Mastering Project Portfolio Management

I think that the biggest challenge is that project portfolio management is still being treated as a reactive, tactical discipline.  It’s being seen as a consolidation of reports on current initiatives, rather than a strategic approach to managing organizational resources to deliver the collective goals and objectives. This reporting driven approach also means that it tends to be focused on traditional, waterfall-based project delivery.  Many organizations struggle to integrate agile and hybrid into their portfolio management approaches, which means it’s only addressing part of the portfolio. Finally, portfolio management is still measuring performance against project metrics rather than business metrics – it’s seeking to ensure efficient and effective work delivery rather than optimized outcome achievement.

The biggest driver is the acknowledgement that what they have in place right now simply isn’t good enough.  In many organizations there was never a conscious decision to implement portfolio management, it was a natural evolution from the desire to improve the ‘big picture’ of what was happening across the portfolio of strategic initiatives. Now there is a recognition that portfolio management must be the foundation for the delivery of that work – planning, funding, execution and benefits realization.  That can’t happen with the historic approach that organizations have in place so that’s driving improvements.

This question is simple. If you are not doing this, how do you prioritize the most important work to get the most benefit from your budgets to meet your strategic objectives? The truth is, you can’t!

Every organization will benefit from project portfolio management.  There isn’t a business on the planet that doesn’t think it can do better – public and not for profit as well as private.  And with so much focus on discretionary investments these days – projects, it is essential that all such investments deliver the greatest benefit.  Project portfolio management helps achieve that.

The main goal should be to show the business their investments based on their decisions and strategies. The investments should show past investments, current investments, and future investment with the goal of consistently improving the portfolio to affect positive business outcomes.  The management of the portfolio helps to organize and prioritize the right projects to be selected to move the business towards its strategic objectives, these while balancing business needs against the constraining resources of people and available dollars.  A secondary goal should be to mature the PMO organization itself along with value delivery. Gartner has a great model to follow – their five progressive level of the PPM maturity model. This will help you also show your leaders how your organization is maturing while you are stewards of the company’s assets in managing an overall portfolio.

Start by focusing on what’s important.  Why is portfolio management being undertaken?  What are the business opportunities or the challenges that are currently preventing the organization from optimizing the performance of the projects it undertakes?  That may be a long list, but prioritize based on impact on business performance and ability to address the issues.

For many organizations that can start with benefits realization.  It’s an area many organizations struggle with, especially for non-financial benefits so make it an area of focus for portfolio management.  Avoid focusing on standardization of processes and monitoring adherence by teams – that doesn’t drive performance and will lead to rejection of portfolio management as a concept.

Running a portfolio management process should inherently assume that continuous improvement is part of it since the business climate is ever changing, so should the portfolio management process to adjust to these changing needs. Assuming that a PMO has a portfolio management processes and tools in place, I recommend improving the portfolio with regular check-ins with the PMO team, business analysts and the functional business customers for input.  Create a listening post for your stakeholders and provide them with the information they need for timely decisions on their project investments.  Also, perform an annual audit on your portfolio using the internal auditing team to help with a backwards view to see if projects provided the business benefits that were claimed. This will help improve the governance of programs and projects that are selected in the future to focus on those that provided the most value.

It has to start with the ability to support all projects and all business areas.  Regardless of how work is structured, which approach is used to deliver it, or where in the business it is being run from, every project has to be part of the portfolio management framework.

Next, it has to connect all strategic elements. Planning and investment funding are seen these days as part of strategic portfolio management, with the more traditional project portfolio management elements then handling the delivery and benefits realization elements. That connection with strategic portfolio management must be seamless, and there must be support for benefits realization/outcome management.

If a project fails to deliver expected benefits then project portfolio management must have the ability to drive adjustments elsewhere in the portfolio to make up for that shortfall and protect the overall goals and objectives of the organization.

Ideally, organizations should have a fully integrated project portfolio management (PPM) solution.  The tool itself will be able to support strategic planning and funding, the communication of those plans, the setting of goals and objectives, the definition and planning of initiatives, the metrics and measures that will be used to determine the success of those initiatives and then the communication of that to all the relevant teams.

