Definitions of Project Portfolio Management main terms

A B C D E F G I L N O P R S T W

A

Agile methodology

What is Agile?

Agile is a project management methodology. It is most commonly deployed as a software development method.

While there is no single creator of Agile methodologies, it was first outlined in 2001 by 17 software developers in the Manifesto for Agile Software Development. This is more commonly referred to as The Agile Manifesto.

How Does the Agile Methodology Work?

An Agile project team starts with a very simple, functional project design. They then add further functionalities in later versions called ‘iterations’. At the end of each iteration, they have an updated, tested, and shippable or usable software version. Developers or project managers (PMs) then collect feedback from customers and users to identify potential improvements.

Agile incorporates feedback from users and the customer at an early stage. This ensures the end product is in line with customer expectations and relevant to market needs.

Project stakeholders decide what the next iteration will target. They will incorporate user feedback, team feedback, and any relevant outside trends. This offers increased flexibility and easier collaboration while focusing on delivering a usable product with continuous improvements.

You may be familiar with the Waterfall method, which is more rigid and doesn’t prioritize frequent, fast changes. In contrast, the Agile methodology allows for changes at any stage while ensuring each product iteration is functional. The changes will depend on your product or industry but may include useability, security, performance, integration, etc.

Agile methodologies differ by:

The length of their iterations (1 to 4 weeks)
The activities performed
The resulting deliverables

Can Agile Be Applied to All Projects? And When Does Agile Not Work?

There is no one-size-fits-all approach to developing any product or undertaking any project. Agile methodologies mainly suit complex projects, such as software development. But you can apply its principles to any project that requires flexibility and collaboration. So, when does Agile not work? Here are some things to consider before applying Agile methodologies to your project.

Does the project have a clear deadline and an established set of requirements? If so, it may be too rigid to realize the benefits of Agile methodologies. Instead, a more standardized approach may be better suited.
Agile methodologies are most effective when an entire organization adopts them. If senior leadership is not ready for an organizational shift to Agile, or the project’s risk tolerance is too low, it may not be the right time. Ask yourself: are stakeholders interested in adopting an Agile approach? Could my project benefit from it? If so, now might be the time to build a business case for it and try it.
Agile produces better project outcomes because customer and stakeholder feedback informs each iteration. Gathering feedback can be challenging for industries that deal with highly regulated products or sensitive data, such as the pharmaceutical industry. In this instance, other methodologies may be more suitable.
The larger the team, the more challenging the coordination. Agile may be better suited to small groups that span multiple teams, but this requires seamless collaboration.

What are the Benefits of Being Agile?

There are several benefits of adopting an Agile approach. It enables your team to develop and roll out a usable product quickly. Then, the focus is on scalability, improvements, and developments. Benefits to your team, organization, and end-user include:

Agility empowers teams to collaborate on common, strategic goals. The idea is to work without rigid structures and confinements. Teams communicate regularly and respond quickly to market and consumer changes. This ensures continuous improvement with every iteration of the product or project.
Organizations can enjoy a faster time to market by prioritizing a viable product over a perfect or comprehensive one. This reduces initial costs, helps prioritize resources, and enables early intervention to mitigate risks.
Agile methodologies rely on customer feedback and input, enabling you to design a product tailored to your audience’s needs.

What are the 4 Values of Agile?

The Agile Manifesto outlines four values of Agile. These form the foundation of Agile and should inform project decisions.

Individuals and interactions over processes and tools

Agile prioritizes people over processes to eliminate rigid structures, timelines, and bottlenecks. This enables greater flexibility and a focus on communication and collaboration.

Working products over comprehensive documentation

Agile prioritizes the delivery of working, usable software. This ensures the creation of a tangible product alongside the opportunity to grow and develop it.

Customer collaboration over contract negotiation

Including customers in product development is at the core of Agile. The process should be people-centric rather than product-centric. This means that a product evolves based on user feedback rather than adhering to a detailed contractual outline.

