PM vs. PPM. What is the difference between project management and project portfolio management? This is a common question. If you are reading this blog post, then you have probably asked this question yourself. In his book, The Project Workout Bob Buttrick, PMP, provides a simple, easy-to-understand answer:
Directing the individual project correctly will ensure it is done right. Directing ‘all the projects’ successfully will ensure we are doing the right projects.
If you put project management and project portfolio management together that would ultimately mean doing the right projects right. That sounds good, doesn’t it? But let’s go a little deeper to really understand what is involved in both. While we’re at it, we’ll also briefly discuss program management and how it fits into this picture.
You are likely already familiar with project management, so let’s start there.
What Is Project Management?
Project management put simply is a series of tasks that are done to produce a specified product, service, or result usually within a designated time frame. Project management includes work collaboration and task management. A project typically has a project manager and a project team. A project manager can manage several projects as long as he or she has sufficient capacity.
A project manager has the following tasks:
Clarifying project objectives, and assigning tasks and responsibilities
Planning and keeping track of project timelines and detailed milestones
Checking the progress of the project and its adherence to the timeline, budget, and requirements
Monitoring the risk portfolio
Managing the team to success. This involves overcoming conflicts on the lower level, communicating with team members and tying in key stakeholders
What Is Program Management?
A program is a group or sub-portfolio of related projects that together fulfill the same benefit or strategic objective. Program management focuses on the success of the program as a whole as opposed to the individual successes of each project. In other words, the goal of program management is to achieve the desired result for that group of projects as efficiently as possible.
Program managers communicate regularly with project managers. They also coordinate with the PMO to ensure the right projects are chosen and prioritized, to identify risks, issues, and dependencies, and to find solutions in order to achieve the objective and keep the program on track.
What Is Project Portfolio Management?
Put very simply, project portfolio management (PPM) is the management of all projects in an organization from a high-level perspective. Many companies use a Project Management Office (PMO) to handle all activities related to PPM. The PMO is the central hub for all projects in the business, driving PPM on a largely strategic level. The PMO is a fixed and permanent entity within the business organization. The focal points of its work are resource management and cross-level as well as cross-project communication (source: Strasser).
In other words, the purpose of PPM is to prioritize projects, plan and staff them realistically with qualified and available employees (resource management), monitor them, and keep all involved parties informed about their status.
When a company doesn’t use project portfolio management, they often run into the common problem of implementing too many, unimportant, projects. This practice causes employees to be constantly overloaded and overextended. It also leads to projects being stopped due to low quality or simply because they are not feasible. This bottom-up approach consumes unnecessary resources, neglects the business strategy, and pits projects against each other in a competition that usually only has one winner.
PPM, on the other hand, follows a top-down approach. This ensures that important, less risky projects are implemented first and that they also have the necessary resources. Remaining capacities are then used for additional initiatives. PPM places great value on resource planning and resource conflict resolution, which in turn increases value creation in a business.
Project portfolio management tasks include:
Strategic alignment: selecting and prioritizing projects that align with strategic objectives
Resource management: planning, managing and staffing human resources in terms of projects This includes keeping up with employees’ skills and capacities as well as taking into account project timelines and budgets
Rough milestone planning: initiating, planning, implementing, and completing the projects
Training and coaching project managers and teams
Introduction and maintenance of PM methods, tools, and technologies
Project portfolio controlling: monitoring and evaluating project progress
Project support: communication and support for project teams
Program support: communication and support for program managers, especially in regards to risks, issues, and dependencies to find solutions to keep the program healthy
The line between project management and project portfolio management is often blurred because people attempt to accomplish all of the tasks we discussed under the heading of project management. For companies that work on a large number of projects, it makes sense to clearly delineate between PPM and project management. Project management focuses on the execution of individual projects (doing the projects right). Many companies have a good handle on project management, but have more trouble when it comes to project portfolio management.
What Is Lean Project Portfolio Management?
At Meisterplan, we have developed a lean project portfolio management method to help you focus on the high-level, strategic decisions for the entire project portfolio (doing the right projects). Our Lean PPM method divides PPM into four areas of activity:
Strategize – translating your business strategy
Collect – collecting project proposals
Decide – deciding which projects will be implemented, and when
Execute – managing approved projects
Our Meisterplan software is your Lean PPM solution, and we develop it specifically to complement the Lean PPM method. With features like sub-portfolios, what-if scenario simulation, interactive resource management, and built-in reporting, our Meisterplan software supports you and your lean PPM processes, ensuring that the information you need is available whenever you need it, and that challenges can be resolved as they arise.