Project Portfolio Management
The Project Portfolio Management (PPM) capability is the ability to select, approve and balance project portfolio components (projects, programmes, or sub-portfolios) to deliver the organization's strategic objectives and its operational needs. Managing the project portfolio will prioritize, monitor, track, analyse, report, and as necessary, terminate project portfolio components that plan to, or that currently consume organizational resources.
Structure
PPM is made up of the following Categories and CBBs. Maturity and Planning are described at both the CC and the CBB level.
- APortfolio Processes Definition
- A1Strategic Objectives Breakdown Methods
Select appropriate methods and processes to identify the incremental steps and objective progressions or enablers necessary to achieve the organization's strategic objectives.
- A2Components' Contribution Recognition Methods
Select methods and processes that identify the contributions that project portfolio components can make to the organization's strategic objectives.
- A3Methods to Rank, Rate, and Select Project Portfolio Components
Establish (or identify) and select methods to rank, rate, and select project portfolio components for their strategic contributions.
- A4Project Portfolio Management Tools and Infrastructure
Provide the necessary tools and infrastructure supports to track, communicate, and assist with the progress of project portfolio components.
- BPortfolio Strategy Alignment
- B1Verification and Validation of the Organization's Strategic Objectives
Validate that everyone in the organization has the same shared understanding of the organization's strategic objectives and how these can be achieved — prior to any large commitment of resources.
- B2Strategic Value Contribution Change Management
Adjust the portfolio to reflect any identified divergence (beyond acceptable margins) from the strategic value contribution expected of project portfolio components.
- B3Inspiration and Leadership
Provide leadership that inspires and motivates stakeholders to work towards the achievement of the strategic objectives. Illustrate how the effective delivery of project portfolio components contributes to the strategic objectives.
- CPortfolio Oversight and Control
- C1Project Portfolio Component Evaluation and Approval
Evaluate and approve project portfolio components (projects, programmes, and sub-portfolios) based on their strategic contribution, and their ranking and rating versus alternative components. Evaluate the potential impact on cash flow of prioritizing the portfolio.
- C2Project Portfolio Risk Management
Analyse and review risks associated with project portfolio components in order to arrive at an understanding of the portfolio's total risk profile.
- C3Project Portfolio Component Support
Gain senior management support and approval for the removal of obstacles to the progress of project portfolio components. Be responsive to project and programme managers who have escalated issues to the portfolio level. Attend project meetings to show support and be particularly responsive to agile projects.
- C4Project Portfolio Component Failures Management
Identify and remedy or cancel project portfolio components that are failing or are out of control.
- C5Stakeholder Communications Management
Listen to and respond to stakeholders' concerns and feedback. Generate specific status updates for stakeholder groups and communicate these appropriately so that informed decision-making can be facilitated at all levels.
Overview
Goal & Objectives
An effective Project Portfolio Management (RM) capability aims to:
- Focus organizational resources to deliver the organization's strategic objectives.
- Simplify and rationalize the steps and incremental progressions towards strategic objectives to improve success rates.
- Gain support by making visible the strategic contribution of each step and incremental progression towards the organization's strategic objectives.
- Reprioritize the portfolio based on strategy change — for example, mergers, acquisitions, and business environment changes.
- Improve confidence that all programmes in the portfolio remain aligned with the organization's overall strategy and business objectives.
- Support strategic organizational changes particularly those that involve cultural or behavioural changes.
- Provide insight into financial, people, and technical resource requirements for the execution of the project portfolio.
- Keep stakeholders informed and appraised of the portfolio's status.
- Maintain stakeholder support by soliciting timely feedback for any proposed changes to the portfolio.
- Monitor ongoing risks, progress deviations, and other factors that might impact upon the portfolio's success.
- Improve consistency in the evaluation of the portfolio's status (e.g. have all portfolio sub-components use the same status reporting period) to aid understanding and facilitate decision-making.
- Support timely delivery of programmes within the portfolio through effective monitoring of resource allocation and use.
- Identify and realize synergistic value opportunities across related programmes.
- Improve consistency and transparency in programme and project selection, based on agreed evaluation and prioritization criteria to gain consensus and support for the prioritized execution of the portfolio.
