Project portfolio management certainly has its baked-in set of challenges, managing a cluster of projects, especially when there’s resource overlap tends to amplifies those challenges. Easing those challenges, clarifying priorities, and proactively avoiding bottlenecks are the key benefits of Project Portfolio Management (PPM).
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What constitutes a portfolio?
Portfolios serve to group projects from an organization’s roster of current or potential initiatives into a folder of projects that align with that organization’s financial goals.
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In layman’s terms, PPM is used to identify and prioritize projects that mitigate risk while providing potentials for high profitability.
If we consider a project as a collection of tasks to be executed by people that further the project’s progress through milestones, portfolios identify these initiatives in the higher order context of the organization’s goals of profitability.
The point of portfolios is to maximize profit by deducing the way and order in which resources should be devoted to each project.
How is portfolio management different than project management?
Project management orchestrates the process of completing the goals of a set initiative, whereas portfolio management sees this initiative, along with the others in the organization, in a wholistic picture.
A project manager is devoted to maintaining timelines and order within their project, where a portfolio manager devotes resources across projects in the portfolio to maximize profit while minimizing risk.
Benefits of portfolio project management
Instituting PPM in your organization comes with benefits such as:
- Allowing management to observe clustered project health as a microcosm of the organization’s performance
- Facilitating decision making and resource prioritization
- Aligning individual projects with organizational goals
Instituting a portfolio
Begin by identifying goals and establishing a strategy.
Portfolios are backboned by purpose, and so if the goal of the portfolio is unclear, so too will be the results. Here are three ways to institute the successful implementation of a portfolio:
1. Defining KPIs
Now that you have your goals in place, determine the best ways to calculate success, risk, and profitability within that portfolio by defining your top KPIs.
2. Creating a team
Recognize the people and other resources that are required to effectively execute the projects in the portfolio.
3. Strategizing project plans
Create a prioritization of the initiatives within the portfolio based on the required resources to complete versus the net gain of completion using sprints or milestones.
Structuring your portfolio
Tools such as Nifty bring projects and members of a portfolio into one place where they can track each project’s health, assess previous project performance, and proactively avoid upcoming bottlenecks.
1. Portfolio Dashboards
Portfolio Dashboards give insights into project members and statuses at a quick glance to get project managers up to speed on where exactly they stand across the projects that are part of their management responsibility.
2. Portfolio Overviews
Portfolio Overviews provide detailed analyses of portfolio project progress, timelines, and statuses as well as overdue, upcoming, and completed tasks that fall within each initiate or milestone of the projects.
3. Portfolio Management
Portfolio members and projects can be updated to ensure that the latest members and initiatives are in line with each portfolio’s goal. Members that are part of a portfolio will be automatically invited to all projects that are created public. Additionally, projects can be moved between portfolios if and when workloads broken up into teams.
The outcome of project portfolio management
In the way that project milestones add context to daily tasks, portfolio management allows upper management to observe a collection of initiatives through the lens of organizational goals.
That said, project portfolios can start small and scale with time to allow you to begin your foray into PPM by grouping projects based on clients, account managers, or internal teams, and challenge you to meet (if not beat) specific KPIs.
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