In order to build up a portfolio of projects, it is beneficial to look firstly at the structure of an individual project – the smallest complete unit within the portfolio. Any project can be further broken down into three core elements, also known as resources: Money, Time & People. Project management concerns itself principally with delivery of the specified task on time and on budget, or to be more precise within the allowed/arranged consumption of resources. Project management (PM) within IT can utilise a number of methodologies to best deliver their aims.

None of these methods need be implemented in their entirety. A blending of PM techniques most suitable to the specific organisations and their processes is likely to be used. There are many PM process but the most pertinent of these to IT project management (in my opinion) are * PMBOK – Project Management Book Of Knowledge. PMBOK is a book which sets a set of guidelines and common phraseology for project management. * Prince2 – Projects IN Controlled ENvironments. PRINCE2 is an industry standard set of process driven methodologies. COBIT – Control OBjectives for Information Technology. COBIT is a framework for providing best practise across an enterprise. It particularly excels in linking the business and IT strategy & goals. One of the main difficulties is project management one a singular basis is the lack of focus on broader business. The scope narrows to dwell only on the task and hand, and delivering that task on time, in budget and without overt, unplanned consumption of resources. But this process does not serve the business in the most efficient manner.

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There is no mechanism to address a re-alignment of business priorities that will render the project less effective, possibly caused by a strategic change by a competitor in the marketplace or new regulations. Moreover there is no management process to safeguard against and deal with difficulties such as project over-runs and delays, projects falling out of scope, shortages of resources or possibly even duplication of effort between projects. And finally there is no mechanism to ascertain if the project truly succeeded in delivering the value to the business that was promised at inception. A Project Portfolio

A project portfolio at its most simple can be considered similarly to any other portfolio, be it financial investments, artwork or even a portfolio of documents. A project portfolio is no different – it allows us to view and compare each piece of work both individually and against its fellow projects on like-for-like merit. Generally (but not always) a portfolio will belong to a specific business unit or cost centre. This is the most logical construction for a portfolio. Resources (Time/Money/People) are assigned from a pool of resources (possibly a cost code or business unit) to individual projects.

An extension of this is to view each project as an investment, the sum of the resources which it is consuming. By now viewing projects as a consumer (of resources) within a business unit budget (portfolio) it becomes possible to compare projects on a like for like basis (the basis is cost) for the first time. (Maizlish & Handler, IT Portfolio Management: Step by Step, Wiley, 2007) Minimising cost alone will not provide the business with the best level of return on investment. It is necessary to extend this paradigm further, developing more metrics to ascertain levels of value derived from ongoing projects.

It is also beneficial to have regular checkpoints built into the structure of the project to allow for re-assessment of Project scope –To ensure that the scope is still relevant to the business need and in line with IT and business strategy Cost versus return – Will the project deliver the expected benefits, and are the benefits still worth the cost? Resource consumption – Are the resources currently being utilised by the project better expended elsewhere? Duplication of effort – Is the same work being down elsewhere in the portfolio and can the resources be shared?

There are a number of prerequisites if project portfolio management is to be implemented correctly. Without these in place the probability of failure is greatly increased. Business buy-in: Without the buy in of all relevant stakeholders and business owners the chances of successful implementation are greatly decreased. It stands to reason that PPM will cause significant organisational change, which could be obstructed if any of the parties involved were not fully committed.

Correct understanding of the business strategy: Given that one of the aims of PPM is to increase the productivity and ROI of projects within the business, and that the business strategy is somewhat vague or worse, not stated, it is incumbent upon the PPM professional to ascertain the strategy and closely align the IT strategy alongside in order to achieve the best return. It may be necessary to even interview business leaders or provide them with questionnaires in order to achieve this fundamental goal.