- Prioritize the execution of project portfolio components that have greater value potential in alignment with the organization's strategic direction to maximize early benefits realization.
Scope
Definition
The Project Portfolio Management (PPM) capability is the ability to select, approve and balance project portfolio components (projects, programmes, or sub-portfolios) to deliver the organization's strategic objectives and its operational needs. Managing the project portfolio will prioritize, monitor, track, analyse, report, and as necessary, terminate project portfolio components that plan to, or that currently consume organizational resources.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for PPM at each level of maturity.
- 2Basic
- Practice
- Map project portfolio components' contributions to strategic objectives.
- Outcome
- The strategic contributions of project portfolio components (including ranking and rating processes) are visible to all stakeholders.
- Metric
- Number and percentage of project portfolio components mapped to strategic objectives.
- Practice
- Develop processes to identify portfolio risks associated with project portfolio components.
- Outcome
- Portfolio risk identification brings insights into potential issues, and enables any risk events that occur to be proactively managed and appropriately handled.
- Metric
- Number of risks per component and percentage of component risks considered to be effectively managed.
- Practice
- Develop processes and procedures to communicate project portfolio component issues to portfolio management.
- Outcome
- Portfolio managers, programme managers and project managers understand the levels of issues they should manage, and communications on these are prompt and appropriate.
- Metrics
- Number of appropriate escalations versus number returned as inappropriate.
- Number of escalations communicated effectively.
- 3Intermediate
- Practice
- Train staff to select, rank, rate, and prioritize project portfolio components based on strategic contributions.
- Outcomes
- Ranking and rating processes are transparent and understood by all stakeholders.
- Stakeholders agree to and execute the proposed prioritizations.
- Metric
- Number and ratios of staff trained and staff untrained.
- Practice
- Use a rigorous portfolio component risk identification and analysis approach that encompasses organizational risk, performance risk, resource and staff risk, financial risk, market risk, technology risk, regulatory risk, and public relations risk.
- Outcome
- Effective risk identification and analysis are in place and rigorously applied.
- Metric
- Number of non-identified risk events occurring.
- Practice
- Communicate using the communications plan.
- Outcome
- The communications received by staff are appropriate in any given set of circumstances.
- Metric
- Number and percentage of planned and unplanned communications.
- 4Advanced
- Practice
- Develop a ‘what-if’ scenario analysis capability to understand portfolio impact of changes and risk events.
- Outcome
- Potential changes and their impacts are analysed to facilitate informed decision-making.
- Metric
- Number and percentage of decisions facilitated with ‘what-if’ analysis reports.
- Practice
- Recognize and reward stepping-stone projects or projects that deliver progressions towards strategic objectives.
- Outcome
- Staff members are motivated based on the activities they carry out rather than on longer-term strategic objectives.
- Metric
- Staff surveys and morale measurements across the portfolio staff.
- Practice
- Automate the detection of control limit violations to assist in early detection and reporting of issues.
- Outcome
- Any breaches of controls by project portfolio components are detected earlier and reported directly to all appropriate levels.
- Metric
- Number and percentage of controls violating project portfolio component variances.
- 5Optimized
- Practice
- Leverage the latest tools and their advanced features to optimize execution.
- Outcome
- Most of the mundane repetitive tasks are automated and the possibility of human error in calculations is reduced or eliminated.
- Metric
- Number of project errors and variances of those metrics.
- Practice
- Work closely with strategic planning to maintain alignment and prioritized focus.
- Outcome
- Portfolio management is an integrated part of the company's strategic objectives-setting function and plays a significant part in the delivery of those objectives.
- Metric
- Percentage of the portfolio budget assigned to specific strategic objectives.
- Practice
- Develop project oversight and monitoring capabilities to detect problems and potential problems across many projects, allowing a proactive set of supports to be in place — e.g. earned value, S-curve analysis, etc.
- Outcome
- Project oversight is an efficient and effective activity that can detect and report on the issues that require attention.
- Metric
- Project control variance exceptions detected at project portfolio level versus project management level detections.
Reference
History
This capability was introduced in Revision 18.01 as a merger of Portfolio Management (16) and Portfolio Planning and Prioritization (16).