Project Portfolio Management Process Phase 1
The project portfolio management process can be subdivided into two separate phases:
- Prioritization and selection of candidate projects for the portfolio
- Maintaining the pipeline: continuing, delaying or terminating approved projects
The first phase happens before any project initiation and starts with a preparation of the business case and a subsequent evaluation of each of the potential project's values, benefits and risks that may modify aforementioned benefits (see Figure 2). Then, the overall fit of each project into the organizational strategy is determined. Next, the overall balance of the project portfolio is examined in order to ensure that no department or direction has received insufficient or too much weight in the final portfolio.
Figure 2: Business case stage
The next step is to rank all of the successful candidates according to their selections criteria and assess the overall company resources available for the next period. The resources start getting assigned to projects on the list until all of the resources are exhausted.
Company management also needs to assess the inventory of available resources (including human resources), decide on an optimum or acceptable size for the pipeline (while considering "Business As Usual" needs) and estimate durations, costs and human resource requirements for each candidate project. Accomplishing these tasks without sound project management and scope definition capabilities would be very challenging tasks indeed!
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Introduction to Part 2
