Project Portfolio Management

Foundational principles of PPM

PPM – yet another ‘Three Letter Acronym’ or ‘TLA’ to add to a very long list in project glossaries but it is perhaps one of the most important ones you need to know. Before we dive a bit deeper into what Project Portfolio Management really means let’s understand a few of the foundational principles:

• PPM is agnostic to project methodology, whether they be Agile or Traditional / Waterfall (in fact, having PPM established at the beginning of an organisation's Agile journey will be beneficial to critical processes such as roadmap management and results management).
• PPM is for use at scale – the smaller the portfolio, the less value PPM may provide (for example if you have one project, a program or a portfolio on top of it will just be replicating the same data and duplicating processes for no benefit.

So let’s get back to those definitions and how you can use one or all of them for your project organisation.

PPM is a hierarchy

One of the simplest definitions of PPM is to describe the different types of change delivery processes and how they are logically arranged according to levels of importance, size or other indicators. The traditional hierarchy mostly focuses on the three levels of Portfolio (highest), Program and Project with each lower ranked level having a subordinate or ‘child’ relationship to the higher level. In some cases there can be sub-portfolios or sub-programs as a way to more easily organise a large group of projects but the more levels the more complex the management processes will need to be.

In Agile, Portfolio and Program concepts still need to exist however it is important that they are adapted to include structures such as Value Streams and Epics as well as processes such as decentralised decision-making (as one example).

PPM is a data model

The PPM structure is based on a number of data attributes within a hierarchical data model. Setting your structure up based on this definition will allow for some best practices to be put in place:

• PPM should only support one–to–many relationships (one program to many projects / initiatives). Many to many relationships cannot be supported and your reporting will break not to mention confuse governance and duplicate effort.
• Parent-child relationship: Structuring your hierarchy in this way will allow for easier maintenance of information in one place. If the ‘Child’ is the Task for example, and that attribute is updated by a resource, the changes can flow up the hierarchy automatically.
• ‘Parent’ maintenance: A Parent Portfolio, Program or Value Stream can only be closed if all the dependent child activities are also closed.

There may be concerns in applying such a definition to PPM given, like any hierarchical data model it could create inflexibility. This does however have benefits given governance / compliance processes such as reporting will be dependent on the data model remaining consistent therefore having to carefully control changes is not necessarily a bad thing.

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PPM is a toolset

This is less a definition and more a recommendation based on common sense and the need to have a tool do the heavy lifting for you. Once the hierarchy and data model is defined, automation is key, which can only be done through good use of PPM tooling. Many project management or delivery software options exist however often only have basic features. This may be fine for basic use but it is best to define your solution architecture for tools alongside your data and processes when setting up.

The use of sticky notes and whiteboards for collaboration and visualisation will always have a place although 2020 has shown us that co-location is not always going to be possible and teams must work together in a virtual environment.

PPM also assumes your entire organisation is a stakeholder and being able to roll up team level information for Executive or Board Committees via tools for real time insights will be critical.

Most importantly...

PPM is a set of processes, roles and responsibilities integrated in your governance decision-making and delivery frameworks

The definition you set for a project lifecycle in your organisation informs the scope of your PPM framework. It is also best to consider your PPM framework as a sub-set of your Portfolio, Program and Project governance.

Critical processes in PPM

There are many critical processes in PPM all of which can be found in the various project management methodologies such as PMP, Prince2, Scrum etc. however there are a few that need to be highlighted:

Demand Management

Whether it be managed via value streams, Epics, Ideas / Innovation or traditional project requests, no organisation can manage competing priorities without this process.

Portfolio Management

Your most important stakeholders will be your investors, whether they are internal such as the Executive or Board of your company or external. These stakeholders will need assurance ongoing on the return on their investments, which can easily be given with transparency at portfolio level. It will also allow for corporate governance processes to interact with project governance in a way that enables compliance and quality.

Program and Project Management

A huge area but ultimately, given the points made regarding the PPM data model, a major dependency for realisation of outcomes against Key Performance Indicators (KPIs). For your Portfolio stakeholders, the health of an investment and the likelihood of the expected return must be reportable which is only done through these processes.

Benefits management

The approval of an investment will almost always be based on the promise of a return. In other words that the intended business value is achieved via outcomes such as increased customer satisfaction, reduced service cost or incremental revenue increases driven through continuous feature releases.

Project Portfolio Management is a vast area that will need to be tailored to fit your type of projects and your organisational needs. If sitting down and writing processes and developing frameworks seems overly tedious and something you don’t have the time or resources for, let a PPM tool do that for you. A suggested way is to build it ‘bottom-up’ which will ensure your PPM approach is a reflection of the work you do and you can evolve it over time. PPM is the most effective way to achieve Project Management at scale and, most importantly, it will keep your stakeholders informed and their outcomes assured.

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