Small companies with only a few active projects may be able to successfully achieve good results without implementing a portfolio management strategy. Their pool of sponsors and executives is limited enough that everyone can likely get together for quick project status reviews, and budgets are monitored closely because funds are so lean that no one’s losing track of what’s being spent.
As organizations begin to support a broader list of projects—whether greater in number or more complex in scope—that all changes. The ability to properly oversee the full extent of the initiatives in the pipeline becomes more important. Without visibility at the portfolio level, the business may commit to more projects than it can successfully execute, or budgets and other resources may be stretched to the point that the quality of future projects suffers.
If you’re wondering whether it makes sense to pursue a formal project portfolio management methodology, consider if you’ve encountered any of the following issues—they often signal that it’s time to handle your list of projects in a more comprehensive way.
- You have enough projects in the works—or a diverse enough group of sponsors and executives—that your top leaders sometimes forget which initiatives are active, which are in the formal planning stages, and which are waiting in the wings for their turn to launch. It’s nearly impossible to effectively prioritize projects if stakeholders don’t have visibility into the complete list of initiatives that should be included in periodic assessments.
- There are multiple projects in the pipeline and you’ve experienced resource conflicts as a result of the either the volume or the pace of all the initiatives you’re managing. You may also know there are opportunities to more efficiently manage your resources but you don’t have the full picture of the organization’s projects or a complete list of activities that are pulling from your resource pools.
- The status of your ongoing projects has become more difficult to ascertain, with project team members sometimes reporting conflicting status data. Compiling granular information into a high-level view suitable for review at the C-level either isn’t happening or the resulting data is unreliable. Your executive team may already be losing confidence in the reports they receive from your project managers.
- Your firm’s available funds are being spread across more projects than anyone realizes and money isn’t always directed at the most strategically important or time-sensitive efforts. It may also be difficult to get a complete and accurate accounting of which projects are over budget, which still have money available, and if potential cost savings have been missed because no one is aware of areas where labor, equipment, shipping fees, or other line items could be consolidated.
- Across the various initiatives your company is supporting, there’s a lack of consistency around how return on investment (ROI) figures are reported or assessed. This results in some efforts appearing to have better financial performance metrics than they actually do. The misleading data in turn leads to poor strategic decisions about future projects, potentially planting the seeds for ongoing inefficiencies and lost value in every initiative the organization undertakes going forward.
A robust and time-tested project management methodology can be instrumental in enabling your business to address these challenges and create an environment where project data is accurate, complete, and current. With a comprehensive view of the organization’s active and pending initiatives in hand—along with performance metrics on past and current projects—your team can deploy resources more effectively and the leadership team will be confident that mission-critical projects are on track for successful completion.