The business rationale of project portfolio management
An efficient project portfolio management system is crucial if companies are to achieve their performance targets and strategic objectives. Effective project portfolio management can help companies create organic value, unlock hidden value from within processes and can help manage risks. Project portfolio management can be defined as the planning and management of a set of concurrent projects and programs within the organization. Although the projects are not necessarily connected or interdependent, they do have an impact on each other due to their reliance on the same resources.
There are two critical phases of project portfolio management: planning and management. During the planning phase, coordination and communication between senior managers, project leaders and operational heads is essential to leverage buy-in and gain leadership commitment. As the projects progress, the focus shifts to tracking and reporting, coordination of resources allocation, communication between project participants and coordination between different project leaders. In addition, the success of a project portfolio management strategy largely depends on other crucial elements in the mix. These include: organizational structure, internal process, the availability of real-time information on capabilities, control and systems and human factors. The transparency of goals and business objectives among all employee groups is also essential to be able to empower staff, as is clear communication channels.
Overall, the project management activities should be focused on aligning the company’s portfolio of projects with its strategic objectives so that organizations can achieve the desired results.
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