What is Project Portfolio Management software?
Estimated reading time : 9 minutes
- Project Management tools help make sure that projects are delivered within deadline, within budget and within scope. They provide Project Managers with a granular understanding of all the aspects of projects in order to maximize the chances of success.
- Project Portfolio Management tools go the extra mile. They help manage the coordination of projects and resources across the organization to optimize overall value and attain strategic objectives.
What PPM tools and solutions can do for you
Managing portfolios of projects involves a good deal of complexity. Project Portfolio Management professionals need to make sure they select the best projects and build value-optimized portfolios. They are required to define detailed and realistic plannings for projects, factoring in interdependencies between initiatives and resource constraints. Portfolio Managers and PMO Managers apply sophisticated financial modelling to appraise project and portfolio potential return and risk. Such activities are everything but easy to perform manually. For example, determining the critical path for a project typically requires painstaking calculations. All the more that any change in the original assumptions will require re-doing the work.
This is why dedicated technology solutions have been created to help. Today’s enterprise software market includes a flourishing PPM segment, with a range of solutions that propose to help Project Management Offices (PMOs), Portfolio Managers, and Project Managers to simplify, streamline, accelerate, and improve PPM work. When properly used, the right PPM platform can make all the difference in a project-oriented organization. Here is an introduction to Project Portfolio Management software, including use cases and benefits, tips to select the best solution for you and leverage all the capabilities of your tool, and points of attention.
The first PPM-oriented products to be developed were Project Management tools. These software programs were created to help Project Managers plan, organize, and manage their resources and projects. Project Management tools offer features designed to assist in a wide array of project-related tasks. They enhance visibility on the project pipeline and eliminate the need to search for project-related information by centralizing all the relevant data in a single place. They remove some of the administrative overhead that traditionally eats up Project Manager time by enabling to automate a whole range of simple, repetitive tasks and calculations, such as progress and cost tracking. They provide ready-made timesheets and project calendars, or pre-filled project models that save PMs valuable time in the project planning phases. They can deliver basic data analysis to aid in business case evaluation and selection, resource allocation, budget management, and problem solving. They offer communication channels and collaboration spaces to help project teams easily share files, collaborate on documents, and send instant comments and notifications. Dynamic execution support capabilities are decreasing the risk of project failure: the system is able to detect potential conflicts, blockers or issues and notify Project Managers, who can anticipate and take timely action to support vulnerable projects before it is too late.
Long story short, Project Management tools automate with intelligence a lot of the project management work. They can facilitate and accelerate the planning, execution, and delivery of projects, which translates into improved performance metrics.
Without a doubt, elementary Project Management tools can bring huge efficiencies to the management of standalone projects as they help Project Managers streamline the workflow to optimize project planning and monitoring activities. However, the organizations that manage their projects as programs and portfolios will soon find that they need extra capabilities.
A portfolio is a grouping of projects that is designed to achieve a defined business objective or strategic benefit. The ultimate purpose of any portfolio of projects is to help materialize the long-term strategy defined by the organization. A portfolio typically encompasses a sizable number of projects. What more, it is not uncommon for a business to create and run multiple portfolios — especially in large enterprises with wide ranges of activities and many business units. Whereas managing projects requires a close focus on the details of operational execution, managing portfolios demands a wider-lens view. Portfolio Managers need to consider the various projects under their purview as a whole and make sure they understand the interconnections and interdependencies. Although on-time, on-cost, and on-quality project delivery still matters, what successful portfolio management really is about is ensuring the balance of the overall portfolio and its ability to deliver strategic benefits.
And that’s where traditional Project Management tools meet their limitations. PM platforms will vastly improve the implementation of a given project, but they won’t really help decide which project should be incorporated into which portfolio, how to sequence, arrange, and prioritize multiple projects optimally, as well as how to manage the dependencies across large numbers of projects which have to share resources and access to funding — they’re just not designed for that.
