Today's businesses find it increasingly important to choose the best portfolio of projects that will help their organizations meet strategic goals. They find it equally important to execute the portfolio of projects efficiently, bringing to the customer the expected quality and benefits desired from each of the projects. To help in accomplishing this goal, the best organizations integrate Portfolio Management (PfM) and Project Management (PM) practices to bridge the gap between the executive decision process and day-to-day project execution. The two practices together make up what we refer to as Strategic Project Management.
Effective PfM connects business goals, objectives, and strategy to project management. Within PfM are fundamental practices that include linking strategy to project prioritization and selection, and balancing an organization's portfolio to achieve the best results. Also included are typically:
To create and manage a diversified portfolio of projects, organizations need to apply these fundamental processes and develop a standardized approach. Effective project management includes standardized PM practices, highly integrated PM tools, trained and experienced project managers, and a supportive PM organization. Also included is the application of project performance metrics to manage project schedules and costs.
Project Management is the art and science of applying a set of knowledge, skills, tools, and techniques to project activities to meet or exceed stakeholder needs. Portfolio Management similarly is the art and science of applying a set of knowledge, skills, tools, and techniques, but to a collection of projects in order to meet or exceed the needs and expectations of an organization's investment strategy. Both PM and PfM are focused on helping to meet or exceed stakeholder needs, but differ in the stakeholders and focus. The stakeholders for individual projects include business owners, business sponsors, and often the end user of a project's output. These stakeholders are specifically concerned with satisfying their own business requirements and needs, and controlling cost and schedule. When their projects slip or exceed budget, these stakeholders want to know what activities drove the variances.
The stakeholders for the PfM process include financial management, senior business executives, and ultimately the stockholders of the organization. These stakeholders are concerned with optimal investment of scarce company resources, and typically are interested in the return on investment, strategic alignment, and risk profile of the portfolio.
To satisfy both sets of stakeholders, organizations must define an integrated process that links project management and portfolio management practices. They must define review and communication processes that address the needs of the different stakeholders.
Today, companies are challenged with developing and implementing growth strategies, identifying innovative ways to attract and retain their own customers, effectively transforming their business operations, and managing the impact that these changes will have on their organization. A clear strategy to address these issues provides the business perspective and insight to frame business decisions and projects. MNB offers advisory services to help analyze, improve and transform business operations and technology strategies. We leverage deep industry expertise and thought leadership to help our clients move quickly from vision to value and drive sustainable business advantage.
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