PPM: The Pragmatist’s Guide to Project Portfolio Management

There might be a certain amount of crossover between the two disciplines, but project management and project portfolio management are two very different things.

Project management is…

The organisation and management of individual projects from inception to completion. This entails:

• Creating and maintaining the project roadmap
• Calculating budgets
• Scheduling tasks and allocating resources
• Monitoring progress and performance
• Communicating with stakeholders
• Managing project risks

Project portfolio management is…

A strategic framework for selecting, validating, and prioritising projects in your pipeline. This entails:

• Aligning your project portfolio with strategic business goals
• Prioritising and validating projects
• Evaluating potential ROI
• Managing costs and resources
• Identifying and mitigating portfolio risks
• Implementing PMO governance

Decision makers

These are typically members of the C-suite. Decision makers are responsible for setting your organisation’s strategic objectives and have the final say on the projects that make up your portfolio.

Portfolio managers

Portfolio managers oversee the successful execution of your project portfolio, ensuring they support your strategic objectives. A portfolio manager may sit within or outside of the project management office (PMO).

Portfolio managers wear many hats. They’re responsible for everything from evaluating project requests and data analysis to performance monitoring, standardising PPM processes, and communicating with stakeholders. Unlike a project manager, portfolio managers have a bird’s-eye view of your entire portfolio.

Project manager

The project manager is responsible for planning, monitoring, managing, allocating resources and reporting on the progress of individual projects in your portfolio. They coordinate the efforts of the project team to ensure timely execution and delivery.

Project coordinator

Project coordinators work alongside project managers, typically taking charge of simple or repetitive tasks to free up the project manager’s time. A project coordinator’s duties include basic administrative tasks, such as scheduling meetings and data entry.

Team member

Team members possess specific skills or expertise essential to project success. For example, a typical construction project team would be comprised of architects, designers, engineers, and contractors.

1. Define your objectives

Project portfolio management begins with setting your organisation’s strategic objectives. Do you want to increase customer satisfaction? Streamline critical internal processes? Launch a new product? Defining your goals helps you focus your efforts and identify the most valuable projects in.

2. Review your project pipeline

You’ve defined and agreed on your key strategic objectives. Now it’s time to fill your portfolio. Review your pipeline to identify existing and potential projects, then select the ones that best align with your business objectives. Don’t worry about creating a comprehensive plan and business case for every project proposal. At this stage, the important thing is to create a list of viable projects.

3. Evaluate, select, and prioritise

Once you have a list of projects, you need to score them based on strategic alignment and potential business value. There are numerous qualitative and quantitative factors you can include in your scoring model. These will differ from project to project. For example, increasing NPR scores will carry more weight in a project to improve customer satisfaction than one to reduce unnecessary admin. A robust scoring system helps you prioritise and invest in the right projects.  

4. Validate

This stage ensures the projects you’ve selected are viable. You’ll build a comprehensive business case based on capacity, resources, dependencies, and potential risks to demonstrate the value of your selected projects. This is the document the leadership team uses to approve or reject project requests.

5. Manage and monitor

The final step is to manage and monitor your portfolio as it unfolds. You might need to reallocate budget and resources, rescope, update priorities, manage risks, or introduce new projects. Project management is unpredictable. Review your portfolio regularly to account for unforeseen changes and issues.

Take a top-down approach

Traditional project portfolio management takes a bottom-up approach. Portfolio managers create detailed plans for every project up front, working out who’s responsible for what and when before they consider viability or strategic alignment. The problem with this approach is that you can expend time and effort on projects that might never get off the ground.

The opposite of this is a pragmatic, top-down approach. Instead of planning every detail of the project in advance, you simply identify the projects that best support your strategic objectives and put together a basic cost and resource profile. You don’t have to create a comprehensive project plan right off the bat or worry about PMO resource management for every task. This accelerates innovation and minimises wasted effort and resources.

Simplify and standardise

Few organisations have a clear structure to capture and act on demand. Things get lost in the shuffle and, even if a request does find its way to the appropriate people, it can take months before it becomes a formal project.

Pragmatic portfolio managers use PPM software to overcome this problem. For example, a simple Microsoft Forms integration makes it easy for anyone in your organisation to submit ideas and requests, ensuring decision-makers always have visibility over new and pending requests.

When you ask people to use a uniform form or portal, you can design it to capture all key information up-front. This will avoid time-consuming follow-up. The form should invite the requestor to identify the business benefits of their request. Consider what questions you can ask to make people think deeper about the impact of their idea.

Score against business objectives to prioritise projects

Good PPM prevents you from spending time and resources on the wrong projects. And that means you need a simple and reliable scoring model to evaluate project requests.

A robust project portfolio prioritisation model enables you to review and prioritise project requests against defined business goals. Organisations use a mix of quantitative and qualitative criteria to calculate project value. These criteria usually fall into three categories:

• Strategic
• Risk
• Financial

A project scoring model provides a value-based approach to prioritisation. Resources and budgets are finite. Value-led prioritisation supports rational and consistent decision-making, which leads to higher success rates because you invest in the right projects.

Remember to review your scores regularly. This lets you adapt to priority shifts, resource constraints, risks, and other changes that may impact your portfolio.

Establish a single source of truth

When project data lives in multiple platforms, it’s difficult to maintain the consistency and visibility you need to make informed decisions.

A pragmatic approach centralises data management to provide a single source of truth for portfolio managers and project teams. That means saying goodbye to spreadsheets as data stores and implementing project portfolio management software that delivers an enterprise database for project information instead.

Good PPM tools make life easier for everyone. It reduces data entry times, makes reports available instantly without manual intervention, and gives teams access to deeper, fresher data that delivers better insights.

Consider using a modelling tool

The bigger the portfolio the greater the challenge of optimising it. Teams need to schedule projects to make the most of available resources and smooth out demand spikes and troughs. A modelling tool – typically available as modules in PPM applications – can help with this.

A portfolio manager can use a modelling tool to simulate "what-if" scenarios, such as delaying a project, putting it on hold, cancelling it, or delivering it quicker ahead of schedule and the impact on resource demand.

Creating a variety of scenarios and comparing the results can deliver clarity to help schedule the actual roadmap for your portfolio.