Understanding Project Portfolio Management (PPM)

Project Portfolio Management (PPM) is a phrase used to describe the processes that are used to analyze a group of current or proposed projects on the basis of several key characteristics. The aim is to determine the sequence of execution of these projects to best accomplish the organizations overall objectives.

The attributes or characteristics that are analyzed by the PPM process is the project total expenditure, timelines, Investment schedule, Resource Utilization and interdependencies with other projects. It is helpful to make wise decisions regarding project investment by organizing a series of projects into a distinct portfolio of reports.


PPM tools aid to enable organizations to deal with projects continuously from concept to completion. In PPM, instead of analyzing individual project proposals, a set of projects as a portfolio is analyzed. Apart from the decision on investment, PPM provides support to continuous measurement of the project portfolio.


This enables each project to be checked for its contribution to business so that management can facilitate decommission of a project if necessary and redirect the resources to work on projects that are of more importance. This periodic refresh of the portfolio is to better align projects with customer requirements and business states.


One method that is generally used in PPM tools is the decision tree analysis. Resource allocation is an important element of PPM. The available resources must be balanced against the demand. The existing labor, funding commitments and availability of skills must be well understood before deciding on investment in projects. This helps the prevention of delay in project completion as there is less risk of unplanned resource constraints in the midst of a project cycle.


Implementing PPM at the organizations level is challenging in terms of receiving enterprise support as key stakeholders must agree on the decision criteria and preferences. The complexity and approach to IT projects may make PPM unsuitable for smaller organizations with lesser projects.


The other reasons may be the cost incurred in data collection, analysis and documentation. The organization should also be sufficiently mature and have the infrastructure and attributes in place. An effective project management methodology should be in practice, relevant information should be available on every project and a project office that owns the process of project inventory should be in full swing.


There are several Project Portfolio Management software systems available. The recent trend of improved resource tracking and functionality assessment is a great benefit to the Portfolio manager. While selecting the PPM software, organizations should give leverage to their business objectives and the availability of key features. These key features are project evaluation process, cost and benefit measurement and tracking methodology, resource allocation and attrition Planning, the communication or way of reporting of key data.


Project Portfolio Management can assist project managers by bringing realism to an organization’s planning, rationality in resources (Human and Financial) allocation and the right visibility to the project and the key stakeholders. Once a project portfolio management is successfully adopted it can offer a sound beginning towards building the organizations vision.

| An Insight into Scope Statement in Project Management | Creating Effective IT Service Level Agreements | Disaster Recovery Planning – General Concepts | Introduction to Agile Project Management | Overview on the Six Sigma Practices | The Project Office as an Aide to Project Management | Trends and Thoughts on Project Portfolio Management |

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