Where goes the Money - Project Portfolio Management
Oftentimes, many view project portfolio management as a standalone process, while others see it as part of the project selection and/or management process. Experton Group advises clients that the purpose of IT project portfolio management is to select the projects that are best aligned to corporate goals and objectives. Experton Group also cautions clients that many corporations experience difficulty determining which projects to execute because there is an excess of projects, political difficulties in prioritizing and selecting the best investments, and not enough resources. IT executives as well as their line-of-business (LOB) counterparts should develop a project portfolio management process. Once that is in place, they should consider tools for assistance.
Many Clients who are selecting project initiatives have debates about proper selection criteria. Value criteria for project selection should be developed by the enterprise to align projects appropriately with corporate goals. Executives must weigh cost, current budget constraints, project size, time to market, and other associated risks. Other criteria include project length and phasing, resources required, and termination factors. Projects should be tracked so that people understand later why they made the decisions they did originally. Executives need to know that they have chosen the right criteria and that they are weighing those criteria correctly when doing project selection. Moreover, there are tools available that can help IT executives manage these metrics and even help them to proactively predict when problems will occur by using “what if” scenarios. A good graphical display of the project portfolio matrix with simple comparison, positioning, and ongoing tracking is a must in order to support the executive selection and review process.
Experton Group believes it is imperative to develop a project portfolio management process to evaluate, select, implement, and support projects that align with corporate strategic goals and objectives. IT executives should work with their line of business (LOB) counterparts to define a project portfolio management process. They should also ensure that their LOB counterparts share in the responsibility of not only selecting appropriate projects, but also in ensuring they are completed in a quality manner, on budget, and on time. IT executives may also wish to tie the results of the projects to both their and their LOB counterparts' profit and loss (P&L). This provides a valid baseline and helps ensure accountability.