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The State of Project Portfolio Management in 2016

An Overview: Why Do We Need PPM?

There is no denying that project portfolio management (PPM) has gone through various stages of transformation over the last 15 years: since the early phase where there was total ambiguity about the PPM discipline, to a more recent scenario where Project Portfolio Management (PPM) is considered a catalyst for solving all project-related concerns.

Today, PPM is a valuable answer for any project management office (PMO) willing to better manage and execute their projects as well as derive more value for their organization. Though the majority of organizations still prefer to manage projects by using complex spreadsheets, the truth is that at a certain point it becomes not only highly productive but also obligatory to implement a PPM solution.

This article renders an opportunity to synthesize our learnings about Project Portfolio Management and make some bold assertions about the PPM developments that will affect project managers in the coming future.

A Reality Check

From a business perspective, every stakeholder or decision-maker would like to know the kind of returns that can be expected out of investments. However, the reality is that the majority of project managers and stakeholders are often plagued with project-related challenges and lack the tools or methods to realize their visions. According to a recent survey by Thinking Portfolio, here is a snapshot of the major challenges lurking behind the project failures.

priyanka9These surprising viewpoints depict the common state of an organization struggling to keep a track of its ongoing projects and their effects on cash flow.

The Solution: Investing in Portfolio Management

The above-stated survey results reveal the continued challenge with resourcing, aligning projects with business objectives, and connecting success metrics with PMO goals, thereby resulting in failed projects. In such a scenario, organizations need to leverage the existing opportunities and improve their PMO’s performance with proper process adjustments and an investment in a PPM solution.

priyanka10Although the proper implementation of a PPM solution has been proven to increase resource efficiency, business alignment, and a PMO’s value contribution, a staggering 44% of respondents do not have a solution in place.

As of now, this number may seem high, but there is definitely an improvement from 2015, where 55% of respondents reported not having a PPM system in place. This positive trend should encourage organizations of all maturities to strongly consider making an investment in PPM, as this could result in an improved ability in measuring, monitoring, and having a system of accountability across the project portfolio.

Moreover, the following statistics may reaffirm our belief in PPM’s capability to turn around a project’s performance and deliver the expected ROI.

priyanka11The Top 5 PPM Use Cases

1. Resource Time Tracking:Typically, project leaders estimate resource hours by soliciting feedback from skilled resources.

62% of organizations quote “capturing time / costs against projects” as their biggest project management challenge.

2. Project Inventory and Tracking:Proper management of project inventory furnishes the desired visibility to the entire organization’s project workload. Thus, PPM is obligatory to better manage robust project inventory, tracking, and reporting.

3. Managing Portfolios: Once the organizations have the entire portfolio framework, it is more likely for them to evaluate the benefits and risks of individual projects. Using a platform to enhance portfolio visibility, identify portfolio health, and enable portfolio-level reporting leads to increased portfolio success.

4. Reporting: Well-timed visibility into project and portfolio activity is vital to proving the value and impact that projects have on an organization.

66% of organizations communicate with their clients using their PM software.

5. Resource Management: Resources are key to the success of every project. Thus, the ability to identify resource demand or required skillsets and manage resource workloads is of prime importance. PPM has the potential to deliver leadership predictive capabilities to proactively manage constraints and ensure balanced capabilities.

Key PPM Lessons for Every PMO

According to Thinking Portfolio’s recent study, the PMO tops the list of forums that are actively utilizing portfolio management capabilities in an organization.


Thus, it is essential for every PMO to take into consideration the trends in portfolio management for implementing corporate strategy and for forecasting strategic risks.

The Annual Gartner PPM and IT Governance Summit is a rich source of valuable key learnings for every PMO professional. Here are some key takeaways from 2016’s summit that are applicable to every PMO.

priyanka131. Flexibility: The role of a PMO should be adaptive depending on an organization’s needs. Whether it is an enterprise PMO (ePMO) or an ITPMO, the ultimate goal remains the same—deliver results to propel the business forward. Senior researcher Mbula Schoen shared survey results on how the business views their PMO. Though nearly half of business stakeholders believe their PMO is integral to the business, the other half is skeptical on the additional business value that PMO delivers.

PMOs need to expand their business mindset by thinking, communicating, and managing to value or business outcomes—especially when change occurs—with the help of PPM.

2. Value Delivery: Organizations can use multiple key performance indicators (KPIs) and metrics to measure value. This is where the PMO needs to take a stand and define value by evaluating two specific parameters: business outcomes and measurable metrics. In these terms, PMOs can limit their focus on the following:

priyanka14The PMO can ensure perfect alignment with business outcomes and relevant metrics by prioritizing projects in the planning phase and challenging team members to make better decisions during execution. A very common method to ensure alignment is to implement scoring based on these business outcomes.