Responding to change over following a project plan

The Agile methodology turns the product plan into an evolving document. The roadmap at the start of the project may look very different six months in. And this is a good thing, especially in the current volatile climate. Project teams can pivot in response to uncertain economic circumstances, resourcing issues, or increased competition.

Agile Stage-Gate

What is Agile Stage-Gate?

Agile Stage-Gate is a recent evolution of the Stage-Gate process. It combines the classic Stage-Gate structure (phases and gates) with the self-organized teams and short cycle iterations presented by Agile methodologies (often derived from Scrum).

Short, time-boxed iterations that focus on delivering a working product increase the frequency and speed of feedback from customers and users. This allows teams to focus on developments that deliver value to the organization and its customers. Plus, the ability to adapt quickly to market changes.

How Do You Incorporate Agile into Stage-Gate?

There are several ways to incorporate Agile into Stage-Gate. These include:

1. Introducing Agile Processes:

Agile project teams follow a traditional Scrum process, an iterative and incremental approach to project management. It requires daily meetings, a visual Scrum board, a sprint backlog detailing tasks, a graphical burndown chart showcasing progress, and more.

2. Aligning Focus

In Stage-Gate, teams may take a ‘divide and conquer’ approach, tackling several projects across different geographies. In contrast, speed is a critical differentiator when incorporating Agile. As a result, project teams are focused on one project only and work collaboratively on its completion.

3. Less Rigid Planning:

When adopting Agile processes, project plans must be more flexible and less defined compared to Stage-Gate. For example, only 20% of a product may have been defined before Agile development begins (as opposed to 40-60% in a traditional Stage-Gate process).

What is an Agile Stage-Gate Example?

Let’s explore how an organization might implement an Agile Stage-Gate hybrid approach.

A typical Stage-Gate approach (with 5 stages and 4 gates) might look like this:

Stage 1: Discovery and objective setting
Gate 1: Review objectives and ensure strategic alignment. Approve, refine, or kill before moving forward.
Stage 2: Planning and initiation
Gate 2: Assess the plan and begin resource allocation. Approve, refine, or kill before moving forward.
Stage 3: Product development
Gate 3: Test product based on original objectives and plans. Approve, refine, or kill before moving forward.
Stage 4: Pilot or market testing
Gate 4: Final tweaks based on user feedback and time to decide if it’s ready for launch.
Stage 5: Product launch

As you can see, this is a practical yet rigid approach. Most importantly, it relies on completion and box ticking at each stage to move forward. To make this Agile, here are some changes your organization can make. In this example, stages become sprints.

Pre-sprint discovery and planning stage
Gate 1: Approval of backlog, initial sprint plan, stakeholders’ roles and responsibilities, and plan for future product or project iterations.
Sprints 1-4: Product development (including testing and incremental feature updates)
Gate 2: Review sprint and obtain feedback. Use this insight to decide whether to continue as planned, pivot to change, or amend upcoming sprint plans. At the end of every sprint, the product is potentially shippable (even if it has not been launched to the public). Repeat this process until the final iteration of the product or project is ready.
Final product development/launch
Gate 3: PMs or developers assess the ‘readiness’ of the product or project for the market. Once approved, the launch takes place. Make further refinements if it’s not ready.
Continuous improvement
Gate 4: The project team obtains user and stakeholder feedback for future product iterations. This includes continuous monitoring, developing a feedback loop, and testing performance.

How Many Gates Are There in Agile Scrum Stage-Gate Checklist?

Stage-Gate, also called Phase-Gate, includes 5 clearly defined stages or phases and 4 gates.

So, what is Phase-Gate in Agile? Agile Scrum Stage-Gate or Phase-Gate is less rigid. Because of the continuous improvements associated with Agile, gates may be less distinct and will not necessarily stop a project’s development in its tracks. Instead, consider them a checkpoint to evaluate progress, detail the next steps, ensure goal alignment, and gain feedback. Organizations may still use the 5 stages and 4 gates approach in Agile Scrum Stage-Gate but opt for more flexibility.

