Projects are a vital element of every enterprise — without them, all businesses would become completely stagnant! Along with pushing enterprise growth and development, projects also allow organizations to demonstrate their expertise, highlight employee talents, and contribute to company-wide missions and goals.
Despite the importance of enterprise projects, many organizations struggle to understand and keep their project portfolio moving ahead at enterprise-level speeds and quality. This is likely due to a lack of project portfolio management, or PPM. Project portfolio management helps businesses understand what work they should be doing, where their human and monetary capital is going, when, and how.
Without effective project portfolio management, projects don’t get the support they need to succeed: resources and funding aren’t properly allocated, employees get spread too thin, and the entire organization loses track of what their priorities should be. As a result, all projects drop to priority zero and nothing crosses the finish line. This can lead to many issues within the enterprise:
- Employee disengagement — When employees notice projects are often unrealistic, are always changing or continue indefinitely, their motivation and morale are greatly decreased.
- Disappointed stakeholders — When projects fail to meet deadlines or ever reach completion, key investors and contributors become frustrated (and understandably so). This is more project management practices and not portfolio management practices.
- Reduced ROI and company growth — When the project pipeline moves slowly or comes to a pause, enterprise projects get put on hold and may never be picked back up again. This means your business isn’t progressing according to plan, and may not be progressing at all.
How can organizations leverage powerful, consistent, and reliable project portfolio management? It’s a question SEI consultants discuss with all kinds of businesses, and one we will explore and answer in this article.
The Value of PPM
It’s critical for businesses to undertake the right projects, at the right times. This helps companies adapt quickly, stay competitive, and deliver on shifting customer expectations. Companies with effective project portfolio management can prioritize projects based on their importance, relevance, and goals — then supply the right capital accordingly.
Organizations that leverage excellent project portfolio management reap many benefits, including:
- Better resource allocation
- Balance of funds and resources
- Improved efficiency and productivity
- Improved confidence in staff and leadership
- Streamlined communication and collaboration
- Reduction in redundancy and points of failure
- Faster decision-making and action plan formation
- Overall alignment within an organization
Effective project portfolio management also provides opportunities for stakeholders to re-evaluate the essentiality of certain tasks, and pivot or halt processes as necessary. By shifting resources to more relevant projects, organizations can ensure the most important projects are completed efficiently and effectively.
Why PPM Poses a Challenge
One key reason companies struggle to prioritize certain projects is due to a lack of alignment on priorities. New initiatives are exciting, meaning many companies have a hard time saying no. But when businesses approve more projects that they can support, they are at risk of all projects grinding to a halt.
It can be difficult for organizations to know which projects are the most critical, and it can also be difficult to say goodbye to certain projects. By taking a holistic approach to project portfolio management, organizations can carefully consider all projects in the pipeline and cultivate an understanding of how each one impacts overall portfolio objectives. Then, companies can prioritize specific projects according to company goals and available resources.
Many organizations fail to understand the importance of project portfolio management or confuse it with project management. Unlike project management, project portfolio management isn’t about doing projects well — it’s about doing the right work at the right time. By supporting processes that enable the right projects to be completed in a timely and high-quality manner, project portfolio management is the first step towards creating a portfolio of actionable enterprise projects.
Leverage Effective PPM with SEI
Excellent project portfolio management requires organizations to look objectively and comprehensively at existing projects, then prioritize them based on what’s best for the enterprise. This leads to increased project delivery and greater financial investments, contributing to a more positive and productive business environment.
At SEI, we help organizations approach their project pipeline with a holistic view, taking into consideration appropriate resource allocation, current relevance, and overall enterprise significance. With our assistance, organizations can push forward with the right projects and let go of those that no longer serve a purpose. Interested in learning more about project portfolio management, and how SEI can help? Reach out and continue the conversation today!