AuthorsCIOIT GovernanceProject Portfolio Management

Using Project Portfolio Management to Sharpen Strategy


When there are many projects run by an organization, it is significant to manage and evaluate them by grouping projects into strategic portfolios. Project portfolio management (PPM) is an excellent business practice that enables an organization to keep its projects aligned to its business objectives. PPM doesn’t get involved in project execution, but it plays a major role in project selection, benefit realization, prioritization, funding, optimum resource utilization, risk assessment, etc. This helps in determining the best ways to invest the organization’s capital and resources.

At an individual project level, it is important to analyze how each project is performing and in what way it affects the entire portfolio. The following questions must be raised:


Benefits of Adopting Project Portfolio Management

  • PPM reduces “no value” projects. In a portfolio some projects are said to have duplicated objectives and efforts. PPM plays a critical role in such situations to select a project. PPM tools help to track the overall project value, benefits, ROI, and other factors that influence the decision-making process. Based on such rankings, the projects are selected or cancelled. PPM is required for making right decisions for assessing the most profitable portfolio.
  • PPM creates an atmosphere where collaborative decision-making is easier and more profitable.
  • It minimizes the risks pertaining to individual projects in terms of business impact.
  • PPM seeks to utilize resources in an optimum way for all projects.
  • PPM tools are believed to be more accurate and efficient. Based on this real-time data, risk evaluation and mitigation is executed.
  • Expenses are aligned to budgets and enhanced project success rates.
  • PPM gives a holistic picture of all projects for a comprehensive understanding of the organization.

The entire objective of project portfolio management is to improve the bottom line of those projects that drain resources and are not contributing to the health of the organization.

But in order to do that, organizations face several challenges.

Challenges of Project Portfolio Management

  • Too many projects may be running simultaneously, which distracts or misleads the creation of a portfolio. At the same time, one project manager is accountable for multiple projects, which results in lack of focus and failure.
  • Some projects have undefined scope and/or are not aligned to objectives.
  • Project prioritization is not done effectively at an early stage.
  • Lack of senior management support for requirements claimed by project managers can prove to be a challenge.
  • Sometimes differentiated support for distinct projects can also be a struggle.
  • Many projects have somewhat similar secondary objectives and are executed in a similar way. But this distracts the focus from the main underlying objective of individual projects.
  • Project risk assessment must be done. It is also very important in PPM to identify and manage the individual project risks and how they impact the portfolio.
  • The nature of PPM sometimes can be a challenge, for example sharing of resources for multiple projects. This may ultimately cause confusion among project managers who are managing more than one project. This is termed as dislocation of resources.
  • As a basic requirement of PPM implementation, timesheet data should be collected from each employee to understand what employees are working on as well as comprehend project delivery status. Many times, employees misconceive that they are being watched. This concept is known as Big Brother Syndrome. To overcome this, employees must be regularly educated about real benefits of timesheet data collection.
  • PPM brings in a huge change in an organization. First and foremost, it demands proper implementation of project management process at an individual project level to fetch data for portfolio management. If the project management maturity level is higher, PPM implementation will be an easy task.
  • In PPM, organizations tend to rely on software or tools Software is considered to be a crucial aspect of PPM rather than just one part of the entire process. This might shift the focus and meanwhile overlook other aspects of PPM.

The Role of Internal Politics and How to Manage It

Internal politics and working culture in an organization are the main hurdles for any project execution. In-house politics prevent an organization from implementing new strategies and technologies in a project. From the beginning itself, people tend to resist change implementation. Resistance to innovative changes hampers the progress, thereby creating challenges to manage the portfolio efficiently.

Yet another mistake made by organizations is that higher authorities initiate projects assuming that all employees are in sync with the changes. Top-level management must identify the resistance and tackle it at an early stage. Management must ensure that every employee knows the benefits of PPM and the value it brings to the company. As a part of process improvement, organizations must make it a regular practice of educating people on PPM values. Many companies hire specialists called ‘evangelists’ to address the particular issue.   Evangelists assist the companies to overcome such problems. This approach will certainly reduce the internal politics and resistance from employees.

Resource Allocation

It is significant to analyze the resource requirement for individual projects with the help of three key pillars of project management: scope, budget, and time. Identify the skill set essential for a particular project. The next step would be to recognize the number of resources available and the number of resources to be hired. It will be feasible if resource capacity is analyzed with respect to other projects in a portfolio. Once the above figure is derived, answering the following questions will help in the resource allocation process.

  • patil2Is this project overstaffed? If yes, shift a few resources to other similar projects where they can be utilized in an optimum way.
  • Is this project having sufficient resources? If no, pull in a few more resources either from other projects of the portfolio/organization or hire new resources.
  • Are the resources planned and allocated properly? Resource planning is morally done on the basis of individual project scope, budget, and time duration.


PPM is aimed at reducing failure rates in projects. Portfolios are set up to gain visibility on failing projects before it is too late. There is also an opportunity to make mid-course corrections for underperforming projects. Likewise, it helps in making subjective and rational decisions pertaining to various projects. But a PPM can be utilized promptly only if the above said challenges are eliminated. The only technique is to address every challenge with a proper solution. Managing a single project is often a difficult task. Thus, execution of multiple projects can be even more challenging. Deploying an intelligent piece of PPM can perhaps help in this regard.

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