Project portfolio management is considered to be a logical decision process. To execute PPM effectively it is important to consider some other aspects. In fact, there are characteristics of PPM that have a great impact on its implementation. Let’s analyze some of the most important assumptions that can have a great influence on PPM execution.
Projects help companies achieve strategic objectives
To achieve strategic objectives companies need first to develop the strategic plan. Afterwards, to fulfill the strategic plan objectives, they have to select and prioritize their projects. It is crucial to create the right combination of different types of projects such as innovative projects, process improvement projects and maintenance projects.
To support the strategic plan, companies need to launch and complete a variety of projects. In fact, companies need to consider a balance of projects to be launched that allow them, once they have been completed, to achieve their strategy.
Companies control all the resources
To select, prioritize and manage projects within a portfolio companies should control all the resources. In addition, another assumption is that projects within the portfolio compete for the same resources. This is not always true. In fact sometimes companies collaborate with external partners; in those cases they do not have control over all the project resources (Perks, 2007).
Factors that can influence projects
When companies execute projects should be fully aware of all possible factors that could influence projects. There are internal and external factors.
The internal factors refer to anything that is under the control of the company. Corporate mission, culture and leadership style are examples of organization’s internal environmental factors. Whereas companies do not control external elements. There are numerous external elements such as current economic situation, laws and customer demands.
As technology, markets, and industry environments keep changing, it is difficult to be fully conscious of all the factors that might influence the project portfolio.
Keep in mind
We have just said that to implement Project Portfolio Management (PPM) effectively it is important to consider assumptions that can have a great impact on its implementation. At the same time companies should be also aware that these assumptions cannot be always valid. For this reason, companies need to analyze in depth all aspects before executing PPM.