Why is project portfolio management important?
When delivering multiple projects, being able to effectively manage the collection of projects becomes a critical task.
First of all, what is a portfolio?
Well, it’s a collection of projects that are currently active within an organisation. The active projects will (should) have the shared objectives of delivering a number of benefits to the organisation, they don’t necessarily have a direct relationship to each other.
A portfolio can also contain projects that all require specific management and delivery styles.
But what does project portfolio management actually mean for an organisation? Essentially, successful project portfolio management should deliver the creation of a portfolio that moves an organisation closer to its further towards its overall goals and objectives. It also involves the allocation of resources, such as staff and budget to projects when required and the need to constantly review project priorities.
When implemented effectively, project portfolio management will help improve project management processes and methods and reduce project failures. A recent PMI report outlined that organisations with mature project portfolio management processes completed 35% more of their projects successfully, wasting less time and money.
We have listed other benefits of effective project portfolio management:
- Better decision making – with the data available you should be able to determine which projects are performing (or not) and which projects are contributing to the portfolio objectives (or not).
- Mature risk management – introducing project portfolio management should see an improvement in the overall risk management approach as you will begin to look at risks at portfolio level as well as project level.
- Collaboration and visibility – teams are more likely to work together when there is effective project portfolio management in place, and the portfolio view will also provide everyone in the organisation a more comprehensive view of projects across the organisation.
Delivered successfully project portfolio management should help organisations answer these critical questions:
- Are we investing in and delivering the right projects?
- Are we managing our change capacity effectively?
- How well are we delivering projects?
- Are we realising the benefits?