In this Part 1 we will cover:
Project Portfolio Management is the newest boy on the block, when it comes to the project management training circuit these days. Actually, it has been around for a few years, but is still not well understood in most circles and its place relative to project management itself is a subject of some debate. In fact, in 2006, the Project Management Institute ("PMI") issued The Standard for Portfolio Management, meaning of course, The Standard for Project Portfolio Management. So, there are those who would like to see it as an extension of project management expertise. However, we don't see it that way - rather, we see it the other way round. Project management is an essential tool of project portfolio management. But we are getting ahead of ourselves.
Much of the material, recommendations and suggestions outlined in this series of papers have been abstracted from the new content in the PortfolioStep™ Version 3.0 released by TenStep that we helped to develop. As TenStep's president, Tom Mochal, noted when he announced the new release:
"The PortfolioStep framework is comprehensive and unique, especially in the way that it defines the annual business planning process where companies determine what work is going to be authorized for the following year. We also have unique concepts about the work that is managed in the portfolio as well as how to balance your portfolio of work to the optimum benefit of your company."
Tom also noted that this release is aligned with the new portfolio management standard from PMI but has also added a number of new concepts making the product much more comprehensive and broader than the PMI Standard. For practical and successful application of project portfolio management we believe that it is necessary to go further than simply aligning projects with corporate strategy. We believe that the success of a project portfolio is to be found in the benefits that the products of projects generate. In other words, the methodology must be more comprehensive than the ground covered by the PMI standard.
Of course, the PMI standard is a descriptive document issued as a "guide". While a methodology can be deduced from such a document, based on its description of inputs, outputs, techniques and so on, what most practitioners need is a consistent and definitive methodology. PortfolioStep™ Version 3.0 provides this methodology. PortfolioStep™ Version 3.0 can be generalized for a variety of project types, but to provide clarity, particularly where techniques and examples are given, the primary focus of PortfolioStep™ Version 3.0 is on information technology and related type projects.
Portfolio management is a business process that requires a set of detailed processes to be conducted in an interrelated continuous sequence. It facilitates decision making, through evaluation, selection, prioritizing, balancing, execution of the work, harvesting of benefits and feedback of results for process improvement. It presumes that the organization has a strategic plan, along with customary mission and vision statements, together with strategic goals and objectives.
It also presumes that no organization has sufficient resources to meet all of its business needs. This is true in the best of times. It certainly is even truer when times are tough. Even if your organization is a rare one that has all the money it needs, you seldom have the people capacity to complete everything you would like. The typical response to managing scarce resources against an unlimited demand is to come up with some type of prioritization process so that you only approve and fund the work that will provide the most value.