High performance project portfolio management is often sought and rarely achieved. There is no practice more critical to streamline and organise the enterprise for profit – and to coordinate resources and operations with the strategic objectives and goals that drive its success.

In this guide, we will explore how project leaders can take a more strategic, business-outcome focused approach to project portfolio management - an essential skill in today's world, where the increased pace of change caused by digital transformation demands a culture of strategy execution, increased PPM Maturity, bimodal support, plus more proactive PMOs that contribute real business value.

This guide will allow your teams to discover the processes you need to bring strategic heft to your activities. Your PMO can be the driver of greater business value among key stakeholders, gaining their trust as you take the wheel. Use these solid project portfolio management disciplines and the governance structure recommended here to improve your decisions and forge a new agenda for your high-performance PMO.

Acronyms Defined: PPM, PM, and PMO

Although this guide is designed to help you take a more strategic approach to project portfolio management, for those of you that are new to project portfolio management (PPM), it’s probably best that we first define PPM and then talk about why project portfolio management is so important.

The Project Management Institute offers this definition: “Portfolio management ensures that an organisation can leverage its project selection and execution success. It refers to the centralised management of one or more project portfolios to achieve strategic objectives. Our research has shown that portfolio management is a way to bridge the gap between strategy and implementation.”

We are sometimes asked about the differences between Project Portfolio Management (PPM), Project Management (PM) and the Project Management Office (PMO). Here is a simple but useful way to explain the differences of these three functions:

  • Project Portfolio Management: Doing the right work
  • Project Management: Doing the work right
  • Project Management Office: Tying it all together

So why is project portfolio management so important to organisations of all types and why is it imperative that you learn more about PPM best practices? .

PPM Challenges and Opportunities

Regardless of your role in PPM (CIO, PMO leader, portfolio manager, resource manager, etc.), you are no doubt aware of the unprecedented volume of business change taking place in the industry right now.

With many of the risks inherent in business change found in poor execution and oversight, rather than mismanagement and bad strategy from advisors, many organisations are left facing the challenge of linking strategy and execution, in a bimodal world, where both traditional and agile projects need to be executed in a collaborative way, and as a natural extension of the business rather than as separate and conflicting entities.

This is where a strategy-led, business-outcome focused approach excels, using top-down project, programme, and portfolio management to help mitigate critical risks such as:

  • Lack of uniformity and rigor in how initiatives and projects are proposed, budgets requested and assigned.
  • Forecasting and planning activities not synchronized with subsequent project execution and management.
  • Senior management does not have visibility into project execution, including deliverables, issues, and benefits realisation.
  • Individual projects and initiatives are not synchronized with activities elsewhere, causing dependencies to be overlooked or ignored and leading to adverse impact on customers and employees.

The above factors can compound to create major liabilities for an organisation including negative market perceptions; inability to deliver expected benefits; cost overruns; diminished customer and supplier relationships; and talent flight.

While these challenges seem daunting, our mission is to help you address these issues at both the strategic and operational levels and achieve some key benefits, including:

  • How you can translate strategic initiatives into the project portfolio to deliver real business value.
  • Why you should extend your planning horizon to provide clear visibility into resource demand and capacity.
  • How you can help your PMO transition from being reactive to proactive.
  • The importance of uniting multiple methodologies to achieve a single shared vision across all work, regardless of delivery model.
  • How you can engage project stakeholders with clear communications that help them realise business value.
  • Why effective resource management has never been as important for ensuring successful project delivery in a face paced ever changing business environment.

We will explore these benefits in greater detail later.

Six Major Trends in Project Portfolio Management

Before we dive deeper into the fundamentals of top-down project portfolio management and its associated benefits, it's important to understand some of the highly disruptive trends that are happening in the industry right now.

1. The Shift to Digital Business

Perhaps the most significant and empowering change is the digital transformation of most aspects of the business (both inside and outside of IT). This accelerating digital workplace will require teams across your business to do more with less, which means that almost every organisation will face a unique quest in conquering their resource capacity planning challenges. Just one of many examples we will explore – it will become essential to find an elegant way to visualise resource availability, usage, and backlog to manage and optimise capacity at the project, programme and portfolio level.

2. Key Changes in IT Delivery Models

As Agile project management techniques continue to build momentum, project leaders will need to find innovative ways to unite multiple methodologies to provide a single governance view. To help ease this transition to a more bimodal way of working, organisations will need to take a more top-down business-outcome focused approach to PPM, converting strategy into actionable projects by focusing on critical milestones that provide operational insight which help deliver change fast.

3. Growing Business Demand for Adaptive and Agile Development

As the enterprise need for agile expands, high performing PMOs will need to execute a clear strategic response, focusing on how to translate strategic initiatives into the project portfolio to deliver real business value. To effectively model the future, organisations will need to efficiently manage project intake, prioritisation, and benefits realisation to justify investment decisions and drive improved governance.

4. Business Demand for Adaptive Approaches

Agile methods, rapid change and limited budgets will all play a crucial role in determining the success of many PMOs. PMOs that fail to mature and take a more strategic approach to project portfolio management will most likely become misaligned with an organisation's goals, be seen as failing to deliver value and face being disbanded.

5. Persona-Based Usage

As PPM maturity continues to increase and business value rises, more and more PMOs will continue to extend their reach throughout the business. With the added prospect of multiple user groups with diverse requirements, PPM Leaders will need to take a more persona-based approach to speed user adoption, utilising pre-configured user journeys focused on different business outcomes and end-user requirements.

6. Achieve a Business Outcome Focus

For many years project portfolio management has been viewed as a tool predominantly for IT, but in the face of unrivalled change, portfolio leaders need to take a more business outcome focused approach to portfolio selection and prioritisation, to increase their influence across the business. A top-down, strategy-led approach to project portfolio management will help build consistency, enabling business leaders to easily peer into the future to make justifiable decisions on how to drive innovation whilst balancing the need for business as usual activities. .

