In fact, according to Statista, 80% of organizations have one or more PMOs.”

The Project Management Office (PMO) serves as a central hub for project oversight, governance, and support, ensuring that projects are executed effectively and aligned with business objectives.

But what exactly are the roles and responsibilities of a PMO within an organization? Understanding the roles and responsibilities of a PMO is crucial for organizations looking to enhance project delivery, increase efficiency, and achieve business objectives.

This blog will provide valuable insights into the significance of a value-centric PMO, their primary roles and responsibilities, and how they contribute to successful project outcomes.

But first, let’s begin with the PMO definition.

What does PMO (Project Management Office) mean?

A project management office (PMO) refers to a group, department, or entity within the organization responsible for providing management reports, establishing guidelines, and a governance framework.

The primary role of a PMO is to establish and maintain project management standards, processes, and best practices, ensuring that projects are executed efficiently. Further, they also enable optimal utilization of resources, help a business achieve strategic objectives, and protect it against market volatility.

Now that you are clear about what is the pmo, let’s understand the roles and responsibilities of Project Management Office.

What are the PMO roles and responsibilities?

A value centric PMO can play a wide range of roles in modern business. It can potentially be a game-changer for a project-based company.

Some of the responsibilities of a project management office include:

Establish project governance structure

PMO establishes a project governance framework with a structured approach to govern the projects. It involves various stakeholders like team members, project managers, project sponsors, investors, clients, etc. These stakeholders have well-defined roles, responsibilities, and decision-making capacities. The purpose of the governance structure is to ensure that:

• The projects are prioritized and aligned with the short- and long-term goals of the business
• The right people have access to the right information to make the right decisions
• The projects are staying within the planned time and budget
• Enterprise resources are utilized in the most efficient manner
• There are ongoing risk assessments and mitigation across all projects

Provide management reports

One of the core PMO roles and responsibilities is to centralize information and deliver it to the right stakeholders. It is to ensure that the management makes informed and timely decisions for the success of the project. Following are some examples of management reporting:

• Overall progress and health of projects
• Status of milestones and deliverables across the portfolio
• Financial information about the budget, forecast, actuals, margins, etc.
• Project risks and progress on mitigating these risks
• Operational efficiency and project performance
• Effective management and utilization of enterprise resources

Prioritise projects as per strategic business objectives

Setting up operational and strategic objectives is critical to future business planning. They are essential to short- and long-term business success. These objectives are achieved with the help of various programs and portfolios consisting of projects. PMO plays a crucial role in this process and carries the following responsibilities:

• Ensure that the programs and portfolios are aligned with operational and strategic objectives
• Projects are selected and prioritized as per these business goals
• Enterprise resources are allocated and utilized as per business goals
• Design and track various program and portfolio performance KPIs

Plan and schedule resource efficiently

Resource planning is one of the most critical duties of the project management office (PMO). This process ensures that the right resources are allocated to the right project at the right time. These are some highlights of efficient resource planning and scheduling:

• Eliminate silos of spreadsheets with a single resource plan
• Create visibility of resource capacity, competency, and availability for all stakeholders
• Establish a real-time resource scheduling to accommodate the fast-changing ground reality
• Track all types of work, i.e., project work, non-project work, vacation, etc.
• Establish multi-dimensional viewing and overcome the challenges of a matrix structure.

Forecast and enable resource capacity planning

In a dynamically changing business environment, it is critical for a PMO to forecast and get real-time foresight into project resourcing. So that the PMO can take corrective actions ahead of time.

A few examples of resource forecasting are:

• Forecast capacity vs. demand to identify shortfall or excesses of the resources
• Forecast people on the bench and project vacancies to minimize resource wastage
• Forecast resource management financials to determine the margin and profitability.

Streamline and automate processes and workflows

As an integral part of performance improvement, PMO streamlines various project management processes and methodologies. For examples:

A few examples of resource forecasting are:

• Establish project requesting, selection, and prioritization process
• Streamline workflow for resource requisition and allocation
• Gathering up-to-date information about employee skills, interests, experience
• Forecast and provide early warning before it is late

Reuse project learning and knowledge

The Project Management Office enables team efficiency by facilitating knowledge transfers between departmental project teams. It makes project plans, reviews, templates, and documentation widely available to concerned members.

This helps them to save time and costs that would have otherwise gone into rework. Rather than reinventing the wheel, project teams can not only shorten their learning curve but can also get more work off the ground from the organizational knowledge being shared.

Mentor and train project managers

The PMO support includes providing mentoring and coaching to the project managers. After all, they are at the heart of the project lifecycle.

Developing a project manager’s competencies enhances their ability to lead and manage project execution and team dynamics.

Moreover, it equips them to gauge their team’s strengths and prevent member conflicts. This way, projects can tap into potential from within, with staff whose critical skills and knowledge can be used to complete tasks and help one another.

Maximize strategic & billable resource utilization

Employees must work on a billable or strategic project for a project-based company. So, the PMO team must work on maximizing its workforce’s billable and strategic utilization. To achieve this, a PMO constantly forecasts the utilization of resources and moves them to billable and strategic projects.

Facilitate team collaboration and communication

It is now a critical responsibility of a PMO to ensure that there is an efficient framework for seamless team collaboration and communication among team members. It helps in

• Aligning remote teams and bringing everyone on the same page
• Completing task faster without unnecessary waiting
• Communicating faster with the right person without chaos
• Addressing urgent issues faster and more effectively

McKinsey & Company states that employee productivity increases by 20-25% when employees are connected.

Now that we understand the Project Management Office roles and responsibilities, let’s learn about the various types of PMOs.

What are the types of PMO?

Modern PMO is divided into different types based on organizational structure and function.

The typical Project Management Office structure is as follows:

Project management office:

A Project Management Office is focused on supporting project managers and their teams in successfully delivering individual projects. It provides guidance, best practices, templates, and tools to ensure consistency and efficiency in project management practices.

Program management office:

A Program Management Office is responsible for overseeing a group of related projects that are aligned with a specific program or objective. It focuses on managing interdependencies among projects, resolving conflicts, and ensuring that projects achieve organizational goals without setbacks.

Portfolio management office:

The Portfolio Management Office oversees the entire portfolio of collective projects and programs across the organization. It manages the allocation of resources, prioritizes projects based on strategic objectives, and monitors performance across the various programs.

Enterprise-level PMO:

An enterprise-level PMO is responsible for aligning project management tasks with the organization’s overall strategy and goals. It oversees all program and project management responsibilities across the organization and ensures that projects and programs align with its overall strategy.

In terms of function, PMO can be classified into three main types.

Supportive PMO:

Such type of PMO supports and guides project managers as and when required. It focuses on creating a framework of processes, governance, training modules, and mentoring programs that help project managers in daily operations. Usually, a supportive PMO functions as a consultative entity.

Controlling PMO:

A controlling PMO focuses on enforcing project management processes and standards across the organization. It reviews and approves project plans, monitors project progress, and identifies potential risks and issues. The controlling PMO also ensures that projects align with the organizational objectives.

Directive PMO:

This type of PMO positions itself as a decision-making authority with a higher degree of control or complete control to direct projects. A directive PMO operations includes assigning project managers, providing resources and support to managers, and controlling the project budget and schedule.

Since we now know about the PMO structure and roles & responsibilities of each type, let’s dive into the business benefits of a PMO.

What are the benefits of a Project Management Office (PMO)?

PMO helps organizations deliver projects successfully within time and budget. Here’s how-

Enables real-time visibility across the enterprise

PMO replaces silos of spreadsheets with a centralized system. It enables the PMO department to collect data directly from the originating sources and makes them visible to different stakeholders as per their specific roles. This real-time visibility fosters collaboration and informed decision-making.

It further streamlines communication, enhances project tracking, and empowers executives, project managers, and team members with up-to-date insights, ultimately driving greater efficiency across the entire organization

Implements standards and best industry practices

Traditionally, a PMO defines project management standards and guidelines as well as sets up a project governance structure. In addition, it evaluates and identifies best practices in its specific industry and implements them in the business.

This proactive approach not only ensures consistent project execution but also enhances overall quality, reducing project risks and deviations. Furthermore, by aligning with industry best practices, the PMO keeps the organization well-prepared for evolving market trends and customer demands, ultimately fostering long-term success and growth.

Aligns projects with business objectives

A value driven PMO helps the management in selecting and prioritizing the projects aligned with their strategic and tactical business objectives. In addition, it can track and improve the strategic utilization of resources. Furthermore, a value-driven PMO fosters adaptability by regularly assessing project performance against established objectives and adjusting strategies as needed.

By promoting a clear link between project investments and business outcomes, it enhances accountability, transparency, and the overall strategic agility of the organization, ensuring a sustained competitive advantage in an ever-evolving marketplace.

Helps in business decision making

A PMO’s job includes tracking major KPIs and forecasting metrics related to the projects, programs, portfolios, resources, risks, etc. They generate reports for different levels of management to help them make timely decisions.

These reports serve as critical tools for executives and stakeholders to assess project health, allocate resources judiciously, and align projects with strategic goals. The PMO’s data-driven approach not only aids in identifying trends and potential issues but also facilitates proactive decision-making, eliminating potential bottlenecks.

Helps in reducing project resourcing cost

A value-driven PMO does forward planning and allocates the right resources for the right projects at the right time. This approach minimizes the need for last-minute, expensive recruitment.

As a result, it helps reduce resourcing costs significantly. Further, as the right resources are available during the project initiation, it helps in timely completion of the project. Hence, increasing profitability for the organizations and improving customer satisfaction.

Improves effective resource utilization

Organizations can improve their profitability and sustainability with a PMO. It helps track future resource demand and forecasts billable, non-billable, and strategic utilization. Hence, PMOs can proactively mobilize resources from non-billable to billable and strategic work.

Further, PMOs can check whether a resource is over/underutilized and take course corrective measures to ensure optimal utilization. This ensures that the right talent is available when and where it’s needed, maximizing productivity and preventing employee burnout.

Optimizes project workforce to beat market volatility

A value-driven PMO does capacity planning to forecast shortages or excesses of resources due to market volatility. It helps build an optimized workforce without extra overhead so that the business is not affected due to market volatility or business uncertainties.

Furthermore, PMOs can create the right mix of contingent and permanent employees to meet future project demand. This helps PMOs not only reduce costs but also improve scalability, enabling the business to seize opportunities and mitigate risks effectively in the fast-changing market conditions.

Shares project knowledge

There is always plenty of learnings, lessons, skills, and experience acquired while executing a project. A value-driven PMO collects this knowledge intelligently and shares them with other projects.

By facilitating the access to collective wisdom from previous projects, it empowers managers to draw inspiration and guidance for upcoming projects, significantly improving the likelihood of success. This knowledge-driven approach enhances decision-making, minimizes risks, and fosters a culture of continual improvement, ultimately leading to better project outcomes

Improves communication and productivity

Complexities of project execution have multiplied many folds due to matrix organization structure and remote working. So, PMO operations have started providing a collaborative framework for these teams to improve communication and avoid chaos.

This collaborative framework fosters cross-functional teamwork, breaking down silos and enhancing synergy among diverse teams. By facilitating streamlined communication and providing standardized processes, the PMO boosts productivity, minimizes project delays, and ensures that project objectives are met efficiently, even in the face of complex organizational structures and remote work challenges.

Knowing the benefits of a PMO, let’s see how an organization can set up a successful PMO.

How to establish a successful PMO in your organization?

Establishing a successful Project Management Office in an organization involves careful planning, clear objectives, and effective execution. Here’s a step-by-step guide to help you establish a successful PMO:

Assess the current state of project management

Before establishing a successful Project Management Office (PMO), it’s crucial to assess the organization’s existing project management practices. For this, firms can first conduct a thorough analysis of ongoing projects, identifying the strengths, weaknesses, and gaps in project management practices.

Further, firms can also gather feedback from project teams and stakeholders to gain insights into the pain points and areas needing improvement. This assessment will provide a baseline for understanding the organization’s current project management state, ultimately helping you tailor the PMO’s objectives and strategies.

Determine the specific purpose of your PMO

The next step is to clearly define the purpose and objectives of your PMO. This purpose should align with your organization’s strategic objectives. Whether it’s enhancing project delivery, resource allocation, risk management, or portfolio management, articulating a specific mission helps set the direction and expectations for the PMO.

For example- If the goal is to enhance project delivery, the PMO can streamline processes and provide best practices. In the case of resource allocation, it can optimize resource utilization. For risk and portfolio management, the PMO can establish frameworks to minimize risks and maximize returns. This alignment ensures that the PMO’s efforts directly contribute to the organization’s success.

Recruit the right project management professionals

The success of your PMO hinges on having the right talent in place. Hence, it’s essential to identify and recruit project management professionals with necessary skills. Depending on the size and complexity of the PMO, various roles may be required, such as project administrators, technical specialists, training professionals, and project managers with diverse expertise.

