A strong project portfolio management strategy includes regular reviews—of risk factors, budget and schedule adherence, resource allocations, and the overall health of the portfolio, just to name a few. Similar reviews may be conducted across individual projects, but widening your perspective to encompass a comprehensive portfolio view enables your organization to do so much more.
By enhancing your organization’s portfolio-level insight, you gain the ability to analyze your data more deeply, allowing you to achieve better results over the long term. Whether you want to focus on expenditures, resource consumption, project timeliness, or trends across all of these areas, advanced analytics applied against your portfolio data can reveal important information about your organization’s performance.
Return on investment
Maintaining awareness into the financial health and performance of your company’s portfolio of projects empowers you to take timely and appropriate action to ensure that every project delivers the expected ROI. This is particularly important if the business needs to secure a minimum level of return to fund future efforts, or if a partnership or other agreement obligates your team to achieve specific financial performance metrics. An analysis of your portfolio can help you keep on top of issues such as delays, budget variances, and other factors that could chip away at your ROI.
Resource allocation and consumption
Knowing how resources are assigned and used at the project level is valuable insight, but visibility of this data at the portfolio level provides the kind of strategic view that’s necessary when making important business decisions. You’ll know if some divisions are consuming resources at a higher rate than others, or if a functional area carries the bulk of the requests for high-demand, high-value resources. You may also learn that specific project types routinely exceed their resource estimates, data that can help boost your continuous improvement efforts.
Staffing requirements and opportunities
Seeing how human assets are allocated across the entire portfolio—not only internal workers but also external contractors, consultants, and temporary personnel—can be useful in developing future forecasts and streamlining operational workflows. Can staff time be more efficiently used by adjusting allocations at the project level? Are high-demand personnel overbooked or forecasted to support multiple projects simultaneously? This information is also important when determining how the organization fills its staffing needs. You may be better served by hiring in-house expertise to minimize vendor costs in some instances, or by developing new skills among existing staff members in others.
One big benefit of a comprehensive project portfolio management strategy is the ability to use the data to run what-if scenarios to determine the best course of action based on business needs, market pressures, financial expectations, resource availability, and workload levels.
- What if we execute several high-risk projects simultaneously?
- What if one project in a chain of strategic initiatives is delayed?
- What if we reprioritize the projects in our portfolio?
- What if a project doesn’t deliver the expected ROI? How is the viability of future efforts diminished in that situation?
Scenario planning can help identify potential impacts that may not be immediately obvious in the early project planning stages, as well as uncover opportunities to improve project performance that aren’t visible at the individual project level.
Unfortunately, some organizations try to make do with project data rather than elevate their insight to include their full portfolio. Using information that’s too narrow in scope produces poor results, similar to analyzing project data that’s incomplete, out of date, subjective, or duplicative—your understanding of potential outcomes is skewed and the decisions you make based on that understanding may be similarly misinformed.
PMAlliance, Inc offers project management consulting, project management training and projec