A portfolio is a collection of your best work, put forth in the hopes of making a positive impression.

Project managers want to fill their portfolios with projects that were or will be successful. This can mean a lot of things: the project stayed under budget, was completed on time, or it made stakeholders happy.

No matter your definition of project success, one thing remains the same: it behooves you in your project management career to become adept in determining the worthiness of a pursuit before you even begin. 

Project portfolio management (PPM) helps you do just that — look at an array of potential actions and make a critical choice as to which path will be the most fruitful. When you become proficient at PPM, you build a lasting reputation as a project manager who delivers on their promises.

And what is a project manager, if not a promise manager?

What is project portfolio management (PPM)?

Even if you have the budget for trial and error, I can bet you’d rather not waste time on the “error.” That’s where PPM comes into play.

PPM is a strategic process project managers use to determine a proposed project’s return on investment (ROI). Essentially, PPM analyzes a bunch of data points to determine the business risk of a project and help companies decide if a project is worth pursuit. 

Types of business risk examples courtesy of Business Jargons

The PPM process is similar to a feasibility study. One major difference is that feasibility studies focus on one specific project at a time, while PPM analyzes the business climate as a whole to help create a cohesive forecast as to what risks could appear. PPM also focuses on every possible project on a company’s list, as opposed to just one.

Let’s discuss what project portfolio management is able to accomplish.

Mitigates and balances risk

We’ve already discussed the importance of a risk management strategy in and of itself. But PPM is a separate strategy, and one that helps mitigate risk. By using the PPM method to analyze trends and perform market analyses, business professionals are able to make the safest decisions for their companies.

Or if they do decide to get into some risky business, they at least know the odds.

Outlines responsible parties

One important aspect of PPM is outlining the roles and responsibilities various project members will be in charge of. This ensures that, prior to beginning a project, all necessary parties are present and accounted for.

Essentially, it gets your project team in place. It would be a real bummer to press “go” on your decision to redesign your website and then realize no one on your team knows how to code!

Gives an overview, not a close-up

PPM is different from other aspects of project management, such as a feasibility study, in that it provides an overview of many different projects, as opposed to a close-up of one at a time.

More specifically, it allows companies to look at past, present and future projects with a bird’s eye view. This is great for companies that want to plan their entire year of projects out, as opposed to focusing on one at a time.

Maximizes benefits

When you have the big picture, you can better disperse and utilize resources. If you know all of the upcoming projects within a six-month window, you are much less likely to run out of money or necessary supplies.

Additionally, you can finagle projects in such a way as to ensure you’re reaching all of your goals and objectives for the six-month window, or whatever unique timeline you’re working on.

Determines projected value

Before undergoing any project, you need to understand the effect and value it can have toward your company. Project portfolio management helps you determine the impact a project will have on your company overall.

Once you understand the project’s value — i.e. will it make a lot of money, will it drive traffic to the website, will it raise awareness — you can determine which projects make sense to collectively pursue.

Mischief managed

There’s a lot more to learn about project portfolio management – don’t think that we’re done here! But I hope you have a good grasp on what a portfolio is, and how it could help your company proactively prepare for projects.