Furthermore, the recruitment process should be meticulously tailored to align with the PMO’s strategic objectives. Collaborating closely with senior leaders and stakeholders ensures that the selected professionals not only possess the requisite skills but also resonate with the organization’s culture and vision. This approach fosters a dynamic and well-rounded team capable of navigating the multifaceted challenges of project management, ultimately increasing the PMO’s ability to deliver successful outcomes.

Craft a detailed Project Management Office charter

After that the next step is to prepare a PMO charter that will serve as the guiding document for your PMO. It outlines the PMO’s objectives, scope, responsibilities, governance structure, and key stakeholders. Additionally, the PMO charter should define decision-making processes, roles, and escalation procedures, ensuring clarity in project governance. It should also establish performance measurement criteria to assess the PMO’s effectiveness over time.

Once the charter is created, firms should share the charter with relevant parties, ensuring alignment and understanding of the PMO’s role within the organization. Further, regular updates and reviews of the charter is needed as it will help keep the PMO aligned with the organization’s evolving needs and goals.

Choose appropriate PMO model for your firm

Selecting the right Project Management Office (PMO) model is a pivotal decision that can greatly impact an organization’s project management effectiveness. The choice should be informed by factors such as the organization’s size, industry, and strategic objectives. For example- in smaller, innovation-driven firms, a supportive PMO model is often preferred. It offers guidance, best practices, and expertise, nurturing project management maturity while allowing flexibility for creative endeavors.

In contrast, larger organizations may lean towards a controlling PMO model, emphasizing standardization, compliance, and risk management. However, regardless of the chosen model, it’s essential for firms to remain flexible and open to adaptation, allowing the PMO to continually align with shifting needs and goals, ultimately enhancing project success rates and overall organizational performance.

Develop standardized project management processes

Standardized project management processes are the cornerstone of an effective Project Management Office (PMO). These processes provide a consistent framework for initiating, planning, executing, monitoring, and closing projects across the organization. In the initial phase, it’s crucial to comprehensively identify and document these processes.

This includes defining project roles, responsibilities, workflows, and specifying the tools and templates to be used. In the second phase, the focus shifts to implementation and integration of these processes. For this, firms can establish thorough training and educational initiatives. These programs are designed to ensure that all team members possess a clear understanding and the ability to effectively apply standardized processes.

Establish a plan for Key Performance Indicators (KPIs)

Key Performance Indicators (KPIs) helps Project Management Office (PMO) towards success. The initial step involves defining KPIs that align precisely with the PMO’s objectives and the broader organizational goals. These KPIs should be specific, measurable, attainable, relevant, and time-bound (SMART) to provide meaningful insights into performance.

Once established, it is crucial to regularly track and assess the selected KPIs to gauge the PMO’s effectiveness. This ongoing evaluation allows for timely identification of bottlenecks, inefficiencies, or areas requiring improvement. Further, the insights gained from these KPIs also facilitate informed decision-making and help the PMO adapt strategies to align with evolving organizational needs.

Next, let’s learn about the essential elements to look for in a modern PMO software.

What to look for in value-driven PMO software?

As discussed in the previous section, a value-driven PMO carries many responsibilities for modern business. So, it is critical to have a tool with all required functionalities to help deliver PMO tasks and responsibilities.

Project Management: A PMO software requires functionalities to manage a project efficiently. It should have capabilities for project scheduling with WBS, milestone tracking, risk management, document tracking, etc.

Portfolio Management: It is critical to have a bird’s eye view of various projects run in the business. PMO software requires portfolio management functionalities to help track various project KPIs and provide early warnings about the projects.

Resource Planning & Allocation: A PMO tool requires a centralized resource planning facility. It ensures that the right resources can be identified easily in a large pool of resources. It helps to allocate the right projects at the right time.

Resource Capacity Planning: This is one of the most critical functionalities of PMO software. It would help a business forecast shortfalls or excesses of resources so that the right resource treatment can be applied to the resource pool to have an optimized workforce.

Work Management: In a matrix organization structure, it is complex to track work allocated to an individual from multiple projects across the globe. Work can be related to a project or non-project activity. So, the PMO tool must have a full-fledged detailed work allocation and tracking facility.

Team Collaboration: Team collaboration is part and parcel of seamless communication for distributed teams and members working from home. So, PMO software has to have a team collaboration facility to improve productivity and responsiveness.

Next, we dive into the future trends of the PMO.

What does the future of PMO look like?

The future PMO (Project Management Office) is expected to undergo significant changes to meet the evolving demands of project management in a rapidly changing business landscape.

Let’s look at the future trends for PMOs:

Adoption of agile project management methodologies

The PMO of the future will embrace agile methodologies and adaptive project management approaches to enhance project delivery. Agile frameworks such as Scrum or Kanban will replace or supplement traditional waterfall methods. In addition, PMOs will prioritize iterative development, collaboration, and flexibility to respond to changing requirements and market conditions.

To support this shift, PMOs will foster a culture of agility and provide training and resources to project teams. They will also leverage agile project management tools and techniques to facilitate effective communication, collaboration, and transparency among team members.

Strategic alignment between project management and business objectives

PMOs will evolve into strategic partners, critical in aligning project portfolios with organizational objectives. They will collaborate closely with top management to prioritize projects, allocate resources, and ensure that projects contribute to the organization’s strategic goals.

PMOs will develop robust portfolio management frameworks, provide comprehensive project performance reporting, and facilitate informed decision-making at all levels of the organization. They will also proactively identify and manage risks and dependencies across the project portfolio to minimize potential disruptions.

Embracing digital transformation and automation

Future PMOs will leverage advanced technologies and automation to streamline project management processes. Everything will be automated using project management software, from project documentation to reporting and administrative tasks, enabling PMO staff to focus on value-added activities. These sophisticated tools integrated with Artificial intelligence (AI) and machine learning (ML) will help PMOs to analyze data, identify patterns, and gain predictive insights for decision-making.

Furthermore, PMOs will explore emerging technologies like blockchain and the Internet of Things (IoT) to enhance project transparency, security, and efficiency. Additionally, by embracing digital transformation, PMOs can facilitate remote project management, enabling virtual teams to collaborate effectively across geographies and time zones. Cloud-based project management platforms, video conferencing tools, and virtual workspaces will become essential components of the PMO’s toolkit.

Emphasis on innovation and continuous improvement

PMOs of the future will foster a culture of innovation and continuous improvement within project teams. They will encourage experimentation, creative thinking, and knowledge sharing to drive innovation in project delivery. PMOs will establish mechanisms such as innovation labs, cross-functional collaboration platforms, and idea management systems to capture and implement these innovative ideas.

To support continuous improvement, PMOs will emphasize lessons learned and best practices. They will facilitate post-project reviews, conduct project audits, and promote knowledge-sharing sessions to capture insights and enhance project performance over time. The PMO will act as a catalyst for organizational learning and continuous enhancements.

Data-driven decision making

PMOs will be driven by data analytics and business intelligence. They will leverage real-time project data to monitor performance, identify trends, and make informed decisions. Advanced analytics and visualization tools will provide stakeholders with actionable insights, enabling them to proactively address issues, allocate resources effectively, and optimize project outcomes.

PMOs will invest in data management capabilities to ensure project data’s accuracy, reliability, and security. They will also develop data-driven performance metrics beyond traditional measures, incorporating factors such as customer satisfaction, stakeholder engagement, and strategic business value.

In summary, the PMO of the future will be agile, digitally enabled, strategically aligned, and data-driven. It will drive innovation, facilitate collaboration, and continuously improve project delivery, ultimately contributing to the organization’s success in a rapidly evolving business environment.

Conclusion

The Project Management Office (PMO) drives project success and organizational efficiency. It encompasses various roles and responsibilities that contribute to effective project management and strategic alignment within an organization. Furthermore, the PMO catalyzes continuous improvement. As a result, PMO is an indispensable function that enables organizations to navigate the complexities of today’s business environment and drive overall excellence.

The Glossary

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According to an HBR finding 2018, agile adoption has gone beyond IT. As per their survey, about 55% of specific sample organizations have partially implemented agile methodology & processes, and a quarter of the same group has already put it into practice.

The traditional project management method tries to complete the delivery within a stipulated time and budget. It does not allow frequent changes to the business requirements in the middle of the project. Agile project management, on the contrary, fixes time and cost to control the requirements. It heavily relies on the collaboration between the team and the business users to create the right product.

Managing resources is an essential component of project management. They are scarce, expensive, and must be utilized efficiently and effectively. But does resource management play a significant role in the agile development framework? It certainly does, as it is the only way to control project resource costs and complete the delivery satisfactorily.

This article discusses several bottlenecks and their solutions in agile resource planning and management.

What is agile methodology?

Agile methodology is an iterative and incremental approach to project management that involves continuous feedback and adaptation to changing requirements and priorities. It offers a flexible and collaborative approach that helps deliver high-quality products within time and budget.

There are many different agile methods, some of which are Scrum, Kanban, Lean, RAD, and Extreme Programming. Scrum is a robust framework for implementing agile software development processes and other projects. It utilizes short iterations of work, called sprints, and daily meetings, called scrums, to tackle discrete portions of a project until it is completed. Scrum has three key roles: The Scrum Master, Product Owner, and Team members.

The sprint planning meeting is held on the first day of every sprint. After a delivery commitment is made in a sprint planning meeting, the team begins the work and tracks its progress. At the end of each sprint, the stakeholders are invited for a sprint review. The features completed during the sprint are discussed, and feedback is requested.

The product owner keeps track of the feedback and maintains a product backlog with the changes.

In the release-planning meeting, the product owner presents the features they want to be completed in the quarter. Then, the team provides gross-level estimates, which decide the specific features that can be completed in a given sprint. The team also jointly determines how many such features can be completed by the quarter-end.

Release planning can be feature-driven (how many sprints will be required to deliver all the features?), time-driven (how many features can be completed by a specific deadline?), or cost-driven (Important features that must be created within the budget?).

The Scrum methodology requires product backlog (work to be done), sprint backlog, release burndown, and sprint burndown. In addition, the team defines all other forms of documentation as per the specific situation.

The project manager often becomes the scrum master, but this may not always be true. For example, in traditional estimating, all requirements are fully defined, with tasks created and estimated based on their fixed scope. Conversely, agile resource planning and estimation use a top-down method to forecast each sprint.

What are the characteristic traits of agile resource planning?

Agile resource planning is an approach to managing and allocating resources in a flexible and adaptive manner, primarily used in project management and software development contexts. The traits of agile resource planning include:

Flexibility

Agile resource planning emphasizes the ability to quickly respond and adapt to changing project requirements, priorities, and resource needs. It allows for adjustments and reallocation of resources based on evolving circumstances.

Iterative approach

Agile planning is often done in short iterations or sprints, with frequent reassessment and adjustment of resource allocation based on feedback and progress. This iterative nature allows for continuous improvement and optimization of resource utilization.

Collaboration

Agile resource planning encourages collaboration among team members, stakeholders, and resource owners. It involves open communication and close cooperation to ensure that the right resources are available at the right time. Apart from technical and domain knowledge, the following additional skills are also required in an agile resourcing environment. In addition, the following agile characteristics help in delivering high-quality projects.

Prioritization

Agile planning involves prioritizing tasks and resource allocation based on their value and impact. It focuses on delivering high-value features or outcomes early on, enabling stakeholders to provide feedback and make informed decisions.

Continuous monitoring and adaptation

Agile resource planning requires ongoing monitoring of resource usage, progress, and performance. It emphasizes the need to gather data, analyze it, and make necessary adjustments to optimize resource allocation and ensure project success.

These critical traits of agile resource planning help effectively manage resources in dynamic environments. But first, let’s understand the challenges of resource planning in an agile environment.

Challenges of managing resources in agile environment

For projects to be successful, it is vital to have the right resources. While agile methodologies offer flexibility and adaptability, managing resources effectively within this can be complex. Here are some common challenges of managing resources in an agile environment:

Difficulty in managing changing project requirements and scope

Agile projects are characterized by their adaptability and responsiveness to change. However, this flexibility can pose challenges when it comes to resource management. As project requirements evolve, new tasks can emerge, existing tasks can be reprioritized or modified, and additional resources can be added to the project.

If projects managers are unable to anticipate the changes and manage them accordingly, it can lead to last-minute firefighting for resources and overloading of existing employees. This impacts on the project quality and causes delays in delivery.

Inability to manage competing project priorities

Agile projects often operate in dynamic environments where priorities can shift rapidly. Stakeholder requirements, market conditions, or internal organizational changes can lead to changes in project priorities.

Constantly juggling competing priorities and conflicting resource demands can cause significant stress and burnout among team members. It can lead to a decrease in morale and productivity. This, in turn, can further hinder the progress of agile projects.

Conflicting resource demands

In an agile environment, resources typically work on multiple projects concurrently. However, each project has its own set of deadlines, deliverables, and resource requirements which can result in conflicting resource demands and contention among different projects or teams.

