What is Project Portfolio Management?

In a classic blog post on our website, Jörg Leute explained the 4 pillars of PPM. These include:

A robust PPM Process

The details of the process will look different from organization to organization. Still, a robust PPM process will, in some manner, always include these four steps:

• Strategize by setting evaluation criteria that will contribute to your goals
• Collect projectProjectA project is a time-limited undertaking with defined objectives and resources that delivers unique results and often includes complex tasks. proposals for evaluation
• Decide which projects to implement
• Execute and coordinate approved projects

We recommend the Lean PPM™ Framework to make sure your process addresses all 4.

A clear organizational structure outlining jobs, roles and accountability

PPM is a continuous process with clearly defined roles and responsibilities. Many successful companies have a dedicated department, known as a Project Management OfficeProject Management OfficeA Project Management Office (PMO) is a permanent organizational unit responsible for the centralized and coordinated management of all projects. (PMO), just to maintain and refine this process. Whether you establish a PMO or not, key roles in PPM can include the project portfolio manager, program manager, project (or product) owner and resource manager, although these may have different names at your organization.

Meetings, checkpoints, deliverables

Several meetings or checkpoints are necessary to keep all stakeholders informed about decisions and current progress. These include, for example, portfolio board meetings, pipeline review meetings and meetings for resolving bottlenecks.

You can find a detailed structure for scheduling routine PPM meetings, including who you should include in what meetings and when, here in our Lean PPM Templates.

Software to support stakeholders with data capture, simulations and progress-tracking

PPM should support all stakeholders throughout the entire process: from planning and execution to subsequent analysis. This works best with software that is easy to use and benefits all stakeholders along the entire value chain.

• PPM optimizes resource utilization. Skilled workers are always allocated to the most important projects according to their abilities — without overload or downtime.
• PPM lets all stakeholders have their say and makes sure they’re satisfied. PMO leaders, project managers, project leaders, team members and executives: they are all empowered in their roles, always up to date with new decisions and optimally utilized. This motivates and retains skilled professionals within the company.
• PPM helps you get an overview of all your company’s projects. Moreover, this overview will help you appropriately weigh the risks and rewards of each individual project. This will help you create a portfolio that balances projects based on their risk profiles.
• PPM ensures all dependencies are accounted for. With clear dependencies and a detailed roadmapRoadmapA roadmap is a strategic overview of one or more projects, their progress, milestones, and objectives., your planning helps reduce waiting times when transitioning between projects or project phases.
• PPM makes sure projects truly fit with your strategy. Projects are only approved if they align with the company’s strategy and there is sufficient budget and capacity to execute these projects.
• PPM makes your priorities clear. Management knows when high-priority projects are completed and is able to make flexible decisions and to prioritize projects.

PPM differs from multi-project managementMulti-Project ManagementMulti-project management (MPM) is a dynamic project management method that enables the simultaneous implementation of different projects with independent goals, schedules and dependencies. by focusing on strategic objectives and emphasizing strategic alignment. While multi-project management also involves running multiple projects simultaneously and allocating resourcesResourceResources are all the people, places and things that you need to complete projects. The most important resource? Employees, of course! among them, the projects do not necessarily share a common goal or depend on each other.

Ideally, a Project Management Office (PMO) should help in implementing project portfolio management (PPM). The PMO acts as an intermediary between strategy providers and the executing departments.

When implementing PPM at your company, make sure to pay attention to the following:

1. Assign roles: Appoint portfolio coordinators, project managers and resource managers.
2. Schedule regular meetings: With various regular meetings, you can communicate business goals, keep all stakeholders informed, monitor the current portfolio and make decisions.
3. Use Meisterplan: Our PPM tool includes all the essential features that support all stakeholders optimally, from the CEO to individual team members.

The application of project portfolio management allows your company to focus on those projects that are aligned with your corporate strategy and goals. By optimally utilizing resources, you can not only complete projects on time but also increase employee satisfaction. With a clear overview of dependencies between multiple projects, you can minimize risks and address issues accordingly.

In short, you don’t waste resources on unsuitable projects. Keep track of what’s happening in the company, and you can always react accordingly.