Similarly, organizations can use Scrum meetings (called ceremonies) to track progress and answer questions throughout the process. These may help inform the number of stages and gates your Agile project requires. Scrum events include:

Sprint planning to identify what the team must achieve in this increment of time
Daily meetings, often called ‘Stand Ups’
A sprint review, where teams showcase work and receive feedback
A sprint retrospective, where team members reflect on success and areas of improvement

What are the Benefits of Agile Stage-Gate?

There are several benefits to adopting Agile Stage-Gate in project management (PM). It is highly suited to projects with changing requirements because of its rapid approach and incremental nature. Benefits include:

A focus on innovation, adaptability, and acceleration
Increased project flexibility and ability to pivot
The ability to test assumptions while the project progresses
Faster response to real-time changes and easier prioritization of tasks
Enhanced team, customer, and stakeholder coordination and communication
Boosted productivity (and, in turn, higher morale)
Reduced time-to-market (leading to potential decrease in costs and resource strain)
The creation of an ongoing feedback loop

What’s the Difference Between Stage-Gate and Agile?

The classic Stage-Gate process transforms how businesses approach project and product management from a long-term perspective. But for some businesses, a more flexible, real-time iteration of the Stage-Gate process is required. With Agile Stage-Gate, organizations gain all the benefits of agile working while yielding strong results from Stage-Gate. So, what are the key differences?

Stage-Gate

Stage-Gate or Phase-Gate uses a 5-stage and 4-gate process to structure and amplify new product development. Every stage details the work that must be completed and then evaluated. Think of the evaluation as the gate you must pass through to move on to the next stage. Project teams will ask questions about the project’s value, alignment with strategic goals, profitability, resource allocation, and more. They will decide whether the deliverable is ready to move into the next phase, if it needs adjusting, or if the project gets killed. This helps project managers (PMs) break projects into smaller stages and evaluate the deliverables as they go.

Agile Stage-Gate

Agile Stage-Gate takes elements of the classic Stage-Gate approach while implementing Agile methodologies. This includes shorter cycle iterations where teams manage their own workloads, aiming to create tangible deliverables at the end of each cycle.

As with Stage-Gate, the project is split into stages. However, these short increments are called sprints and last between 1 and 4 weeks. At the end of every sprint, there is a deliverable that key decision-makers and stakeholders can review, give feedback on, or approve at various gates. This enables the business to implement changes quickly, speed up time to market, and tailor the product to the project’s strategic needs.

B

Burn-down chart

A type of chart used in agile methodologies to measure the amount of work remaining against time.

A typical burn-down chart will plot outstanding work (number of features, ideal days, team days etc.) on the vertical axis, and time (days, iterations, sprints etc.) on the horizontal axis.

Burn-down charts are very useful to measure actual work progress against ideal work progress, and detect potential schedule overruns and work-pace issues early on.

C

Capacity planning

What is Capacity Planning?

Capacity planning is a process used to predict a company’s upcoming demand. And, significantly, whether it has the resources to support this demand.

The approach relies on a company’s data to make informed predictions. This can include historical project data, customer behavior, and industry or market research. This data enables organizations to calculate resource requirements (such as equipment, workforce, facilities, and systems). Doing so helps minimize idle resources and overproduction and prevent resource or product shortages.

Some approaches to capacity planning include:

Lead strategy (increasing capacity to match an anticipated increase in demand)
Lag strategy (meeting demand increases or decreases as they occur)
Match strategy (increasing capacity when demand starts to grow)

What is the Purpose of Capacity Planning?