This can cause delays, conflicts, and compromises in resource allocation decisions, impacting project progress and overall efficiency. If tasks or projects with high priority are not given the necessary resources, it can result in missed deadlines and compromised project schedules.

Poor communication and collaboration between teams

Effective communication and coordination are crucial for resource management in agile projects. However, lack of proper communication channels, poor resource visibility and dispersed teams can affect the collaboration between team members, stakeholders, and project managers.

This can result in misinterpretations and misalignment of expectations, leading to inefficiencies, duplicated efforts, and rework. As a result, team members may spend more time seeking clarification, impacting the overall productivity and project progress.

This article shows you the importance of collaboration and cross-team collaboration best practices.

Skill gaps and resources shortages

Agile projects often require a diverse range of skills and expertise. However, poor visibility into resources skills, lack of proper training and development opportunities, skill obsolescence, etc., can lead to skill gaps, as team members may not have the necessary competencies to effectively contribute to agile projects.

Without the necessary expertise, teams may make mistakes or overlook critical aspects of the project, leading to failures or low quality of deliverables. In addition, it also affects employee productivity because resources struggle to perform tasks efficiently due to a lack of expertise or resources, resulting in delays in project delivery

Knowing the challenges of resource planning in agile project management, let’s understand how advanced resource management software can help manage resources effectively.

5 best practices for agile resource management

Effective agile resource management helps identify and allocate resources to ensure that teams have the right skills and capacity needed to deliver high-quality results. Here are some best practices for agile resource management:

Leverage cross-functional teams and their skills

Cross-functional teams consist of individuals with a range of expertise and abilities, allowing them to contribute to different aspects of a project. By harnessing this collective knowledge, organizations can optimize resource allocation and utilization for agile projects.

In addition, it promotes flexibility, as team members can adapt to changing project needs and fill gaps in skills or knowledge as required. By leveraging the strengths and capabilities of cross-functional teams, organizations can enhance productivity, deliver high-quality results, and foster a culture of collaboration and knowledge sharing.

Prioritize project tasks based on business value and dependencies

Agile projects typically involve a backlog of tasks, and it is important to prioritize them strategically to maximize the overall project value. By focusing on delivering high-value features or outcomes early in the project, organizations can ensure that the most critical objectives are addressed first.

Additionally, managers need to understand task dependencies to determine the sequence and order in which tasks should be executed. By consistently reassessing and reprioritizing tasks based on their value and dependencies, organizations can ensure that resources are allocated efficiently, resulting in better project outcomes and increased customer satisfaction.

Monitor and track resource utilization

Agile resource management emphasizes the importance of continuous monitoring of resource utilization levels throughout the project lifecycle. It involves regularly tracking resource usage, progress, and performance to identify any deviations or issues. By monitoring resource utilization, organizations can identify potential bottlenecks, underutilized resources, or overburdened team members.

This allows project managers to make timely adjustments and reallocate resources as needed. In addition, it helps in being responsive to changes in project requirements, priorities, or constraints and ensures that resources are aligned with the evolving needs of the project, optimizing their utilization and enabling timely delivery of project milestones.

Practice iterative and incremental development

Iterative and incremental development promotes the breaking down of work into smaller units and delivering value incrementally. This enables better estimation, planning, and allocation of resources. By dividing the work into smaller increments, teams can optimize resource utilization, as these units are easier to estimate and allocate.

Additionally, iterative development facilitates prioritization based on feedback, ensuring that teams focus on the most valuable and high-priority items, thus helping in competent allocation. It also allows for adaptability and mitigates risks, as the team can adjust resource allocation in response to changing requirements or emerging opportunities.

Encourage a culture of continuous learning and improvement

To foster a culture of continuous improvement in resource management, it is important to encourage team members to actively pursue learning and growth opportunities. This can be achieved through participation in training programs, workshops, or upskilling activities. By continuously expanding their knowledge and skills, team members can make valuable contributions to the projects.

In addition, embracing a culture of continuous improvement means viewing each iteration or sprint as an opportunity for learning and refining resource management practices. It is crucial to regularly review and adapt processes based on feedback received and the outcomes achieved. This iterative approach enables the team to enhance resource allocation, improve capacity planning, and optimize resource utilization effectively.

These are some of the best practices for efficient resource management in an agile project environment. Now, let’s understand the key features of resource management software to help manage resources in agile projects.

Resource management software for agile framework

Resource quality plays a significant role in an agile project environment. One cannot optimally use critical resources by assigning work below or above a person’s capability.

One also needs visibility into all the resources – available or not – and their costs. Only then can one balance people, technology, knowledge, time, and budget to deliver on time and goal. This needs to be analyzed before creating WBS (Work Breakdown Structure).

Here are some of the salient features of resource management software to manage agile projects:

Resource or workforce scheduling

Resource scheduling involves identifying and allocating resources for a specific period to different project tasks. With a centralized Gantt chart view of the enterprise, resource scheduling eliminates silos of spreadsheets. It also facilitates deploying the “best-available-best-fit” rather than the “first-available-first-fit” resource. Most agile projects operate with small team sizes. The product backlog will be adversely impacted unless the right resource is deployed for the right task.

Resource utilization

A resource is effective if it works on billable or strategic projects and is fully utilized per its capacity. The efficiency of an organization can be determined by the cumulative utilization of all its employees. Resource managers can proactively mobilize resources from non-billable to billable/ strategic tasks and maximize their billable utilization. Furthermore, ensuring minimum time is spent on mundane tasks such as attending meetings for the scrum team members is crucial.

Forecast shortfall or excesses of resources

Resource capacity is the total number of standard hours an individual is available to work per the employer’s arrangement. Resource demand is understanding the number of resources required to meet the demand for various types of work. Capacity vs. Demand is the process of forecasting shortages or excesses of resources by analyzing the gaps between resources’ capacity against the demand for resources.

It is a shortage of resources when the demand is higher than the capacity or supply of resources. Conversely, it is an excess of resources when the demand is lower than the capacity or supply of resources.

Effective bench management

Bench refers to employees not assigned to any project but on the company’s payroll. They are, in short, kept as reserves by companies on their payroll in anticipation of future projects. If the size of the bench is not controlled, this cost suddenly balloons and significantly affects the company’s bottom line. Therefore, Scrum Master needs to consider bench resource availability during sprint planning.

Forecasted vs. actual use of resource

Resource forecasting predicts various workforce metrics such as demand, supply, vacancies on the bench, resource cost, etc. A resource may be booked for multiple projects where they are expected to spend a certain percentage of the time. Therefore, a timesheet helps record the time an employee spends on each job. This is essential in agile project management to control project costs.

The PMO office verifies if the person concerned has spent the same hours on different activities as per the allocation or if there is a variance.

Managing pipeline projects

The two pipeline management goals are to build a healthy pipeline and win more deals. However, the pipeline or future projects also must be delivered on time and within budget, and one needs advanced resource planning to complete them. Many scheduling software allows creating a project plan using ghost resources, which can be replaced with the existing resources. Since frequent requirement changes are expected within a project that follows agile methodology, timely resource capacity planning is essential.

Supporting matrix structure

In a matrix organizational structure, some individuals report to multiple supervisors or leaders. This relationship can be described as a solid or dotted line of reporting. Managing a shared resource becomes complex when two managers have different project priorities.

It is necessary to ensure that the resource is not overloaded, leading to burnout or unplanned attrition.

Matrix organization can complement the agile project management process when the Scrum Master can access surplus resources in other departments.

Visibility of resource information for decision making

Relevant information about a resource can be viewed using an advanced filter to help decision-making. It can also be made role-specific, e.g., a project manager will only see information related to the projects he manages. On the other hand, a location manager can see resource-related data for the location. These fields could include skillset/competency, cost rate, charge-out rate, etc.

A resource management software with an advanced filtering option can quickly identify appropriate resources for a scrum master.

Forecasting financials

Forecasting is the process of making predictions of the future based on past and present data. To calculate the gross margin for a project, we need to know the charge-out rate and cost to the company of each resource. Most of the projects operate either on a fixed cost or on a time and material basis.

For a fixed-cost project, the revenue amount is already known, and we only need to calculate the resource cost for the project duration.

Scenarios – modelling and simulation

The simulation technique determines how projected performance is affected by changes in the assumptions that those projections are based upon. What-if analysis often compares scenarios and their potential outcomes based on changing conditions. The changes can be simulated in a sandbox environment, and the best possible scenario can be applied to the schedule.

When there is a resource crunch, agile project management can decide on project and resource priorities using simulation.

Business intelligence and reports

Business intelligence provides actionable insights by performing extensive data analysis. Resource management metrics are generated using real-time data, individualized reports, and dashboards. The reports allow managers to make informed decisions and monitor the overall resource health index.

Scrum masters can immensely benefit from the digital dashboards created using real-time business intelligence with changing requirements.

Workforce planning and optimization

Strategic Workforce planning looks at system-wide issues and strategies to:

• Support the organization’s strategic plan (e.g., reorganization and redeployment).
• Address external workforce factors that affect the entire business (e.g., succession planning for retirement bubbles or staff reduction planning for budget cuts).
• Maintain organizational capacity (e.g., in-service training).
• Mitigate risk exposure (e.g., safety planning and Equal Employment Opportunity training).

What is next?

Resources must be utilized efficiently as they are the most high-priced investments of any business. This must be considered while implementing effective resource management in an agile project. In addition, organizations spend a lot of time and cost creating the right talent pool.

Depending on the nature of the project, an appropriate methodology, such as a waterfall or agile, can be adopted. Accordingly, it is necessary to tap the skills and competencies of resources for overall efficiency and profitability.

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in providing Enterprise Resource Management Software. With more than 20 years of experience, SAVIOM’s solution is being used by many Fortune 500 companies across the globe. It also provides tools for project portfolio management, professional service automation, and workforce planning software.

Whether it is Agile, Waterfall, or any other methodology, SAVIOM can provide a comprehensive solution for managing resources.

If you carefully observe, constructing a township and society entails a similar objective, such as developing a residential haven for the client. So, if you group them together, it will be easier to manage their resources, budget, etc., as they are interrelated and share a common purpose.  

Similarly, another program can be building a shopping complex or mall as they share a similar goal of constructing a recreational and shopping facility for the client.  

The next hierarchy is the portfolio, where you group the construction programs together as they all serve the same strategic goal. This grouping mechanism led to the development of the 3 Ps- Project, program, and portfolio.  

Now that we have set the stage, let us understand the difference between project management, program management, and portfolio management.  

Let’s begin.  

Project vs. program vs. portfolio

A project is a part of a program, while a program is a part of a portfolio.  

It implies that a project is at the lowest level in the hierarchy of the 3Ps (project, program, portfolio), while a portfolio is at the topmost level. 

Let’s understand the definitions,   

Project

A project is a temporary endeavor with a fixed start date and end date undertaken to create a product or service. It is performed by people and bound by budget, timeline, and scope. For example, the construction of an apartment can be considered a project. 

Program

A program is a group of similar or interrelated projects managed together in a coordinated manner. The aim is to regulate projects that have a common goal and would yield better results and profitability when managed together.  

Portfolio

A portfolio is a group of different programs and/or projects within the same organization. These programs or projects may not necessarily be related to one another. Taking the initial example, all the individual townships, societies, or malls, when grouped together, can be considered a portfolio. 

From the KPI standpoint, most of them are common to these three, but differ in the calculation. These are return on investment, utilization rates, earned value, etc.  

Based on the organizational strategy, the operations are usually carried out by the PMO at all three levels to reduce the administrative burden on managers.  

What does project management comprise?

Project management is limited to managing a single project, its resources, budget, and other aspects to deliver it successfully.  

It comprises the following elements. 

Defining project scope

A project scope document gives a comprehensive account of goals and deliverables, schedule and budget, acceptance criteria, key processes, risks, and constraints. This document ensures alignment between the client’s requirements and final deliverables and fosters transparency. It also serves as a reference point for any future changes needed during the project execution, helps assess their repercussions, and assists in informed decision-making accordingly. So, defining and documenting the project scope is the first element of project management. 

Project planning

After the project objective is understood and agreed upon, the next critical element is project planning.  It implies deciding how to execute, monitor, control, and close the project. A work breakdown structure is an integral part of project planning as it helps simplify the project into manageable tasks. Project planning is an iterative process and is never complete until a project is closed.  The complexity of a project determines the length of the project planning stage in project management. 

Resource scheduling and optimization

After creating the work breakdown structure and estimating skill requirements, the project manager raises resource requests. Once the resource manager fulfills them, the project manager assigns them to different tasks based on their skill sets, experience, capacity, etc.  

After allocating resources, tracking utilization levels and optimizing their schedules is essential to ensure that no one is overutilized or burnt out. Resource optimization is a comprehensive technique that helps align the project implementation and completion dates with resource availability.  

