Project Portfolio Management: When we establish a personal objective, we soon draw up plans and goals to achieve the result. In the business environment, this is no different: to achieve the business strategy; an organization develops different projects that will achieve that end together.
But how to guarantee that these projects will be aligned until the end? In this sense, portfolio management is a great ally of organizations, ensuring that projects will be executed to achieve the objectives.
Do you want to know how to manage portfolios in your company? Could you go check it out?
What Is Project Portfolio Management?
Project portfolio management is the centralized administration of one or more portfolios to achieve the organization’s strategic objectives.
We can imagine project portfolio management as a “portfolio” that organizes initiatives, ensuring that the executed projects contribute to achieving strategic objectives.
Thus, the objective of portfolio management is to select and prioritize projects that will bring the most impact to the organization’s strategy, indicating which are the best initiatives for investment.
This enables organizations to:
- Align projects with strategic objectives;
- Have agility and ease in decision-making;
- Optimize resources and improve return on investment;
- Improve communication;
- Reduce costs.
Okay, but who is responsible for carrying out portfolio management? Typically, this role is assigned to the project office or Project Management Office (PMO).
What Is The Importance Of Portfolio Management For A Company?
Many ideas of how to get there soon arise whenever we talk about strategic objectives. These ideas, which can later become strategic initiatives, are analyzed by the portfolio manager to verify if they can be transformed into projects or programs.
Programs are broader initiatives with larger goals and benefits, while projects are temporary endeavors to create a unique outcome.
Thus, portfolio management is important for organizations, as it is more linked to the organization’s long-term development than day-to-day initiatives.
As you’ve seen, investing in project portfolio management enables organizations to achieve their goals. Now, let’s talk about how to manage this in your business.
How To Manage A Project Portfolio In 5 Steps
We can say that portfolio management has three basic objectives:
- Manage resources and prioritize projects;
- Supervise projects and anticipate trends;
- Communicate results and intervene when necessary.
But to achieve these goals, you need to follow the five steps below:
Identify Initiatives
The first step in managing your project portfolio is to survey existing initiatives in the organization. This will help you classify projects, making them easier to manage.
In addition, it is important to analyze project proposals, assessing the scope, risks, costs, and whether these initiatives are favorable to the business.
Categorize The Projects
With the project proposals in hand, the next step is categorizing the initiatives by grouping them by affinity and need.
You can create strategic project groups, legal obligation projects, sustainability projects, etc. With the projects categorized, it is easier to identify and select those more aligned with the strategic objectives.
Prioritize Projects
In this phase, you will select and prioritize projects within the same category. It is time to analyze the characteristics of each one and select those considered most relevant to the strategy.
For this, follow these steps:
- Establish criteria for each category of projects;
- Create a matrix of values for each of the project categories;
- Assign a score for each of the criteria for each of the initiatives;
- Add up the points to obtain the final score of the initiative;
- Classify the projects, creating a ranking of initiatives.
- It is worth remembering that elaborating the criteria by categories only needs to be done once. Afterward, do periodic reviews.
Project Balancing
With the ranking of projects in hand, you will have a list of priorities for execution. Thus, in the balancing phase, you will analyze the available resources and, if necessary, re-plan investments.
This phase is important to prevent projects in a given area from being prioritized over others. If this happens, it may cause a mismatch in strategic planning.
In addition, it is necessary to evaluate the organizational capacity to meet the projects, considering human and material resources. Based on this view, it is possible to define the best execution sequence for the portfolio.
Monitor The Progress Of Initiatives
Once you’ve decided which projects to run, you need to keep an eye on the conduct of those initiatives.
Follow the evolution of the projects and, in case of deviations from the deadline, cost, or scope, take the necessary and appropriate actions at the moment!
Also Read: Steps For Sound Process Management In Your Company