Project portfolio management is not a new phenomenon. We all do it as technology executives, and we’re likely to be good at it based on traditional norms. The environment of project management has been constantly evolving. Given how market fluctuations control people, processes, and projects, the introduction of a new strategy for project execution is equivalent to stabbing uncertainty.
The term: Project portfolio management
Project portfolio management is the art and science of making investment mix choices, organizational constraints, allocation of resources, project priority and schedule. It includes comprehension of the portfolio’s strengths and weaknesses, forecasting opportunities and risks, matching investments to goals, and maximizing trade-offs experienced to maximize returns, i.e. outcomes over assets, in given risk appetite, i.e., uncertainty about returns.
Before the digital transformation, portfolio managers’ primary goal was to optimize technology output delivery under budget and schedule. This IT-centered policy emphasized consumption over output and risk over return. Besides, the conventional IT financial framework was simply a cost-recovery model that was not appropriate for portfolio managers to explain how business outcomes on technology investments could be maximized. As a result, portfolio management has been marginalized to bureaucratic overhead and a good-to-have extension of the function of program management.
Project portfolio management- The trends of the present that shape the future
The face of project portfolio management- until 2018
It comes to no surprise that for most PMOs in 2017, execution remained a major point of focus. Moving on, however, succeeding years showed a slight transition in the distribution compared to previous years. While most PMOs were still hyper-focused on delivering on-time and on-budget programs, the importance of generating business value was also recognized. The PMO is in the perfect position to create business value with transformation initiatives becoming more common in the project mix.
Several trends were identified in the Project and Portfolio Management (PPM) arena in 2018. Several developments came straight from advancements in IT, providing exciting opportunities to gain expertise in the Project Management Office (PMO). Some movements were more subtle, requiring “softer” changes and seeking to unite the PMO cohesively. Together, these trends have shaped PPM as we know it into a system that allows the digital transformation era to change.
What did the year 2019 bring for project portfolio management?
Agile and Waterfall
The increasing complexity of the project has contributed to the reconsideration of the basic methods of project management. For this purpose, classic waterfall projects aren’t always the ideal response to manage activities, resourcing, costs, and facilities in fast-paced environments. The acceleration has facilitated the use of agile project management methodologies that are especially committed to innovation-driven efforts. These include mobile application design, new functionality developments, and new medical-pharmaceutical tools.
Until recently, resource management has never been considered necessary for project portfolio management in large organizations. Skills have been at stake, not the individual. Things have changed over the period; resource availability is a barrier now. For hierarchical organizations and larger programs, what was appropriate for small projects is certainly unthinkable. The project manager has to work closely with functional management to check the organization’s ability to provide the required capabilities (individuals and skills, costs, facilities, etc.) to ensure that the project runs as planned.
Remote work, global and virtual teams
The project teams are now applying more and more diversified hard and soft skill sets in addition to the increasing complexity of the projects. Project teams are becoming more multi-geographic and multicultural. Due to cost, environmental awareness and work-life balance issues, it is no longer justified to have everyone around the same table.
The virtual concept implies that there is now a commonplace for remote teams. As a consequence, the element of communication is crucial to the success of a team. The project manager must have strong ideologies of remote management and master the new communication and data sharing concepts. The project manager also needs to improve the capacity within these virtual teams to promote unity under these conditions.
The future coming through 2019
The transition of PMOs from cost centers to profit centers. PMOs must acquire high-end consulting capabilities and provide competitive services to business units. PMOs will focus on an ‘outside-in’ perspective and move away from the perspective of’ inside-out.’ PMO drivers are going to be around consumers, markets and the economy, not just internal efficiencies.
Projects may begin to be found in various business functions where they may not very often occur, such as sales, marketing, partnerships, human resources, etc. To deliver better results in their respective functions, marketing managers, sales managers, HR managers, finance managers and the like must acquire project management skills.
The project portfolio management market is expected to grow with immense penetration of connected devices in emerging economies. If project management implies doing it right all the time, it means doing the right things at the right time. Usually, an organization has business goals and plans.
Each department may suggest, sponsor or execute projects to help the organization achieve these business objectives. As a result, everyone would compete for a limited source of resources and funds. Senior executives use portfolio management to assist in selecting, optimizing and overseeing project investments to ensure that approved projects align with the company’s goals, strategies, and timelines.
It’s not a surprise that artificial intelligence is becoming incredibly popular and common in the workforce. Project teams have always been pushed to execute projects faster and more efficiently, and this challenge has driven the development of project portfolio management (PPM) software to further simplify project managers’ work. It speeds up project managers’ execution and delivery.
This emerging technology offers many benefits to businesses in all sectors and provides immense potential.