Regular status updates

Informing the concerned authority about the project’s progress is crucial to keeping them on the same page. Therefore, status updates form an integral part of project management. The project manager shares the status of the project’s constraints with stakeholders, sponsors, and team members regularly throughout the project’s lifecycle. They also inform clients or stakeholders about any major issues or challenges to seek their buy-in for remedial measures. 

Risk management

Risk management is the process of identifying, assessing, and preparing for any potential project risks that could turn into issues later. It also involves prioritizing risks based on their likelihood and impact. Various methods like risk matrix, assumption analysis, etc., can help with the same. For example, the manager can plan for prolonged absences/unplanned attritions by keeping some similar-skilled resources in buffer, especially for critical roles.  

Regulating project lifecycle

Project management encompasses tracking a project at various stages of its life cycle, which helps identify and mitigate possible roadblocks, discrepancies, or issues that can later disrupt the project. Suppose you notice any variance from the initial budget, you can take proactive measures to control it before it derails the entire project.  

This is how projects are managed. Whereas, the regulation of a program looks at a broader perspective and ensures the shared goal of individual projects is achieved.  

Let’s understand what it entails.

What does program management comprise?

Program management refers to managing all the interrelated projects together and ensuring they are well-coordinated and strategically aligned.  

It comprises the following elements: 

Supervising resource allocation at a program level

Program management involves managing and supervising resources in individual projects. It includes identifying and assigning the right team members for each job and moving them between projects to address ramp-up and ramp-down processes across the program efficiently. 

This helps minimize bench time and utilize resources within the program instead of hiring new candidates. Further, managing finances or non-human resources and adjusting them between projects to avoid budget or schedule overruns also comes under program management. 

Tracking individual projects’ progress

Program management involves tracking individual projects’ progress and ensuring that they all are on the right path and aligned with the program’s objective. It also includes identifying and mitigating any issues hindering an individual project.  

The manager can then help the respective project manager eliminate the roadblocks and hindrances through guidance and resources as required. In addition, administering various ongoing operational activities and their outcomes also comes under the umbrella of program management. 

Program-level risk management

Program-level risk management involves identifying and understanding various possible threats and risks to the program and implementing an appropriate mitigation strategy.  

For example, if the manager notices a budget overrun in a single project, they can intervene to control costs proactively. They can take measures like revising the other projects’ budgets to retain the balance.  

Managing project interdependencies

Multiple projects within a program can have several interdependencies. They can be internal, including knowledge-based, resource or technology related, etc., or external, including market interdependencies. Let’s say, an apartment and bungalow under the same township project require the same equipment for their construction.  

The manager can assess various parameters like the deadline, budget, profitability, etc., to determine the priority level of projects and provide the equipment accordingly. Further, they can treat this equipment as an asset for not just these two projects but also for future similar projects. This way, creating and preserving assets (prototypes, code snippets, tools, templates, etc.) can help manage project interdependencies better and save time and costs for similar future projects. 

Stakeholder management

A program manager acts as a primary point of contact for various stakeholders and maintains effective and healthy communication with them throughout the program.  

For that, communicating with them on a regular basis and keeping them up-to-date with the milestones achieved and overall progress is vital. It is also crucial to be transparent about the issues and challenges at any point in time and implement corrective measures only after seeking their feedback, suggestions, and buy-in.  

Change management

Sometimes, clients may request changes to one or more projects. Change management is the process of creating a framework to handle these change requests and ensure timely project delivery. For example, if a client requests the addition of two more functionalities in an application, it may affect the program’s overall budget and timeline.  

In this case, the program manager coordinates with concerned stakeholders, senior management, and the Change Control Board (CCB) to discuss these requests. After thoroughly analyzing and determining the feasibility of the two functionalities, the board either accepts or denies the request.  

Now that program management is clear, let’s discuss what portfolio management entails.

What does portfolio management comprise?

As discussed above, portfolio management is about looking at the projects from a broader perspective and managing them for strategic alignment.  

The following are its components. 

Project selection and prioritization

Effective portfolio management involves creating a list of potential pipeline projects or ideas for new projects. After that, the portfolio manager selects the projects according to predefined standardized selection criteria in terms of business value, ROI, resource efforts and requirements, competitiveness, alignment with the strategic goals, etc.,  

Following that, the portfolio manager evaluates and prioritizes them as per standardized criteria. Accordingly, they can initiate allocating resources (human and non-human) to high-value projects, followed by other endeavors.   

Validating project feasibility before initiation

Several bottlenecks, constraints, or issues can render even the most balanced and judiciously created portfolio infeasible. Therefore, portfolio management doesn’t restrict itself to selecting and prioritizing projects.  

Instead, it also involves discussing dependencies, skill requirements, capacity, budget, and other constraints with concerned stakeholders and team members. Only after validating all the projects, the manager eventually initiates them.   

Continuous management and monitoring

Following the initiation of projects is the step of tracking the status of the projects. A discrepancy, delay, or budget overrun in one project can have a domino effect on the rest of the projects and eventually the portfolio. 

Implementing project portfolio management software can help them monitor every project’s progress on a centralized platform in real-time.  

Maximizing portfolio profitability

Portfolio management includes monitoring the portfolio budget and controlling it with suitable measures. It encompasses ensuring competent and cost-effective resource allocation to avoid over / under allocation of tasks and maximize profitability and productivity.  

The portfolio manager also regularly revises the program list and makes sure that only the projects with the highest business value remain the top priority. They also have the authority to remove a program or project that no longer aligns with the company’s strategy. It helps save time and unnecessary expenditure and mobilize the resources to high-priority projects.  

Portfolio-level risk management

Common types of portfolio-level risks include:
– External ones, like disruption in an industry, changes in
            competitors like mergers or acquisitions, recessions, environmental disasters, etc.
          – Internal ones, including operational challenges, senior leadership changes, etc.
          – Execution-related risks, including limited resource capacity, weak project management  
           standards, project dependencies, etc. 

Portfolio management entails creating a governance team with seasoned program managers, subject matter experts from various industries, financial analysts, etc. This team conducts regular audits to identify any risks and issues, assess them, and intervene to prevent or eliminate them proactively. 

Regular communication with senior management

Similar to programs, regular communication with the senior management is a crucial component of portfolio management.  

Portfolio management involves keeping the higher-ups informed of the overall progress of the portfolio and conveying any bottlenecks that need timely intervention.  

In some cases where the portfolio manager implements any portfolio-level change or in a particular project or progress, justifying it with the reason(s) to the senior management is essential. It helps retain their trust, get any assistance required, foster transparency, and ensures alignment of the portfolio with organizational goals. 

Conclusion

As already evident, when you scale up from project management to program/portfolio management, the scope is defined on a broader range. While project management is all about monitoring an individual project’s activities and ensuring its successful completion, program and portfolio management are about regulating a cluster of projects.  

Though all the three domains are essentially different, they are complementary and interrelated to each other. Therefore, it is vital for the project managers, program managers, and portfolio managers to coordinate and ensure overall business growth and success.  

However, as the number of projects increases in the portfolio, it becomes challenging to monitor each of them and control every constraint such as budget, schedule, scope, and so on.  

To combat this challenge, companies are now implementing a systematic framework to manage and execute their portfolio, known as project portfolio management.  

PPM provides visibility of every project, its progress, and a high-level overview of resources’ productivity. In other words, it helps managers select, manage and execute profitable and strategically aligned projects while also catering to efficient resource planning. Given the benefits, developing an effective project portfolio management strategy is critical for enterprises. 

This blog focuses on the significance and steps involved in project portfolio management.

Let’s get started:

What is project portfolio management (PPM)?

Project portfolio management (PPM) is the centralized process used by project managers and PMOs to manage one or more portfolios and achieve an organization’s strategic or long-term objectives.  

According to PMI,  

“PPM is the administration of one or more portfolios that bridge the gap between strategy and execution while improving overall efficiency.” 

It enables managers to analyze the potential of various projects and formulate a plan to manage them. By following the PPM process, managers can consolidate the existing project data, forecast pipeline opportunities, and deploy the resource pool to the most valuable projects.  

In a nutshell, an organization that implements project portfolio management centralizes the selection, prioritization, authorization, and management of projects and resources within a portfolio. 

Now that the definition is clear, let’s understand the fundamental difference between the three ‘P’s of project management below:

Portfolio VS. Program VS. Project

Here is an overview of the difference between these terminologies. 

A project is a temporary and unique endeavor undertaken by a company or an organization to create a unique product or service. It has a definite time frame and comprises several tasks and sub-tasks to achieve a specific goal. 

A program is a group of related projects managed together to achieve a common goal. All projects within a program cater to a unique product, service, or outcome. 

A portfolio is a collection of several programs, individual projects, and other initiatives that may or may not be related to one another. However, they are all managed under one umbrella to achieve a strategic business objective. This includes improving profit margins, developing multiple similar products, etc.  

Simply put, projects are grouped within more extensive programs that fit within larger portfolios. 

By now, you must have understood the meaning and finer differences of the above terms. Now, let’s know the benefits that an organization can expect after implementing a definite Project Portfolio Management process: 

Importance of project portfolio management

Within organizations, the resources are always limited, whether it’s people, space, financials, or equipment. Therefore, based on the organization’s mission and business requirements, PPM helps balance the portfolio such that appropriate projects and programs are selected, and the right resources are allocated for execution. 

The other notable benefits of effective project portfolio management are: 

• To begin with, it helps select and prioritize strategically aligned projects.  
• Eliminates the low-profitable projects that are not adding any value to the portfolio. 
• Enables managers to foresee risks involved at the portfolio and project level to form a mitigation plan ahead of time. 
• Facilitates the allocation of resources to the most feasible and profitable projects across the enterprise. 

• With a centralized view of every project under one portfolio, managers can easily track and monitor its progress and execution.  
• Helps manage all the project interdependencies within a portfolio and mitigate resource-related risks. 
• Moreover, PPM provides centralized information to keep every stakeholder or other decision-makers on the same page and minimize internal conflicts or discrepancies.  

The next pertinent question is, what exactly does a project portfolio manager do on a regular basis? Let’s look at their roles and responsibilities in detail here: 

What are the roles & responsibilities of the Project Portfolio Manager?

As the name suggests, portfolio managers are the concerned people responsible for managing multiple programs and projects within a portfolio. They ensure that all programs under their respective portfolio are on track and align with the firm’s long-term goals. 

They essentially work to supervise their portfolio’s progress, balance workforce capacity against demand and ensure competent resource allocation for seamless project execution. Since some project priorities are subject to change at any given time, portfolio managers need to monitor and evaluate all projects in regular cadence.  

It may also be the case that managers find that some projects are underperforming during the execution of a project or program. In this scenario, a portfolio manager can either upgrade or reprioritize the programs and projects within a portfolio. 

Furthermore, a large part of a portfolio manager’s job involves maintaining good relationships with stakeholders. They are responsible for reporting and informing the project’s status and performance to the stakeholders.  

Besides this, portfolio managers are tasked with identifying change requests and prioritizing the most important ones based on their impact on the constraints and available resources. They are also in charge of assessing the risk in each project and implementing contingency plans if things go wrong. 

The functions outlined above are the core activities of a portfolio manager. Now, let’s talk about various steps involved in the PPM process:

What are the steps in project portfolio management?

The various steps of the PPM process help create a link between the overall business strategy, project selection, and project execution. 

Here’s a list of the vital steps involved in this process:

Define project selection & prioritization criteria

As discussed earlier, the projects that a company groups together in one portfolio decide the firm’s profitability and help to achieve long-term business goals. Therefore, to succeed with project portfolio management, you should first define standard project selection criteria.  It will help you undertake only profitable projects and contribute to the company’s mission in the long run. 

After the projects are selected, prioritizing them will ascertain that the company’s resources and efforts are not wasted in futile endeavors.  

Validate portfolio feasibility based on ROI

Once you have decided which projects to pursue, it’s crucial to assess their impact on the whole program and portfolio. The next step is to check its feasibility in terms of financial, human, and non-human resources. For that, you can consider the following questions: 

• How does the project drive business goals? 
• Is the project aligning with the program and portfolio? 
• What is the project’s expected ROI? 

• What resources do you need for the execution? 
• What are the potential risks?  
• Are there any resource constraints?  

These pertinent questions will help to substantiate all the projects within a portfolio. For example, if three of your software development projects under one program will begin in April and you only have limited software developers, it will be a hindrance. Also, if two projects are interdependent, and a delay in one would cause a delay in the other, you might want to rethink starting them both simultaneously.  

Form a resource plan for various projects in a portfolio

After the projects have been selected and prioritized, creating the right resource plan for each project within the portfolio is the next critical step. This will facilitate resource managers to deploy the workforce to the highest priority projects first, followed by the less-priority ones. In addition, it will help them make the best use of available resources and their expertise. 