Business leaders use capacity planning to ensure that resources align with demand. Capacity planning helps determine the resources a business needs to reach its goals. This is both shorter-term projects and activities and longer-term objectives. So, is capacity planning important? The simple answer is yes. It has several critical purposes within an organization, including:

Better forecasting. A clear understanding of your business’s capacity enables more accurate predictions of workload, outcomes, finances, and more. You will be better prepared to pivot and adapt to unexpected events (like internal company changes), unforeseen circumstances (such as a competitor launching a new product), and even emergencies (as extreme as natural disasters).
Visibility of gaps. Pre-identifying the skills required for a project helps you plan forward and fill any skills gaps. For example, you can hire new team members, upskill existing staff, or upgrade specific systems. This enhanced visibility also helps to ensure skill sets align with the company’s broader objectives.
Ensuring enough supplies. Resources don’t only refer to the people in your team. They are also the materials you need to run your business. Capacity planning allows companies to track resource use and minimize any risk of shortages.
Resource adaptability. Resource shortages can, of course, lead to issues. But overcapacity can be as problematic. Capacity planning techniques help identify underused teams, outdated skills, and excess materials. This enables you to make better resource decisions and adapt to future needs.
Optimized human resources. When there is a lack of human resources, job creep becomes inevitable. By planning ahead, you can ensure jobs are performed by the right person or people (and at the right seniority level).
Cost and risk management. Capacity planning helps avoid overprovision (more resources than required) and underprovision (fewer resources than needed). Both of these increase risk and incur unnecessary costs.
Scalability. Capacity planning allows for more agility because it improves forecasting and optimizes resources. This enables businesses to scale to meet demands more easily (and more rapidly).

What’s the Difference Between Capacity Planning and Production Planning?

Production planning and capacity planning both sit within operations and share some similarities. But, there are critical differences between the two. Production planning focuses on the current requirements of the production process. Capacity planning looks at how it can handle future demand. Let’s explore this further.

Production planning

Production planning means developing a plan to deliver products, goods, or services. The process started in manufacturing, but organizations of many sizes, industries, and outputs have adopted it. For example, production planning can benefit healthcare, retail, and construction.

Teams use the process to:

Estimate product demand.
Identify the materials and resources required for successful delivery.
Plot out the production schedule.
Coordinate with suppliers/third parties.
Allow for quality control.
Monitor performance.

This approach ultimately defines the day-to-day activities, minimizes risks, reduces costs, and helps businesses create an efficient production process.

Capacity planning

Capacity planning is a strategic approach to managing an organization’s future demands. It assesses a company’s capacity to handle predicted workloads and adapt to change. (No matter how unexpected that change is). Business leaders can then change systems and resources to ensure successful outcomes.

What’s the Difference Between Capacity Planning and Resource Management?

Resource management is an operational function of the business. It encompasses several different processes, including capacity planning and resource allocation. Let’s explore each of them.

Resource Allocation

Resource allocation involves planning, scheduling, and allocating resources across a business. It is an operations-focused practice. It determines capacity, gives specific resources (or identifies extra resources required), and matches capabilities to business needs. This includes human resources, financial and material resources.

Capacity planning

Capacity planning is one aspect of resource management. It is a strategic approach to determining your organization’s capacity for future projects. It does not focus on individual people or equipment. Instead, it ensures the right resources (not too few or too many) to meet future business demands. It focuses on team and system capabilities, forecasting, and preparation for future needs.

Want to implement capacity planning in your organization? Get in touch today.

Continuous innovation

See sustaining innovation

Continuous planning

Continuous planning is an approach to planning where static annual or bi-annual plans are replaced with a continually updated plan, which is revised every time an internal or external event (such as a shift in priorities, an unexpected delay in a given program or a change in the business environment) occurs.

Continuous planning is tightly linked with the implementation of Agile and Lean methodologies, which both advocate short, flexible plans that can be adapted to changing circumstances.

Whilst most studies focus on the team level, continuous planning has benefits at all levels of the organization, including the strategic, portfolio, and product levels.

Crystal methodologies

A family of lightweight computer development methods that were created to suit different types of projects depending on their size, complexity and criticality.

They rely on seven key principles: Frequent delivery (every few months), Reflective improvement (feedback based on performance), Close communication (which requires team members to be in the same room/building), Safety (of team members who are encouraged to speak freely, and of end-users when the software can affect human lives), Focus (on top priority issues, with no-interruption periods), Easy access to expert users, Automated tests and integration.

