Understanding the functions of each of the following levels of our projects: Portfolio, Program and the Project (PPPM) will help your organization manage your projects with a clearer understanding of how all the pieces fit. In this discussion, I talk about the concepts and knowledge surrounding the Project/Program/Portfolio Management (PPPM) disciplines in use today.
This first discussion will talk about the concept of portfolio management. In several of my past contracts, the organizations struggling with the issues of how to implement portfolio level management. One was attempting to make portfolio management another hierarchical management plane where program managers reported to the portfolio manager. One felt all the decisions should be made somewhere, so they layered in a place for all major decisions to be made on all the projects and programs that were in this division but they did not have the required prerequisites in place to support portfolio management of any type or form. Both of these scenarios cause chaos which was NOT want you want added to your plate with you are already trying to manage a difficult project. Can you relate to either of these scenarios?
So, what really is portfolio management?
In a distillation, portfolio management are the activities an organization envisions to create, plan, manage, and monitor investments oriented towards achieving the strategic goals of the organization.
While this may be a different view from of the current bodies of knowledge, but that is portfolio management in a nutshell. Portfolio management is distinctly different from project and program management. It has differing focus, goals, objectives, and artifacts. Thus, it should NOT be seen as another managerial layer placed on top of a project management structure.
Portfolio Management should be seen from the value that it can provide to an organization’s project management environment — the strategic alignment perspective. In Figure 1, the differences between the PPPM levels is illustrated using their characteristics of:
The portfolio level focuses on the strategic investment view with risk minimization for benefits generated as its goal & objective. These characteristics are foreign to most project and program managers, I have discovered, but are in the prevue of the Senior Leadership Team (SLT) members. For this point alone, the best candidate for being a portfolio manager is a member of the SLT. WHAT???
This is the advice I give to all my PPPM engagement clients.
I hope this column has at least opened your mind to the PPPM Roadmap concept and that you will take this discussion back to your organization for some discussion.