Although complementary, we often associate project management and project portfolio management. However, these two theoretical frameworks do not imply the same forms of management, the same professions, or the same responsibilities. What are the main differences between those two frameworks? How to move to project portfolio management? What is the role of PMO? Find out the answers in our blog.
What are the differences between project management and project portfolio management?
If you’ve been in the business of project management for a while, it has no secrets for you. Project management is the set of activities aimed at organizing the smooth running of a project and achieving its objectives. This is defined by a scope, a budget and a duration. To carry out this project, a set of tasks must be carried out by a collaboration of specialized resources within a defined time, under the supervision of a project manager, who ensures that they run smoothly.
The project (or program) portfolio includes all of the company’s projects. The concept of the project portfolio is to take distance and get a global vision of the projects carried out in alignment with the strategic objectives of the company. In particular, it makes it possible to centralize and optimize the allocation of resources (all the more if they are limited) and to unify information to draw common processes within the company and improve their efficiency. In other words, portfolio management provides an overview of projects to analyze and prioritize those that are aligned with the strategy of the company while ensuring maximum efficiency.
How to move on to project portfolio management?
As you will have understood, managing project portfolios brings another dimension to your business strategy. Each project is always managed individually, with its investments and its risks. But bringing all the projects together in a portfolio makes it possible to control and reduce the overall risk. The profitability of each project, and of the company as a whole, is much better measured.
To move to project portfolio management, it is necessary to set up tools, processes and teams within the organization. Managing a project requires technical skills linked only to the project in question. Project portfolio management requires strategy management and risk management skills.
The project portfolio management (PPM) requires functions and profiles with a real interest and legitimacy to guide the selection of projects in the portfolio. Moving to project portfolio management involves adding new methods to cover this wider field and the extended responsibilities that accompany it.
What is the role of the PMO in managing project portfolios?
The Project Management Office (PMO) defines the standards and processes, ensures that project managers and their assistants have the required knowledge and know-how, implements tools to facilitate project management, and controls the proper use of all these resources at the portfolio level.
Sound and efficient project portfolio management is carried out with a dedicated governance council which works in partnership with the PMO. A good project portfolio management model combines the talents and responsibilities of the PMO and the governance council with those of senior management to ensure that projects effectively contribute to the company’s long-term ambitions and strategies.