What happens to companies that use PPM?

What happens to companies that use PPM?

Companies can obtain many benefits by adopting Project Portfolio Management. In general, PPM helps companies to flourish by allowing them to focus on the most important and strategic projects and programs. Let’s analyze what happens to companies that use PPM.

How can PPM help companies?

PPM is able to deliver many benefits to an organization other than time, quality, and budget. A survey aimed at exploring the benefits of PPM technique in the manufacturing industry showed the following benefits of PPM:

  1. Increased profits
  2. Increased cost savings
  3. Optimal allocation of resources
  4. Investment of funds in appropriate business areas
  5. Contribution to reduce time to market
  6. Alignment levels of products/projects with business strategy
  7. Identifying appropriate technology to align with market dynamics
  8. Identifying and managing gaps in the product portfolio
  9. Elimination of efforts on product/project redundancies
  10. Elimination plans of unyielding projects

Moreover, companies use PPM to recover from poor financial performance. Studies indicate that PPM helps companies to improve their market positions significantly relative to their competitors. In fact, there exist other benefits that could be expected when adopting PPM methods:

  1. Maximizing value of investments while reducing the risks
  2. Enhancing communications and business leaders alignment
  3. Improving resource distribution and terminating some projects

Disadvantages of not using PPM

So far, we have analyzed all benefits a company can obtain from using Project Portfolio Management. At the same time, it can be interesting to know what the disadvantages are of not using PPM. Generally speaking, organizations deal with the following problems when there is a lack of PPM practices (Kendall and Rollins, 2003):

  1. Unbalanced portfolio
  2. Projects are not linked to the strategic goals
  3. Projects that do not add value are in the portfolio
  4. Too many active projects in the portfolio

In addition, companies that do not use PPM methods can encounter some other problems (Payne, 1995):

  1. Lack of coordination between projects
  2. Late delivery on projects
  3. Unexpected resource bottlenecks
  4. Conflicting project objectives
  5. Disappointment with final project benefits
  6. Resistance to organizational changes

Keep in mind

Finally, we can state that Project Portfolio Management is a practice that combines organizational focus by selecting the projects aligned with the strategy and Project Management which focuses on delivering projects effectively and according to plan. It is crucial for companies that want to reach their strategic goals to adopt and embrace PPM.

Francesco Pecoraro

Francesco has extensive experience as a project, program and portfolio manager, project management officer (PMO), digital transformation and strategic consultant. He is also considered a communication, public speaking and leadership expert.

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