D

Design for Excellence (DfX)

See design for X (DfX)

Design for X (DfX)

A set of methodologies which aim at incorporating optimizations for later stages of production, servicing or disposal of a product right at the design phase. X is a placeholder for the aspect that is being optimized for. Some examples of such methodologies include Design for Manufacturability (DfM - maximising the ease with which a product is manufactured), Design for Reliability (DfR – preventing failure of the product for a given amount of time), or Design for Logistics (DfL – minimising logistical costs).

DfX is also known as Design for eXcellence.

Disruptive Innovation

A type of innovation which creates new markets, or fundamentally alters the dynamic and hierarchy of an existing one by introducing unexpected creative changes in a product, service, process or technology. Often the creative change will bring simplicity (and intuitiveness), affordability, convenience or accessibility to an area where existing products or technologies are complex or expensive.

A large number of blue chip company failures have been attributed to the effects of disruptive innovation, which are all the more difficult to compensate than they are unexpected, and thus present a critical risk.

DMADV methodology (DMADV)

A methodology for the development of new services, products or processes (as opposed to improving existing ones) that aims at ensuring that they achieve Six Sigma quality.

DMADV is composed of 5 distinct phases: 1) Define - the problem, the goal and the customer's needs, 2) Measure - identify the parameters that must be quantified, how to measure them, then collect the data, 3) Analyse - the options and develop design alternatives, 4) Design - the chosen alternative using results of the previous step, and 5) Verify - that the design will work in the real world, and begin production/sales.

Dynamic systems development method (DSDM)

A heavier agile project delivery framework focused on delivering functionalities within tight time and budget constraints, and that can be used both for software and non-IT related projects.

DSDM is built on 8 core principles that centre on delivering functionalities that correspond to actual business needs at short intervals, ensuring teams communicate clearly and are empowered to make decisions, testing early and continuously to ensure high quality, accepting and integrating change, and monitoring and documenting to ensure proper control.

E

Earned Value Management (EVM)

A project evaluation technique to measure a project’s progress, alert to deviations from schedule and budget baselines, and forecast its completion date and final cost.

EVM centres on the measurement and tracking of a project’s Earned Value (EV), which is the intrinsic value of the work already performed at a given moment in time. The Earned Value is compared to the Planned Value (i.e. the value of the work that should have been performed if everything had happened according to plan), and the Actual Cost (i.e. the amount of money actually spent to perform the work).

EVM is now considered a best practice for project and programme management. The US Departments of Defence and Energy, NASA, the FAA and other technology-related agencies have adopted EVM as a central tool for the management and performance measurement of their procurement programs.

Earned value management system (EVMS)

A set of tools and processes used to plan and control a project or a program using earned value management methods.

For an EVMS to be effective, it needs to integrate the management of costs, schedule and work scope, establish a baseline plan against which progress of the project or program will be measured, and apply earned value management methods to monitor the project, alert to issues and help implement corrective or mitigation actions.

Reference documents for the constitution of an EVMS are ANSI/EIA Standard 748 in the United States, DIN 69901 in Germany and BS6079 in the United Kingdom.

What is an Earned Value Management System (EVMS)?

To implement Earned Value Management (EVM) in an organisation, you need a system that will provide the data, structure, standardisation and calculation methods necessary to compute and monitor the different elements of EVM.

An EVMS therefore is a system that provides the necessary integration between costs, schedule and work scope together with the tools to plan and manage them, establish baselines, track the different cost and performance indicators, and perform analyses and forecasts based on the accumulated data.