With these trends in mind, how will your PMO be affected? In the next section we delve into the impact of a top-down strategy-led approach to project portfolio management on the PMO, exploring:

  • Why PMOs need to become more business outcome focused.
  • Why they need to execute a clear strategic response to digital transformation and an increased pace of change.
  • Why developing a culture of strategy execution is so important
  • Why driving increased PPM Maturity, and transforming the PMO from being reactive to proactive contributes real business value.

Taking the Right Approach

So which approach is best? The chaos abates in a very short time and clarity arises when the PMO uses a top-down approach that provides the executive team with a pragmatic, information-focused solution that manages resources, costs, delivery and benefits.

Once the teams working within a PMO experience this, and once they capture all of the deliverables and benefits and share them appropriately to executives, these organisations are able to:

  • Reduce chaos
  • Improve project delivery
  • Improve morale
  • Improve customer relationships, and
  • Realise more profitable projects

This approach is vitally important in industries affected by digital transformation, or other forms of intense and disruptive change. A top-down approach ensures your PMO teams remain focused on the business objectives and desired outcomes of a project. With the right tools, management can watch budget, resource and delivery KPIs at a desirable level without having to drill down into the level of detail required by an individual project manager. Ultimately, with a top-down approach the C-suite can quickly tell if projects are delivering to expectations based on the proposed business-outcomes.

A key question to ask when evaluating a top-down approach is whether your project demand far outweighs your resource capacity. In more traditional, critical path type industries such as construction and architecture this isn’t always true and can be rectified through sub-contracting.

However, in industries where regulatory change, new competition, alternative business models and digitalisation are all driving intense change, the ability to manage project intake is mandatory. Project intake is the kingpin to the strategic “gate-keeping” process. When PPM leaders have the ability to select projects that align to the overall business goals, these leaders can:

  • Ensure optimal resource usage, scope and delivery; and
  • Enable a clear, real-time view into how the current project portfolio is impacting the organisation’s health.
  • These capabilities allow all leadership to keep tabs on key performance indicators, at the right level, so they can select better projects and help position the company for future success.

Unless you are exceptionally lucky and work in an industry where you can consistently meet project demand or you are a clear market leader with limited threats, do not let a bottom-up approach limit the strategic value you bring to the business. Top-down project portfolio management can be the engine that drives improved business performance and you and your PMO can gain a seat at the strategic table. With visibility and clarity, you are a true business partner in the quest for a healthy and thriving enterprise.

The Benefits of a Top-Down Approach

Deliver business value

Having the right approach to developing your Business Transformation Office will be critical to the success of your change programmes. It represents the link between the decisions that you make and the executional activities required to implement change and deliver benefits. Establishing clear roles and responsibilities, and accountabilities, based on a sound approach to programme management will be vital. At KeyedIn we focus on a top down approach with our clients; making sure that senior executives have the tools they need to manage the performance of strategically important change initiatives, from decision making and planning to benefits delivery.

Why developing a culture of strategy execution is so important

The success of strategic initiatives, whether at the organisational level or within business units or functions, can dramatically impact the underlying value of an enterprise, its cash flow, relationships with its customers and the morale of its people.

When everyone is on the same page with a single version of truth, and data is available to everyone in real time, there is a solid foundation of understanding. A culture of trust is built from the solid management of key KPIs that include deliverables, resource capacity and proactive decision making. These changes will allay fears and help your people more readily align behind the business. Your teams will come to expect clear, honest communications about why certain projects have been given priority. Top-down project portfolio management will dispel much of their firefighting activities reacting to forecasting error and missteps

Why PMOs need to execute a clear strategic response to digital transformation and an increased pace of change

Is your PMO able to gather disparate data and analyse and disseminate information in real time? Digital transformation is eliminating paper-based processes and increasing the pace of change and connectivity at a phenomenal rate. A top-down approach to project portfolio management gives executives the dashboard views they need to manage the performance of strategically important change initiatives, from decision making and planning to benefits delivery. With the speed of change empowered by digital transformation, access to real-time data is increasingly important, especially for those managing project portfolios.

Top-down project portfolio management requires input from across the organisation, including finance, executive management, and business groups, as well as IT. With top-down project portfolio management, project planning is viewed as a fundamental initiative with stakeholders required to take part in the decision-making process. Top-down portfolio management moves away from the project-centric, bottom-up approach, forces everyone to accept responsibility for critical KPIs, and is designed to prevent a single stakeholder, for example IT, being blamed for poor decisions.

The Bottom-Up Approach

“Bottom-up” project portfolio management is often cited as a “project to strategy” approach. The approach possesses standards and processes for notification and for reporting. While this will generally allow project managers to use the appropriate tools during project fulfilment, it is not optimal for ensuring that all activities in the portfolio are realising strategic benefit.

On its face, the execution-led (or “bottom-up”) approach makes great sense, but it carries with it a dangerous assumption: That everyone will use the system consistently and will update it in a timely manner. Any experienced user of traditional project management software will tell you that adoption and standardisation are two key challenges.

Even with good adoption, where the bottom-up approach really fails in its complexity. Just because those on a project team are able to document and share what they are working on, doesn’t mean this newfound visibility means everything is as it should be. Most projects enter the system without ever being vetted against benefits; strategic impact; or having the appropriate priority for customers, new innovations or market growth. Even though the people working on these teams may realise the value of their contribution to the project, they don’t know where their project or group of projects fit into company goals. These projects may come in on time and budget; everyone may be well informed, motivated and empowered, but ultimately a bottom-up approach doesn’t answer the fundamental question of whether these are the right projects. Even the best run project in the world that delivers limited business value, will ultimately be viewed a failure by the exec team - the people that fund a PMOs very existence.

