Project Portfolio Implementation – The Secret Strategy

Project portfolio approach and practice is still developing for many organisations. Organisations with responsibility to deliver many projects a year like utilities companies, government organisations, assets and financial management, contractors, consultants and projects developers are the most must users for it.

Portfolio defined by the PMI in “The Standards for Portfolio Management – Third Edition” as a component collection of programs, project, or operation managed as a group to achieve strategic objectives.

On simple words, the portfolio is an engineering management system within the organisation to maximize profit and limit loses. It will have a wide power within defined policies and processes to monitor delivering projects objectives, programs strategy and business vision.

The portfolio system is a defined governance and integrated processes within the organisation functional departments.

Project Portfolio Management (PPM) is the best practice for project-based organisation. The transition from function based organisation to project based organisation is the only method to maximize the use of fund, resources, assets and risk management to increase profit, maximize opportunities, limit loses and risks.

However, the organization maturity on project management and portfolio management put a challenge to many organizations who wants to implement PPM system.

Therefore, what is the best approach to implement it within any existing organization?

I will share here some secret focal strategies, which should be considered on any PPM systems implementation.

Function vs. Portfolio

In the existing organisations, the first challenge is to resolve the conflict between the functional departments and project delivery team. This can be done through taking the projects support responsibility from the function and hand it over to the portfolio manager. The governance policy and processes for portfolio team responsibility, obligations, authority and KPIs must be defined within this transition.

Gradual Implementation Strategy

The transition strategy is recommended to be gradually with limited number of projects, clients, resources and fund. Even to split the portfolio based on client, region, or sector in the beginning to limit the conflicts and to increase the capacity on each portfolio with sample KPIs. However, this is a temporary step in the beginning. After that it is recommended that each portfolio to have different clients and different disciplines to have a sustainable delivery within each portfolio.

Don’t Put All Your Eggs In One Basket Yet

It is recommended also to have different portfolios before jumping to one big portfolio with sub portfolios. This will minimize the load of implementation while delivering projects.

Management

It is highly recommended to assign the portfolio’s directors from outside the organization because he will be committed to the new changes. However, the project managers are recommended to be from within the organisation because the are familiar with the old project delivery within the functional departments and they can take the responsibility of it within the new PPM system.

Different Business Objectives and KPIs

Each portfolio will be aligned to the business value and strategy. Defining the portfolios establishment and KPIs should not be the same for all portfolios. Some portfolios will have short term objectives and others will have long term objectives.

Resource and Assets Portfolio

Important secret part of the portfolio strategy success is having the shared resources and assets as a separate portfolio. The main strategy for this portfolio director is to ensure his clients (The other Portfolio Directors) are happy while he is satisfying his own KPIs.

Dashboard – Cash Flow KPI and the other KPIs

The main component for the Dashboard must be the cash flow and the KPIs. Other components will be based on the organisation need.

The Positive portfolio cash flow is an important KPI. However, it is not recommended to just monitor it without having a report of the programs or projects with negative cash flow. The governing policy should have a formula linking the positive portfolio cash flow with the negative cash flows including the risk impact. A condition must be on place for moving the negative cash flow project to another portfolio which is the next secret.

Projects with challenges

Here! It is highly recommended to have a governance for projects with issues, negative cash flow, delays, suspended, claims issues, and any other issue including close out issues and contractual issues. This portfolio need certain skills to deal with its clients and its portfolio KPIs are different. The KPIs here are mix between urgent KPIs and long terms objectives or even crucial to the overall business. It needs different governance and processes.

There are more secret points which are not applicable to all organisations or cases and need to be addressed case by case as a result of the organisation assessment before implementing the new PPM system.

I hope this article is useful for you. If you like it please press like and subscribe for future Project Portfolio Planning posts.

Thanks for reading.

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