Portfolio management implementation
'The motivation for implementing PPM can be from the desire for improvements in operational efficiency, improvements in cost savings, or increased profits. Interestingly enough, an effective PPM system will result in all three, regardless of which motivation was the basis for implementation.'
P. F. Rad and G. Levin, Project Portfolio Management Tools & Techniques, ILL Publishing, New York, 2006.
So, your organization is ready to implement project portfolio management (PPM). Congratulations! PPM is an effective business practice that can enable you to generate significantly more value from your projects, even while cutting costs. Best practice organizations are finding that PPM enables them to make better, more informed, and more cost-effective decisions on an on-going and regular basis.
Be aware, though, that the road to PPM is often rocky. For many organizations, successfully implementing PPM is difficult and time-consuming. Also, establishing PPM is a high-risk initiative. Failures are not uncommon.
There is no way to guarantee that you will be successful in implementing PPM. However, having observed many organizations at various stages of the process, I have concluded that there are 8 keys to success: (1) embrace the principles involved, (2) choose an approach that fits your situation, (3) secure executive support, (4) establish governance, (5) create a value-measurement framework, (6) implement effective processes, (7) institutionalize essential capabilities, and (8) follow a road map.
Figure 1: Keys to implementing project portfolio management.
PPM is not just another project management process. PPM is a philosophy — one that, in accordance with the analogy based on financial portfolio management, is focused on value creation. Getting the most from PPM requires reshaping thinking. Your people should fully embrace the following principles1:
'Without a strategic methodology, project portfolio planning is frustrating and has little chance of achieving exceptional business success.'
G Wahl, "Applying Financial Principles to Your Project Portfolio, " Point B on Project Portfolio Management, 2010.
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