The evolution of business practices is connected to portfolio management practice development. While a common starting place for the “birth” of project management may be the need to establish control over the timeline. The end goal of PPM is no longer a representation of tasks, work effort, and progress. Modern organizations face new demands for higher visibility into portfolio initiatives and management. Portfolio management is not caring for individual projects.
Portfolio management is a set of methods, processes, tools, and techniques used to manage all data streams in terms of projects. Conventional project management focuses on one project at a time. “Enterprise management” or “portfolio management” is most effective by supporting all projects that you might want to pursue. Critical planning and oversight functions are the jobs of executives or managers.
Some crucial components of portfolio management are:
- prioritization – development of a project portfolio model that aligns projects to the priorities of the business;
- a set of areas that reflect the work, resources, and schedules that have been selected for detailed planning and next execution;
- and “business intelligence” capability, like dashboards, reports, etc. that provide key milestone, financial, and other performance data to the various executives and stakeholders within the enterprise.
Key critical elements of the enterprise management and adoption of portfolio management
Business requirements are a vital part of successful project management, in any field of work and economic model. The Standish Group’s Chaos Report has shown that without clear direction and objectives, there is no way a business can measure the work and cost and establish whether the effort supports the business.
There is no clear universal measure for how exactly a separate project is driving the business forward. If you lack established business requirements, any project completion may result in poor business returns and lead to ad-hoc project decision-making. A constant race that meets only immediate low-level needs on every step, rather than fulfills the “bigger picture” goals.
Project management methodology is the question of choice for every enterprise. Omit it is the application of knowledge, skills, tools, and techniques to meet project requirements. And there are a wide variety of project management methods and approaches.
However, management’s primary focus has to be on how work, deliverables, and the scope, are to be completed in synch with resource allocation (cost), over a specified timeframe (schedule), while weighing potential additional constraints (risk, quality, etc.). This is a basic example of the core of effective portfolio management.
The problem of business communications acquires urgency in recent years. Since many companies are moving to distributed business and creating distant branches and offices. Today there are many tools that help and transfer information from person to person, from person to group of people. These tools include email, instant messengers, video conferencing, blogs, social networks, collaboration tools, and many others. These tools are now available not only on personal computers but also on tablets, smartphones, and even regular TVs.
There are similar trends in project management. Traditional project management is undergoing many changes. It is moving with the times, adding to its piggy bank more and more new tools for planning, analyzing, and co-organizing work in a project.
Technological progress affects not only the style of project management but also the formation of the team, the ways of communication between the participants, and the leadership style of the leader.
Now, instead of the classic meetings face-to-face the trend, remote management, and planning, are based on web-oriented platforms, and solve work issues through instant messengers, blogs, and social services. Such a transition from classical management gives the company an undeniable competitive advantage.
Saving time, using collective intelligence, increasing productivity, and managing flexibility is a small part of the positive aspects provided by project management.
Thus, Project Management, as one of the elements of Enterprise management, gives your business the ability to unlimited use of collective intelligence and project information within a team to achieve a common goal.
Competencies of the practitioners such as planning, and scheduling are critical for project managers in all sectors of the market. Scheduling is certainly one of the most basic yet critical aspects of portfolio management. However, it is only one of many competencies required for successful project planning, execution, and control.
Other critical competencies required for the successful adoption of portfolio management strategy include domain expertise, business process aptitude, technology skills, communication, and other “soft skills.” The modern project management environment demands from a PMO a significant level of competence beyond the baseline project management knowledge.
Industry and defacto standards are usually established by consensus and later approved by a recognized authority. Such standards allow common and repeated use. They are basically guidelines for activities aimed at the achievement of the maximum degree of order and control over portfolios. The portfolio management framework ensures both the structure and flexibility, fitting the company and attainable by its employees.
Industry best practices are usually used informally, not as standards, but rather like techniques, methods, or processes that have proven themselves over time to accomplish some given tasks. It is beneficial to adopt suitable practices in conjunction with custom build standards. This approach creates a firm foundation that can support business goals and growth.
Portfolio management is designed to make the complexities of a business easier, by offering orders. As your business grows, the number of your projects multiplies. Your project efforts go to the next level. This is when you would require a broader set of management principles, tools, and skills.
Portfolio management should simultaneously reach deep into the project management practice and rise above the single “project problems”. Onto the plain of building and executing the “master plan.” If you still don’t have a portfolio management strategy in place, you’d better get one.
Otherwise, you won’t be in a prime position to reap the maximum result and successes from your project and initiatives. As it becomes obvious from the list above, portfolio management not only utilizes project management tools.
It requires a deep understanding of the organization’s DNA and the best tools to monitor and correct the progress and reflect the alignment of project work to business goals. By applying an effective portfolio management methodology across your enterprise, you’ll be able to see a return on organizational development aimed at strategic business growth.