The Magic 7 Project Portfolio Management Process Steps
Countless business articles have provided you viable information regarding project portfolio management, accompanied by its objective, the roles of the portfolio manager, and the benefits of the project portfolio management as a whole. But how does one exactly execute project portfolio management? There are the basic ways to steer it to the right direction, but is there a definitive step to it? The answer is yes. Implementing project portfolio management takes more than just assessment, evaluation, and tracking. It’s actually an art form where the portfolio managers juggle different tasks and ingrained necessary measures to secure both the projects and portfolio’s welfare. And the answer to all of these is in the guise of project portfolio management process steps.
The project portfolio management process steps mentioned below cater to all types of organizations that execute portfolio management to reach their business objectives and their strategic goals. Remember that these project portfolio management process steps don’t fix your woes within a day or week; treat it as the start of your path towards an efficient portfolio.
Project Portfolio Management Process Steps : #1 – Commitment from the Executives
How do you expect to execute a certain methodology when none supports it? Some people are not immediately willing to accept new methodologies or procedures since it disrupts their routine or tools that they get used to. No matter how you avoid this, there must be support and commitment on all sides of the party, especially the senior executives. But some of them are probably not keen to jump on the project portfolio management bandwagon. Let them know that organizations that resort to project portfolio management experience more competitive advantage in the market. Don’t just provide vague benefits to them; be specific and if needed, demonstrate.
Project Portfolio Management Process Steps : #2 – Project Management Education
The next point of project porfolio management steps is a successful excution of project portfolio management which starts with being educated with the ins and outs of portfolio management. This means that organizations must be able to see the clear picture of what project portfolio management is all about, not just only the surface, but with the processes as well that include scoping, assessing, and utilizing.
Project Portfolio Management Process Steps : #3 – Capacity Builders
After defining processes phase is in place, organizations must now focus their attention on their capacity and capability in the portfolio pipeline. Measuring the budget allocation is the easier way to estimate the pipeline. For instance, if the organization has decided to funnel certain cost to a particular project in the next year or so, that project’s budget will then be estimated, provided that they are successful.
On the other hand, some companies tend to fail to acknowledge the following crucial factors when they do this method:
- Project timeframe and interdependencies are ignored
- Human resources and efforts are overlooked and organizations fail to turn into a monetary Hence, issues in human resources are prevalent.
Project Portfolio Management Process Steps : #4 – Have a Project Score Model
A project scoring model is helpful when selecting and evaluating future projects. This will help the organization executives consider variables that they deem the strategic objectives.
After identifying prioritization criteria, those criteria should themselves be prioritized first before using them to prioritize projects. This is because not all of those criteria would be equally important to the organization.
Building a project score model is one of the key elements of efficient project portfolio management steps.
Project Portfolio Management Process Steps : #5 – Balance is Key
The next point we bring up in our project portfolio management process steps is Balance.
Balance is not a function—it’s both a principle and a discipline. And in the project portfolio management world, it plays a big role in identifying and evaluating projects that have potential value. The departments within the organization often lack projects and sometimes, in this case, they are overwhelmed with an excessive number of projects which not fully help to satisfy the organization’s strategic goals. The balance in this situation is absent.
You may have the portfolio to select your projects, but it doesn’t mean that you need to clog that portfolio with too many projects. Separate projects based on their size, duration, or even resource capacity.
Project Portfolio Management Process Steps : #6 – Pinpoint Strategic Alignment
The concept of portfolio strategic alignment is very simple: All existing projects must align the company’s business objective, as well as their implementation. But even if you have the full grasp of it, it’s still a complex aspect. Let us narrow it down further.
A CEO of a particular company—let’s call it Company Y—runs a list of the following projects in her roster. She plucks one project from the list—let’s call it “IT Support Expansion”. She then decides that in order to such project to happen, she has to turn her attention to her organization’s strategy and place that expansion in Asia. The alignment is there. She has successfully aligned that project to the business strategy and even objective. So the question is, how do we know if Company Y’s CEO is NOT manifesting strategic alignment? She only plans to expand IT support in in another continent. The company, after all, is planning to establish the project in Asia, not in Europe or the Middle East. The focus has lost and so is the alignment.
You cannot just change the following aspects in a project, except on instances that they align to the company’s business objectives.
Project Portfolio Management Process Steps : #7– Provide Project Scores
The Portfolio Steering Committee must use project scores to both identify and determine project proposal scales and cut-off based on resource and time constraints. The following resources must be carefully estimated so that they will be able to determine how many projects can fit in. Not all projects must join in since resources are limited and are usually reserved for projects that show value.
We couldn’t stress this enough: refrain from the idea that these steps will solve all your problems immediately. They are called project portfolio management process steps for a reason because you need to do certain activities to help balance your projects within your portfolio. Some of the tasks in the project portfolio management steps take a while to work—but it doesn’t mean that you should give up. If there is one thing that the project portfolio management process steps have taught us is to be patient. Because such virtue definitely pays, and that’s when you realize that it has its reward.
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