In case of any resource shortfalls, managers can look into the nature of the skillset required and the project duration and initiate retraining and upskilling programs. They can also hire a permanent/contingent workforce to fulfill the demand. 

Optimize resource schedules for better utilization

To achieve optimum productivity and ensure timely project delivery, optimizing a resource’s schedule is essential. Depending upon the timeline, project managers can create an appropriate resource schedule. If a niche resource is allocated to two or more projects within the portfolio, they can consider implementing optimization techniques.  

For instance, they can implement the resource-leveling technique and adjust the project timeline as per the critical resource’s capacity. Or else, enforce smoothing techniques to pull in more resources and balance the workload or redistribute the tasks while staying on schedule. Additionally, even during the execution, project managers can keep track of schedule with forecast vs. actual utilization and understand if the project is progressing as planned, and there is no shift in the timeline.

Monitor & control project portfolio

Once the projects are initiated, the onus is on portfolio managers to regularly track projects‘ progress and check if any significant issues have emerged. For example, if the project manager notices an increase in costs or a delay in meeting milestones, they should intervene and take corrective actions to get the project back on track. 

Monitoring the portfolio will include the following: 

• Provide expert assistance and audit the project delivery mechanisms. 
• Coordinate with project managers to monitor the performance of projects 

• Track the milestones progress and completion regularly. 
• Identify and resolve conflicts between project managers. 
• Make changes to the portfolio as needed, including putting projects on hold, canceling, and adding new projects. 
• Ensuring projects are progressing without any shift in strategic alignment. 
• Monitor and track the project and portfolio budget accurately so that things don’t go out of hand. 

Streamline change requests from clients

Every project is subject to change at any given point. It can be additional client requirements, or modifications in the current phases, etc. Thus, it is crucial to analyze any change requests before implementing them during the project’s course.  For instance, if a client requests impromptu revisions to a current project, then the project team is required to do additional tasks. Therefore, it will require more effort from the team’s end, escalate project costs, and even lead to timeline delays.  

To regulate this without causing scope creep, managers can formulate a change management strategy. It lays out the actions that must be followed when a client requests a modification. Thus, the onus lies with the change control board to examine and review all the changes suggested by clients. And once approved and deemed feasible by CCB, then only it is incorporated into the execution. 

Implement a risk management plan

Developing an organizational risk management strategy is vital for mitigating uncertainty within the project portfolio and ensuring success. Managers can conduct risk assessments before and throughout a project’s lifecycle to evaluate each project’s inherent and potential risks. It enables them to take corrective actions in a timely manner and keep the stakeholders up-to-date on any changes. 

This helps businesses be proactive to combat issues such as loss of employee productivity, shortage of resources, skill gaps, unplanned absences, or retirement and mitigate them effectively.  

By following these steps, managers can implement a resource management solution to ensure maximum productivity and successful project delivery. The following section explains how a resource management solution can become a significant game-changer in streamlining the PPM process:  

How can resource management software help streamline project portfolio management process?

An advanced resource management solution provides unmatched visibility into the resource attributes such as skills, location, experience, availability, utilization, etc. Thus, using an advanced filter, resource managers can allocate the best available resources to suitable projects at the right cost.   

The forecasting and capacity planning solution provides foresight into resource demand across various portfolios. Based on this, managers can forward plan pipeline projects and implement the right resourcing treatments to bridge the gap. The tool also gives you real-time insight into the resource metrics such as availability, utilization heatmaps, capacity vs. demand, project vacancy and people on the bench, forecast vs. actual, etc. This is particularly helpful in a multi-project environment as the managers can view all the data-driven insights, stay forewarned of issues, and take corrective actions before the project or portfolio is derailed.  

Conclusion

Project Portfolio Management is fundamental to a business’s success and growth. It has a much broader scope than traditional project management, which primarily focuses on delivering individual projects within a deadline, budget, and scope. 

PPM helps create a strategic plan, make informed decisions, centralize demand management, schedule, and manage all resources and projects successfully, thereby driving more profitability and efficiency. 

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

Streamlining every factor to maintain the project’s health index is an arduous task. Now, imagine the efforts and diligence required to supervise these elements for several projects simultaneously.

Project portfolio management software is designed to address this complex situation. It facilitates project managers to consolidate data on a unified platform and track its progress in real-time.

However, one of the most imperative factors contributing to the project’s success is often overlooked, i.e., resource capacity planning. It is a comprehensive process that allows resource managers to fulfill the project demand well ahead of the curve to ensure timely delivery.

If followed meticulously, resource capacity planning can become a game-changer in the project portfolio management strategy. This blog will explain how,

How can PPM benefit from Resource Capacity Planning?

Before we delve into how resource capacity planning benefits the project portfolio management process, let’s first understand its definition,

What is resource forecasting & capacity planning?

Resource forecasting and capacity planning is a comprehensive process of predicting project resource demand, evaluating the gap between the demand and existing resource capacity, and finally taking the suitable resourcing measures to bridge the gap and fulfill the resource requirement well in advance. This approach promotes managers to be proactive and avoid potential bottlenecks in the future.

Benefits of resource capacity planning in PPM

As mentioned earlier, a portfolio consists of multiple projects, and the onus lies in project managers to deliver each project successfully. Therefore, it is imperative to ensure that they have the right talent to execute the project tasks with utmost efficiency. If not, it can have a catastrophic effect on the project’s performance.

Forecasting and capacity planning plays a crucial role here. It facilitates managers to foresee the resource demand for pipeline projects and request this personnel from resource managers ahead of time. It gives enough lead time to the resource managers to first analyze the skills gap and build a strategic plan to bridge it.

They can either do planned hiring or upskill or train the existing workforce. Moreover, a capacity planning solution also maintains the single version of truth. It accommodates the enterprise-wide information in a single repository. by accommodating the enterprise-wide information in a single repository.

Managers can make use of this and even recruit competent and cost-effective global resources across the matrix boundaries. By implementing these measures, they can reduce project costs significantly.

Furthermore, resource capacity planning enhances transparency at the workplace that eliminates conflicts between project managers. The enterprise-wide visibility keeps every manager informed about the ongoing projects and resource allocations which further negates the fire-fighting for the talent pool.

Overall, forecasting and capacity planning ensure individual projects’ timely execution, thereby making the whole portfolio a success.

In addition, it encourages advanced planning, future-proofs the workforce, and enhances the efficiency of a PPM strategy.

The following section will emphasize the various resource-centric challenges faced in PPM and how forecasting and capacity planning can help you combat those,

What are the resource-centric challenges in PPM?

According to PMI, 26% of projects fail due to resource dependency and 18% due to inaccurate resource forecasting techniques.

It can be attributed to the absence of a dedicated resource management process in place. Here is a run-down of the most prominent resource-centric challenges:

Lack of definite project selection criterion

Not every project that comes your way can add value to the portfolio or align with your long-term business goals. Therefore, project portfolio managers must form a systematic project selection criterion that will ascertain that no talent or resource is wasted on futile projects.

However, some organizations fail to form such a framework and allocate the workforce to projects that will not add to the bottom line in the long run. It also delays the critical and strategically aligned projects requiring the same skill set and, in worse cases, brings them to a halt.

Inadequate forward planning for pipeline projects

Proactive planning is at the crux of resource capacity planning. It is only possible when organizations have deployed modern resource management solutions that can provide data-driven foresight. However, many organizations still use primitive tools to form the project resource plan that fails to provide visibility into pipeline projects’ demand.

Without staying forewarned, project managers end up requesting resources at the eleventh hour that does not leave enough room for resource managers to form the right action plan. It can eventually lead to last-minute hiring, escalated project resource costs, inappropriate allocation, schedule overruns, and so on.

Insufficient information on resource utilization and availability

Before scheduling the resources to a specific project, it is critical to check their current schedules and availability in real-time. Otherwise, it can lead to double-booking, which will eventually cause overutilization and burnout. At the same time, managers should have an overview of the projects they are working on.

Sometimes, critical resources work on non-billable or non-priority projects that can lower their productivity and add to the firm’s financial expenditure as they do not bring any ROI. However, many organizations do not use the right software to get these real-time updates on resource metrics that lowers the resource and project health index at the same time.

Absence of a centralized system to overview projects and resources

A project-led business is a conglomerate of multiple portfolios, and each of them comprises a myriad of projects. With the advent of globalization, companies have expanded their horizons and onboarded a vast expanse of the talent pool from across boundaries. To ensure the seamless functioning of a system, it is vital to stay connected and updated on the know-how of each office.

Unfortunately, not every organization has yet invested in a system that can break these geographical barriers. As a result, it creates a gap between project and resource managers of different locations and departments. It further leads to siloed data, disparities in data inventory, lack of real-time updates, and internal conflicts. All this cumulatively disturbs the project’s course and the functioning of a portfolio.

Internal discrepancies & conflicts in the resource requisition process

Resource requisition is one of the most essential yet underrated processes of a project portfolio management process. Project managers still use endless trails of emails or messages to request resources from resource managers. Given the dispersed nature of workplaces, this process gets cumbersome and time-consuming, leading to delays in deliverables.

When the project portfolio governance teams fail to automate the resource requisition process, it can lead to inappropriate resource allocation.

Resource managers rely on a first-come, first-serve basis instead of evaluating the criticality of the projects.

Moreover, it can create rifts between managers as an unautomated requisition process does not maintain an audit trail to keep everyone on the same page.

Growing skills gap due to ever-increasing market volatility

The current market has become increasingly dynamic and witnessing ever-changing market demands. For instance, technological advancement made programming languages like Java obsolete by bringing in easier and sophisticated ones like R and python. This scenario is widening the skills gap as only the current generation of software engineers are well-tuned with the new trends.

A study suggests that by 2030, 85 million jobs will be unfulfilled due to skill shortages.

This growing skills gap poses a threat to many organizations as they fail to future-proof the workforce. Moreover, the future options to broaden their horizons and take on innovative and advanced projects to enhance their portfolio are declining. It can negate their chances to stay ahead of the competition.

These challenges can be faced head-on by simply implementing the best practices of capacity planning and forecasting. Here is how it can help you combat them,

How to overcome these PPM challenges using resource capacity planning?

Resource forecasting and capacity planning is a modern solution that can help you tackle these challenges and enhance your sustainability and profitability. Here’s how,

Form a project selection framework to ensure strategic alignment

Every project you add to your portfolio uses up your company’s resource inventory, including financial, human, equipment, assets, and more. At the same time, these projects are the stepping stones to attaining your long-term objectives. Thus, the project portfolio governance team must form a solid project selection framework.

It will allow you to take up profitable and strategically aligned projects and ensure that your company’s resources are utilized at the right place. Additionally, the selection criteria can entail standard policies and practices to prioritize projects, which will ease resource planning.

Use resource management solutions to maintain a single version of the truth.

An advanced resource management solution is the need of the hour. It encapsulates every feature integrated with modern technology to facilitate the smooth functioning of your organization. From providing 360-degree visibility to data interpretation using business intelligence and forming intuitive reports, it covers it all.

Thus, organizations must implement futuristic resource management software to form a centralized platform.

It will let you overview all the planned and future projects and resource profiles (skillset, role, location, etc.). Furthermore, using the unified data-inventory managers can ensure competent resource allocation and simplify matrixed structures’ complexities.

Use forecasting and capacity planning solutions to form real-time data inventory.

Efficient capacity planning in PPM demands instant updates of resource metrics like utilization, availability, etc. Therefore, it allows resource managers to evaluate their workforce’s bandwidth with precision and ensure optimal utilization. For example, suppose a resource is utilized for five hours against the total capacity of 8.5 hours. In that case, the resource manager can go ahead and schedule an additional project based on their role.

Moreover, real-time reports also provide a comparison between forecasted or planned vs. actual values. If there is a deviation, managers will be better positioned to take remedial measures and safeguard the project’s health index.

Take real-time stock of active and planned projects and future resource demand.

As mentioned earlier, forward planning is the essence of efficient resource forecasting and capacity planning. By investing in an advanced tool, managers can procure instant updates on both ongoing and upcoming projects. They can leverage the data and evaluate if there will be a ramp-down of resources in the near future, and if yes, can actively plan for future projects.

Additionally, keeping a real-time stock of future resource demand will allow project managers to assess the required skill set and accordingly request resources. Resource managers will then be able to provide resources by implementing planned hiring, mobilizing resources from non-billable to billable projects, and so on. It will allow you to form the resource plan before the new projects’ commencement and prevent future roadblocks.

Formulate a transparent and automated resource requisition workflow.

When multiple projects and project managers are involved, it’s imperative to form a transparent solution to minimize conflicts. Developing an automated resource requisition workflow is a step towards that motive. It will allow project managers to place the request in time, overview the present and future project allocations.

At the same time, resource managers will have a workflow to assess each project, deduce its criticality, and allocate resources accordingly. These steps will maintain an audit trail and enable project managers to keep track of the resource allocations. As a result, everyone will stay on the same page ensuring effective operations of the project portfolio.