Characteristics of an EVMS

To be effective, an EVMS must (among other things) combine the following characteristics:

Ability to plan the whole project/program work scope from inception to completion
(1) Allow and facilitate the breaking down of the work scope into units of work that can (2) be assigned to people or organisations, (3) identify and track significant dependencies between these units, and (4) relate them to time-phased budgets
Objectively and meaningfully measure project/program work progress
Work at an appropriate level of detail for tracking project/program data: not so broad that the data becomes meaningless, not so detailed that tracking work progress requires too considerable amounts of time
Allow for prompt implementation of corrective or mitigation actions

EVM Standards and Guidelines

The scope of data and processes required to implement EVM means that no two companies will have the same tools and setup.
To help organisations design and implement an effective EVMS, several standards have been published, the most well know of which is ANSI/EIA Standard 748 in the United States. ANSI-748 lays down 32 guidelines, grouped under 5 umbrella topics, that cover the whole of the EVM calculation and monitoring process.

Other project or program management standards include sections on EVM such as DIN 69901 in Germany and BS6079 in the United Kingdom.
Certain government contracts may require the contractor to obtain certification/validation of its EVMS, either by dedicated government agencies such as the Defence Contractors Management Agency (DCMA), other third-parties, or self/peer review, depending on the agency overseeing the contract.
Planisware includes out of the box all the elements required to build a compliant EVMS, and several of our clients have successfully obtained DCMA certification with Planisware as an essential system.

Further reading

Planisware’s fully integrated Earned Value Management features in action
How Airbus uses Planisware for EVM
Glossary of Earned Value Management
An EVM Cheat Sheet

Efficient frontier

A method derived from financial portfolio theory to find out, given a set of project proposals, the optimal project portfolio (i.e. selection of projects) that will maximize value for the organisation at each level of investment or available resources.

Very few companies can boast the kind of resources or investment budget to engage in every viable project proposal that they identify. A key question of project portfolio management thus becomes: how do I select the projects I invest in, so that I maximise the value I will obtain from them, given my limited investment budget / resources?

The efficient frontier theory aims at answering that question.

Dr Michael M. Menke offers his perspective on what is the "Efficient Frontier" in the context of Portfolio Management (Watch the video)

Why use the Efficient Frontier?

The Efficient Frontier helps answer some important questions:

With my current level of budget, what is the best selection of projects to maximise the value of my portfolio?
The one on the Efficient Frontier for my current level of budget.
What is the minimum amount of investment I need to obtain a specific level of returns?
The cost of the portfolio on the Efficient Frontier for the level of returns that I need.
Given our current portfolio, are we over-spending in regards to the expected level of returns?
How far away are we from the portfolio on the Efficient Frontier for the level of returns we are at?
If we decide (because of political reasons or other) to select a sub-optimal set of projects, how much are we over-spending or how much value are we leaving on the table?
We are over-paying by the difference between the cost of our selected portfolio, and the cost of the portfolio on the Efficient Frontier for the same level of returns.
We are leaving on the table the difference between the returns of our selected portfolio, and the returns of the portfolio on the Efficient Frontier for the same cost.
Considering our current portfolio, is there a way we could obtain more value with a lower level of investment?
Can we change our portfolio selection so as to inch closer to the efficient frontier?

In addition, the visual nature of the Efficient Frontier helps create a different perspective by helping managers and decision-makers understand the relationship between the value created by the portfolio and the costs incurred, and better measure the trade-offs entailed by the decisions they take.

The Efficient Frontier method is particularly useful for industries or business models where:

projects require very large investments, especially at the beginning of the project or program
the benefits will be realized several years down the road, and / or
projects are seldom killed

because it builds the optimal portfolio before the projects are started. So this method is particularly used in the pharmaceutical and biotech, aerospace & defense and chemical industries.

Enterprise Agile Framework

A type of Agile methodology that aims to scale Agile principles and practices to the enterprise, and address the specific challenges of managing a large number of Agile large-size teams (i.e. composed of hundreds or thousands of team members), whilst continuing to deliver on the promises of Agile development methods.

What is an enterprise agile framework?

Enterprise Agile Frameworks seek to answer the question of how to apply methodologies such as Scrum or ExtremeProgramming (XP) which were designed for small teams, to organizations that count hundreds of teams, teams-of-teams, or even teams-of-teams-of-teams?

