Project Portfolio Management vs. Project Management: What Does your Organization Need?
Category : ERP
Blog posted by : Admin / 18 Jan, 2022
While Project Management (PM) is a system commonly used by many organizations to plan and execute project-related tasks, the Project Portfolio Management (PPM) software finds fewer takers.
A PPM software solution enables monitoring and managing of projects, programs and portfolios of an organization through a single centralized dashboard. Often, people are not aware of the differences between PPM and PM and cannot analyze why they should choose one over the other.
Although both management systems streamline business workflows, they do differ in their functionalities and objectives.
Why Should You Read This Blog?
This blog will focus on the definitions of PM and Project Portfolio Management in addition to describing the processes and activities involved in each technique. The blog will also list the minute differences between both the processes.
The list of differences will help you understand both the techniques clearly and the detailed description of activities will help you analyze what your business needs. Once you figure out which activities fit in more with your business, you will then know whether to invest in project management or Project Portfolio Management software.
In order to understand the definitions of the two terms without creating any ambiguities, it would be best to break them down into smaller components and compare.
| Project Portfolio Management vs. Project Management | |||
| PM | PPM | ||
| 1. | Aim | Planning, designing, controlling and executing a series of tasks | Analyze value of ongoing projects and choose upcoming ones |
| 2. | Outcome | To deliver a product, service or benefit | To align all projects with the company’s business objectives |
| 3. | Method | Complete within the given timeline and resources | By optimizing resources and budget |
| 4. | Skills | Communication and collaboration, handle risks and change | Project organization, consolidation and analysis |
| 5. | People | Project manager, team, sponsors and clients | Portfolio managers, Project Management Office (PMO), executive administration, sponsors, customers |
| 6. | Value | Creating deliverables | Creating business value |
| 7. | Purpose | Executing projects in the right manner | Picking the right projects |
| 8. | Approach | Bottom-up | Top-down |
Project Management (PM)- Definition, Process and Activities
PM consists of a number of tasks that need to be completed to deliver a predefined value. Projects are generally temporary in nature, with a start date and end date. The end result is usually a product or a service.
Project managers need to oversee a core team along with all the stakeholders, such as vendors, suppliers and clients.
Project Management Process
1. Set Project Goals
Surely, it is important to set realistic goals but it is equally important to define them clearly. Every aspect of the project needs to be considered to define the goals and scope, which then needs to be communicated to all team members.
Often organizations miss out on clearly communicating the goals of the project to each and every team member. It gives the team a purpose, which reflects in their quality of work.
2. Define Scope of Work
The scope of work clearly outlines the work that needs to be done in order to complete the project. The actual scope of work varies from industry to another. In some cases, it also includes a list of the hardware or software that would be needed.
3. Create WBS
The way a team handles its collective tasks predicts the probability of the delivery of the product or service. A Work Breakdown Structure (WBS) is a great way to break down all tasks into smaller and more doable tasks. With the project management software, you can easily create many WBS workflows based on deliverables, phases, products and more.
4. Develop a Schedule
Scheduling involves planning a lot of activities and also details about them. Start and end dates need to be assigned to tasks, which in turn are grouped into phases for easier monitoring. Every activity is assigned a team and a member who will be responsible for completion.
Planning and scheduling create a realistic timeline that can be followed by the entire team. With the PM software, project managers can easily create Gantt charts and monitor project progress visually through graphical representations.
5. Create Contingency Plans
After creating a timeline with the activities that align with the goals of the project, the manager also needs to take into account possible delays and risks. A contingency plan comes into the picture to accommodate expected and some unexpected delays.
6. Manage Change
As the project progresses, there is bound to be some change in the activities or team members. To create a plan to oversee change beforehand makes the transition easier. It should list out the expected impact of the change, who it will impact and how the transition will be handled.
PM Activities
The following terms are probably some of the most commonly used ones in day-to-day life. This phase-wise breakdown of activities can be planned, executed and easily achieved with an automation system such as project management software.