This is why the companies that run portfolios of projects in pursuit of high-level benefits need the support of a fully-fledged Project Portfolio Management tool.
Project Portfolio Management Software offers the same capabilities as Project Management platforms, with a whole bunch of cherries on top.
A PPM platform is a piece of software designed to help the enterprise’s project professionals handle groupings of projects or products, while taking into account their interrelations and their impacts on strategic objectives. For instance, it materializes n-n connexions at the level of one or multiple portfolios across various areas of the business, showing how individual projects may be interdependent and synchronizing schedules. Industry-grade PPM solutions include business cases and candidate projects into portfolio views and analyses in order to offer a forward-looking perspective on project activities and guide decision-making.
Whereas PM tools provide a platform for managing a project from A to Z, PPM software centralizes and consolidates project activity at the level of the company to provide a comprehensive, all-encompassing view of processes, operations, and resources. Thanks to this superior visibility, the PMO and other PPM professionals are able to take a step back and gain a big-picture understanding of what’s being done at the scale of the whole business.
Project Portfolio Management platforms consolidate all the information in real-time, taking into account any update of any of the individual projects in the portfolio and adjusting the overall picture accordingly. Automated calculations and analysis help to make sense out of huge amounts of data and extract the actionable information or valuable insights that will guide sound and smart decisions. Based on that knowledge, cross-project management and optimization features make it possible to perform instant adjustments at the portfolio level.
Among the key capabilities and features of Project Portfolio Management tools are resource and budget management functionalities. Any self-respecting PPM platform boasts modules that are designed to help see, understand, manage, and optimize the allocation and utilization of the organization’s resources.
For financial resources, PPM software provides budget planning features that make it easy to estimate and forecast all costs related to specific projects and portfolios. Capabilities include support for various ROI calculations. Automated expense tracking features help monitor the implementation and execution costs, with automatic alerts and notifications in case of potential overruns. This way, Project Portfolio Management software helps the company make sure that project and portfolio activity is in financial control.
Optimizing the utilization of human and material resources involves an extra layer of complexity. A dollar is a dollar (as long as you leave out currency exchange and time value of money considerations — but that's another story). But different pieces of equipment or machinery won’t have the same purpose and usage conditions, and different workers will have different roles and skills as well as unique individual traits. PPM platforms provide resource management features designed to help ensure that every resource is assigned in the best possible way. First of all, the software opens up visibility on resource availability based on working hours, previous assignments and engagements, and personnel leaves and absences. Then it leverages capacity analysis and pre-defined resource attributes to recommend the resource allocation plan that optimizes overall utilization while intelligently matching resource skills or capabilities with project requirements. In addition to speeding up and facilitating the process for resource allocation significantly, this enables the company to make the most out of its resource investment. Any change of fluctuation in demand or capacity due to the occurrence of unexpected events is automatically taken into account. The tool automatically identifies the next-best option and provides mitigation suggestions. Bottlenecks and resource shortage can be anticipated well ahead of time, and staffing decisions can be made on the basis of sound and objective data. And, because portfolio-level analysis enables the tool to understand which projects are most valuable or critical, it also factors in such value considerations when resource trade-offs between projects are warranted.
At the end of the day, the PMO knows who is working on what across portfolios and has the assurance that every resource is assigned to the right tasks at the right time. Real-time visibility into inbound demand and capacity allows Resource Managers to anticipate and solve problems in a timely manner.
We mentioned earlier that a key purpose of the Project Portfolio Management discipline is to enable the organization to achieve strategic benefits. This starts by selecting, prioritizing, and enabling strategy-aligned projects. A firm’s resources are inevitably limited. In many of today’s organizations, they’re even getting pretty scarce. So the goal is to make sure that whatever amount of funding and capacity is available is funnelled to the initiatives that will most directly contribute to materializing the enterprise’s vision for the future.
