Project portfolio management
Portfolio project management (PPM) is creating a huge buzz in amongst project management. It is innovative, effective and produces results. Stephen Jenner, the Director in the Ministry of Justice on Secondment to the Transformational Government Group in the Cabinet Office, visited our branch and gave presentation on portfolio project management (PPM) and its role in “Influencing the Weather”.
According to the Association of Project Management, Portfolio Project Management is defined as “the selection, prioritisation and control of an organisation’s projects and programmes in line with its strategic objectives and capacity to deliver.” Jenner describes PPM as a catalyst for propelling organisations towards finishing projects effectively. He describes PPM as a tool for ensuring an organisation “does the right thing and does it right”. In his analogy of doing the right thing and doing it right, PPM is divided into two steps. The portfolio definition - is the process that the organisations decides and reviews which projects should be part of the portfolio. It is important an organisation understands the final benefits at which it is aiming to achieve prior to executing this step. The “does it right” step is the portfolio delivery. During the portfolio delivery, insight into the key branches of the organisation and the role in how projects are executed will be revealed. If the portfolio is defined with precision and quality, it will deliver the results for the organisation.
Jenner also spoke about the vast literature available on PPM. Jenner himself has a book titled “Transforming Government and Public Services, Realising benefits through Project Portfolio Management.” He emphasized that although the PPM is goes unutilized by companies, there is enough literature for those who are interested in starting portfolios. For those of us who are skeptics about the competency of PPM, Jenner lists evidence from the IT industry, his own extensive research from public sector case studies, practitioner groups, academic research and its role in new product development. Despite evidence of its potential to assist companies in delivering results and preventing failure of delivery in project management, research shows that most companies are still quite hesitant. According to a US survey report, only 30% of portfolio management has been in place for more than two years. Since PPM does not produce immediate results, companies fail to continue the implementing PPM. Additionally, cases in which PPM fails might be a determent to organisations. Jenner though, suggests the failure in PPM often is because the portfolio delivery process is not done accurately. For example, if the portfolio focuses only on large projects, or it does not include past projects or focuses only on current project. Other common failings might include, evaluating initiative against strategy rather than a strategy –led portfolio.”
In summary, Jenner states that for a PPM to be effective there is a need for five key components. They are, senior management commitment, governance alignment, strategy alignment, portfolio office and energized culture; with these supporting the portfolio definition and portfolio delivery process. He also emphasized on the PPM not only a tool for being more effective, it is a benefits-led change programme that produces “measurable improvement…which will contribute towards more than one objective of the organisation.”