1. Initiation- All pre-sales activities take place during this phase where the company understands the requirements of the client which are listed out clearly.
2. Planning- This phase involves the planning and scheduling activities that include determining the scope, budgets, resource and timelines.
3. Execution- The team gets to work and starts executing the tasks assigned to them. The top executives receive scheduled reports on the work and cost of the project, which sometimes is also shared with the client, upon request.
4. Control and Monitoring- Assessing the quality of work is equally important during the execution phase. Checking for deviations, maintaining open lines of communication, mitigating delays, following the set timeline and more activities are ongoing ones.
5. Closeout- The phase begins when all the requirements of the client are complete. If the deliverables are acceptable to the client, after evaluation the project will be handed over to the client and they will sign-off on the closure of the project.
Project Portfolio Management (PPM)
Project Portfolio Management can be defined as the collective handling of an organization’s projects, programs and processes. A group of projects form a program and a group of programs form a single portfolio.
The reason for the categorization of certain projects varies from company to company. For all projects and programs to fall under one portfolio, they do not need to be related to one another.
With the implementation of Project Portfolio Management software, managers can monitor all activities and determine if the outcomes are aligned with the company’s objectives or not. Optimization of all project modules can also be easily achieved with PPM software.
Program Management
A group of projects are executed under a common umbrella, known as programs. The overseeing of individual projects with pre-defined deliverables to fit into a larger strategic plan is program management.
A program manager needs to change projects, if needed so they move in the direction of the company’s objectives. Taking up strategic initiatives is an important job for a program manager to improve organizational performance. A challenge for the program administration would be get the team and all the stakeholders on the same page and to keep their activities in line with the company goals.
Portfolio Management
Taking Project Portfolio Management vs. Project Management into context, the end goal of PM is to achieve the target within a stipulated time. In portfolio management, the ongoing goal is to align all projects and programs with the organization’s strategies and objectives. Instead of handling the resources, budget and activities, portfolio management focuses on optimizing them.
A project portfolio manager or the PMO selects projects after analyzing and determining their value. One of the important parts of their jobs is to pick the right projects for the organization that will help propel the company’s mission.
Objectives of Project Portfolio Management
- While projects focus on delivering value, the PPM team works through a broader perspective.
- Select and prioritize projects that will help achieve the company’s objectives
- Analyze projects and determine value to decide whether to continue or stop
- Optimize and procure resources
- Train and provide knowledge to teams
- Creates consistent process across projects and programs
- Support teams and remove obstacles for them to advance
Project Portfolio Management Process and Activities
It is common knowledge that strategic planning is the main goal for PPM but resource optimization and conflict resolution are also some resultant activities to keep the teams functioning and focused.
1. Business Objectives
Identifying business objectives helps plan and choose projects. It is also essential to communicate the goals to all stakeholders and collectively plan the direction of projects.
2. Research Ideas
Once a portfolio is set up, it needs project ideas. The portfolio manager can research and source for ideas while involving the team to pitch in.
3. Develop Evaluation Criteria
To select projects that fit in with the pre-defined strategic objectives, managers need to determine value. The evaluation criteria will be created based on the cost, duration, risk, ROI and resources available.
4. Assess Feasibility
Evaluate the risks associated with the shortlisted projects and conduct feasibility studies to avoid underestimating or overestimating the project.
5. Execute your Portfolio
Collaborating with projects and programs managers will be the most common activity for a portfolio manager in addition to identifying deviations, resolving conflicts, pausing or stopping a project and continual monitoring to ensure adherence to overall strategic objectives.
Project Portfolio Management vs. Project Management Software -Complete Project Life Cycle Tracking with Powerful Analysis Tools
One of the best ways to achieve the goal of strategic as well as task management is to invest in PPM software. It provides all stakeholders with a centralized dashboard that is accessible through the internet on any device! Generally, for larger organizations, PPM has become a necessity with the broader perspective it lends to the running of the company. For smaller organizations, PM software would suffice.
