Any organization that runs projects eventually reaches a point where project portfolio management (PPM) implementation becomes necessary or even indispensable. As project activity grows more complex, being able to quickly prioritize demand and resources, identify conflicts, and define work plans becomes more important than ever. Knowing how to implement project portfolio management (PPM) helps improve visibility over project and portfolio activities and provides insight into their strategic alignment.

However, the implementation of a PPM system is not as easy as it may seem. Creating project portfolio management processes involves introducing organizational changes that will impact the process, structure, and culture of the enterprise. Let’s examine some of the steps you should take to ensure that your PPM process implementation efforts go off without a hitch.

Step 1: Analyze the Current State of Your PPM Practices

Before you worry about PPM implementation, take a step back and look at your current project and portfolio management practices, systems, and tools (if you have any). This will help you set your expectations and get a feel for what your PPM processes should seek to change.

Take an objective snapshot of the way things are and work to determine what needs to be tweaked or overhauled. Then, drill down into the details to tie problem symptoms to their probable root causes. This is the best way to identify effective solutions.

Many of the companies that set about to implement PPM in order to address insufficient work prioritization and competition for limited resources have the following problems:

  • Without a formal governance framework or system, no one is responsible for overseeing the end-to-end life cycle of cross-functional projects.
  • Different functions and groups use different tools and processes to record, analyze, and track project requests. Those disconnected processes are not always clearly defined, either.
  • Project resources and funding may be tracked and managed at the level of a domain without company-wide supervision. Schedule clashes and conflicts are frequent.
  • Data collection is inconsistent and haphazard, leading to missing, inaccurate, redundant, or outdated information.
  • Because of a lack of communication across functions, different teams commit to delivering projects without confirming that capacity allows it.

These are just a few examples to consider; every organization is faced with unique challenges and requirements. Regardless of what they are, the pain points should be mapped out and analyzed for successfully implementation of project portfolio management processes that lead to tangible change.

How to Implement Project Portfolio Management (PPM) Processes


Step 2: Define PPM Scope and Objectives Before Implementing

Following the analysis of your current position, you should have a good idea of where you want to get. For each of the areas showing room for improvement, use a competitive benchmark to quantify performance gaps. You should also try to assess to what extent your new PPM process can make things better.

As you do so, it’s important to set realistic expectations. There’s only so much that PPM can do: it is not a cure-all for all business issues. For example, even the best PPM systems won’t do much to solve problems due to an ill-fitted strategic positioning.

Do your best to make sure that you understand what you can really achieve with your PPM initiative. Otherwise, making overpromising claims and pursuing unattainable targets will harm the value — both actual and perceived — of your endeavor. 

Once you have a good idea of what you’re trying to reach, find the path that’ll take you there. In other words:

  • Determine what the scope and extent of the methodology you are trying to develop should look like.
  • Understand if the PPM process should be integrated with other organizational systems (e.g., Financial Management, Human Resources Management).
  • Define near-term areas of focus for your PPM (most immediate needs and priorities) and a longer-term roadmap (mid and long-term milestones).
  • Identify who should spearhead the process to maximize adoption and impact.
  • Identify the necessary skills and tools for both successful implementation and the related change management effort.


Managing Change

Introducing PPM processes into your organization can disrupt the habits of many people across the business. They’ll need to be convinced of your initiative’s relevance and supported as they learn to work under the new system.

Consolidate the findings of your analysis and your proposed PPM model into a business case and present it to executive and operational stakeholders. The goal is to create a common understanding of the challenges at hand and a shared vision of the desired outcomes to secure endorsement for your plan.

Step 3: Creating a Framework for PPM Implementation

The PPM methodology you design for implementation should provide a clear and solid framework. It should include criteria to assess project worthiness according to specific requirements, along with a method for prioritizing initiatives and incorporating them into a specific portfolio.

Your initial framework should also provide a methodical approach for project planning, initiation, execution, and delivery. That means outlining clear processes to manage workflows, permissions, and approval criteria.

Following the establishment of selection and prioritization criteria, put these criteria to the test. You could, for example, ask project managers to test the system against a sample of completed representative projects, comparing criteria-based assessments with actual outcomes. This will let you know if your system and assumptions are valid and where they require adjustments.

Step 4: Develop a Governance System

You also need a PPM governance model to actively support and oversee the processes you’re designing. A common and simple way to establish a governance structure is to create a Portfolio Management Council composed of the business and PPM leaders who participated in the strategy formulation process.

Your governance body will help identify and allocate budgets to different strategically aligned project categories. It will also be in charge of distributing the resources required to implement decisions and taking action to mitigate issues that might threaten benefit realization.

In addition to that top-level PPM governance body, you can establish subsidiary governance structures to oversee and manage specific PPM aspects or areas — for example, to ensure that individual projects align with the strategy and execute properly.

Step 5: Choose and Implement Project Portfolio Management Software or Information System

Your team will need the ability to run in-depth analyses to select and prioritize projects, make investment decisions, and optimize resource allocation. This requires the support of a robust PPM software solution.

PPM tools like Sciforma provide a single platform to accommodate all project-related data (including financials, schedules, resource information, etc.) at the level of multiple portfolios, with safeguards and audit trail mechanisms to ensure data integrity and accuracy. Sciforma also makes it possible to automate repetitive tasks to get required data at the push of a button while reducing the administrative overhead for project managers and contributors.

A professional PPM software tool will also allow you to:

  • Highlight the linkages between projects, portfolios, and strategic orientations
  • “Crunch the numbers” using advanced analytics and financial modeling
  • Run project and scenario simulations.
  • View key insights that will facilitate reporting to decision-makers and stakeholders


Final Thoughts on How to Implement Project Portfolio Management (PPM)

The successful implementation of PPM practices in a project organization requires a methodical approach and a sound process. You will need to design and apply a standard methodology, a governance structure, and management processes designed to facilitate operations and decisions. The goal? To enable the business to derive superior value from its investments in its portfolios of projects.

The key to a quality PPM initiative is to mold the process to your organization’s specific challenges and configuration. While this requires some upfront effort, it yields much better results than trying to force-fit a solution unaligned with your business drivers.

Want more tips? Check out our Project Portfolio Management Strategy Guide to get your PPM processes off the ground quickly and efficiently.



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