A PMO using only a bottom-up approach will have limited visibility and experience several serious problems:

  • Unprofitable projects continue to drag along, pulling resources in their wake, burning out staff and frustrating valuable customers.
  • Leaders will be unable to step in to terminate non-strategic time-wasters.
  • There is no accurate and impactful way to shift resources onto projects that could deliver or are delivering against goals.
  • Portfolio and project managers are unable to employ agile course correction.
  • There is not enough visibility to gain an accurate real time snapshot of the portfolio status; meaning executives must wait for bad news to filter up through project roll-ups—by which time it may be too late to recover.

Although project managers using a bottom-up approach will be able to keep abreast of specific project progress, as well as potential risks and issues - which holds great benefit for meeting timelines and budgets. All too often with this approach, a lack of standardisation and over complexity results in project managers reverting to using the technology that they are most comfortable with, usually Excel or MS Project which results in chaos. No one possesses “the big picture.” And when the PMO attempts to capture and distil all of the PMO’s activity for leadership, a huge reporting overhead is created. Someone (often a dedicated resource) must first gather the project data and then combine it into a format that executives can consume.

That’s the beauty of a top-down approach, project managers can use the tools they desire to deliver projects on time and on budget, but ultimately a top-down approach delivers greater business value by ensuring the right projects are deliver at the right time. The end result, key stakeholders and executives benefit from much improved real time visibility into key KPIs that facilitate more informed decision making.

How to Integrate Agile Projects for Standardised Visibility

There are many challenges when combining agile with traditional project management techniques. Visibility for portfolio managers and their directors first requires a firm grip on the reins of project demand. This gets tougher as processes get more iterative and as project sponsors fade away when faced with too much change, too quickly.

Agile PM does not normally allocate resources using classical buffer methods—those that place extra capacity at preordained phases of each project in a portfolio. Managing resources and risk among the many moving parts in your portfolio, will depend on how visible your work management capabilities are, from start to finish.

Many project managers also prefer methodology they are most familiar with. Traditional waterfall PM users like it because fixing time and costs for a project helps teams keep a handle on resource and capacity and, by extension, on budgets and delivery. However, that’s not how many businesses operate. And what good is a PMO that can’t deliver what business needs dictate?

This is why you need to acquire a PPM tool that provides native integration with agile project management solutions. You will then have a strong advantage because the PMO will have one system for all project data, whether those projects were executed using a waterfall or agile methodology. This integration allows PMs and users to continue to work in their familiar environment, while updates on their activities, progress, and logged time are pulled seamlessly into PPM and attached to the proper project and portfolio for accurate, up-to-the-minute reporting. Ultimately, this flexibility helps to drive widespread adoption among the user community, regardless of the type of work those users were doing.

Agile project management, when managed using a top-down PPM solution, will deliver visibility and enable both cost and process control as well as the flexibility needed to retain your company’s potential for innovation. For more about top-down vs. bottom-up PMO management, see section three above.

Combine Multiple Methodologies in the Same Portfolio to Provide a Single Governance View

Turnaround time for most projects in an agile portfolio is getting shorter. PM leaders must account for this by instituting the appropriate stage gates for projects. In addition, PMs would do well to gain a better handle on typical agile and waterfall lifecycles and the common challenges inherent in each.

Use governance practices that include rigorous resource capacity planning best practices. Be sure to invest in a tool that provides solid analytics to track your agile resource capacity and demand profiles.

Gain visible data to correct course via a governance policy that reflects strategic portfolio activities. Using multiple methodologies in the same portfolio becomes especially crucial when resources are deployed across business units. A PPM solution built to be used by everyone could have hundreds of people working on projects across the globe. To capture all of their activities and have one version of the truth is really compelling and to have a system that everyone wants to use is even more exciting.

Getting governance right becomes even more important when managing these projects that reach deep into an organisation’s functions. With the right PPM tool, you can effectively enforce governance controls and ensure those proven processes are being followed in real time, which helps keep costs in check. Governance will power scenario modeling so you can better manage project demand, especially in agile environments.

Modelling your scenarios helps you:

Approve investments by categorising the kinds of work you will need to accomplish and make sure these work streams are differently sourced according to whether they are innovative or business as usual projects. Many innovative projects run using agile methods; while business as usual projects, such as IT infrastructure, can be managed effectively using waterfall methods.

Use your collaborative software to institute a “deep-dive” scenario modelling process that ensures portfolio-level resource demand is continually monitored. Ensure that service delivery and consulting operations delivery, whether they use waterfall or agile, are accurately modelled.

Manage demand on the portfolio level with a full picture (visibility via scenario modelling) of all programs so you can institute control at any level, whether you’re working in agile or waterfall.

Six Key Areas for Exemplary Project Portfolio Management (PPM)

Every business is different. However, a solid process enabled by PPM technology that will identify, qualify, and fund only the most strategic projects will literally protect the PMO from extinction. No matter what your specific business needs are, these six areas will thoughtfully address any constraints and competitive forces your business faces by aligning everything you do as a PMO leader with your sponsors’ and executives’ business needs.

1. Project Portfolio Definitions

Project definition and subsequent agreement on the scope of work included within the portfolio, will keep scope creep from taking over. For example, find a way to work with executives to both agree on types of project you will run and how the portfolio will be structured. Share the decision-making process for project hierarchy in light of how you are attempting to align to specific categories. For example, you might work on projects deemed mandatory, experimental, or maintenance, among others. These categories will be key when analysing the portfolio mix: the movement of resources within it; and making important strategic portfolio decisions. Finally, the portfolio’s key performance indicators (KPIs) will form your portfolio scoring model, using parameters like business improvement, cost reduction, market penetration or revenue generation. You also need to define which functional areas your portfolio encompasses and open up clear and documented communication protocols among these departments.