Use capacity planning solutions to upskill and future-proof the workforce

The growing skills gap is a significant concern for most organizations. To take on advanced projects and maintain the competitive edge in the hyper-competitive world, it’s critical to think ahead and plan. Using the forecasting solution, managers can predict the future project demand and gauge the skill set accordingly.

The project portfolio governance team can then study the skills gap and form an action plan to bridge it. The optimal solution is to conduct and organize internal training to upskill the existing workforce. It will help you future-proof them, beat market uncertainties, promote professional development.  At the same time, it will facilitate effective bench management.

A modern capacity planning solution can become a game-changer in formulating a PPM strategy. However, while these solutions can help you combat resource-centric challenges, it’s essential to note the factors that influence the whole process.

Factors that can influence workforce capacity planning

While defining a definite capacity planning process, the project portfolio governance team must evaluate attributes that can impact the whole process. Internal factors such as the organizational framework, its policies, and the nature of projects you provide play a critical role in defining the process. Along with these, resource availability, sudden ad hoc changes like unplanned attrition, prolonged absences, stretched project timelines, etc., can also alter your resource plan.

External factors that can influence capacity planning are the clients’ expectations, contractual obligations, stakeholders’ interventions, etc. Additionally, if you cater to construction projects, environmental changes, unpredictable mishaps, etc., can also lead to changes in the capacity plan.

Over to you

Project portfolio management is a composite and structured process to ensure that the company’s undertaken projects or endeavors align with the long-term strategic goals. Along with that, it takes care of each project’s and resource’s health index. So naturally, taking care of multiple factors at one is not an easy feat.

Investing in a resource capacity planning and forecasting solution is the best bet for any successful business.

It can help the senior management ensure timely execution of projects and within budget while keeping the resource health index in check. So, it’s time to realize the ways it can transform your PPM strategy.

Have you invested in a capacity planning solution yet?

It is only possible if the portfolio’s scope, projects undertaken, and future initiatives align with the organization’s long-term business goals.

Strategic alignment allows organizations to prioritize suitable projects that will help them reach long-term goals faster and channel the company’s resources in the right direction.

This article will explain how to undertake strategic alignment of a portfolio to deliver high and sustainable performance on a continuous basis.

Let’s start with the fundamentals of strategic alignment of a portfolio;

What is the Strategic Alignment of Portfolio?

It is the process wherein the projects, programs, or individual initiatives are aligned with the organization’s long-term business goals. The word “Alignment” emphasizes that the projects undertaken must comply with the ultimate business objective at every step of your planning process, i.e., from initiation to execution.

According to PMI– “ The strategic fit of a portfolio is the degree to which the sum of all projects and programs reflects the business strategy.’

For instance, the digital marketing organization aims to increase the monthly traffic on a website from 15K to 5X times by next year. So now, the firm will align all social-media and marketing programs (optimizing On-Page and Technical SEO, quality content creation, community building, advertising, etc.) to the traffic generating goal. This strategic alignment of all the initiatives helps increase traffic, generate more leads, and enhance ROI.

Therefore, projects and programs should be grouped into a portfolio based on relevance and similarities. Following that, the portfolio can be undertaken by the project management office (PMO) to meet overall company objectives.

Importance of Strategic Alignment of Portfolio

According to HBS research, “the failure to align portfolios with the organization’s goals is a crucial reason why businesses creating innovations fail to become sustainable businesses.”

Today, many organizations are diversifying projects and services and catering to multiple industries. Therefore, the importance of strategic alignment of portfolios has arisen. It helps in creating a big picture by linking every portfolio to the organizational goals.

To achieve long-term goals, employees should also be informed of their companies strategies and what’s expected of them. Once employees know how they can directly contribute to the firm’s success, they begin to work smarter and more efficiently. This boosts workforce productivity which positively impacts the project performance and quality.

Aligning project and program activities with strategic objectives empower businesses to become more resilient against market volatilities. In addition, it makes it easier to manage ad-hoc changes and adapt as opportunities and resource-centric challenges arise.

In summary, the importance of strategic alignment of the portfolio cannot be overstated. Thus, considering it in your next business planning process will improve the ROI and profitability.

Factors Affecting the Strategic Alignment of A Portfolio

Project Prioritization & Selection

The projects that a company takes up decide the firm’s profitability and helps to meet the business goals. The PMO plays a critical role in forming standard project selection criteria to keep everyone on the same page. It means that viable projects with better ROI and also its relevance to the business strategy. It ensures every project you work on should help you climb up the ladder to achieve these goals.

If any projects do not meet the overall organization goals, there will be a waste of resource efforts and adversely affect the bottom line. Therefore, prioritizing and selecting a project is one of the most important factors affecting the portfolio’s strategic alignment.

Resource Allocation Strategy

It is said that- Opportunities are boundless, but resources are limited!

Once projects have been selected and prioritized, it is imperative to identify and allocate competent resources to suitable opportunities. It is a fundamental activity that results in accomplishing the organization’s objectives and helps to maintain overall productivity.

Resource allocation strategy enables deploying the key resources across multiple projects instead of assigning them to a high-priority one. It also keeps a check on resource overloading and potential conflicts. As resources are finite, improper allocation results in cost escalation, delivery delays, and, subsequently, low client satisfaction.

Business Operations

Business operations are the day-to-day activities organizations engage in to generate revenue and improve profitability. It emphasizes how work is done within an organization and automates end-to-end workflows. However, complexities stemming from the ever-evolving business dynamics such as diversification of portfolio and expansions, these processes get standardized to keep operations on track.

A wrong process can put project quality at stake. Therefore, the onus is on managers to proactively detect and respond to critical situations and analyze process performance. Thus, well-designed business processes keep your team’s tasks streamlined.

Reuse of Assets

For strategic alignment and good portfolio management, the organization must re-use the assets from the inventory meticulously. This approach reduces project management costs and acts as a time-saving strategy. In addition, these purpose-made assets can help the teams determine what is in the inventory and what can be reused for the new project. For instance, developers do not need to rewrite the codes and run programs for the things already present in the inventory.

Thus, the ultimate benefit is efficient asset management allows you to do more with fewer resources. It consolidates all project-related data and documents into a central database with real-time updates. The automation within the system ensures that all the data from both previous and ongoing projects are securely collected, routed, and shared for future similar projects.

Alignment Between Sales & Delivery Team

The sales team and the delivery team drive all the revenue by creating a successful customer journey. If the sales team doesn’t involve the delivery team before signing the deal, it will lead to eleventh-hour resource allocations, jeopardizing the quality of deliverables. Ideally, once a sales opportunity reaches a certain stage, the delivery team gets visibility into the sales pipeline. Thus, there should be a constant collaboration between the sales and development teams.

The sales team should be aware of the company’s long-term goals and strive to win opportunities that propel business sustainability and profitability. They should also consult the delivery team before confirming the feasibility of deliverables to clients and other stakeholders. In this way, both sales and services teams are equipped to support one another’s needs and serve clients more effectively.

Stakeholders Buy-in for Critical Decisions

In an organization, senior executives and key stakeholders are the decision-makers. So, before implementing any major decisions relevant to portfolio management, it is imperative to get consent from concerned stakeholders. In addition, it can help align the business strategies with long-term business goals and drive growth and profitability.

In essence, gaining stakeholder buy-in eradicates downstream problems in portfolio management, such as conflicts over project priorities, internal bureaucracy, program constraints, etc.

Transparency & Communication Among Team members

Transparency in the workplace is critical in building a sense of ownership and enthusiasm among team members. The company’s vision, corporate goals should be communicated to all the resources so that everyone in the team is accountable. After all, a well-organized and collaborative team is the backbone of every successful organization. In addition, it ensures that daily actions of the resources are in line with the strategic direction of the organization’s goals.

For example, the way a remote team interacts differs from the way an in-house team will communicate in the office. And this is often reflected in the productivity of a team. With the right resource management tool and its collaboration feature, managers can effectively communicate in real-time and ensure the right task management.

Now let’s understand what role resource management plays in managing a portfolio.

Role of Resource Management in Effectively Managing a Portfolio

A portfolio has multiple projects and programs. Due to the limited availability of niche skills or multi-skilled resources, managers find it challenging to manage a portfolio of products or programs. Since resource constraint is a significant concern, the onus is on managers to plan them efficiently and distribute them across different projects.

Let’s take the example of a finance portfolio; a finance portfolio may include diverse banking programs, bank application projects, insurance projects, etc. There might be any stand-alone finance project also. As a portfolio manager, your ultimate concern would be to make the finance portfolio grow and expand. This is where resource management supports the portfolio.

It provides 360-degree visibility to managers ensuring that resources are working on projects that are strategically aligned. It helps to efficiently manage resource utilization within projects and programs and maximize the profitability of an organization.

Portfolio resource management helps to schedule the appropriate resources across geographical boundaries in the portfolio. It allows managers to forecast future resource requirements for projects based on skill sets needed against a timeline. The utilization metric helps managers ascertain that the resources are working on value-adding initiatives and improving the overall productivity.

The PMO executives can equip a robust resource management tool to get complete visibility of the skills matrix and resource capacity in advance. With the ability to provide foresight into capacity vs. demand, resource utilization, and other metrics, a tool will empower them to make data-driven decisions.

It gives better visibility on resource metrics such as resource requirements, availability, resourcing costs, risks, etc. The tool also provides a what-if analysis feature that helps managers to simulate different scenarios. All of which streamlines resource management approaches while forming the right project resource plan for your firm.

Conclusion

The factors mentioned above are imperative for managers to undertake the right projects for the firm. Many things contribute to organizational success, and strategic alignment of the portfolio definitely takes precedence over elements. It ensures the company’s best possible use of financials, human resources, intangible assets, etc.

An effective project resource management solution facilitates aligning the organization’s resourcing strategy to its long-term goals. It contributes to overall business profitability and sustainability, enabling companies to stay ahead of the competition.

Have you strategically aligned different portfolios with your organization’s goals?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helping them to achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

This interdependence of technology and business couldn’t be explained better. An organization’s efficiency highly relies on its ability to choose the right tool within the industry. Most of the firms are diversifying and extending their reach across geographical boundaries. Therefore, it has been critical to standardize processes, methods, and tools across different subsidiaries.

A study by PMI revealed that 66% of companies using project management software, complete their projects within their original budget.

One such tool that has made PMO’s and project manager’s lives simpler is project portfolio management (PPM) software. It facilitates hassle-free management of multiple projects at once. From forming a structured project selection criteria to keeping a tab on every project’s and resource’s KPIs, the tool covers it all.

However, one has to be highly diligent and mindful of the organization’s strategic purpose before selecting this tool. There is no ‘one-size-fits-all solution when it comes to solving business concerns. Every firm is unique in terms of its goals, objectives, and needs. Thus, it is of utmost importance for decision-makers to evaluate each tool before putting in the money carefully.

This article takes you through the evaluation criteria you can follow to buy the right PPM tool for your firm.

Starting with the basics,

The purpose and benefits of the PPM Tool

Every project taken up by the firm contributes towards reaching the strategic goals and increasing the profit margins. Thus, it is crucial to assess the project and its impact on the bottom line meticulously before making any investment. However, it’s not easy to do so without a systematic approach when your firm caters to multi-faceted projects.

A PPM tool allows PMOs and project managers to formulate a definite project selection criterion that ascertains no parameter is overlooked. The enterprise-wide visibility feature of the tool gives a glimpse of this to every stakeholder in real-time.

Once there is a consensus to go ahead with it, the next step is project planning. With a birds-eye view of all the projects, managers can prioritize them based on their criticality, deadlines, and other factors that seem appropriate. Using the PPM tool, they can form a work breakdown structure for the high-priority projects, identify and schedule the competent resources, and get a headstart.

Project planning and initiation are only half the battle won. To steer the projects through success, managers have to monitor and control their progress constantly. The PPM tool has dedicated modules for effective financial, resource, and risk management, enabling them to stay updated on all project and resource KPIs. Using this data, managers can plan the right course of action and stay ahead of the curve.

In addition to these benefits, a PPM tool also provides uninterrupted collaboration to strengthen the team and bridge the communication gap within the matrix boundaries. Overall, a PPM tool is an inventory of the right solutions to streamline the management of several projects under one roof.

Out of these modules, resource management plays a vital role in deciding the project’s course. That’s because the workforce and their competencies bring your project to fruition.

Now let us discuss why having a resource management function in the PPM tool is necessary,

The purpose of resource management in the PPM tool

Every project is subdivided into several stages, which are further broken down into small tasks. Each task demands a niche skillset for its appropriate execution. Once managers procure adequate resources, they are scheduled based on their availability.

The workforce has specific charge out and costs rate, and if not utilized efficiently, it can elevate the project budget eating up the revenue. Furthermore, poor performance or low productivity can even delay the project timeline. Thus, to stay on track with the project plan, it is of utmost importance for supervisors to manage the resources smartly.

