Introduction to Project Portfolio Management (PPM)

When there are many projects run by an organization, it is significant to manage and evaluate them by grouping projects into strategic portfolios. Project Portfolio Management (PPM) is an excellent business practice that enables an organization to keep its projects aligned to its business objectives. PPM doesn’t get involved in project execution but it plays a major role in project selection, benefits realization, prioritization, funding, optimum resource utilization, risk assessment, etc. This helps in determining the best ways to invest in the organization’s capital and resources.

At an individual project level, it is important to analyze how each project is performing and in what way it affects the entire portfolio. The following questions must be raised;

Benefits of adopting Project Portfolio Management

  • Reduce “no value” projects. In a portfolio some projects are said to have duplicated objectives and efforts. PPM plays a critical role in such situations to select a project. PPM tools help to track the overall project value, benefits, ROI, and other factors that influence the decision-making process. Based on such rankings, the projects are selected or canceled. PPM is required for making the right decisions for assessing the most profitable portfolio.
  • PPM creates an atmosphere where collaborative decision-making is easier and more profitable.
  • It minimizes the risks pertaining to individual projects in terms of business impact.
  • PPM is mainly meant to utilize resources in an optimum way for all projects.
  • PPM tools are believed to be more accurate and efficient. Based on this real-time data, risk evaluation and mitigation is executed.
  • Expenses are aligned to budgets and enhanced project success rates.
  • PPM gives a holistic picture of all projects for a comprehensive understanding of the organization.

The entire objective of project portfolio management is to improve the bottom-line of those projects that drain resources and do not contribute to the health of the organization.

But in order to do that, organizations face several challenges.

Challenges of Project Portfolio Management

  • Too many projects running simultaneously, which distracts or misleads the creation of a portfolio. At the same time, one project manager is accountable for multiple projects which results in a lack of focus and failure.
  • Some projects have the undefined scope and few are not aligned to objectives. This comes as a challenge for PPM.
  • Many projects have somewhat similar secondary objectives and are executed in a similar way. But this distracts the focus from the main underlying objective of individual projects.
  • Project prioritization not done effectively at an early stage.
  • The project risk assessment must be done. It is also very important in PPM to identify and manage the individual project risks and how do they impact the portfolio.
  • Lack of senior management support for requirements claimed by project managers can prove to be a challenge for portfolio management.
  • Sometimes differentiated support for distinct projects can also be a struggle.
  • The nature of PPM sometimes can be a challenge, for example sharing of resources for multiple projects. This may ultimately cause confusion among project managers who are managing more than one project. This is termed as a miss-location of resources.
  • The in-house politics and company culture is one of the main barriers.
  • As a basic requirement of PPM implementation, timesheet data should be collected from each employee, to understand what employees are working on as well as comprehend project delivery status. Many times, employees misconceive that they are being watched. This concept is known as Big-Brother Syndrome. To overcome this, employees must be regularly educated about the real benefits of timesheet data collection.
  • PPM brings in a huge change in an organization. First and foremost, it demands proper implementation of the project management process at the individual project level to fetch data for portfolio management. If the project management maturity level is higher, the PPM implementation will be an easy task.
  • In PPM, organizations tend to rely on software or tools Software is considered to be a crucial aspect of PPM rather than just one part of the entire process. This might shift the focus and meanwhile, overlook other aspects of PPM.

The role of internal politics and how to manage it?

Internal politics and working culture in an organization is the main hurdle for any project execution. In-house politics prevent an organization from implementing new strategies and technologies in the project. From the beginning itself, people tend to resist change implementation. Resistance to innovative changes hampers the progress, thereby creating challenges to manage portfolios efficiently. Yet another mistake made by organizations is that higher authorities initiate projects assuming that all employees are in sync with the changes. Top-level management must identify the resistance and tackle the same at an early stage. Management must ensure that every employee knows the benefits of PPM and the value it brings to the company. As a part of process improvement, organizations must make it a regular practice of educating people on PPM values. Many companies hire specialists called ‘evangelist’ to address the particular issue.   Evangelists assist the companies to overcome such problems. This approach will certainly reduce internal politics and resistance from employees.

Resource allocation

Let us consider an example of a clinic that employs a set of people in each department.


As shown in the above example, any organization is concerned about the number of resources employed in a particular department and keen to understand if they are overstaffed, understaffed, or properly staffed. On similar lines, it is significant to analyze the resource requirement for individual projects with the help of 3 key pillars of project management i.e. Scope, Budget, and Time. Identify the skill set essential for a particular project. The next step would be to recognize the number of resources available and the number of resources to be hired. It will be feasible if resource capacity is analyzed with respect to other projects in a portfolio. Once the above figure is derived, answering the following questions will help in the resource allocation process.

  • Is this project overstaffed? If yes, shift a few resources to other similar projects where they can be utilized in an optimum way.
  • Is this project having sufficient resources? If no, pull in few more resources either from other projects of portfolio/organization or hire new resources.
  • Are the resources planned and allocated properly? Resource planning is morally done on the basis of individual project scope, budget, and time duration.


PPM is aimed at reducing failure rates in projects. Portfolios are set-up to gain visibility on failing projects before it is too late. Also there is an opportunity to make mid-course corrections for under-performing projects. Likewise, it helps in making subjective and rational decisions pertaining to various projects. But a PPM can be utilized promptly only if the above said challenges are eliminated. The only technique is to address every challenge with proper solution. Managing a single project is often a difficult task. Thus, execution of multiple projects can be even more challenging. Deploying an intelligent piece of PPM can perhaps help in this regard.

Reference Links: