Today, companies are constantly under pressure to innovate and grow. To reach these objectives, they need to find an efficient way to implement their strategies.
Organizations execute their strategies through the creation of strategic initiatives. The execution of the organization’s strategies happens through the use of programs and project portfolios.
Nevertheless, in many organizations, a gap exists between the development of a strategy and its successful implementation. Project Portfolio Management (PPM) contributes to closing this gap.
Senior management
It is important to consider that strategic transformation can only be accomplished when senior management engages deeply in project management.
In addition, the managerial perspective has changed from the past. It has changed from focusing on one project to managing a whole collection of projects as one large entity at the same time.
Portfolios of different project types are under the governance of organizational units or responsibility areas. Whereas, managerial processes must link projects to business goals and the expectations set by the company strategy.
Portfolio management
As the rate of change in any industry is so fast, organizations are increasingly becoming more projects based, and therefore, they are focusing more on effective project management.
Project Portfolio Management (PPM) represents a managerial approach. It does not only focus on techniques, tools, and methods, but it also includes aspects of how PPM is implemented. In addition, it is crucial to establish the goals and benefits of portfolios before the selection of any projects can take place to meet the overall objectives of the company.
Project Portfolio Management (PPM) helps manage the complexities of multi-projects. It has the objective to assist an organization in achieving this competitive advantage through the implementation of organizational strategies and balancing portfolios. The implementation of the strategy and portfolios maximizes value and ensures sustainable use of company resources.
Project Portfolio Management (PPM) is the practice of managing one or more portfolios that aim to achieve the organization’s strategic objectives. It is basically an executable plan of linking the projects, programs, and portfolios to the organizational strategy.
There are different theories regarding the relationship between portfolio management practices and their performance. In general, a company should rather customize its project portfolio to correspond to all the different processes and the strategic innovation needs.
Program management
A program is “a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually” (PMI 2005). Some programs can be complex. To get the most out of the companies need to manage their complexity.
Program Management is the process of managing a group of related projects in order to achieve a defined business goal or benefit.
The management of multiple projects refers to the organizational level environment that allows an organization to manage projects concurrently. This can refer to projects that vary in size and importance, and they may not necessarily be directly related.
Program management is a centralized and coordinated approach that manages goal-related projects to achieve the program’s strategic objectives.
It is important to understand that the complexity and maturity levels of every organization differ, and the way in which decisions are made must be adjusted accordingly.
Keep in mind
The top management of a company creates the strategy. Then it is filtered down to the portfolio level, and finally to the project level. Basically, organizational survival depends on a constant stream of successful new products. The most important goals of PPM are to effectively implement organizational strategy through a portfolio of projects and improve the long-term value of the portfolio.
It is essential for each company to design a portfolio planning process to fit the nature of its business and to complement the relationships the firm typically maintains with its customers and key partners.
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