Apart from the impact on the project’s lifecycle, sub-optimal utilization, incompetent allocation, and other resource-centric errors can deteriorate the resource health index leading to unplanned attrition. Even one discrepancy can restrict the entire project’s progress. Resource management resolves all these employee-centric challenges and keeps the project in line with the plan. This is why it is a non-negotiable module of the PPM tool.

Keeping these basics in mind, it’s time to dive deep into the intricacies of evaluation criteria,

The evaluation criteria of a PPM tool

Although every organization is distinct, the PPM tool they eye for should have certain functionalities that combat the common portfolio management challenges. Below is the rundown of some necessary features you should look for before putting your financial reserve into it,

A centralized platform to manage individual projects

First and foremost, the tool should be able to replace the disparate tools and their siloed data. It should bring every project and its details on one single platform.

A unified version of truth allows managers and stakeholders to overview any project and its progress instantly. Moreover, a centralized depot of data eliminates internal conflicts and keeps the team on the same page.

Resource management solution

The role of resource management in PPM has been discussed in the previous section. To add to that, managers must ascertain that the PPM tool has a standalone solution that will allow them to manage the resources intelligently. It should have advanced features that update the data entered by resources in real-time.

The holistic view of future resource demand and capacity will enable managers to implement appropriate resourcing treatments to bridge the gap in advance. With a multidimensional view of resource schedules, managers will be able to form balanced workloads. Along with that, an organized view of projects will also let them book the critical resources to high-priority projects first.

Moreover, the advanced filters will let you identify and allocate the right resource to the right task at the right cost and time. This, in turn, will ensure the timely delivery of projects while maintaining productivity and quality.

Financial management

Finishing and delivering the project within budget is one of the deciding factors of the project’s success. If one project is over the budget, it will not leave enough room to control the scope. Thus, the onus is on managers to regulate and control the finances throughout the project’s life cycle.

A tool should be able to give real-time insights into forecast vs. actual costs. It will allow managers to draw a comparison between the planned budget and present expense.

In case there is a deviation, managers will be able to control the costs before it’s too late. Another factor to be considered while managing the project finances is hiring or deploying cost-effective global resources. With 360-degree visibility of the enterprise-wide resource pool, the decision-makers will assess the cost of similarly skilled resources in different locations. It will help form the right mix and curb the costs while maintaining the quality at par.

Risk analysis

It is natural to expect some uncertainties during the lifecycle of a project. Mitigating these risks requires a definitive framework in place long before the risk surfaces. Besides, if one project has potentially multiple risks, managers can take a go or no-go decision based on the impact of these risks.

Naturally, it is not easy to manually assess each risk factor. To err is human. Having a tool in place will prevent room for guesstimations and make space for accurate data-driven insights. A PPM tool should provide a dedicated channel to analyze and categorize these risks based on their severity and probability.

Following a well-structured risk management framework, managers can form a backup plan for the most probable and critical risks and tackle them head-on.

Real-time tracking to evaluate progress

The whole purpose of buying a tool is to bring the dispersed teams together and keep everyone informed of every project metric. It eliminates discrepancies, double-bookings and also allows managers to keep a tab on the project’s performance and employee productivity at any time.

Thus, a tool should have real-time tracking that will allow managers to gauge the progress and take remedial measures in case of any deviations. It includes the project metrics viz. finances and timelines, resource metrics like utilization, bench reports, etc.

Forecast vs. actuals to maintain the project’s health

Supposedly, you have scheduled a resource for a task for 15 days. However, he/she takes 30 days to finish the same task, which will have a domino effect on the consecutive tasks. At the same time, if the resource is to begin the next project after the end of this task, it will delay that too.

To keep a hold of such situations, one should select a tool that provides real-time forecast vs. actual reports on project costs, resource utilization, and revenue. These reports act as an alarm for project managers who then have enough leeway to protect the project’s fate in time.

Scalable, integrable, and configurable to meet the business needs

Needless to say, every organization aims to scale up its business operation. In this case, the tool they deploy should accommodate the added number of projects or resources into the database. In simple words, the tool you look for should be scalable to attune your future business expansion plan. It should also seamlessly integrate data from other business applications you are using to avoid double-entry and manual errors.

Every business is different and handles a diverse set of projects. For example, if you are a marketing firm, your tool will have different roles, projects, or departments. In the same way, an accounting firm will follow a different organizational structure. Thus, to ensure that you and your workforce do not face a challenge while operating these tools, invest in the one that is easily customizable and configurable.

Collaborative platform to keep everyone on the same page

If you are working in a matrix organization or a shared-services model, or if your firm is operating virtually, then sharing files and essential documents instantly with your team needs proper planning. Often we miss out on important information amid tight deadlines.

Thus a tool with an in-built collaborative platform will promote effortless inter-departmental collaboration in real-time. If you are working on two projects simultaneously, it will allow you to form different channels or groups with the specific team and share the data with the concerned members. It will keep the information in one place and save the additional cost of an external collaboration tool.

These are some of the features one should look for within a PPM tool to reap all the benefits and solve the significant portfolio management challenges.

Additionally, you can leverage these tips to enhance the selection process further,

Tips for selecting the right tool for your firm

Evaluate your firm’s strategic goal

Every process, every project you undertake, and even the tool you invest in should align with the strategic goal of your firm. For instance, if your long-term strategic plan is to form a well-defined PMO and deliver business value, invest in a PMO-centric tool. Investing in a solution that does not support the PMO functions will then be a futile investment.

What are the current challenges you face?

The first purpose while buying a tool should be to tackle the current challenges rather than availing of the other luring benefits.

If you cannot manage the resources well between multiple projects, investing in a robust solution helps.

It’s always recommended to evaluate and analyze the current difficulties faced by the organization.

Assess every feature before selecting the tool

A tool has multiple layers of functions in it. Managers should attend demos, get a hands-on experience of the tool, and explore every tiny feature before giving it a go. If your tool has a resource scheduling feature but does not have a color-coded utilization heatmap, then it’s incomplete information. It’s better to know this before you buy the licenses as it will cost you a hefty amount but will only solve half the purpose.

Make the final selection based on ROI

Any tool or software for a project you invest in should provide a substantial return on investment. The features of the tool along with its associated cost between different vendors need to be compared to arrive at the right decision. The PPM tool you select should at least help you minimize resourcing costs by a significant margin along with its features.

At the same time, one should be able to recover the cost incurred by the software from the savings within a minimum amount of time (Payback period). Thus, the final decision should be based on the ROI which can be calculated by doing a cost-benefit analysis between several options.

Conclusion

A project portfolio management tool is an incumbent solution for firms handling diverse projects. Thus, it is imperative to select the right solution that caters to every function of effective portfolio management. Given the immense importance of resource management in PPM, the decision-makers must ensure that the tool encompasses a robust solution that evaluates all resource metrics in real-time.

The evaluation criteria mentioned above are a definitive guide for PMOs and project managers looking for an ideal PPM tool.

How do you evaluate the business management tools?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in providing robust and configurable solutions to manage your resources effectively. With over 20 years of experience leading the market, Saviom is actively used by over 15 highly-esteemed global companies worldwide. The tools within the suite include project portfolio management, professional service automation, and workforce planning software. It also entails supporting solutions to schedule equipment and assets seamlessly. Re-engineer operational efficiency with a system shaped around your business!

According to Gartner, effective portfolio management helps organizations with clear visibility into diverse interdependencies across project teams.

Project interdependency influences the planning and can even affect project outcomes. Therefore, project managers need to successfully ascertain the best ways to manage and leverage their resources for various work operations.

At the project level, Project Interdependency Management (PIM) also formulates a structured process that helps managers to oversee these project linkages better and then deliver projects within scope, time, and budget.

In this article, we dive a little deeper into different interdependencies within project portfolios and highlight how they impact the project’s progress.

What is Project Interdependency?

Project interdependency is a relationship of tasks or projects wherein one project can impact another’s progress, or their order of occurrence can substantially influence the portfolio’s course. These Dependencies can be any deliverable, process, tasks, technology, or product produced by any project, team, or resource.

However, if not appropriately managed, all these interdependencies can lead to discrepancies and conflicts among teams. Therefore, Project Interdependency Management (PIM) provides processes, tools, and techniques to project managers to identify, analyze, track, and manage various project dependencies cohesively.

For example, let’s assume your team is working on a construction project. Here, on-site construction workers can only begin when the architect completes the blueprint design and the necessary material is procured and available at the site.

There are two different ways to measure Project Interdependencies a) Dependency Matrices and b) Network Mapping Method.

Dependency Matrices:

This technique produces a visual way of understanding sequential project interdependence. It uses a 2-dimensional grid that depicts bi-directional dependencies of a project within a portfolio.

For example, an engineering design project is dependent on various tasks. The prototyping is dependent on initial planning and analysis. At the same time, designing and development tasks are dependent on prototyping. And lastly, quality control is dependent on product development. Thus, all these tasks exhibit sequential dependencies.

Network Mapping:

This method uses graphical models to map interdependency project networks. It is highly critical and applicable for teams that manage multiple and large projects. The outcome identifies multidimensional, complex dependency through a 3D visual representation of nodes and arrows.

For example, the same engineering design project can depend on various tasks and other projects or have a multi-project build process. Here the nature of a team’s work and interdependency can be multi-dimensional.

Network mapping is more scalable than any other PPM method as it easily addresses direct or indirect interdependencies of highly complicated project portfolios.

Why is Project Interdependency Management (PIM) Critical?

What happens if task B of the project doesn’t start on the planned date because task A is delayed, and now it’s affecting the project’s overall progress?

Suppose your team is working on a high-priority software development project where the designers, developers, and testers are scheduled for the two-month-long development & testing phase. But now, the project schedule is slipping from the developer’s end, and their tasks are not completed as per the project schedule.

With a lack of real-time update of this dependency, the QA engineers/testers would show up and bill their time. It would blow up project costs, cause delays and significantly affect the entire project.

In any of these scenarios, the implementation of project Interdependency management (PIM) practice provides a structured approach with formal documentation. It prevents scope, schedule, and cost risks from becoming major issues and improves projects’ quality delivery.

Given the importance of PIM, here’s a detailed explanation of different types of project interdependencies with examples:

Types of Project Interdependencies

Let’s now discuss various types of interdependencies among different projects across a portfolio of IT/IS or any other projects.

Internal Dependency:

These are the dependency that takes place within the framework of the project, department, and organization.

Resource Interdependencies
Resource interdependencies refer to the shared service model of critical resources between two projects. It arises due to resource-limited availability and high demands for the same resource across multiple projects in an organization.

For example, there can be SEO expertise required for both web development and marketing projects. However, if there is only one resource available, it creates a resource interdependency as both the projects require resources with the same skillset.

Technology Interdependencies
This interdependency facilitates managers to leverage one project’s technical knowledge to another project, enhancing technical collaboration across multiple projects.

For example, developing a new version of computers depends on another project of developing operating systems designed to run on a 64-bit processor.

Technical Interdependencies
In technical interdependency, the output generated by one project determines the input of another project. For example, the first consumer data collection project will capture customers’ information based on their online interactions. And the second project of implementing a Business Intelligence (BI) will transform these data into insights for future reference.

Knowledge-based Interdependencies
The ongoing parallel projects within the same portfolio generate knowledge and expertise that benefit other projects. It is a proactive system for managers to use the knowledge gained from previous projects and drive innovation to similar future opportunities.

For example, a smartphone company often releases its upgraded version with more attractive features.

External Dependency:

These are dependencies that affect your company and projects through external influence.

Market Interdependencies
Projects are constrained by and rely on both the corporate environment and the changing competitive demand outside the company. It can impose additional challenges for projects.

For example, a new smartphone (product) of one brand is launched in an existing market of another smartphone company. An upgraded version of the smartphone is released in the current market of the same company.

Now, let’s dive deep into the scheduling categories of dependencies:

Scheduling Categories of Project Dependencies

Managers must formulate a project schedule before resource scheduling to identify the order of tasks. Most commonly, there are four scheduling categories of dependency in project management. These are:

Finish-to-Start (FS)

FS dependency is when Task-II cannot take place before the completion of Task-I. For instance, designers must complete the wireframing in a software development project before developers begin with the development work.

Start-to-Start (SS)

Here both task A and task B need to start at the same time. For instance, For a successful Video development project, designing, copywriting, and content phrasing tasks begin together to develop a video within brand guidelines.

Finish-to-Finish (FF)

Here both task A and task B have to finish at the same time. These two tasks are mostly mutually dependent activities. For instance, software testing and debugging are completed concurrently.

Start-to-Finish (SF)

It is the most uncommon type of dependency, which is often mistaken by the FInish-to-Start type. Here Task B cannot finish unless Task A has started. But once Task A is initiated, Task B can be completed at any time. For example, the account manager can only invoice the client (task B) after the product’s delivery (Task A) is initiated.