2. Ideas Management

Portfolio experts agree: Before a project becomes a project is the optimum time to begin to define its scope and strategic impact. If you do not possess a way to manage all of the ideas for projects that your PMO might field, then you will not be able to structure your project intake process appropriately. When projects are just ideas or proposals, your project registry will help you decide which you should move forward with by asking a series of questions about the achievability of the project and the capacity you’ll need to accomplish it. Managing ideas in a collaborative way, ideally embedded within your portfolio management tool, is the only way to ensure the right people are reviewing ideas and that these ideas are not introduced into the portfolio in a disruptive way when they finally become projects.

3. Strategy Alignment

When aligning our portfolio for strategic impact, it is important to remember that the value that a project brings is based on the cost/benefit implications of each project and how well it aligns with your organisation’s goals and objectives. First, you decide what your “current state” is and how you can ensure that based on what your organisation is today, you can move forward effectively. Next, consider future vision, including your organisation’s mission and vision as well as where your organisation should be in 3, 5, 10 and 15 years. For future vision, you focus on three key areas - Market, Product and Services. Gap analysis is next: What do I need to do now to close the gap and move toward our desired state? After the gap analysis is complete, you can finally look at how your strategy will ultimately translate into projects, and define project hierarchy and interdependencies. In this way, you can own a process that serves as a continuous mechanism to ensure that every portfolio of projects governed by your PMO is:

  • aligned with strategic intent;
  • assumptions defined in the original business case are adhered to;
  • and, if you possess the right PPM tool, that decisions made during development are based on timely and accurate data.
  • or more specific ways to align strategy, download Empowering the Business Through PPM.

4. Resource and Business Capability Analysis

Resource and Business Capability Analysis is crucial to determining whether the business has the capability to undertake the required work in order to meet portfolio objectives. First, you must determine resource demand and constraints to understand the resource spread between business-as-usual activities such as existing projects and administration, and the demands of new projects. You must then identify existing resource demands and constraints by creating resource supply and demand scenarios. Thus, you will be able to analyse the impact of cancelling active projects, putting them on hold and monitoring their impact over time. When you do so, you establish metrics and processes that will allow the business to determine at what point in time there will be insufficient or excess capacity for the project portfolio as a whole. Ongoing, responsive capacity management requires constant access to up-to-the- minute data from all related systems. The end result is a controlled and predictable method of monitoring resource and business capability against the strategic planning process. For more about effective resource management, watch our webinar, Managing Resources Effectively to Generate Successful Project Outcomes.

5. Portfolio Selection, Prioritisation and Authorisation

To select and prioritise projects to deliver the highest strategic value, you must ensure that there is a balance in the mix of projects. To obtain balance, you must create a project registry, in which you document a detailed inventory of projects to see if they are achievable, worth doing, have business impact, and that you have sufficient capability and capacity to bring them to fruition. Ranking and scoring for benefit and value are also crucial to ensure a balanced portfolio strategy is on track. Benefits are often scored based on:

  • Net present value
  • Productivity index
  • Earned value analysis
  • Internal rate of return (IRR)
  • Cost/benefit analysis

Prioritising according to risk takes into account several types of projects. Tactical and administrative projects deliver on what’s needed right now to ensure competitive advantage or support currently promised service levels. Conversely, strategic projects deliver competitive advantage in the future, requiring a high-skill level and are higher risk. Innovation projects follow that profile as well, as do future vision projects. You must also decide which projects are mission critical: Their failure results in major implications to the business. Finally, highly desirable or desirable projects are important but not essential. Your PMO team can prioritise according to your particular business needs if you look at all of these categories as a whole and come up with capacity that ensures the most pressing projects move to the front of the line.

6. Portfolio Execution and Monitoring

Execution and monitoring the portfolio has to do with tracking project interdependencies within the portfolio so you’ve got a clear directive for resource allocation throughout. You must also be able to respond to changes in business strategy, especially those that conflict with the PPM process. Monitoring risks to governance, strategy, operations, marketplace, and legal to provide safeguards for the portfolio.

Accurate execution can’t take place without a way to balance the portfolio. Once you understand what brings value to your business and the threats to that value, you can move intelligently. For example, balance always includes juggling high risk / low risk and the number of long-term, medium-term and short-term projects. Remaining strategic during execution requires the clear-eyed ability to eliminate overlapping and redundant projects, as well. Monitoring benefits as they relate to project synergy with corporate goals; investment levels; and payback encompass both the tangible and intangible benefits of projects. Refer to the sidebar for more about the appropriate steps to execution and monitoring. .

Ensuring a Strategic Impact

Research has shown that organisations, which are immature or lack portfolio management processes, have a higher probability of project failures and experience a multitude of problems.

Strategically aligning project portfolios must take into account the needs of both your PMO and your organisation as a whole to be fully effective as a strategic anchor. Your PMO must work in alignment with the strategic groups and imperatives of the business to form the future profitability and ultimately the success of your organisation.

Do you have the right balance of projects to ensure delivery of strategy? If your portfolio doesn’t measure effectiveness against corporate objectives; against short- and long-term ROI/ROO and risk profiles, then you may not be able to deliver strategic results.

Creating processes to measure risk vs. rewards, clearly delineate investment profiles, and run scenarios to meet strategic pivots for competitive advantage or to avoid infrastructure failure are also important in ensuring that your portfolio’s business is perceived as crucial to the business itself.

What an Effective PPM Framework Can Achieve

To align projects with corporate objectives and business strategy, and to ensure you’ve selected and prioritised based on resource capability and financial constraints, you must have a solid PPM Framework.

Let’s look at some key benefits from following a solid framework:

  • You will realise that you’re not only doing projects right, you are doing the right projects.
  • Your projects will be maximised to the overall success and welfare of the business.
  • You will have a balanced mix of projects across the entire portfolio including long, short and medium-term projects as well as high and low risk projects.
  • You possess much needed visibility into failing or ill-performing projects.
  • Your office will be able to make subjective and informed decisions and share them confidently with the executive and sponsor teams.