According to a recent survey, 51% of organizations reported using a scoring method to align with the business.

3. Portfolio Management: One of the most debated topics during the summit was the implementation of portfolio management. A major point of concern was whether to implement the PPM tool or the process first. The best practice is for organizations to do both, simultaneously. The primary reason for this is to create unity between processes and tools to allow scalability as the PMO matures. However, there are several factors that determine the selection criteria for PPM processes and tools, principally three critical pillars:

  • Alignment: From a process viewpoint, alignment means understanding business strategies and forming the project portfolio into categories that help classify work and resources. On the other hand, a solution is needed to build a top-down portfolio hierarchy that has a many-to-many relationship from a tools perspective.
  • Value: Value is all about prioritizing projects and resources to ensure they are suitably deployed and generate the best benefits for the organization.
  • Planning: Planning connects alignment and value together to set a direction for the company’s project portfolio roadmap. In the recentProject and Portfolio Management Landscape Report by Innotas, over 70% of organizations reported that they do not have enough resources to meet incoming project demand. Thus, it is important to ensure planning processes have the critical elements and information to maximize the value of the portfolio.

The Key PPM Trends in 2016

Here is a chance to review and reflect on some of the industry-specific project portfolio management trends of the present year that have made a significant impact on businesses.

The Power of Applications

Application ecosystems are present everywhere, and they are increasingly focused on empowering businesses with time. Applications are changing the way businesses operate and optimize, yet many organizations still fail to manage and track them proportionally. Based on such facts, we believe the consumerization of IT will continue this year and in the near future as well.

The Automation Drive

Predictive analytics is undoubtedly gaining popularity in multiple domains like sales, marketing, security, consumer, financial, etc. Likewise, PMOs are adopting predictive analytics to re-plan and organize their portfolios. Predictive analytics enables them with the right metrics and data for better decision-making and innovation.

Agile Isn’t Everything

Agile too has gained much-needed popularity in organizations, especially in product development, yet organizations have experienced certain challenges and visibility gaps with agile in 2016:

  • Delivery in smaller increments: The agile delivery model focuses on intermittent milestones while incorporating feedback at regular intervals. This can act as a conduit for better communication between stakeholders and the delivery teams.
  • Increased focus on outcomes: Agile is all about delivering better products for which one needs to keep the team centered and concentrated on the desired outcome. However, this approach might not be applicable for every development case.
  • Repetitive testing is on the increase: Outsourced QA testing continues to thrive in 2016 regardless of agile or waterfall method.
  • Collaboration: Recommendations and feedback continue to improve with the help of collaboration tools and become more important in the case of a distributed workforce.

Smarter Resource Management

According to the recent Spiceworks IT Report, IT budgets have leveled off in 2016. This report records flat budget for IT, as well as flat staffing budget. This year IT has done more with less and gained efficiency in terms of resource management.

IoT Is Driving PMO Specialization

The “Internet of Things” (IoT) has urged the desire for more data, be it for the business or decision-making. But for the PMO, here is what it holds:

  • In 2016, PMOs have become more specialized.
  • Collaboration and data sharing has become critical for the PMO to ensure alignment and make informed, data-driven decisions.
  • IT data mining projects have taken a larger share of a PMO’s accountability.
  • The need for better IT governance and control has been seriously taken into consideration.
  • Security concerns arising due to proliferating apps and devices have become a part of the PMO’s responsibility.

Cloud Computing Is Shaping The Future

  • In 2016, software providers have concentrated more on change management and execution models. The cloud environment has facilitated this approach without any security concerns, as well as encouraged better adoption and compliance among users.
  • There has been a significant shift in the thought process regarding pricing, customer engagement, sales models, and market approach.
  • Companies adhering to this thought process are measuring, managing, tracking, and tracing all execution metrics to drive continuous improvements.


Project portfolio management has displayed a strong growth trend in the past years, and it shall continue to gain importance in the future as well. However, the uncertainty of the current business environment makes it more imperative for each organization to eventually apply the theories and knowledge of portfolio management to their own operational culture and models. If corporate values do not support open dialogue and learning through practice, introducing portfolio management will be a challenging task.


About Priyanka Chakraborty

Priyanka Chakraborty is a content specialist, currently a part of CAI Info India. She holds diverse experience in content writing spanning domains like Information Technology, Digital Marketing, Social Media, Content Marketing, Nutrition, Health & Fitness, Photography, Website Design, Career Advancement, etc. In the past, she has worked with the leading job portal of India,, and then moved on to a UK-based online education company, Shaw Academy, before joining CAI India. A writer by day and a reader by night, she loves to explore her creative instincts further in art and painting.

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