Communication: Following on from business buy-in, there must be clear channels of communication to all key stakeholders, as the PPM process is an ongoing and iterative process. Changes in project priority due to changing business needs or other reasons will need to be conveyed. Accurate Information: To be truly successful in PPM it is vital to obtain true and factual information relating to each project. Bias from stakeholders relating to individual projects can lead the project portfolio becoming skewed and misaligned to business/IT strategy.

Documentation: the PPM process should be measurable and repeatable and as such should have strong documentation written during implementation to support the processes at every stage. This documentation should be reviewed on regular intervals (like each part of the PPM process) to ensure it is up to date and in line with requirements. Project Office: This is a hard requirement particularly for any organisation wishing to implement at a level where PPM is utilised across the entire organisation, but would be beneficial to all.

The Po is the effective owner of the entire PPM processes, gathering the data, ranking the projects accordingly, re-distributing resources and budget where required and all the administrative and management functions involved. Maizlish and Handler identify an eight-step model to successful implementation of PPM. These steps are not completely iterative and have numerous feedback loops and break points within the model to allow for constant project improvement.

Potential Pitfalls & Resolutions

Aside from the pre-requisites that ar previously mentioned and assumed to be in place prior to implementing PPM, there are a number of other potential pitfalls (this list is not exhaustive, there are many! ). Initial difficulties and costs can be a deterrent to initial wholesale implementation. For a company to dedicate a number of project managers for a number of months in order to build the framework for PPM could make some organisations baulk at the prospect. To overcome this PPM can be implemented piecemeal in a series of “quick wins” to display its value to the organisation, then more broadly implemented.

Ownership bias towards a project can lead to skewed data reported which has a follow-on effect in the wider portfolio. It is essential to utilise a standardised structure for project assessment to allow for the most beneficial comparison in a portfolio context. The assessor should preferentially not be involved in the actual project implementation (ideally being a member of the Project Office involved in PPM oversight). This can minimise risk in this regard. Managers and project managers may see the PPM process as a “land-grab”, aimed at taking some of their precious resources or prized projects from their grasp.

This is also a human issue and can be overcome with a two pronged approach – having senior management buy-in and using a piecemeal implementation approach to demonstrate the value of PPM. Continued and consistent assessment of the actual PPM methodologies are crucial to the ongoing success of PPM. While there is temptation to treat the process methodologies as “in-place” and “complete” once they are scoped in the beginning is achieved a key factor in demonstrating the value and creating enduring value is that the processes themselves are scored and analyzed much that same as any project that is contained within the portfolio.

Conclusion Many problems plague IT departments today. Projects can run in single channels, lacking visibility of others and creating duplication of effort. Projects lose scope and exceed budget, in terms of both funding and consumption of resources. Business strategy may change rendering a project less worthwhile or possibly more beneficial and urgent. If implemented properly PPM allows a business to align business strategy very tightly to IT strategy, the number one concern of CIOs questioned by SIM in their annual pool of technology leaders in 2011. In fact it could be strongly argued that there is NO entry in the list of top ten responses that would not be considerably improved by PPM)  management is truly the tool to help a business succeed in all seasons, be it bust or boom – or at the very least it can assist the IT function in driving the business in the desired direction (poor business strategy is outside the scope of this paper! ). However it may be most beneficial to implement in a time of recession.

When funding and resources are tight wringing every cent from budget and aligning resources, time and effort to the most optimal result is vital. It is important to view PPM as a tiered process, with each project being the lowest common denominator grouped by sub portfolio (risk profile), then portfolio (business unit/cost centre) and followed by the organisation (if implemented to this level). This gives the most clear view to decision makers of crucial information relating to the relevance and ROI of all ongoing projects.

In summary, PPM is a process which all companies should consider adopting and can: * Re-align your IT strategy to closely reflect that of the business. * Successfully ensure that projects are relevant, feasible and optimized to business requirements. * Derive the best possible results from the least amount of budget and resources. * Make IT a strategic enabler, moving away from a cost centre. * Improve the project process throughout the company, delivering clear and measurable results and ROI consistently.