The 5 major benefits of adoptiong a effective PPM and PMO initiative are clear: better decision making, lower risk, better resource use, stakeholder value and repeatable business impact. PPM enables the PMO to move beyond execution-focused results and simply managing on-time and on-budget project metrics to strategic-driven selection for measurable results. This doesn’t mean foregoing focus on execution and tactics, rather building on these methods to improve outcomes. Strategic PMOs must create a culture that is results-driven and impact focused.

PPM software can help answer critical business questions that benefit the bottom line. What work are we doing? Who is doing it? How long does it take? How much does it cost? These might sound trivial on the outset but getting real, reliable answers is not as easy as it sounds. Visibility is key for business leaders and the level of information they are equipped with can help determine the degree of success. In order to make changes, drive results, and deliver on promises, these questions need to be addressed.

What work are we doing?

Focusing not just on how to get work done but why to do the work in the first place is a major milestone toward strategic portfolio management. Understanding what aligns with the business and maintaining that alignment through planning, execution and change, and reporting ensures the PMO is delivering the most important projects for the business and the biggest value from its resources. Visibility into what is in flight, the status of projects in flight, and what the impact of that effort will be is critical to achieving impact from that initiative.

Project portfolio planning helps you pivot, adjust funding and pull back ensuring the right work gets done in the right order. This includes different types of work and methodologies to include structured and unstructured work. Technology can significantly aid in prioritization by automating what is possible and allows business leaders to make decisions based on that information. Prioritization is also not a one-time exercise. The ability to be flexible with what work is being taken on with a prioritized backlog of requests for when business needs change will help not just get aligned with the business – but stay aligned for the long term.

Who is doing it?

Resource management is critical for PMOs and especially so for business-focused PMOs. Visibility into who is assigned to which project, at any given time, allows for optimized use of resources and minimizes waste. Often times the biggest opportunity for organizations to not just gain efficiency and save money, but to make a bigger impact and become more innovative, is in better management of their most valuable asset – their resources. Improving resource management can allow people to feel empowered and engaged while also ensuring the business is making the best use of its available capacity.

Answering the question “who is doing it?” is not just as simple as taking a look at which people are allocated to which projects but really understanding the true capacity, getting to the bottom of what the impact of changes will be for the business and making an effort to become strategic with how resources are deployed. Automation takes a lot of the manual effort out of resource management but also provides information that can’t be achieved through simple tools. A strategic approach to resource management, at the portfolio level, is the answer for business-focused PMO leaders.

How long does it take?

In many cases, the biggest reason for project failure is really scoping failure. It was doomed from the start. This isn’t necessarily avoidable, but it can be mitigated. An accurate forecast, and delivery against those promises, not only positions the PMO as a value-driving entity for the business but also builds credibility as a unit. On-time delivery is a functional part of any PMO and creating accurate forecasts creates predictability for the business.

To really understand how long projects will take, it starts with understanding how much capacity there is to deliver those projects. What other projects within the portfolio are going to happen first, and how important is this project based on the risks and other factors. It requires connecting the dots between projects and resources and aligning the strategy for a purposeful outcome.

How much will it cost?

Managing projects to time and budget is the age-old standard. While many savvy businesses and PMO leaders are moving away from this model as a metric of success, it doesn’t make either any less important. Even if on-time and on-budget are not the singular bar of success, they are nevertheless important contributors of project goals. What is more important, however, is how the portfolio as a whole is performing, if it is meeting expected targets, and doing that in a fiscally responsible way.

Portfolio management consists of many KPIs and metrics, many of which are lagging indicators and a some of which are leading indicators of success. Defining how much a project will cost before it begins, and measuring that against how much it cost at the end of the cycle will determine the ROI expectations on that project. Amplify that to the entire portfolio and the PMO has a good understanding of what ROI can be expected from the investments it takes on. Key to this is having a way to manage that budget and expenses to track how the portfolio is performing and which projects are more costly than others.

Considering Key Functional Areas – Answering Critical Questions

Answering the key questions above is not as straightforward as it may seem. Gathering the information needed to make those determinations and arriving at reliable conclusions requires a high level of visibility and automation that can only be gained from a solution designed for this outcome.

Project Portfolio Management software was built to help PMO teams better manage and optimize their projects and investments at the portfolio level. How they are able to support these goals varies from solution to solution, but there are key categories that are common for most on the market. Understanding what those areas are and how important they are to your team and your business as a whole will help you decide which solution will best position you for success. We’ll outline these categories at a high level for beginning research.

What Work Are We Doing?

