Project portfolio management is necessary to bring all of your projects to success.

PM vs. PPM. You’ve likely heard of both project management and project portfolio management (unless you live under a rock). You might think these things are nearly synonymous, but that’s not the case. If you’re not sure what the difference is, you’re in luck! We’re going to help you understand both and the role they play in nearly every business. In his book, The Project Workout Bob Buttrick, PMP, provides a simple, easy-to-understand answer to the PM vs. PPM question:

  • 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.

What Is Project Management?

Most people are familiar with the concept of project management, but for the purpose of comparing it to project portfolio management, we’re going to provide a clear definition. Simply put, project management 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 can have 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

A project manager needs to have not only technical skills, but also a number of soft skills, including team management, social competency, self-management, and stress management.

What Is Project Portfolio Management?

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. PPM 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 can 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

Why Companies Use PPM

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, while PPM keeps the big picture in mind to make strategic decisions. 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. Without PPM, a 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.

Project Portfolio Managers manage all projects in an organization from a high-level perspective.

A Note About Program Management

Many companies also choose to implement 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 Lean Project Portfolio Management™?

At Meisterplan, we understand the difficulty of obtain a high-level view of your projects. We developed a Lean Project Portfolio Management™ framework that provides a bird’s eye view of all your projects so senior management can make strategic decisions. Lean PPM™ consists of four stages that all take place simultaneously. They are:

  • Strategize – translating your business strategy into criteria to compare projects and determine prioritization

  • Collect – collecting and developing new project proposals based on the strategic criteria

  • Decide – deciding which projects will be implemented, and when

  • Execute – managing approved projects to completion

No project portfolio management framework would be complete without a software to implement it. Our Meisterplan software is your Lean PPM™ solution. Meisterplan was developed specifically to complement the Lean PPM™ framework. With features like sub-portfolios, what-if scenario simulation, interactive resource management, and built-in reporting, our Meisterplan 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. You can see Lean PPM™ in action by scheduling a demo of Meisterplan or starting a free 30 day trial 

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