With a new, optimised PPM Framework, you have the fundamental tools to measure performance; to ensure that all projects/programs are collectively meeting the portfolio strategy; and implemented to make continuous improvements to the portfolio. Once you’ve instituted a standard methodology for starting, managing and making projects accountable to the business, you will be able to deliver a repeatable process that builds trust. This is achieved by a better understanding of resource utilisation in order to ensure that the right staff are deployed on the right projects. Your more agile, the financial picture is clearer: you can calculate the financial impact of several urgent needs or demands, for example, cancelling a poor-performing project; switching priorities based on organisational needs; and redeploying staff quickly. Finally, once you begin reducing project reporting timescales at executive and board level, you allow for faster reactions to market and competitive changes and more accurate decision making.

Easily extend your planning horizon with clear visibility into resource demand and capacity

Extending your planning horizon allows for fewer wasted resources. Improved visibility will deliver both resource demand planning expertise and a brand-new vision of the financial impact of your PMO capacity. There are soft and hard benefits to realise once you’ve achieved resource capacity planning mastery.

As you know, ROI is the tangible cost savings or increases in revenue or profitability that can be directly attributed to the new software. In most cases, a reduction in administrative or reporting times delivers ROI nearly instantly. Once more effective habits are assumed by your people based on best practices enabled by your solution, you will really begin to experience change. This occurs once you possess a single version of the truth, derived through greater visibility and control over people, projects, financials, deliverables, and benefits. Automation of these key processes helps deliver time savings through improved efficiency and effectiveness.

Reduced Project Status Reporting times via built-in reporting capabilities and reduced manual processes. The right tools help you deploy dashboards as well before running any analytics, so that there’s unprecedented a real-time control and visibility.

Simplified Assigning and Maintaining Timelines for Task Based Staffing, Planning and Control. Your resource demand management is more efficient so your staff is allocated appropriately and they often feel much better about not being as reactive or placed somewhere to fight fires.

Limited Manual Searching via Word of Mouth. If you’re like us, there’s nothing you hate more than searching through an email trail for artefacts of a project. Once you’ve got a collaborative tool and capture all portfolio information from ideation to completion, you won’t have to do that anymore—or bug people on their mobiles!

Easy Change Management. The right conversations by the right people at the right time about the right things will drastically reduce unneeded reactivity and allow your executives to feel comfortable when change does occur.

Efficient Time Management. What will also help get a handle on financials? The increased productivity of your delivery staff via a streamlined project portfolio management system that enables efficiency when you’re tracking progress; prioritising schedules; reporting on milestones and so much more. Stage-gating funding is only one of the capabilities that will deliver a compelling ROI.

Make the transition from reactive to proactive

The benefits of instituting an effective PPM and PMO initiative include improved control and visibility to ensure you are executing on the most strategic projects. You can become more proactive as you gain visibility and then you may create a clear line of benefit from your PMO to the bottom line. From product launches to process re-engineering, IT implementation to internal transformation, as well as delivering services and solutions to customers, your organisation will be able to manage resources, monitor progress and quantify success using the right PPM tools and delivering the right executive information to align behind strategy.

Unite multiple methodologies

If you manage both agile and waterfall projects, as well as hybrid projects, you will also have a mandate to allocate the right people to the right projects, however they are structured. It is even more crucial in some respects, to have a clear picture of resources. No matter the methodology, you will be able to approach projects in the pipeline and those already in action with a solid strategy.

Multiple methodologies in a single PMO will require the right analytics, so that all of your project managers will see what is working and what is not. Quality data leads to quality decisions for everyone.

As leaders, you now have transparency about which projects or project groups are performing to standard and are able to promote these success stories. The word, “agile” won’t be so daunting when you’ve got proven results to promote among teams. And your resultant good practices and increased consistency will prove that your activities, regardless of chosen methodologies, will be more manageable to everyone involved.

For more about the proposed project portfolio management benefits of your investment and opportunity, download our PPM ROI Calculator – based on real world examples – to get your best estimate of total return based on your number of project managers and project delivery personnel.

Speaking of real-world examples – in addition to those mentioned here - you can also visit our case studies pages for additional project portfolio management examples of the business benefits achieved via a solid, effective and strategic PPM

Achieve a single shared vision

To gain the most benefit, it will not do to invest in an operational tool that supports delivery and execution but provides limited reporting. Project management teams that focus on maintaining a strategic platform will be able to provide a powerful executive dashboard without too much wasted time custom-configuring reports and dashboards. Only a single shared vision will do. We have proven that time and again, our customers are able to realise the following five benefits when they build or realign their PMO by streamlining their PPM processes:

1) Create Future Vision: Alignment of a portfolio with an eye toward future strategy, making sure that success not only happens today but is more likely in the future.

2) Manage Risks to Business: Delivery of programs on-time and within budget, without scope creep, thereby minimising the risks to individual projects in terms of business impact.

3) Establish Big Picture Control: Understanding the linkages and dependencies between all portfolio projects, especially when it comes to making sure your human resources are maximised for control and efficiency.

4) Improve Collaboration and Communication: Implement stakeholder communication that fosters an environment where collaborative decision making is easier and more fruitful

5) Develop Value Awareness: Continually prove the value of the PMO and PPM strategy to important stakeholders in terms that are important to them.

Benefits uncovered

Here are some key benefits we regularly see from top-down project portfolio management deployments

Standardise Key Project Management Processes: A global leader in skills development achieved significant cost savings and better utilisation of internal resources. Resulting in a 75% reduction in project management reporting times.

Ensure Greater Visibility and Control across your entire Project Portfolio and Resource Pool: A leading airline utilised improved forecasting, capability planning and scenario modelling to overcome visibility and control issues caused by rapid growth.

Drive Growth, Innovation and a Competitive Advantage: Improved resource management and streamlined business processes gave a leading French software publisher room for growth.

