Integrated Project Portfolio Management
Rather than attempt to manage individual projects as if they were stand-alone
endeavors, executives have learned over the years that every project is always
interrelated, primarily through the use of common resources, with some„if not
all„other projects in the organization. Relating selected projects within a program
is often a step in the right direction. Organizations have progressed from single
project and program management to multiple project management, and they are now
moving rapidly to project portfolio management. Dye and Pennypacker show the
key differences between portfolio and multiple project management in
Table 2.
|
|
Project Portfolio Management
|
Multiple Project Management
|
|
Purpose
|
Project Selection and Prioritization
|
Resource Allocation
|
|
Focus
|
Strategic
|
Tactical
|
|
Planning Emphasis
|
Long & Medium-Term (annual/quarterly)
|
Short-Term (day-to-day)
|
|
Responsibility
|
Executive/Senior Management
|
Project/Resource Managers
|
Table 2. High-Level Comparison of Project Portfolio Management
and Multiple Project Management [7]
As indicated in Figure 3, the project portfolio consists
of the programs and projects supporting a given higher-level strategy. There
could be only one overall corporate project portfolio, but it generally makes
more sense to define more than one portfolio on a strategic basis in large organizations
to reflect product line, geographic or technological divisions of the organization,
industry or market.
A Project Portfolio Steering Group consisting of senior executives as
appropriate is responsible for establishing the project portfolio management
process and for the decisions that must be made concerning the programs and projects
within the project portfolio(s) during the operation of that process.
Figure 3. Schematic of Strategies, Projects, a Program and a Project Portfolio.
The project portfolio management process consists of the following
twelve basic steps:
- Define the project portfolios required within
the organization.
- Define the project categories within each
portfolio based on uniform criteria for the entire organization.
- Identify and group all projects within categories
and programs.
- Validate projects with the organization's
strategic objectives.
- Prioritize projects within programs and
portfolios.
- Develop the Project Portfolio Master Schedule.
- Establish and maintain the key resources
data bank.
- Allocate available key resources to programs
and projects.
- Compare financial needs with availability.
- Decide how to respond to shortfalls in money
or other key resources and approve the list of funded projects.
- Plan, authorize and manage each program
and project using the Project Management Process and supporting systems and
tools.
- Periodically re-prioritize, re-allocate
resources and re-schedule all programs and projects as required.
7.
Dye, Lowell D., and Pennypacker, James S. 2000. ñProject Portfolio Managing and
Managing Multiple Projects: Two Sides of the Same Coin?î Proceedings of the 2000
PMI Seminars & Symposium. Newtown Square, PA: Project Management Institute. 321.
|
Objectives
of Project Management
