“Portfolio management is a discipline whose time has come” says Nigel Smith; Chief Executive of the Office of Government Commerce (OGC) is his foreword to the OGC’s recent book ‘An Executive Guide to Portfolio Management’
This view is supported by recent reports from leading research companies Forrester & Gartner which clearly shows a rapidly growing adoption of Project Portfolio Management (PPM) as a critical success factor for project based organisations.
But their research also reports that many organisations fail to achieve the benefits expected of PPM and that many PPM implementations are seriously flawed primarily because the portfolio management business processes were not robust before implementing the PPM technology into their business.
Organisations are spoiled for choice with over 20 vendors offering highly functional PPM systems. But implementing PPM tools and systems is no guarantee of success and may even be counter productive.
The benefits of Project Portfolio Management (PPM) are so attractive that many CIO’s and Directors just want to implement a system and start to reap the rewards straight away.
This is not surprising given the benefits that can be achieved for organisations that get PPM right:
- Organisations implementing PPM processes and tools typically see a 10-15% cost reduction and the ability to free up capital for new investments (Gartner report)
- PPM processes ensure that the right projects are being supported and projects that are performing badly or are not closely aligned to the strategic objectives are either removed or reshaped;
- PPM promotes transparency, accountability and fact based decision making all of which generally leads to better use of the organisations resources;
- The availability of ‘good data’ gives project and portfolio management more credibility in the boardroom which leads to more engagement from senior executives which in itself is one the key factors for successful project delivery;
- More and more companies use projects to deliver their key objectives and strategies and as a result the outcome of projects have a strategic impact on the organisation. PPM provides the management framework and enabler for getting this right.
Properly implemented, PPM can be a key strategic contributor to the growth of your business…but only if your Portfolio Management processes are mature enough to take advantage of the technology and your organisation is ready for the cultural and change management that PPM will introduce.
In my experience cultural and political issues are the biggest rood blocks to implementing PPM successfully and organisations with mature Portfolio Management processes are much more likely to succeed with their PPM implementation. Technology can be a great enabler but does not guarantee success however much the software vendors may try and convince you otherwise.