Regardless of the size of organisation or the field in which your business operates, and whether or not you are working under a constant meteor shower, you have probably heard more about project management than about project portfolio management (PPM), although the difference might not necessarily be very clear. Furthermore, our collective imagination sometimes leads us to think that they are the same thing. Which is not in fact true. For one, the objective is to successfully complete a single project. The other serves to combine forces into a rationalised procedure to successfully complete a set of projects and therefore achieve a more comprehensive transformation.
If a business is to succeed and grow, while a good strategy is admittedly crucial, it is also essential to ensure that the strategy is consistent with day-to-day operations. It is only when this condition is met that all things become possible. To achieve it, project management and project portfolio management are two sides of the same coin. Let’s examine them in detail.
Many people in business appear to be familiar with the notion of project management, it being part of their daily routine. But to fully understand the connection with the broader scope of PPM, we will start by providing a clear definition.
Project management consists of organising a series of tasks, in accordance with a defined methodology, with the aim of accomplishing a specific objective within a given period of time. Project management is undertaken by a project manager or leader, and such individuals often manage a number of projects at the same time, their main role being:
As master planners, project managers must consequently have technical, management and interpersonal skills, but their field of operations, and indeed their vision, is often limited to factors with a direct influence on the smooth running of the project(s) they manage. Anything else is left to its own devices. Project management therefore equates to a restricted, well-defined scope.
Project portfolio management meanwhile consists of organising and completing all of an organisation’s projects to achieve the strategic objectives defined at the highest level of the business. It is the highest level of project coordination, operating at an entirely different scale.
The creation of a PMO (Project Management Office) then becomes necessary. This is a full-time unit within the organisation that concentrates on managing resources and communications at all levels and coordination between all projects. One of the most frequent roles it plays is naturally to resolve issues around scheduling and resource availability clashes.
Project portfolio management therefore makes it possible to improve project prioritisation, scheduling and resource allocation (employees, time and money) in the round.
While project management focuses on methodology and day-to-day operational project fulfilment, portfolio management meanwhile takes a more global coordination dimension, taking account of the company’s overall situation to take the right decisions and prevent employees suffering from excessive workloads. It consequently serves to galvanise collective energy to pull in the same direction and work towards the same objective, always provided that the PMO is using the right collaborative systems.
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Some businesses also put in place a level called “programme management”, which occupies the middle ground, if there is any, between project management and project portfolio management. A programme is a set of related projects together aimed at achieving the same strategic objective for the business. Programme management is consequently focused on the programme’s overall success, as against individual successes for the projects in the programme.
The PMO is accordingly regularly consulted, and programme managers ensure that projects are properly completed in order of priority and importance. They coordinate their work to identify risks, problems and dependencies, and find solutions enabling the desired objective to be reached and the programme to be kept on track.
In contrast, regardless of how projects are divided and assembled within a programme, the priority is to bring together employees with different backgrounds with the appropriate skills to work together to make those projects a success. The issue is therefore the same as for project portfolio management, i.e. trade-offs between the various sub-projects on the basis of staff availability and the general state of progress.
Unfortunately, when it comes to the systems to use for the management process, the knee-jerk response is often MS Project, the leading project management system. However, as we said in our article Are Microsoft Project and Excel the only options for project management or are there alternatives?, while it is a great package for scheduling long and complex projects, it soon reaches its limitations when it comes to collaborative, cross-functional projects, and even more so when the requirement is to manage an entire project portfolio, when the system fails to deliver the necessary flexibility. Successful coordination of a set of projects cannot these days simply be confined to the display of a schedule and a Gantt chart; only an overview of all resources and ongoing projects plus their relative importance in the company’s programmes makes the finest level of decision-making possible.
Businesses nowadays no longer have to manage strategic programmes but instead a plethora of simultaneous transformation, innovation and operational excellence programmes to improve the organisation’s competitiveness. Each department now manages its own portfolio, with projects covering strategy, digital transformation, operational excellence, innovation, the customer experience, robotic process automation, etc.
To stay on course and maintain consistency between the various project portfolios, it is now vital to leave silos behind, and include all these programmes in a single collaborative platform, in order to:
When they are too complex, systems fail to secure the acceptance of the majority of those involved. When they are too simple, systems fail to offer the required level of structuring and control. When they are too specialised, systems lock the portfolio manager in an ivory tower. And using worksheets in spreadsheet packages (Excel, Smartsheet) means you spend more time hunting for information than on driving projects forward.
For project portfolio management, salvation comes only from a suitable collaborative PPM platform:
In short, an effective, no-frills management system that enables the right decisions to be taken.
But before you finally decide on a package, it is essential to begin by disseminating best practice and for that, you need our expert opinion.