With Project Portfolio Management, You Have an Overview of All Projects

Project portfolio management - sounds complicated, is it really? Find out! We explain what a project portfolio is, how project portfolio management (PPM) works, and what benefits it has. You will also learn what the PPM process looks like and which portfolio management tools can support you in implementation.

What is a project portfolio?

A project portfolio is a set of projects of a company that are coordinated together. These projects are comparable to one another and connected with other projects, e.g. through content, resources or goal. The portfolio changes over time. New projects are added, others are ended. The coordination of these projects is called project portfolio management (PPM). The main tasks of PPM are starting the right projects at the right time and ensuring their successful execution. Project portfolio management is usually carried out by portfolio managers or a project management office (PMO).

What is strategic and operational project portfolio management?

Project portfolio management consists of strategic and operational parts. In strategic project portfolio management you choose and prioritize projects to be implemented. You evaluate these projects based on previously defined criteria. As all projects are evaluated according to the same criteria, you can directly compare which projects contribute what to your company. The projects are not only considered individually, but are also related to each other. This way you can identify dependencies. Do you need the same employees for several projects, for example? Are certain tasks being done twice? Does the budget allow for simultaneous project implementation?

In operational project portfolio management the running projects and programs are monitored and controlled. You control the projects with the help of status reports and project reviews (using e.g. ZEP). You can quickly identify problems such as resource bottlenecks with this tool. From this you can derive measures and guide projects towards success. It is also part of the operational project portfolio management to provide uniform procedure models for project implementation: classic, hybrid, agile.

How does agile project portfolio management work?

You can also set up project portfolio management in an agile way, not just projects. What exactly agile project portfolio management looks like, there are a lot of definitions and opinions. Roughly speaking, it's about operating iteratively and incrementally at the portfolio level.

Examples of what agile project portfolio management can look like in practice:

1. Continuous planning: Documents like the strategy plan are adjusted quarterly or even monthly instead of being created once a year and not touched again. This also means that budget and personnel are not planned for the entire year.
2. Regularly checking project relevance: Goals change - projects should too. Not all projects that were approved at the beginning of the year will be needed during the year. Agile project portfolio planning allows for changes to adapt to new circumstances.
3. Stronger dynamics in agile projects: The iterative way of working in agile projects allows for regular customer feedback. This feedback leads to changes in resources, for example, due to adjusted or new requirements.
4. Less control: Agile work is defined not just by the procedure, but above all by the way of thinking. Agility allows you to test new things, make mistakes and learn from them. This applies to the team level, but also to project portfolio managers. They relax the reins without losing stability. This is a learning process that will look different in every company.

Why is project portfolio management important and what are the benefits?

A thousand ideas, limited resources - which projects do you choose? That's what PPM is there for. Project portfolio management enables you to objectively select the most important projects for your company and carry them out efficiently.

PPM brings you numerous advantages:

• Keeping the big picture in mind: PPM gives you an overview of past, current, and planned projects. This allows you to make better decisions for the entire company.
• Choosing the right projects: Select and prioritize projects sensibly based on risks, resources, and more. With company goals in mind, you strategically select the projects that will help you achieve them.
• Transparent project data: You see which projects are currently running and their progress. Staff utilization is visible with a few clicks, as well as the budget. Responsibilities, dependencies and more - everything can be accessed in the tool of your choice.
• Efficiently deploying resources: The availability of company resources is already considered in the project selection and is regularly reviewed afterwards. This provides clarity and the opportunity to optimally use resources across projects.
• Utilizing experiences from past projects: Effective project portfolio management collects information about past project results and the business value achieved with them. It evaluates the success chances of similar projects planned for the future, and helps allocate resources. With an effective PPM strategy, you can use the processes and experiences from previous projects to increase the probability of success.
• Reduced company risk: PPM offers a holistic view of the relationship between risk and reward for the entire project portfolio. Possible risks are factored in at the start of the project and solution scenarios are developed.

What does the PPM process look like?

Regardless of the methodology, the PPM process consists of five basic steps:

1. Planning: Set your strategic goals and criteria: Before starting portfolio building, you need to clearly define your corporate strategic goals. The portfolio should later match the strategic direction of your company. Once your goals are set, you need to define evaluation criteria to use for project selection. Examples of evaluation criteria include payback period, capital value, and investment risk.
2. Project selection: Capture and evaluate projects and ideas: You can start building your portfolio. Note current projects and new project ideas. Get the data from running projects. The defined evaluation criteria come into play here to determine the most important projects. With the evaluation criteria, you measure the value the projects have for your portfolio. With that, you can make data-based decisions for prioritization and implementation.
3. Feasibility check: Assess the feasibility of projects: After project selection, you conduct a feasibility analysis. Consider financial risks, capacity planning and existing resources. It is advisable to develop a risk management strategy. After successful examination, the project is included in the portfolio.
4. Managing the project portfolio: Monitoring and controlling: The projects are running. Now you need to coordinate, monitor, identify discrepancies, and initiate corrective measures. The termination of projects is also part of this.
5. Learning: Final evaluation of projects: Documentation is an important part of PPM. This helps you reflect and analyze even after the project ends. You can incorporate the insights into your next projects and steadily improve your chances of success.

Representation of a PPM process sequence

Finally, a checklist with practice tips for your PPM:

• Track the progress of the portfolio on a dashboard. Various project metrics can be graphically processed with this.
• Keep all projects of the portfolio in view across the years with a roadmap.
• Regularly analyze project reports to check criteria and performances.
• Define dependencies and make them transparent. It is important to know which projects and resources depend on each other in order to keep the portfolio stable.
• Plan capacities proactively. Also make sure that individual teams or team members are not overloaded. This can be implemented with a simple reporting.
• Simplify the collaboration between project managers and controllers. Data on budget and costs should be easily transferable in both directions.

Which PPM software is available?

Project portfolio management software is a tool for centralizing the management and maintenance of a project portfolio. The software is often used to capture and analyze data to ensure that the project portfolio aligns with the company's overall strategic planning and goals.

PPM tools capture measurable values such as the profitability of investments and operational efficiency. These values are compared with the value achieved for the company.

There are many different types of PPM tools. Make sure the following functionalities are available to efficiently use PPM:

• Gantt charts
• Budget, resource and task management (with software like ZEP)
• Live data
• Comprehensive analytics and reporting capabilities at all management levels
• Interfaces to your tools
• Very user-friendly and intuitive
• Support for mobile collaboration and communication

Let's have a look at three popular PPM tools on OMR-Reviews and how you can use them.

Project Portfolio Management Software:

1. ClickUp

With ClickUp you get an all-in-one tool for project portfolio management. ClickUp offers the full range of features you need for your PPM: Gantt charts, calendars, boards, workload overview, time tracking and more. ClickUp has a lot of features, so it requires a bit more time to get used to. Moreover, ClickUp starts from 0€.

2. Airtable

Airtable can also be used for PPM but has a strong focus on databases, similar to Excel. The difference: data is more strongly linked and there are rich features that make file attachments and reporting possible. The right tool for all Excel lovers.

3. Smartsheet

Smartsheet is a popular PPM and collaborative work management software that you can use to implement simple tasks as well as portfolio management. All essential tasks of PPM are covered: Project planning, milestone tracking, resource management, reporting and more. Smartsheet is easy to use and yet allows the use of automated workflows.

Conclusion on project portfolio management

Project portfolio management ensures the right strategic planning, resource planning and management, as well as supervision of all projects. An intuitive project portfolio management software bridges the gap between the company objectives and the project execution, offering an effective system with numerous advantages.