Multi Project Management or Project Portfolio Management (PPM) is defined as a centralized steering and managing process effecting a certain group of projects. Effective PPM is performed by using particularly defined methods, approaches and technologies.
Project Management and PPM – what´s the difference?
Although it´s quite plain that Project Portfolio Management deals with a multiple variety of projects, distinguishing between both terms isn´t that easy. Portfolio Manager transform enterprise´s strategies and goals into a portfolio of projects achievements and results. To put it simple, PPM can be defined as the realization of business objectives through execution of various projects. The use of common techniques and methods within the portfolio can release synergic capacities enabling multi project management teams to outperform single project management strategies.
Requirements and preconditions of a successful Project Portfolio Management
Creating a competitive PPM policy, the projects selected should offer certain characteristics to receive optimal acceptance.
Benefits of project results
Project managers are well advised to check thoroughly if the results of the project will create not only short-term solutions, but sustainable effects and long-term benefits in favor to corporate goals. In addition, the prime motivation for launching the project should be popular according to enterprise´s strategies.
Eligible projects for the portfolio should imply the potential to create significant business value and project objectives should match with enterprise´s strategies and policies. However, the final question: „should we do it?“ may end up with some intuitive motivations of company´s board or other stakeholders.
No matter how interesting the topic of the project is – it needs a stable fundament. Portfolio managers are supposed to check if the necessary personnel and material resources as well as the financial funds are at project managements disposal and if it is possible to gather the essential information to execute the project. And in addition: Is the risk, the project is fraught with, manageable and is it balanced with the risks of other portfolio projects?
Advantages of Multi Project Management
Strategic planned PPM can ensure the following benefits:
Right mix of projects
Projects vary by their short- and long-term benefits, their synergy effects and risks and their estimated return on investment. Selection of high-value projects directs investments towards deserving activities, coordinated and synergetic handling within portfolio projects reduces overlaps and redundancies in day-to-day project business.
Balance of risks
General rules of diversifying portfolio holdings can also be applied on multi project management strategies. Conservative adverse-to-risk-policies may reduce losses and preserve funds, but limit potential profit. Conversely a prone-to-risk portfolio offers great chances of „big gains“ which seem to be like a shortcut to a successful end but implies higher risk of failure. Diversifying enterprises project portfolio offers a balance between risks and potential returns.
Correction of problems in time
PPM is not a „miracle cure“ to eliminate problems but it can help to correct them before they become major issues. Immediate and adequate responses to problems or deviations keeps the project on the right track.
Support and oversight by enterprise´s executive level
Executives have the authority to ensure alignment between projects and business objectives. They can provide positive frame conditions for projects, grant the resources needed and can be helpful to resolve critical issues.