Before today, it never occurred to me, what makes companies invest in the projects they set to do and how they ensure that they are in the right direction. Well, thanks to project portfolio management, this can be done articulately and strategically, to increase chances of achieving strategic goals and objectives. How are these done within a BRM framework to realize the benefits and values for the business?
If an organization engages in effective project portfolio management then they become better placed to accomplish completion of projects which make significant contribution in achieving strategic goals. Of course there is also need to ensure that good decision making processes are put in place if these are to be achieved. Most organizations use guided factors to achieve their objectives and have also developed their own processes and tools. What is common though amongst these factors are: It should be possible to monitor the projects to ensure that the portfolio remains on track as well as being able to adjust the portfolio when changes in strategy or portfolio dictates so. Continous evaluation of the project portfolio not only ensures that the projects remain on track to achieve the objectives, but also helps subsidiary portfolios, programs and projects to work together towards a common goal to deliver value. It is therefore important to measure the performance of individual projects and consolidate them in a mathematically meaningful way which mirrors the strategic importance of the constituent projects.
Project portfolio management process and its integration within an organization’s strategic planning process should be tailored to the company’s needs and processes. The most common approach to choosing projects within a portfolio always follow this path; identification, evaluation, selection, monitoring and controlling of projects. I have to add that these should not be religiously followed but as PMBOK suggests, they are good to be used as guidelines to increase the chances of realizing the strategic goals. Decision making models are routinely used in this process, with a set of preferred alternatives and defined criteria to choose the right projects. Several executive managers whom I have interacted with, noted that this is usually an intense process and may take several iterativly planned cycles as well as flexibility to adapt to factors affecting organizational objectives. Most important during this phase, is the prioritization of goals in strategic planning which is fundamental for effective portfolio decisions. In some cases, companies hire decision analysts and decision makers who work alongside the company’s business analysts, to help the company refine the project portfolio and help the portfolio manager to have a better overview of the projects. This is necessary when taken into consideration that organizational objectives do not have the same strategic importance and therefore need a different approach in prioritization.
In the next post, I will go deeper into the different selection techniques and see how these are done and what PMI recommends.
Project Management 