Deliver Accurate and Timely Management Information: A pharmaceutical and healthcare leader improved project costing, internal recharging and visibility over key project information.

Ensure Consistent Forecasting & Project Delivery: Increased portfolio visibility helped a leading technology services provider grow their professional services capability.

Improve Resource Management & Capacity Planning: A leading healthcare technology solutions provider expertly manages rapidly fluctuating client demands.

Provide Greater Control over Change and Quality Management: A specialist software developer relies on KeyedIn Projects to standardise reporting, increase visibility and gain greater control over change and quality management.

Simplify Project Progress Tracking and Status Reporting: A leading digital integrator centralised core project management processes to drive overall business efficiency improvements and far more effective resource management.

Engage Project Stakeholders with Clear Communication: A leading digital design and development firm achieved the resource optimisation and workflow control needed to cope with change during a period of continuing expansion.

Engage project stakeholders with clear communications

Business partners will report a higher level of satisfaction because your enhanced accuracy has allowed you to meet project deliverables more often. After all, much of what characterises an effective PMO is predictability. Vendors, executives, team members and leaders will all be armed with the power of information to become a better performing entity as a whole. This project ecosystem drives accountability; improves confidence in data; and encourages openness, visibility and on-point decisions that are shared with everyone.

Translate strategic initiatives into the project portfolio to deliver real business value

These are items that truly translate PMO activities into business value. However, the realities of trying to realise these benefits are sometimes grim for PMOs that are not enabled with a quality project portfolio management solution. You will soon enough realise if you are sustaining the business value of your portfolio in the eyes of your executive team and bringing ease of use to project managers working in the PMO. You will experience the exact opposite of the benefits we’ve listed, above. However, if you are just at the beginning of creating a PPM strategy in a fledgling or recently formed PMO, you will need hard numbers to convince all of your stakeholders that you will realise a great return on your investment. Once you extend your planning horizon, your percentages of on-time, on-budget projects will skyrocket.

EPMO Success Metrics: What to Do Right, Right Now

When an enterprise centrally controls all of its projects, it can empower more collaborative, strategic programs companywide. Here are a few best practices to help your EPMO as you use project portfolio management to improve contributions to business goals: 

  • Select and prioritise the right projects – EPMOs are uniquely situated to ensure that leaders and project managers alike can measure the urgency of the project; track the hierarchy of project completion based on organisational goals; and be able to facilitate the higher priority projects first.
  • Forecast the cost of delivering the project portfolio – Financial accountability will be paramount in every EPMO because where there is control of the company’s wallet there is intense scrutiny. The EPMO must track costs on all levels among each function and obtain visibility based on proposed profitability.
  • Provide real time status reporting for executives – Executives are the ones making the business decisions and it is important for them to have real-time visibility of project statuses to make the best decisions. These status reports can eliminate many risks involved with non-communicated project issues.
  • Initiate project governance for consistent processes – One of the major tasks at a new or fledgling EPMO is standardising the project process, ensuring accountability via solid reporting and project governance.
  • Achieve a complete view of all projects – EPMOs very reason for existence is to obtain a single version of the truth when it comes to project status so everyone can prioritise and support the most valuable programs.

PMOs can drive up project success rates using PPM: What’s Going Wrong?

Wherever you are in your PPM maturity, your PMO has the opportunity to gain visibility, control and accountability as well as nail down financial metrics that point to portfolio success.

As you know from painful experience, limited visibility into projects and resources is one of the leading causes of project failure. PMOs that pull together resource management activities on both the departmental and organisational level know what work is being performed by who, and when; how specific projects are aligned with corporate priorities; and how the project and portfolio ROI is calculated.

Additionally, resource and capacity planning are always an issue, especially when projects are managed in isolation. PMOs using effective PPM tactics can centralise the selection and prioritisation of projects to start and complete the right projects at the right time.

Coming up with consistent methodologies for project delivery will always be top-of-mind for the PMO looking to prove its value to stakeholders. Doing so can end the difficulties inherent in status and progress reporting. This capability will frequently end the lack of ownership and/or accountability rampant in organisations with dispersed project leadership.

Are many of your projects late or over budget and fail to meet strategic objectives? It is possible for your PMO to limit project failures through extending the planning horizon, ensuring project selection and prioritisation are in line with resource and financial constraints, and by providing greater visibility and control over the entire project lifecycle. At the end of the day, solid PPM processes allow you to experience these key benefits:

  • Align the portfolio of projects with an eye toward future strategy
  • Deliver programs on-time, within budget and according to scope
  • Understand the linkages and dependencies between various projects in the portfolio
  • Improve communication within the program team among all stakeholders
  • Increase the awareness of the value of the PMO and PPM process

Protect your IT investments and juggle competing stakeholders with great PPM

If your IT department is trying to manage multiple programs in your IT portfolio, you will need to keep a tight rein on resources and finances. You must report status to-the-minute and to-budget to ensure executive confidence. Streamlining the way you run individual projects and ensuring you are spending time on the right projects starts with being able to prioritise and select them.

You must be expert at scenario modelling and have a comprehensive view of your resources. Tight budgets and optimistic deadlines abound in the IT world, especially when it comes to agile project streams. Project governance must be completely watertight for your continued success.

Reporting will be crucial. Reliable analysis that helps minimise redundant activities will allow IT portfolio managers to retain optimum efficiency and productivity across all departments. If you have to say “no” to someone’s pet project because it doesn’t fit—you can react with the facts. You can also react to market and competitive pressures, as well.

A PPM tool delivers a comprehensive overview of all IT activities so that resources can be concentrated where required immediately, and with maximum effect. Whether you use agile, waterfall or hybrid PM, these capabilities will encourage and engage the team and better enable them to talk to senior management about the big picture.

