Project Portfolio Management

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Abstract

This paper seeks to explain the Project Portfolio Management (PPM), the reasoning behind it as a set of processes and methodologies and how these build a group of singular projects into a stack or tier that can be holistically graded, how these processes can drive IT to become closely modelled on and aligned with business strategy. It seeks to point out successful methodologies for PPM implementation and some of the issues that can arise.

The basis of PPM
Project management and by extension portfolio management are curious disciplines. They attempt to present simple methodologies for guiding an activity (or group thereof) through all its stages from inception to completion, within defined cost and time boundaries. Many of the facets of project portfolio management appear to be simply common sense, but there are many more projects that fail because misapplication of these principles. Portfolio management is the process of applying a standardised set of management tools and methodologies against a basket of projects, in order to ascertain amongst other things:

* Which projects are performing as expected relating to resources consumed * Which projects will deliver the expected benefits to the organisation * Which projects have fallen out of scope of the business strategy due to external factors

With the overall goals of:
* Maximising return on investment
* Lowering total cost of ownership through the entire project life cycle (and in particular reduce significant “tail” spending at the mature stage of a project) * Produce fit for purpose systems through constant & consistent rebalancing of inputs (costs & goals) versus outputs (systems) * Aligning IT implementation closely to IT strategy and by extension to the broader business strategy.

According to James Pennypacker and San Retna of the Enterprise Portfolio Management Council the aims of portfolio management can be illustrated by five key questions:

1. How well are we executing?
2. Are we investing in the right things?
3. Are we optimizing capacity?
4. Are we realizing the promised benefits?
5. Can we absorb all the changes?
(Project Portfolio Management: A View from the Management Trenches, Pennypacker & Retna- Editors, Wiley Publishing, 2009) Project portfolio management addresses the answers to these questions in attempt to holistically provide the answers.

A Project
In order to build up a portfolio of projects, it is beneficial to look firstly at the structure of an individual project – the smallest complete unit within the portfolio. Any project can be further broken down into three core elements, also known as resources: Money, Time & People. Project management concerns itself principally with delivery of the specified task on time and on budget, or to be more precise within the allowed/arranged consumption of resources.

Project management (PM) within IT can utilise a number of methodologies to best deliver their aims. None of these methods need be implemented in their entirety. A blending of PM techniques most suitable to the specific organisations and their processes is likely to be used. There are many PM process but the most pertinent of these to IT project management (in my opinion) are * PMBOK – Project Management Book Of Knowledge. PMBOK is a book which sets a set of guidelines and common phraseology for project management. * Prince2 – Projects IN Controlled ENvironments. PRINCE2 is an industry standard set of process driven methodologies. * COBIT – Control OBjectives for Information Technology. COBIT is a framework for providing best practise across an enterprise. It particularly excels in linking the business and IT strategy & goals. One of the main difficulties is project management one a singular basis is the lack of focus on broader business. The scope narrows to dwell only on the task and hand, and delivering that task on time, in budget and...
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