Project Portfolio Management has obtained a lot of attention lately. PPM has gained momentum as companies have recognized that organizational efficiency also depends upon doing the right projects. Basically, it is more important to choose the right project than doing the chosen project in the right way.
Project Portfolio Management processes aspire to improve companies’ success through the allocation of resources to the most profitable projects while monitoring the project portfolio and resource allocations. As companies live in dynamic environments it is crucial to keep monitoring their portfolio of projects.
PPM is an ongoing decision-making process that supervises the execution of all projects. Many studies report that that PPM is most effective when it is tailored for each individual situation.
Many experts have been studying on ways to improve performance in managing project portfolios. Professionals have focused on algorithms and management techniques to collect, prioritize, and select projects.
There are different approaches to select projects for project portfolio. They can range from single criteria to multi criteria approach. An example of the single criteria approach can be the cost-benefit analysis; whereas an example of the multi criteria can be the ranking and scoring methods. In general, the project selection approaches can be categorized as financial and non-financial (Larson and Gray, 2003).
To be as effective as possible in selecting projects it is important to know that the selection criteria is useful to measurably compare each project’s contribution to the organizational strategy (Englund and Graham, 1999). Therefore, the role of the criteria is not simply to specify projects. Strong set of criteria for consideration could be: market size, probability of success, resource availability, return-of-investment, goal alignment, and risk.
Keep in mind
Even though there is no single best practice, there are success factors, across the PPM applications, that companies can study to improve their processes. To become more efficient companies could invest time and money in learning the PPM best practices. The majority of those practices are cross-industry practices, because of the common PPM elements.