For a company, strategic value is obviously correlated to financial value — going bankrupt is hardly a business accelerator — but it usually spans beyond ROI and other financial metrics or calculations. In business too, some things are priceless (or, at least, too hard to quantify!). Improving brand image, accelerating the switch to a digital culture are examples of strategic objectives that financial managers have a hard time monetizing. Besides, such objectives as tapping into new markets, inventing a new product or service, or digitalizing operations can be viewed as strategic goals in themselves, regardless of the financial profitability boost they’re likely to drive.
Once the leaders of the organization or business have defined strategic objectives and directions, Project Portfolio Management software helps the PMO or PPM professionals identify and nurture the initiatives that’ll help that vision come true. The tool’s prioritization engine analyzes candidate projects and business cases against a battery of custom criteria and parameters to compute an alignment score and ranks project ideas by strategic fitness. The criteria can be revised and adjusted over time to reflect changes in the environment or business priorities.
In the realm of Project and Portfolio Management, value appraisal should always include risk analysis and assessment. When evaluating and scoring potential projects, Project Portfolio Management platforms factor in technical feasibility, resource, and budget requirements, as well as the full spectrum of risks and potential issues that may or might harm or thwart the initiative. Project Portfolio Management software tools also help PPM professionals understand how the selected projects should be grouped together in order to maximize synergies and efficiency and to build balanced and consistent portfolios with acceptable global risk profiles.
In addition to being instrumental in project selection and prioritization, PPM software enhances the quality and reliability of any decisions or trade-offs that have to be made to adjust and optimize the portfolios. Because Project Portfolio Management tools provide complete sets of fresh and accurate data, decisions are informed and tend to deliver better results. Your PPM platform also offers advanced data analytics and modelling capabilities to make the data speak and help you define the best course of action. For instance, the ability to simulate “what-if” scenarios across multiple portfolios and to compare the simulations with active projects is invaluable when faced with a dilemma or a complex situation.
From collaborative work management tools to adaptive PMO solutions to costly and high-maintenance IT enterprise platforms, the PPM tool market offers countless options.
In order for you to understand which type of solution is the best match for your company, it helps to analyze your current situation, with a focus on your business challenges and requirements. Understanding the PPM pain points and problems that your organization is currently facing will help you pinpoint what is really needed, and how your new Project Portfolio Management tool can create the most value. Based not only on a comprehensive evaluation of performance gaps and business objectives, but also on stakeholder feedback, you should be able to frame a list of requirements, then browse the market to find the one solution that matches them best.
Additional points of attention and evaluation criteria when exploring Project Portfolio Management tools include:
Most organizations expect or hope to scale up their activity moving forward. So you should pick your solution with growth in mind. Make sure that the tool of your choosing will be able to serve its purpose months and years from now and can adapt to increased use and demand.
Regardless of the technology and PPM maturity of your user base, it is always safer to go for a user-friendly tool with intuitive interface, compelling visualizations, and great navigation experience. This will minimize the need for change management effort.
You’re picking not only a tool, but also a technology partner. Your software vendor should commit to supporting you during the purchase and implementation phases. Top-notch professional services will help you get a usable solution that’s customized to your needs in minimal time. Moving forward, you’ll need responsive customer support and customer success services to help you make the most out of your solution and fast-track user adoption.
Cloud-based PPM tools have been gaining traction because of the many advantages that the SaaS software delivery model has to offer. However, you need to make sure that your solution partner provides appropriate information security and privacy guarantees.
Often dubbed “PMO tools”, PPM solutions are the best allies of Project Management Offices and PPM leaders who seek to make a splash. As a matter of fact, implementing a PPM platform is usually one of the first steps taken by newly-founded PMOs. Because it helps ensure that all projects and portfolios achieve business goals and create strategic value, Project Portfolio Management software is instrumental in positioning the PMO as a key value contributor and a strategic asset.
For more information on PPM software, we recommend:
- Why is Project Portfolio Management important?
- Why do you need a PPM tool?
- Webinar: Do you have the right tools for your PMO?