Types of Planning for Project Portfolios

Everyone has done some sort of planning in their lives. In your personal life, you may regularly plan birthday parties, create grocery lists or pack the right clothes for a vacation. In addition to personal planning, planning is also pervasive in our professional lives. This may consist of scheduling projects based on capacity, putting together budgets and hiring more employees to fill resource requirements. Between both professional and personal lives, we are constantly planning. This makes it easy for us to take for granted the power of making plans and to see them for what they really are.

Because planning may feel like second nature, few realize there are actually many different types of plans used to get results. This is particularly true for planning in a professional capacity. We compiled a list of the five most common types of planning and how they can help companies improve strategy execution. You’ve likely heard of at least a few of these types, but you may not have given them the attention needed to understand the benefits of each type of planning and how they can help you deliver more projects. So, let’s get a little more familiar with planning.

#1. Financial Planning

I am confident that if you are reading this article, then you not only know what financial planning is, you are likely already doing it. Financial planning is part of the foundation of any business and is required for every project portfolio. You need to know how much projects are going to cost and where exactly the cost is derived. But financial planning can also be addressed from another perspective, one that lends itself to strategy execution.

Financial planning isn’t just determining the cost of certain resources on a project, forecasting profits or determining the return on investment of a project. Financial planning should also consider the company’s overall corporate goals. The financials of a project portfolio should be in line with these goals. If there is a large financial investment in a project that is not strongly aligned with a corporate goal, upper management needs to take the time to evaluate the project to determine if it’s truly worth the investment. In this way, financial planning can also act as a litmus test to see if your portfolio is best aligned to the corporate strategy.

#2. Strategic Planning

Strategic planning is a very high-level type of planning where upper management defines what initiatives or goals the company will work toward. Once a goal (or goals) has been selected, projects will be prioritized based on how well they contribute to achieving this goal. Goals can be tangible like an increase in customers or more immaterial like improvement in customer satisfaction.

Even though strategic planning is done at a high-level, its benefits ripple down to every employee in an organization. There are many decision makers in an organization. While there are only a few who make big decisions, there are many who are making much smaller decisions on a regular basis. Anyone making decisions in an organization needs a direction or focus to help them make decisions. When a company has a clear strategic plan, decision-makers at all levels can make the right decisions that lead to achieving corporate goals.

#3. Program Planning

Program planning is often paired with strategic planning. In program planning, a company’s corporate goals are broken up into programs. Programs themselves are the smaller goals that are components needed to be completed to accomplish the larger corporate goals. Projects in each program contribute to the goal of the program. If strategic planning is a very high-level plan, program planning is taking the high-level and distributing it into digestible pieces across an organization.

Program planning might not make sense for all organizations. Program management is useful whenever an organization has complex corporate goals or a large number of projects. By breaking down a corporate goal and organizing it into programs, everyone can better understand the dependencies between projects and programs and more easily identify resource constraints.

#4. Investment Planning

In the context of project portfolio management, investment planning is a type of planning where an organization determines the best projects and initiatives to invest time, money, and resources. Organizations might use this type of planning if they have limits to what they are able to invest and want to make sure investments are put where they will get the most out of them.

Companies like investment planning because it allows them to take limited resources and budgets and get the biggest impact. Investment planning helps nurture innovation so companies can continue to grow with new products, apps or services that give them a competitive advantage. Investment planning can be most impactful for software or product development companies or smaller companies looking to grow. Regardless of the type of company or its size, investment planning gives everyone a target to aim for.

#5. Outcome Planning and Roadmaps

Outcome planning is planning for a desired outcome. While most types of plans fit this definition, outcome planning is distinct because it focuses on a much longer time period. Organizations will determine a long-term outcome and then work backwards to figure out which projects will need to be completed, what resources will be required and what financial investments they will need. The outcome is then plotted onto a roadmap which shows projects, milestones and timeframes.

Outcome planning and roadmaps give the long-term focus needed for companies to continue to grow. Together they ensure that only initiatives and projects that help obtain the outcome are pursued, or at the very least, are prioritized above others. The roadmap will serve as a guide for departments, project portfolio coordinators and project managers as they decide and work on projects.

The Reality of Planning

The Reality of Planning for PPM

Many (if not all) organizations use more than one type of planning for their project portfolio. Companies can use multiple types of planning or take certain aspects from different types to create something completely individualized. Planning is only effective if it suits the needs of your organization, so customization makes sense. Regardless of the types of planning your company uses, you will need a tool through which you can visualize and execute on that plan. Meisterplan is a project portfolio management and resource management tool that helps companies translate plans into completed projects. Meisterplan was built to be lean, so it’s flexible and adaptable to whatever way your company likes to plan. To see how Meisterplan can help make your plans a reality, you can start a free 30 day trial or schedule a one-on-one demo.