{"id":11315,"date":"2022-03-25T12:57:25","date_gmt":"2022-03-25T12:57:25","guid":{"rendered":"http:\/\/ec2-52-95-249-27.ap-south-1.compute.amazonaws.com:8000\/blog\/?p=11315"},"modified":"2023-12-20T20:21:05","modified_gmt":"2023-12-20T20:21:05","slug":"what-is-project-portfolio-management-and-why-is-it-important","status":"publish","type":"post","link":"http:\/\/ec2-52-95-249-27.ap-south-1.compute.amazonaws.com:8000\/blog\/what-is-project-portfolio-management-and-why-is-it-important\/","title":{"rendered":"What is Project Portfolio Management and Why Is It Important?"},"content":{"rendered":"

The evolving market demand and increasing competition have led businesses to expand their horizons, invest in new projects, and build diverse portfolios. The purpose is to maximize the organization’s benefits from its investments in projects.<\/span>\u00a0<\/span><\/p>\n

However, as the number of projects increases in the portfolio, it becomes challenging to monitor each of them and control every <\/span>constraint<\/span><\/a> such as <\/span>budget<\/span><\/a>, schedule, <\/span>scope<\/span><\/a>, and so on.\u00a0<\/span>\u00a0<\/span><\/p>\n

To combat this challenge, companies are now implementing a systematic framework to manage and execute their portfolio, known as <\/span>project portfolio management<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

PPM provides visibility of every project, its progress, and a high-level overview of resources\u2019 productivity. In other words, it helps managers select, manage and execute profitable and strategically aligned projects while also catering to efficient <\/span>resource planning<\/span><\/a>. Given the benefits, developing an effective project portfolio management strategy is critical for enterprises.<\/span>\u00a0<\/span><\/p>\n

\"Maximize<\/a>
\nThis blog focuses on the significance and steps involved in project portfolio management.<\/p>\n

Let\u2019s get started:<\/p>\n

What is project portfolio management (PPM)?<\/h2>\n

Project portfolio management (PPM) is the centralized process used by <\/span>project managers<\/span><\/a> and <\/span>PMOs<\/span><\/a> to manage one or more portfolios and achieve an organization\u2019s strategic or long-term objectives.\u00a0<\/span>\u00a0<\/span><\/p>\n

According to <\/span>PMI<\/span><\/a>,\u00a0<\/span>\u00a0<\/span><\/p>\n

\u201cPPM is the administration of one or more portfolios that bridge the gap between strategy and execution while improving overall efficiency.\u201d<\/span><\/i>\u00a0<\/span><\/p>\n

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 <\/span>resource pool<\/span><\/a> to the most valuable projects.\u00a0<\/span>\u00a0<\/span><\/p>\n

In a nutshell, an organization that implements project portfolio management centralizes the <\/span>selection<\/span>, prioritization, authorization, and <\/span>management of projects<\/span> and resources within a portfolio.<\/span>\u00a0<\/span><\/p>\n

\"Benefits<\/a>
\nNow that the definition is clear, let\u2019s understand the fundamental difference between the three \u2018P\u2019s of project management below:<\/p>\n

Portfolio VS. Program VS. Project<\/h2>\n

Here<\/span><\/b> is an overview of the difference between these terminologies.<\/span>\u00a0<\/span><\/p>\n

A <\/span>project<\/span><\/b> is a temporary and unique endeavor undertaken by a company or an organization to create a unique product or service. It has a <\/span>definite time frame<\/span><\/b> and comprises several tasks<\/span> and sub-tasks to achieve a specific goal.<\/span>\u00a0<\/span><\/p>\n

A <\/span>program<\/span><\/b> is a group of <\/span>related projects <\/span><\/b>managed together to achieve a common goal. All projects within a program cater to a unique product, service, or outcome.<\/span>\u00a0<\/span><\/p>\n

A <\/span>portfolio <\/span><\/b>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 <\/span>strategic<\/span><\/a> business objective.<\/span> This includes improving profit margins, developing multiple similar products, etc.\u00a0<\/span>\u00a0<\/span><\/p>\n

Simply put, <\/span><\/i>projects<\/span><\/i><\/b> are grouped within more extensive <\/span><\/i>programs<\/span><\/i><\/b> that fit within larger <\/span><\/i>portfolios<\/span><\/i><\/b>.<\/span><\/i>\u00a0<\/span><\/p>\n

\"Project<\/a>
\nBy now, you must have understood the meaning and <\/span>finer<\/span> differences of the above terms.<\/span> Now, let\u2019s <\/span>know<\/span> the benefits that an organization can <\/span>expect after im<\/span>plementing<\/span> a definite Project Port<\/span>folio Management pro<\/span>cess:<\/span><\/span>\u00a0<\/span><\/p>\n

Importance of project portfolio management<\/h2>\n

Within organizations, the <\/span>resources<\/span><\/a> are always limited, whether it\u2019s people, space, financials, or equipment. Therefore, based on the organization\u2019s mission and business requirements, <\/span>PPM<\/span> helps balance the portfolio such that appropriate projects and programs are selected, and the right resources are allocated for execution.<\/span>\u00a0<\/span><\/p>\n

The other notable benefits of effective project portfolio management are:<\/span>\u00a0<\/span><\/p>\n