master schedule unless needed staff will be available when the project requires them. Portfolio managers must keep track of staff and project assignments, but short project durations make this easier.
Protect your staff: Except for emergencies or stellar opportunities, staff should remain assigned to a project for its duration. This avoids the heavy cost of ‘context switching’ – the time and energy it takes for staff to divert from one project to another. According to Bob Lewis (2012); “By the time the staff who have been diverted to other efforts are returned to the tabled project, they’ll lose at least a month figuring out how to reactivate everything while rebuilding team cohesion and remembering the myriad agreements and design decisions that had been part of the team’s collective unconscious before the project had been placed in stasis. While they’re doing this, they’ll also be figuring out whether the original project business case is still relevant, now that so much time has passed.”
While portfolio project management may seem like predicting the future, reducing the planning timeframe with shorter and more frequent planning cycles and shorter duration projects, and implementing the above tips can increase your success.
For more information on portfolio project management, contact us.
POSTED IN: Blog