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Project Portfolio Management 101
by Johanna Rothman. Originally published in Cutter's Business-IT Alignment E-Mail Advisor, October 17, 2001.
Too many projects? Not sure which projects are most important? Welcome to project portfolio management.
A client, Tim, is having trouble with his portfolio management. Senior management is organizing next year's budget and hiring plan. They want more projects in the plan than this organization has ever done. And, of course, the IT group is the bottleneck, since IT is involved in every project.
Tim said, "Here's what I'd really like to tell senior management: We're going to plan the minimum number of projects, so that we are not completely overloaded. That way, we have some flexibility, so when business changes, we can reevaluate the portfolio and change which projects we're working on when. We'll work on projects in their importance to the company, and we won't work on projects we can't staff."
Tim wasn't sure he could say this to his senior management team. After all, his senior management has the money to spend. Tim only has the ability to organize and run the projects.
When you're faced with this situation, where you don't have the funds, but you are responsible for making sure the projects go well, try asking these questions of the money-holders:
- Is this project a strategic project for us? What makes it strategic? (Does the strategic reason behind the project change the importance of the project?)
- How does this project fit into all the projects we'd like to do? (Does this project make sense for us to do?)
- Have we done a project like this before? Were we successful? What did it take for us to be successful? Do we have any doubts about our ability to do this project? What are those doubts? (Are we doomed before we start?)
- Do we have the staff or other resources to do the project? (If we can't adequately fund the project, what should we do differently?)
When you organize your project portfolio, make sure you consider the strategic or tactical importance of the project to the overall list of projects. If this project isn't necessary, postpone it.
If this project is going to set you off in a new direction, then ask yourself: Can we stop all the projects in the previous direction? You may not be able to at this time, but if you can't change direction, which projects should you start and which projects should you cancel?
Don't cavalierly take on projects that could be trouble from the beginning, especially strategic projects. Think carefully about what you can do in a project, and how this project is different from your typical projects.
Project portfolio management isn't trivial, but there are some lessons we can learn from our past:
- Fund only the projects you absolutely need. Don't buy in advance for the future, because the future will change too much for you to be able to justify the investment. Planning for the future is fine, spending money isn't.
- How does this project fit in with all the others? Is there a strategic reason for this project? Is there a tactical gain? When will we see any monetary return from this project, directly or indirectly?
- Are we ready to take on whatever's required for project success? If we're not willing to adequately staff a project, why bother doing it? If we can't determine what project success means, why are we considering this project?
Project portfolio management doesn't have to be impossible, as long as we recognize we don't need to execute every project we consider. Sometimes fewer projects are more likely to bring success.
Like this article? See the other articles. Or, look at my workshops, so you can see how to use advice like this where you work.