In this digital world, your leaders know that investing in IT with maximum efficiency has never been more vital, not only to make the best, and most productive business decisions, but also to remain ahead of the competition in the changing technological landscape.

When Embedded Services Organisations (ESOs) harness the power of PPM

It’s sad but true: Only 86% of professional services projects are completed on budget. That means more than 1 in 7 aren’t. Fact is, that’s money being left on the table or money that cuts into your ability to keep your portfolio appropriately resourced. There are five things you can do differently so that your professional services department can use PPM to standardise your projects and experience improved financial control and results.

1. Standardise Project Planning. Project templates that ensure a standard set of tasks reduce the likelihood of critical issues and details falling through the cracks. Planning is more consistent, teams know at the outset what is expected of them, and cost estimation becomes more accurate.

2. Standardise Time and Expense. Logging Your team should have a time sheet process that fits the way your organisation operates, configurable to allow different ways to log time. Role-based views give project leaders an accurate view of hours they need.

3. Standardise Risk Management. Having the right tools and procedures in place for identifying and managing risk can mean the difference between projects that fall apart and those that deliver. Effective PPM processes manage risks like stakeholder participation, resource availability, scope creep, or other challenges.

4. Standardise Contract Management and Billing. Improper billing is as costly as it sounds, and having a standardised process in place means you can immediately start improving your cash flow and profitability. You can manage retainers, repeat contracts, and project deliverables to transparently track the necessary detail.

5. Standardise Project Status Reporting. Clear and consistent reporting that is standardised so that project leaders can compare progress, make critical decisions and compare histories to support post-project evaluation. This begins a cycle of continuous improvement and enables repeatable success.

Persona based approach

Role- and persona-based PPM ensures your company retains visibility of an iterative process and accurately communicates project delivery status back and forth throughout the business. What’s more, persona- and role-based control ensures that this communication reflects real-time updates “from the field” to project sponsors. Finally, whilst new projects and “surprise” projects will always cause some level of reshuffling, each persona-based user will have the information they need to:

  • Accept or reject the project based on solid KPIs;
  • Measure success for both infrastructure and innovation-led projects;
  • Work via waterfall, agile or waterfall-hybrid approaches;
  • Handle resource demand across the company or department;
  • Communicate appropriately with project sponsors and project managers alike.

PMO and EPMO leaders improve project portfolio management maturity

PMO Leaders and EPMO Leaders can make significant improvements to PPM Maturity, specifically in the areas of resource management, budget tracking, project initiation, status reporting, benefits realisation, governance and communication. For EPMO leaders, you can easily coordinate activities across divisional PMOs, disparate teams and geographic locations, while improving operational insight. Visibility for the entire enterprise is within reach with role-based PPM tools. Once everyone is “in the know” then the portfolio strategy becomes clear: Integrating execution status with changes to the portfolio for the users that need it will allow for reduced reactivity. You will ensure that more projects meet milestones more often and enjoy reduced reactivity on the PMO scale. Watch our video that walks you through PMO role-based usage.

A persona-based approach for this group will deliver the right information to remain proactive across competing stakeholders. As an EPMO or PMO leader, how many times have you needed to come up with hard numbers behind your “hard no”? Once granted the capability to configure and publish views for common user personas, the kind of reporting you need rolls right up to your desktop. Bespoke views and dashboards help you cope with the demands of executives, customers and even project managers who may not understand why this or that project array winds up on their plate.

Strategy and transformation - Change leaders can drive impactful initiatives

Transformation leadership must minimise delays and maximise benefits realisation through clear and consistent sponsor engagement. The saying, “run before you walk” applies to these change agents within an organisation. Too often, their multi-functional strategic initiatives cannot perform as required in an inconsistent portfolio that breaks down under “normal” project loads. Many project portfolio management organisations do not have the PPM maturity required to support rapid innovation.

Persona-based utility and functional control will build a consistent framework that easily handles all kinds of projects, even those that deliver rapid change. To prioritise and execute these transformational initiatives more effectively, change leadership roles require both a 30,000-meter view and a granular understanding of the moving parts that will get the job done. Once EPMO and PMOs possess these views, they can provide updates more consistently and prove benefits realisation through clear and consistent sponsor engagement.

CIOs, Digital Leadership - Set strategy and break down the barriers to innovation

Improved resource management and stakeholder engagement can turn the tides when it comes to shepherding your company into the digital revolution that modern businesses require to survive in their competitive marketplace. Once your digital leaders roll up the strategies that will drive these innovation requirements, your digital disruptors won’t be quite as disruptive to your portfolio. By using the appropriate project portfolio management analytics, including reports that roll up from project execution dashboards in real-time, you can deliver improved control, prioritisation and a single governance view across predictive and adaptive projects. A firm grasp of resource utilisation will help drive ongoing activity through improved projects for every role ensures consistent success.

In the IT role, and especially for IT and digital leaders, the key is persona-based usage, coupled with user personalisation. So, if you have a group of IT project managers like software and product developers that need a standard view of project status; a lead for that group and his boss; and perhaps an internal or external customer that needs a certain view of project progress, the only way to check off these boxes will be a role-based interface. Check out what this would look like in this quick video.

IT strategies require defined views that help standardise work management for key roles in your organisation. Digital executives will tailor their home screens and dashboards to simplify the way they work and run either built-in or easily customisable reports to ensure they’re meeting strategic KPIs.

Resource managers utilise project resources in the most beneficial and effective manner possible

Your PMO can gain visibility, control and accountability as well as enable project portfolio management guidelines and financial metrics that point to success. This can become easily attainable with persona-based and role-based portfolio management, especially from a Resource Manager perspective.

When these individuals are armed with a skills database and a role-based platform to review resource allocation, as well as demand and coordination among functions, they can manage both agile and waterfall-based project streams with ease.