Either within the tool itself, or through seamless integrations, there should then be the ability to manage the work across all of the delivery methods – which likely requires multiple tools as Agile teams won’t be using the same tool as waterfall teams.

There should also be integrations with HRIS systems, time tracking, financials and so on to ensure that all data is being tracked in real time.  The tool should have a powerful reporting engine to provide all stakeholders with contextualized insight at any time, and will likely also integrate with a Business Intelligence (BI) platform for further analysis.

The PMO is the body that, more often than not, is asked to administer project portfolio management.  If the PMO is immature then there is no point trying to implement an enterprise wide, planning to benefits portfolio management approach for every organization.  That’s why many organizations are now creating a more strategic Enterprise PMO or similarly named function specifically to address project portfolio management (and often strategic portfolio management).

If an organization’s PMO function is less mature, there can still be elements of project portfolio management put in place – ensuring a focus on benefits delivery rather than the triple constraint for example, or ensuring project teams always have the context for their projects.  But organizations must actively seek to mature their PMOs with a greater focus on business skills, greater engagement with strategic processes, and a clearly defined portfolio driven mandate.

To me, there are four major components that solve for project portfolio management. The first being top-down planning. It’s imperative that organizations have solid goals and objectives and are able to plan their portfolio around those goals strategically. Next, the organization must have investment level funding and governance. This doesn’t mean rigid investment plans, but ultimately a focus on what investments will produce the greatest ROI for the business and a plan to govern those investments accordingly. Organizations then need to be flexible in execution. There is no portfolio that goes without change in an organization over a period of time and it’s important to remain flexible to the changing priorities of the business. Lastly, the organization must have effective outcome management of the project portfolio. Without a focus on outcomes, it’s inevitable that the organization won’t be achieving any of its goals. These are the components I believe organizations should consider in solving for project portfolio management. 

The greatest success that I’ve seen is one what I call the applause meter. My stakeholders are now really engaged in how the PMO can deliver because our project and portfolio management tool, KeyedIn Enterprise, has allowed them to understand more. This has allowed me to get more individuals involved in project management and get them engaged in different things for the organization. That year over year increase in usage of the PMO has contributed  correlated year over year value. Another success I can say is that myself, I was promoted to the Vice President of Project Management and we are looked at now as an Enterprise PMO. At one point, we were pigeon holed in doing just IT projects and we actually do a lot more than just IT projects now.

Not only can I just say it, I can show it. That wide and broad range has created a lot of success in the organization and when new people come in and get work done or understand where things are. They are immediately pointed to the PMO or added onto the PMO, maybe not as a direct report to me, but they are still accountable to me and what is put into the system and the functions that depend on these projects. It’s been a huge part of the success of us being able to grow, collaborate and get promotions – myself and other project managers within the organization. 

If a PMO with accountability for project portfolio management is doing its job properly, then it should always be looking for ways to improve project portfolio management.  Some of those improvements come from executives – better decision making around project selection for example, and some improvements lie with the business departments that own the solutions developed within the portfolio.  But the PMO owns a large part of the execution process.

There should be a culture of continuous improvement, and the PMO must encourage that culture among work teams.  Every element of delivery should be continuously evolving, and there should be an environment where teams feel empowered to adapt and adjust the way work gets done to meet the unique needs of every initiative.

The PMO must ensure that happens, and that the teams doing the work are supported through that process – it’s the only way that organizations can continuously seek to optimize their performance in a world that is constantly evolving.

I believe that organizations should consider the following for effective project portfolio management. First, you must have leadership support. Without the support of your executives, your mission to drive effective project portfolio management for the business is going to fail. The leadership team plays a crucial role in identifying the strategic goals and objectives of the organization that the portfolio of projects must reflect. Secondly, organizations needs to have integrated planning. That means organizations need to prioritize an integrated approach to the entire business plan to execute on those strategic initiatives. Third, enterprise-wide delivery. Theo organization must all be on the same page in delivering the goals and objectives of the business. Next, the organization must have the right tools and integrations to ensure the comprehensive, real-time information in available regarding the portfolio of projects and can be updated as the goals and objectives of the organization change. Lastly, organizations who want to be effective in project portfolio management must have a commitment to excellence. This doesn’t mean perfection, but the organization must prioritize the effectiveness of project portfolio management to ensure the success of the business as a whole. 

