STANDARDIZATION OF PROJECT PORTFOLIO MANAGEMENT: OBJECTIVES AND PROSPECTS
Today, the vast majority of project-oriented organizations are facing an avalanche-like growth in the number of projects being implemented. Obviously, such organizations are in dire need of implementing uniform methods and standards for managing projects and project portfolios. A systems approach can significantly improve business performance and capitalization, improve the business performance of companies.
Portfolio optimization is an opportunity for growth. The goal of portfolio optimization is to increase the manageability and attractiveness of project portfolio. To achieve this goal, it is necessary to develop a standard for project transformation. This is done by combining all the “relevant” projects into groups and comparing them in groups according to the principles:
- common goals
- interconnection and interdependence of projects,
- adjacent projects based on a single customer,
- based on community resources and management
Aligning of all the project portfolio data means choosing what will be managed in the portfolio, in which categories, and how components will be evaluated and chosen for inclusion. This approach establishes a structured, agreed-upon terminology and framework for all the portfolio components. The seven steps of achieving this goal are listed below:
- Identification – the purpose of this process is to create an up-to-date list, with enough information, of ongoing and new components that will be managed through portfolio management.
- Categorization – the purpose of this process is to group identified components into relevant business groups to which a common set of decision filters and criteria can be applied for evaluation, selection, prioritization, and balancing. The categories are defined based on the strategic plan.
- Evaluation – this is the process necessary for gathering all pertinent information to evaluate components, with the purpose of comparing them to facilitate the selection process. Information is gathered and summarized for each component of the portfolio. The information can be qualitative or quantitative and comes from a variety of sources across the organization.
- Selection – this is the process necessary to produce a short list of components based on the evaluation process recommendations and the organization resource capacities. The evaluation determines the value of each component, and the organization resource capacities determine the number of components that the organization can eventually authorize.
- Prioritization – the purpose of this process is to rank components within each strategic or funding category (e.g., innovation, cost savings, growth, maintenance, and operations), investment time frame (e.g., short, medium, and long-term), risk versus return profile, and organizational focus (e.g., customer, supplier, and internal) according to established criteria.
- Portfolio Balancing – the purpose of this process is to include the portfolio component mix with the greatest potential, to collectively support the organization’s strategic initiatives and achieve strategic objectives. Portfolio balancing supports the primary benefits of portfolio management – the ability to plan and allocate.
- Authorization – the purpose of this process is to communicate portfolio-balancing decisions formally, and formally allocate financial and human resources required to either developing business cases or executing selected components.
Sometimes, it is enough to change just some parameters in a project to make it match the parameters you are searching for. To do that you can:
- Concentrate the project on narrower objectives
- Reorient the project to new or additional objectives
- Change the set of results that meet the original objectives
- Reorganize the project team and operational management
- Suspend the project when certain results are achieved
- Complete the project ahead of time, archive its results
Received projects will become your target portfolio. If the portfolio is formed for the first time, describe the “ideal” projects for a more comprehensive solution of portfolio problems. By comparing “ideal project” to real projects you establish if the relevant project is relevant. If it closes tasks not covered by other projects, it is necessary to include it in the target portfolio. Such a comparison in each group is a great solution for the transformation of all projects.
Unification of the data framework
After optimization of your projects and portfolios, the next step is setting up a common data framework. Standardization of all the internal terminology and project details enables easier access, management flexibility and speeds up all the processes immensely. All the projects, statuses on progress, budget markers, deadlines, and other relevant indicators need to be tracked. However, without a unified internal terminology and system, the data can be lost or misappropriated due to the difference in naming. Unification of terminology and standardization of frameworks is one of the steps for the company to move from the practice of “intuitive” project management to improve the maturity level of the company.
Especially acute the needs for unified terminology and relevant indicators is when an enterprise uses different tools for different tracking purposes. For example, we have “plans” in the Planner, “projects” in JIRA and VSTS with limited hierarchy and so on. An eternal dilemma of buying new tools, learning the new tools, integrating them into the existing framework gets even more complicated. The need for the rules to be the same for all projects and teams is justified as the need to consolidate all the data sets under one “umbrella.” While integration capability solves these issues, it doesn’t usually provide a solution for framework unification.
However, some PPM tools have this capability build in. PPM Express allows not only synchronize and integrate the data from third-party tools, like JIRA, VSTS, and Planner but to create a unified terminology to ease the teams struggle with “naming.” It’s more convenient for management to see all the “stories,” “projects” and “plans” in a single dashboard.