Resource managers need to create more visibility in the portfolio, especially about resource allocation among its teams. In role-based PPM, complete visibility means that iterative goals are monitored appropriately by the people who need to act and move resources around to respond. These “mini-milestones” are sometimes the only way resource managers can gauge the current success of their resource allocation decisions. When you have ten or twelve such projects constantly moving to pull resources, visibility will become an imperative.

A centralised system controlled via role-based functionality is the only way to support a holistic view of resource demand; forge a way to manage competing and contrasting workflows; and, finally, obtain a complete picture of the inherent business value and opportunities for innovation in the portfolio that may only be realised through expert resource control.

Portfolio and program managers work beyond silos, across delivery models

Those charged with leading functional portfolios must often create accurate and risk-averse process models to ensure portfolio success. Once competing stakeholders are given access to the appropriate visibility via Cloud-based and mobile platforms arranged by role, they are more assured your portfolio and program decisions carry the most business benefit. Once these role-based functions are on-screen, all stakeholders gain context across company silos that were traditionally opaque. Investment decisions require exactly this level of visibility and control to safeguard portfolio health.

Portfolio and program manager views must allow these individuals to work across the entire project lifecycle because they need to select and prioritise projects across their entire functional team, and, often across siloed teams. Take a look at the actual role-based usage that program and project managers across industries have told us they have found most impactful in this video.

The appropriate information shows up at login, creating a new control of resources and awareness of real-time financial constraints. In addition, the PM persona will have enhanced reporting power to communicate and increase responsiveness. These dashboards gather project and program data and configure it to deliver a richer understanding of the potential consequences of every change in project scope. Both predictive and adaptive PM is supported and project deliverables display in the right way for each user.

Functionality to look for in a tool that grows with you BUT meets you where you are

If you want a quick implementation and easy to use functionality to instantly improve overall project management efficiency, you will need to look for functionality for both a quick-start and on a long-term project portfolio management requirements basis. That’s when you look at configurability to complement your required functionality and avoid project portfolio management limitations.

  • Consider this checklist of functionality, to ensure you are on-point:
  • Unlimited custom fields in common formats such as text, numeric, and keyword lists as well as more complex calculated fields, measures, and SQL lookups
  • Configurable roles-based dashboards that cover analytics.
  • Track costs and expenditures in multiple currencies quickly and easily with a single click.
  • Multi-lingual with pre-configured languages.
  • Templated project lifecycles including initiating, planning, executing and managing projects.
  • KPI configured to ensure visibility in real time.
  • Action views to track opportunities, feature requests and/or helpdesk tickets.

Look to configure views that accurately reflect your individual business processes – you can do so by defining the data, steps and approval stages for each. Ensuring all these elements are covered will positively impact project completion and profitability by eliminating unnecessary resource and project processes right out of the gate.

Proving the ROI before you draft the RFI

Proving that you are spending your PPM money wisely means asking vendors for ROI data before you draft the RFI. This is so important because these numbers are truly compelling. In fact, a Forrester Research Total Economic Impact™ (TEI) study found that a comprehensive PPM tool can provide an ROI of more than 250%. You can ask for the ROI regarding factors that lock in cost-savings; productivity improvements; and others. Here are some examples:

  • Improved productivity
  • Lower costs and greater efficiency
  • Faster, more effective decision-making
  • High user engagement
  • Financial accuracy
  • Forecasting and time and expense tracking
  • Better team collaboration
  • More value from your existing technology by leveraging integrations

How the interactions should look: Building communications strategy with potential vendors

So, you’ve already been on a few introductory calls. Hopefully, during these calls, you were able to nail down a general “draft” of what your requirements will look like. Afterward, your potential vendors should line up a discovery process for you to follow that leads you to solve the business problems you have a, while uncovering potential issues. From that point, you should receive a tailored demo to ensure that all these issues are covered. It should include your data and you should schedule several hours to review it with the stakeholder community. Coach your internal team to take notes; gather their questions and input; and create a document to review with the vendor. You might have them integrate these uncovered issues in a second demo at that point.

Next, lock in a period of unrestricted trial access so that you may further analyse, design, build and refine the potential prototype.

By this time, you will know which vendor to choose, with all other evaluation parameters being equal. Don’t feel badly about those you do not choose but also remember to be honest with them about why you did not choose them—they need this information to improve either their sales methods, their consulting processes, demos and the product itself. It’s good RFI etiquette and shouldn’t take you longer than a phone call (that you have returned!).

Before you roll out the final prototype solution to your internal stakeholders, it’s smart to spend some time going over their earlier remarks and the items uncovered during discovery and putting together cogent arguments as to why a suggestion was or was not included.

The key challenges and barriers to adopting Project Portfolio Management

The issue with traditional product selection processes begins with no transparency. To understand the true costs of a failed RFI Process and a long sales cycle, a clear idea of the risks involved must be gathered and openly discussed among teams.

This discussion should include topics that help you understand your real business needs. Sometimes the difference between what you actually need and what you think you need is miles away from reality. Once you align with business requirements, working with a vendor who can prototype them accurately will help you efficiently identify gaps. The key is to simulate the real world as accurately as possibly. Gaining unrestricted access to the prototype that has been configured to reflect the real world will allow you to overcome barriers and arguments to the project itself by letting stakeholders see true improvement as you come up with parameters for the project portfolio management business case.

By its very nature, the PPM tool demands change within the business, and with change comes resistance—both from above and below. Management commitment to and an understanding of the purpose and value of PPM is critical. Do not delegate your RFI to lower ranks or give up too much power to the vendors. Educate before you implement to line up internal champions. Here is what to do to make sure those champions are up to the challenge:

  • Engage the right people
  • Gain senior management and executive buy-in
  • Create programs to manage change: disseminate awareness, motivate stakeholders at all levels
  • Sell PPM’s benefits
  • Build a Return on Investment (ROI) model
  • Give ownership to project stakeholders and executive sponsors
  • Consider how the tools integrate with the rest of the business and communicate that early