The first question we need to ask ourselves is what is effective? What are we trying to accomplish? Project portfolio management is all about how to get the maximum performance out of your investments. There are a couple of things that I think you need: You need clear project selection criteria including how your projects are going to selected and prioritized in order to have the maximum performance and outcome.  The next is a prioritization framework that you use to prioritize projects including reasons you want to do that project(s). Resource allocation is another area that you need to take into consideration including where you are going to place your better resource or where you need to put those resource to get the maximum performance. That requires you to measure the portfolio you are working on with the right KPIs to drive how you conduct business. Structure is another important aspect. Continuous evaluation of these processes are important for project portfolio management. You should be continuously monitoring and checking to see if you need to change anything. If you do that you are going to have a very healthy portfolio that delivers outcomes and value for your company. 

By far the most common problem I see is the tendency to fall back into a focus on project delivery rather than business outcomes.  Project portfolio management is seen as an overlay to project management rather than a business management discipline and the focus shifts to how the work is getting done, not what is being achieved.  That results in a focus on the triple constraint instead of being concerned with on benefit delivery, and the whole point of project portfolio management is lost.

The other big problem I see is a failure to keep the big picture in mind – the focus is on the project part instead of the portfolio part.  Organizations succeed only when the portfolio as a whole delivers the collective set of goals and objectives.  Focusing on individual projects means losing sight of that. 

A PPM tool can improve overall project portfolio management In one single word – transparency. If you are not tracking your portfolio in a tool:

• How do you know what’s progressing?
• How do you know if it will meet the company objectives?
• How do you determine your priorities?
• How do you get everyone working on the right things at the right time?

Without a PPM tool you are a ship flowing rudderless in the night – with no direction!

The biggest issue I’ve had in using previous project portfolio management tools is that I could not bring the organization together to understand what I was reporting, why it mattered to them, and why it was so cumbersome. After some diligence and looking at other projects. We selected KeyedIn. KeyedIn helped me with how I communicated to the organization at all levels. At one point, I was really focused on communicating to the leadership because I wanted them to recognize us as a value-add PMO and an Enterprise PMO. Previous project managers struggled through the existing tool to get the information in, but it was not producing views and communication that told a story.

What KeyedIn does for me from a project and portfolio management perspective is without much effort it allows me to tell the story. That story is where we are with our projects. How well we are performing on those projects? How much do those projects cost? Past projects that were done and how do I categorize them in the value they’ve provided whether it’s on investment, efficiencies that were produced. It not only allows me to communicate with project managers on their performance, but also the leaders of the organization so they know at all times where their projects are and any issues that we might have that would require their help. KeyedIn has done a really great job at allowing me to manipulate all my project data to tell the right story and the right level of performance.

It allows me to plan for the future by identifying trends and as a results I had a big jump year over year from 2019 to now in the usage of KeyedIn because of the way it solves for project and portfolio management at my company. 

The roadblocks to improving project portfolio management come down to speed.  The world is changing so fast it can be difficult for organizations to keep up, even if they have mature processes that work well.  When there is also a need to improve it can be almost impossible, especially when you have to still deliver on all the projects that are underway while trying to improve the overall management process.

Things can be made easier with clear accountabilities, clear mandates, and practical support in terms of people and tools.  It will take time, but every advancement will make things better.

The top objections that I hear for project portfolio management include:

• Lack of understanding
• Lack of resources
• Lack of buy-in
• Complexity
• Resistance to standardization

It is very key to understand the needs of the top leadership and also how to speak their language. When developing a portfolio management capability, you must demonstrate that the benefits will help these leaders with how they make decisions for a competitive edge.  One tactic to employ is to take the top 3 strategic initiatives and tie them to the portfolio and prioritize execution of these projects to show how they are doing against their goals.  Do all these at a least cost, least effort from them kind of way and you will get their buy-in. Provide an easy way to consume the performance of the portfolio in whole and in parts showing each leader the details of their projects.  Ensure the tool is easy to view and is easily configurable so that the information can help your business leaders with quick decision making. Perform an initial survey of your stakeholders to find out what their needs are, how your portfolio and PMO is currently performing from their point of view and then ask what improvements needed to be made to make their jobs easier to do.