Portfolio Management is evolving over time. Today, Portfolio Management goes over the evaluation techniques. In fact, it is going towards a more comprehensive managerial approach that explains how to use Project Portfolio Management (PPM).
Links between levels
In many companies, it happens that corporate strategy gets filtered to the portfolio level, and sometimes to the project level. In these cases it is important to make the links between levels stronger.
Project Portfolio Management describes the investment strategies of an organization. In addition, it uses synergies to produce greater benefits to the organization. These benefits would be difficult to deliver in case of projects managed independently.
As a consequence, it is crucial to identify goals and benefits of a portfolio before selecting projects. In fact, to meet the objectives of the company the definition of these goals has to happen before the selection of projects takes place.
Definition of PPM
There exist different definitions of PPM. Let’s see some of the most valuable.
The definition of a portfolio is like the definition of a program. Basically, it represents a set of projects that a company manages in a way that produces benefits for the company.
At the same time, a project portfolio is also a collection of projects. All these projects are under the management of an organization, that shares and competes for limited resources.
Eskerod and Blichfeldt (2007) define PPM as the managerial practices that relate to:
- screening, selecting, and prioritizing project proposals
- projects in a portfolio being constantly reprioritized
- ranking projects according to priority
- allocating and reallocating resources to the best suited projects
Finally, some experts consider PPM as the utilization of tools, techniques, knowledge, and skills to a set of projects that have the objective to achieve the organization’s strategy.
Keep in mind
Project portfolio management (PPM) is a discipline that is becoming more complex over time. It will continue to evolve. For sure, PPM represents the management of a whole collection of projects as one big entity to achieve company goals and objectives.