The above dependency types of projects can have multiple predecessors and successor tasks.

Now that you’ve got a comprehensive overview of different scheduling project interdependencies within a portfolio, let’s understand how you can manage them effectively.

How to Manage Project Dependencies?

Here are few steps that managers can take to ensure that they adequately manage the impact of dependencies. Let’s take a look at how you can do this.

Step 1: Identify all Project Dependencies

Identifying all project dependencies on the project will give a head start in their effective management. Managers can analyze the types of dependencies such as start to start, finish to finish, start to finish, and finish to start and include them in the Project Initiation Document (PID)

An example of task-based dependency– A walkthrough or training video of any software to end-users is dependent on another task of preparing a module. Only when the training materials are completely prepared, then the next task of software training can start.

Step 2: Hold a Dependency Workshop

When the project relies on different resources or work overlaps with other teams, running a dependency workshop is ideal. It will make the goals of the project aligned and foster good communication and collaboration among team members.

This dependency workshop will give clear visibility of the resource tasks and processes concerning the project timeline. It will also provide more insights into the deliverable and depict the need and impact of dependency tasks if not delivered.

Step 3: Consider the Risks/Constraints

Now the next step is to define risk management practices, project managers can analyze each dependency work to ensure that project risks are found early in the project life cycle and not later when the solutions are limited and costly.

According to Gartner, failing to understand resources or their work interdependencies can trigger several unrelated risk events within a project.

Therefore, an enterprise risk management system should be in place.

For example, your team is creating an app for a client, and you might be reliant on the first project to reuse the code for this project. But there is a risk that the first project work doesn’t finish on time or that the code isn’t reusable, and you have to start from scratch. These risks driven by dependency are very crucial to manage. Failing to do so will lead to time and budget overruns.

Step 4: Continuous Monitor & Control

Identifying and documenting the dependency log is essential for managers to monitor and control the successful delivery. Using an intuitive project management tool, managers can specify all dependencies and regularly monitor a preferred project schedule’s progress. Assessing the dependencies and constraints also illustrates the health of each project within the portfolio.

Running and managing interdependence will help managers open communication channels with teammates and eliminate dependencies seamlessly.

Conclusion

Dependencies being a critical aspect of PPM practice impacts scheduling and resource activities. Using an intuitive Project Portfolio Management Tool and a Work Breakdown Structure (WBS), managers can help their team members understand and sail successfully through interdependency levels. The Project Interdependency Management (PIM) approach also helps eliminate bottlenecks and constraints in the existing project management system by enhancing the overall project workflow.

How do you manage various interdependencies in your project?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helping them to achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

However, it is not as easy it sounds. When there is an entire portfolio to supervise, it becomes challenging to monitor every project metric diligently.

It is of utmost importance that program and project managers form a definitive framework to standardize the management process. Managers invest significant time and resources in creating a project portfolio management strategy as a part of BAU activities to make an organization successful.

A PPM strategy sets the ground for profitable and strategically aligned projects while also catering to efficient resource management. It offers a myriad of benefits to managers and organizations as a whole by enhancing the overall efficiency.

This blog focuses on the numerous benefits that an effective PPM strategy provides to project managers.

But first, let’s start with the definition

Project portfolio management (PPM) is the process used by project managers and PMOs to analyze a project’s potential and formulate a plan to manage each project. The PPM process consolidates the existing data, forecasts pipeline opportunities, and provides all the information in real-time. The unified management strategy is where all the projects are managed under one umbrella, called a portfolio.

According to the Project Management Institute,

“Project portfolio management is the centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision-making on portfolios, projects, programs, and operations.”

A successful project portfolio management framework includes:

• Identifying and evaluating potential projects
• Approving future projects.
• Assigning project managers to the approved projects
• Including them in the overall portfolio.

PPM’s critical focus is to ensure that the portfolio’s outcomes support the organization’s strategic goals. PPM tools and techniques capture quantifiable information such as return on investment and operational efficiency, comparing them against the delivered business value.

According to the PMI,“94% of high-maturity organizations noticed a tangible impact after implementing the PPM strategy.”

This number tells us that introducing project portfolio management can impact the overall project management process and enhance organizational efficiency.

Now that the definition is clear let’s understand the benefits that PPM offers.

Benefits of Project Portfolio Management

Benefits of project portfolio management include a holistic approach that monitors project status and health, their interdependencies, and the performance of resources assigned to the projects. PPM provides real-time updates of the project metrics and enhances the efficiency of the overall process.

Here is a rundown of the key benefits of project portfolio management.

Align project goals with business strategy

The ultimate mission of any firm is to meet the strategic and short-term goals. And every project that a firm undertakes is a step towards that goal. Thus, project managers must ensure that projects are aligned with business strategy and objectives. If the projects do not align with these set goals, it leads to project overload, waste of company resources, and workforce efforts. Without this linkage with the long-term motives, the project portfolio is practically blind to the organization’s needs.

Project portfolio management (PPM) emerges as a method to manage this puzzle. The core of the strategy lies in evaluating, prioritizing, and selecting a project which is in line with the business strategy. PPM helps put things in perspective and supports making tough decisions based on the company’s vision.

Informed decision-making

Project portfolio management provides high levels of visibility both from a strategic and a tactical perspective. It provides insights into past project metrics such as project costs, profitability, duration, quality, and resource usage. It improves predictive analysis for better resource utilization and risk management, as well as project selection.

An effective project portfolio management strategy lends weight to your decisions by generating data in real-time, preparing you to address every project-centric activity.

Traversing the project portfolio gives you a project history that reflects the symbiotic relationship between people and projects. The data-driven insights facilitate managers to make informed decisions and draw findings, contributing to overall portfolio success.

Improved project selection process

Often, companies have an unclear selection criterion for the new projects. The lack of information makes it difficult to assess the project as per the company strategy. Not every project can align with the strategic goal, and neither can all prove to be profitable.

Moreover, once a project fails, the company initiates additional small projects to compensate for the failure. It makes project management more complex, and the project portfolio starts to lose strategic alignment and value. This inability to focus results in:

• Too many small, low-impact projects.
• A plethora of projects for the limited resources available causing burnout.
• Poor project prioritization.
• Inadequate data on projects.
• High project failure rate.

Project portfolio management helps select the right set of projects that allow businesses to adhere to goals, resource availability, and other criteria. PPM strategy forms a well-defined framework for every process, and the same goes for project selection. With a formulated criterion in place, managers have a model to select the right project.

PPM evaluates and picks the project that will deliver maximum value to the organization. Using various techniques such as ranking methods, scoring models, and other heuristic methods, PPM ensures that approve/do-not approve (go/no-go) decisions are based on relevant and well-defined criteria rather than vague factors or guesstimations.

You can identify those projects that don’t contribute to the firm’s objectives and remove them from the portfolio.

Minimize risks, maximize business impact

The word risk has a robust negative ring to it, but it simply happens to be inevitable at times. The likelihood, type, and impact of different risks cause you to look for alternatives through an effective risk management plan, so that project delivery isn’t completely derailed.

Risks have financial and program implications, meaning that minimizing them prevents you from miscalculating gross efforts required for upcoming and current projects. Project revisions stretch your budget and delay both your resources and project delivery.

The PPM strategy detects budget deviations between planned and actual work in real-time, helping you avoid financial risks after a project commences. It contains standardized project management methods and processes centered around a dependable framework.

The estimation tools sitting within PPM routinely analyze costs versus benefits, helping your project management office identify wayward projects. The sooner they’re placed, the sooner your risks are reduced too.

PPM alerts you to overexposure to non-viable efforts by indicating potential budget overruns, schedule delays, and technical inadequacies. It prevents these risks from carrying through to project delivery, thus leaving you with high-value, low-risk projects.

Optimal resource utilization across the enterprise

PPM mobilizes your resources to invest their best and maximum efforts into the most feasible ventures. In simple words, this means duplicate efforts are not wasted on activities with no monetary benefits to show for them.

The degree of visibility mentioned earlier helps you assess the need and demand for different skills along with future resource availability. You can exercise control over resource utilization and allocate an optimal workload to each resource. With resourcing costs being an actual spend, you can reduce both bench-time and overhead by upskilling and retraining them for multi-faceted projects.

Competent resource allocation gives your organization the ability to make the best use of available resources and their expertise by deploying them onto the highest priority projects.

A comprehensive overview of utilization rates and availability lets you arrive at resource-centric conclusions in a managerial capacity.

Resource profiling, for example, gives you an updated skills inventory, ensuring that peak demand periods don’t suffer from a skills shortage. It scans capacity and redistributes talent in scientifically measured proportions across several projects.

Forecasting project demand to this resource capacity lets you spread your resources out on worthwhile projects without over or underwhelming them.

Deliver projects within time and budget

Most projects fall victim to overspending due to poor cost estimation, mismanaged resource allocation, or miscommunicated project scheduling. Besides overspending, these factors also result in project delays.

It is essential to deliver projects fast, and within the budget, so you start reaping your benefits, and your organization has the bandwidth for other beneficial tasks.

Advanced PPM tools use Business Intelligence to provide intuitive reports like forecast vs. actual cost, forecast vs. actual utilization, real-time availability, and so on. It provides an overview of any deviation from planned to real scenarios instantaneously. With real-time updates like these, managers can take corrective actions well in time to avoid a catastrophic effect on the project’s progress.

At the same time, these reports also factor in past project successes and current project scope, mitigating overspending on projects. Also, a PPM can reduce project delivery time significantly. A study reveals that PPM allows project managers to minimize project elapsed time by around 10%

PPM technology aligned with rich governance, workflow, and standardization allow team members to keep the workflow flowing and increase productivity.

Increased ROI

ROI is the revenue/profit generated after the deployment of the project. Any organization has a goal to achieve increased returns.

By investing in portfolio management tools and training your people, it becomes possible to improve the project success rate, make cost-saving decisions. A PPM helps clarify the broader company goals, improve resource management, and increase its productivity and agility. With PPM, project investment is more likely to pay off and set companies on better footing for the future.

Also, with the help of a PPM, you can cut down resourcing costs. You can forecast the shortfalls and hire cost-effective global resources, ensuring that you have the right resources for your future projects.

PPM solutions enable companies to identify the best investment opportunities and efficiently manage them from design to maintenance to maximize ROI.

Boost productivity with enhanced team collaboration

A PPM solution provides a real-time view of the progress of projects to all the stakeholders. Project managers have easy access to team members. Everyone has a personal dashboard and an updated Gantt chart that provides a visual view of the work’s progress, the different phases’ and their interdependencies. Team members can upload documents on a single tool and make them accessible to everyone. These features greatly enhance collaboration across teams or departments.

Project portfolio management also helps spread a common project culture across all teams. A typical project culture consists of shared norms, beliefs, and project team assumptions. With the help of common project culture, project managers understand the priorities, status of different projects, and their alignment with their objectives. These functions encourage every employee to adhere to a standard methodology facilitating cross-company cooperation.

A shared project culture also promotes quick problem-solving as it keeps every stakeholder, manager, and team member in the loop and allows them to share different perspectives.

Effective management of operations teams across the project

Operations teams are responsible for overseeing, directing, and managing business operations such as accounting, manufacturing, support, etc. They ensure that customers’ requirements are met with optimal resource usage.

During a project’s life cycle, the project team interacts with the operations team at various moments. For instance, at the phase of developing a new product or upgrading a product, both these teams need to exchange information to deliver the project successfully. There are four areas for which operations and project managers have to work cohesively:

• Budget
• Schedule
• Staff Management
• Skills Development

The PPM tool helps you improve operational prowess with smart and competent resource planning and allocation. It provides a start-to-end systematic management process. The analytics you can typically draw from a PPM tool include:

• Overall utilization rates of operations teams.
• Skill surplus or deficit reports.
• Projects that are facing a resource crunch.
• People who are likely to be underutilized.
• Availability statuses across departments.

Creating assets and sharing best practices

High-value projects align strategically with the organization’s long-term goals. Effective portfolio management collects information from those past project initiatives and successfully delivered business value.

It explores the probability of similar projects flowing in the pipeline, preparing your resources to obtain the appropriate briefing and training beforehand.

PPM consists of methods that factor in the scale, complexity, duration, and deliverables of a project. These methods help you manage the assets better and create practices that you can share throughout future projects. With an effective PPM strategy, you can leverage the processes and lessons learned from previous projects. A central repository of historical and real-time data helps you prioritize tasks, preventing ‘guesstimations’ from wrecking them. All this cumulatively forms a full-proof and improvised plan enhancing the probability of success.

Conclusion

PPM applies the needed strategic planning, resource scheduling and management, and monitoring for all projects. An intuitive project portfolio management software bridges the gap between company goals and project implementation and provides an effective system with countless advantages.

Moreover, departmental teams will be guided by a combination of experiential instinct and PPM guidance to deliver projects that accrue business value.

What does your PPM strategy look like?

Saviom Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.