
Investing in a diversified portfolio is essential for achieving financial goals while minimizing risk. Regular monitoring and rebalancing can help keep your portfolio in line with your investment goals and risk tolerance.
Gather project data by collecting in-flight projects, project requests, and ideas for new projects. Use this data to prioritize projects based on your valuation criteria.
1. Identify the Right Projects
To develop an effective project portfolio, it’s important to start with the right set of projects. This means collecting in-progress projects, identifying new project ideas and gathering key project information to assess their value. Once you’ve collected and analyzed your data, you can create a list of projects that best align with your strategic goals and business objectives.
This process includes performing a cost benefit analysis on each potential project. This will help you choose a portfolio of projects that maximizes the company’s return on investment. It also involves assessing the risks associated with each project. This includes looking at the overall risk of the project, its schedule and scope. It is also important to consider the impact on other projects and stakeholders.
Once you’ve selected the right projects, it’s important to properly manage them. This includes monitoring progress, analyzing budgets and resources, and rescheduling projects as needed. It is also important to set milestones for each project. This helps ensure that all tasks are completed by the required date, and it also boosts team morale. You can also use dependencies to help track your critical path and prevent tasks from blocking other teams.
As the saying goes, “don’t put all your eggs in one basket.” In investment portfolio management, this concept is known as diversification. By diversifying your investments, you can minimize risk and increase your chance of meeting your financial goals. This requires weighing strengths and weaknesses, opportunities and threats, and making trade-offs like debt versus equity, domestic versus international, growth versus safety. This is a complex process that requires careful planning and execution. It is also important to rebalance your portfolio periodically to keep it in line with your financial goals and risk tolerance.
2. Develop a Prioritized List
When it comes to prioritizing work for the portfolio, it’s essential to involve stakeholders in developing and executing a consistent process for evaluating projects and their value relative to strategic outcomes. This is an ongoing activity, as new information becomes available throughout the project delivery lifecycle and dynamic opportunities emerge.
The PPM team must have the ability to evaluate and select new products, prioritize existing projects, accelerate or kill them, and reallocate resources as needed to maintain balance and optimize the portfolio. This requires a centralized governance structure, enterprise-wide application of best practices and strong executive-level support.
A clear definition of the business objectives is also essential for effective portfolio management, as it aligns project teams with a common purpose that they can unite behind and motivates them to tackle challenges that stand in the way of reaching those goals. This is similar to the effect that a great song can have on an audience, which often inspires them to rise to their feet and start grooving along to the music.
A key component of the priority development process is assessing value, and that requires a scoring model with the ability to weigh factors like benefits, risks, cost, time and complexity. This score can then be used to rank and prioritize the work in the portfolio, ensuring that all active projects add value and are advancing towards completion. It can also be used to schedule upcoming releases, enabling the PPM team to forecast capacity and prevent resource overcommitments. As a bonus, Float can help track actual versus estimated costs across the portfolio, providing an aggregate view of expenditures and helping to keep budgets under control.
3. Create a Budget
The ability to understand project costs is a key component of effective portfolio management. This includes direct, or project-related, costs as well as indirect, or overhead, costs. In addition to being able to assess and understand each cost, it is important for project portfolio managers to be able to evaluate the impact of each initiative on business objectives. This helps to determine if a project is a good fit for the portfolio.
Portfolio leaders must be comfortable with different project delivery approaches, to be able to assess project progress and determine courses of action. They must also be able to identify constraints and provide guidance for teams working on individual projects.
Finally, they must be able to communicate the results of their work to the organization. This includes developing status reports, communicating with stakeholders about progress and budget, and evaluating the impact of each project in the portfolio.
Portfolio management requires a high level of focus and commitment from leadership and the entire organization. It is an ongoing, iterative process that focuses on alignment between strategy and execution. To achieve this, it is critical for businesses to develop and maintain a clear definition of business objectives. Articulating these objectives aligns teams with a common purpose and helps to motivate them to tackle challenges that could prevent them from achieving their goals.
4. Align Projects with Business Objectives
Project portfolio management must balance a variety of factors, including resource availability and constraints, project dependencies, business value, cost, risk mitigation and strategic goals. As such, the project management process must be more than just “throwing a bunch of projects at the wall”—it requires a coordinated effort to ensure that each individual project is aligned with business objectives.
The first step in this effort is to articulate the business strategy—this provides a clear and shared definition of what should be achieved through each portfolio initiative. This helps to drive alignment across teams and ensure that each project is a contribution toward the strategic objectives. It also makes it easier to prioritize a collection of projects to achieve those objectives, and to make trade-off decisions when required.
Once that’s done, it’s important to set up regular reviews and checkpoints for each project in the portfolio. These are opportunities for the team to assess whether each project is still aligned with business objectives, and if not, to identify a course correction or new path forward. It’s also essential to create open lines of communication between the project manager and the portfolio manager, so that any changes at the organizational level can be communicated quickly and collaboratively.
Finally, it’s important to use a project management tool that supports the portfolio management process. Using an online application, for example, makes it easier to keep track of projects in the portfolio and compare progress, budget and more. Online tools are also great for managing remote teams, as they offer collaboration and real-time data no matter where a team is located.
5. Monitor Performance
Managing multiple projects is challenging, especially with the need to balance resources and skill sets, schedules, budgets, and risk mitigation. Project Portfolio Management is a process for organizing a mix of projects to optimize their execution and delivery against strategic business objectives. It’s a disciplined approach that requires a high-level view of the organization’s objectives and goals, clear leadership on the role of projects in the overall vision, enterprise-wide application of best practices and strong executive support.
Effective PPM enables teams to focus on their work and maximize project performance. With a cloud-based project management software solution, everyone can access the latest data and updates on project progress in real time. This centralized visibility helps stakeholders stay engaged and informed, and it helps ensure that project initiatives are aligned with the enterprise’s strategic objectives.
With PPM, team members can easily see all the projects they’re working on on one dashboard that offers important metrics like progress and budget. They can also create reports based on specific projects or filters. For example, a team member may only want to view the status of their own projects and not those of the entire organization.
Another tool that can help teams stay on track is the roadmap tool, which puts all of the projects on a Gantt chart. Teams can then easily discern if there are any dependencies and address them before they cause project delays. Moreover, they can set milestones to boost team morale and encourage them to hit each goal on their way to the bigger picture.
While a well-defined and optimized project portfolio can have a positive impact on business results, it’s crucial to implement a unified governance structure that supports the Lean-Agile way of working and enables companies to compete in this new age of software and digital. For this to happen, a centralized project portfolio management system must be integrated with the rest of the enterprise technology infrastructure.