Portfolio Management

As PMO leaders are aware, managing a portfolio is much different than managing a project. It requires a lot of movement and coordination to ensure the right projects are staffed from a common resource pool. For enterprise PMOs or strategic PMOs how to use project portfolio planning to deliver higher strategic value means taking a business focused approach to portfolio management that isn’t always functional or straightforward. Certain software functionality supports portfolio management and helps to make critical decisions through the delivery and presentation of information. Some examples of critical portfolio management functionality include:

1. Grouping projects into hierarchies of portfolios and programs

2. Measuring the alignment of portfolios to business objectives

3. Prioritizing portfolios based on custom criteria

4. Providing visibility into the stage/status of projects across a portfolio

5. Supporting custom scoring models to prioritize project requests

6. Modeling and comparing portfolio options using “what-if” scenario planning

7. Configuring portfolio dashboards using specific portfolio metadata

8. Managing portfolios by exception using configurable data boxes

Project Management

For any PPM solution, the more information that can be centralized the better – whether that be through integration or within that system. Project management functionality allows PMs to easily create and manage projects within the software to roll up into the broader portfolio or drill down to report on individual projects. Project management functionality that helps project managers automate and become more efficient include:

1. Creating and managing ad hoc projects or leverage pre-built templates Build and assign tasks to create a work breakdown structure

2. Viewing projects as a task list or using a Gantt chart

3. Tracking deliverables and high-level milestones

4. Supporting risk/issue tracking with high-profile roll-up capabilities

5. Creating and categorizing custom fields on projects

6. Measuring the value and benefits associated with projects

7. Generating automated status reports for individual projects or groups of projects

8. Supporting native integrations to popular CRM systems for project intake

9. Supporting native integrations to popular Agile development tools

10. Configuring dashboards for individual projects or groups of projects

11. Managing projects by exception using configurable data boxes

Work Management

Task-level and execution-level management ensures teams are aligned with the project goals and executing toward those targets. Work management provides all the features needed to plan and get things done. Keeping all project communication and information centralized allows leaders to see status and health of projects easily and avoids additional back-and-forth. It also provides additional visibility while empowering teams to focus on what is important rather than spending time on manual tasks or data gathering. Critical work management features include:

1. Collaboration with team members using social posts

2. Document storage and file sharing within projects

3. Supporting mobile access to projects and tasks

4. Building and sharing ad hoc or scheduled reports

Who Is Doing It?

Resource Management

Centralizing resource information and aligning to critical projects is the art of portfolio management. PPM solutions help accomplish this challenging dynamic through visibility, collaboration, and strategic execution. Ensuring the right people are assigned to the right work at the right time requires tools to help accomplish that. Those tools need to have functionality that includes:

1. Providing visibility into the allocation of all resources

2. Measuring the impact of project demand on resource capacity

3. Forecasting resource capacity by project and portfolio

4. Centrally assign and schedule resources

5. Managing resources by name or by role

6. Tracking an inventory of skills and certifications

7. Managing resources by exception to identify under- or over-allocated personnel

Role-Based Access Control

Different users and roles require different accessibility to the system and information. Security and permissions are a very important aspects of a PPM solution because sensitive information and proprietary data is stored within the system. It is also important because information can be personalized to make it easy to digest. When evaluating PPM solutions, consider role-based access that includes:

1. Access to system features based on roles and groups

2. Configurable dashboards per user, group, department, or companywide

How Long Does It Take?

Time Tracking and Project Scheduling

Accurate project forecasting is the foundation for delivery. Getting an understanding of the scope and effort of the project and delivering to that estimate – or close to it – is what builds credibility for the PMO as a whole. Good project managers are usually able to assess what is entailed in a project, especially if it is similar to one that has been performed in the past, but they are not always able to communicate that effort or show the innerworkings of the project without a comprehensive solution to help demonstrate the information. Key features for answering how long a project will take are related to time tracking and scheduling that include:

1. Support configurable timesheets

2. Track time by hours or days

3. Provide mobile access to time entry

4. Manage project deadlines by exception using configurable data boxes

5. Define a critical path within projects

6. Establish predecessor relationships among tasks

How Much Does It Cost?

Financial Management

Projects are investments and determining how much they cost will provide a baseline for return expectations. Financial management ensures projects stick to budget expectations while also providing finance teams with budget information for easy tracking and expensing. Managing project budgets and tracking actual expense against that budget ensures efficient use of project financial resources and closes the gap between planned vs. actual. Software helps track project financials through:

1. Capturing project costs

2. Providing mobile access for expense entry

3. Tracking costs and expenditures in multiple currencies

4. Forecasting budgets for projects and portfolios

5. Generating real-time reports comparing budgets vs. actuals

6. Managing budget overruns by exception using configurable data boxes

7. Supporting native integrations to popular ERP systems for project financials

8. Roll up budgets and costs against project teams

Other Considerations

When Project Portfolio Management (PPM) goals are clear, critical decisions get easier. PPM provides an array of features that support teams as they navigate the portfolio management landscape and become strategic value drivers for their business. Within the multitude of features and functions there are some others that are critically important, beyond the niceties.

Security

1. Provide encryption of data in transit

2. Support encryption of data at rest

3. Comply with SSAE 16 and related certifications

Usability

1. Offer a cloud deployment model for easy access and a shorter implementation timeline

2. Provide a simple, effective UX that supports widespread adoption

3. Offer a compelling mobile experience for iOS and Android users

4. Provide configurable My Work and My Projects pages for each user

5. Manage work by exception with configurable user notifications

In order to achieve these benefits the PPM Evaluation Process is critical. Discover how to effectively evaluate, select and implement PPM in the next installment of Mastering Project Portfolio Management.