Project management is one of the worst disciplines when it comes to spawning jargon and redundant subcategories — PM, EPM, EVM, BPM, APM … you get the idea.
Some of these “innovations” differ only in marketing semantics, while others have tangible purpose and can add real value to your business. Project and portfolio management (PPM) software falls into the second category; it’s distinctly different from basic project management and promises a strong return on investment when paired with the right company and the right administrators.
Traditional project management (PM) mainly targets micro elements within the project life-cycle (task management, milestones, Gantt charts, time sheets, etc.), with the largest focus unit being the project as a whole. PPM is less about process and more about prioritization.
PPM, on the other hand, focuses on an even bigger picture: managing and balancing allocation of resources across a portfolio of multiple projects, similar to managing financial investment portfolios. In that sense, PPM is less about process and more about prioritization. Project portfolio software helps portfolio managers automate the following core functions:
- Financial management
- Pipeline management (project and product development cycles)
- Change control and contingency planning
- Resource management (as distinctly different from financial management)
- Risk management
In addition to these areas, many PPM solutions also provide standard PM features that enhance visibility, measurement, and standardization, although this is not necessarily the norm.
Kenny Ingram, global industry director at IFS, put it this way: “Portfolio management, be it across products, projects or programs, really involves functionality aimed not at day-to-day project management . . . Rather, it is designed to handle the overarching project, program, or product environment, including current and future needs and demands on resources.”
What You’ll Miss Without It
Under the influence of market transformations like outsourcing, globalization, the mobile workforce, and the growth of collaboration technology, project management has been endlessly adapting and reinventing itself, but it can only contribute as often as it gets used.
According to this year’s Pulse of the Profession report by the Project Management Institute, project-focused organizations report losing an average of $109 million for every $1 billion spent on projects and programs. This could be correlated with stupendously low PPM use; only 17 percent of midmarket companies used PPM last year.
Compare that with this: In organizations that identified as “highly effective in portfolio management,” 62 percent of projects met or exceeded their projected return on investment (ROI).
You Might Need PPM If . . .
The truth is, not every company needs PPM software. Depending on business size and ideology, it might be more appropriate to lean on more basic PM methodology. Some IT buyers say that the huge scale and complexity of PPM systems makes them incongruous with the iterative development processes of smaller outfits, and that could be true, although there are pared down, software-as-a-service versions of PPM that could still be useful in such cases.
In the end, the evaluation is up to you, but here are some contexts in which PPM software could prove especially valuable:
- You have multiple irons in the fire: If your organization is trying to juggle multiple projects simultaneously without using PPM software, you’ve undoubtedly had to work outside of your PM solution to run big-picture plays like resource allocation, change management, and balancing investments between projects. PPM software gives you a unified aerial view of not only the actions your company is taking, but where it’s headed with those actions. Imagine if audio technicians had to run onto the stage and adjust volume and EQ on each instrument during a concert, instead of managing all the levels from a mixing board. That’s the difference between PM and PPM.
- Your projects are complex and enterprise-scale: Big projects that require collaboration between different departments and campuses at different points in the development cycle need advanced organization. Some enterprises rely on the PM features integrated into their enterprise resource planning (ERP) system, as this allows them to work seamlessly between logistics, supply chain management, inventory, and project management roles. But many ERPs only offer basic toolkits for project management, again requiring you to work outside of the system (think spreadsheets, emails, chaos) for your portfolio needs. Even if you already have an ERP, it may be worth looking into a separate PPM solution.
- Your projects involve a high degree of risk: This happens a lot with asset-intensive projects — i.e. ones you’ve spent a lot of money on, but aren’t confident in the outcome and whether or not you’ll reap any ROI. These kinds of projects need to be constantly reassessed for the risk they pose to both financial and time investment, which is one of the essential functions of PPM. Risk assessment is typically important to industries that rely on heavy accounting, such as EPC (engineering, procurement, and construction), aerospace, and defense.
- Your project stakeholders are widely dispersed: Thanks to cloud-computing and collaboration tools, development companies often rely on remote located in different countries. As you manage these long-distance relationships across phone lines, Skype calls, emails, and time zones, it can be difficult to measure progress and orchestrate hand-offs between different teams. PPM solutions like AtTask keep your collaboration tools in-house with streaming updates, peer-to-peer assignments, centralized request management, and document sharing. PPM also helps you allocate resources and larger tasks to the right teams and see a global view of project hours.
- Your company is proliferative and innovative: You’re probably already thinking of companies such as Google, 3M, or Apple, and while that’s correct, IT isn’t the only industry that spends most of its time developing and manufacturing new products. Hallmark, for example, has over 100,000 active SKUs with 40,000 different retailers. When holidays roll around, they have to produce huge volumes of new products and get them out to customers on time. “You don’t manage that on a spreadsheet,” CIO Mike Goodwin told CIO Magazine. Hallmark has been using Planview’s PPM software for over a decade.
If you decide to shop for a project and portfolio management solution, first of all, make sure you start with our product selection tool; we’ll give you personalized PPM recommendations based on your company’s needs. But second of all, remember that PPM software is not an end in itself, but rather the means to an end. The end, of course, is the methodology and discipline you’ll develop as a result of using the software.