This question is particularly valid because:

Classic (or first-generation) Agile methodologies do not tackle this question (sometimes on purpose)
Scaling Agile methodologies to larger organizations raises a host of questions specific to agile development with larger teams.

What are the challenges of scaling Agile?

Among the key concerns that enterprise-level Agile methodologies must handle are:

Visibility: how do you keep track of the Work-in-Progress of hundreds of small teams, and the way their work combines into features, when the teams are largely autonomous and self-organised? How do you get a sense of schedule or cost?
Coordination: how do you get teams of hundreds of people to communicate and coordinate their work in such a way as to deliver the features for which they are responsible, with an acceptable level of quality, and in a reliable manner?
Alignment: how do you make sure that these autonomous and self-organised teams all work in the right direction to further your strategic goals?
Learning: how do you “clone” the success of one team to other teams?
Risk-management: how do you ensure that failure does not take down the whole organization?

What are the main enterprise agile frameworks?

Since the publication of the Agile manifesto in 2001, several Enterprise Agile Frameworks have emerged, among which:

Scaled Agile Framework (SAFe)
Large-Scale Scrum (LeSS)
Disciplined Agile Delivery (DaD)

Criticism of enterprise agile frameworks

Not all experts agree on the necessity for a distinct framework for Agile applied to the enterprise.

Quite a number argue that “scaling Agile” is just a different way of applying Agile principles to development issues. For them, Enterprise Agile Frameworks show a fundamental lack of understanding of the Agile philosophy, and introduce unnecessary rigidities and complexity in product development processes.

Instead, they advocate returning to the fundamental principles of Agile, and recasting “scaling Agile” issues in terms of those principles, then working on each one in small increments, as you would incrementally improve the processes of a small Agile team.

Enterprise project management office (EPMO)

See project management office (PMO)

Enterprise project office (EPO)

See project management office (PMO)

Enterprise Project Portfolio Management (EPPM)

What is Enterprise Project Portfolio Management (EPPM)?

EPPM is a higher-level, more integrated type of project portfolio management (or product portfolio management). It involves breaking an enterprise organization’s strategy and operations into smaller initiatives or groups — often called portfolios. Stakeholders across several teams, departments, and locations will have visibility of these initiatives. They can then assign, complete, and review them accordingly.

In short, EPPM is the approach of managing all the projects a business is undertaking simultaneously. For example, a company may have new product portfolios, cost-saving project portfolios, in-market product portfolios, and technology portfolios. Because EPPM operates at an enterprise level, it encompasses all (or at least the majority) of these different portfolios.

EPPM requires a comprehensive, real-time collection of data, so it is most often discussed in relation to the strategic use of integrated PPM software.

What are the Benefits of EPPM?

Put simply, Enterprise Project Portfolio Management (EPPM) enables organizations to manage and oversee many project portfolios simultaneously, providing:

Valuable data for informed decision-making
A centralized view of the needs and requirements of the whole company
The ability to make it easier to scale the business
Better insight and tools to manage budgets, resources, assignments, and capacity
Real-time, accurate data that empowers you to prioritize projects
Visibility of potential delays, risks, or duplicate tasks
Information required to understand revenue attribution of projects
Clarity on whether to continue with or kill unsuccessful or non-strategically-aligned projects

Many businesses include market-leading EPPM software in their tech stacks to support their EPPM. This enables enterprise organizations to save money, reduce risks, minimize human error, and speed up transformation.

What’s the Difference Between EPPM and PPM?

Project Portfolio Management (PPM) helps centralize and standardize a distinct portfolio of projects. In a nutshell, Project management offices (PMOs) will use PPM within one specific area of the business. For example, new product development may include several initiatives, but all focus on generating revenue through enhanced or new product offerings.

EPPM takes a top-down approach to PPM. Rather than overseeing one portfolio of projects, all of which share a similar goal or outcome, EPPM refers to managing a business’s entire suite of project portfolios simultaneously.

For example, larger enterprise organizations may have company-wide digital transformation projects and new product development split between business-to-business (B2B) and government ICPs.

It can therefore be challenging to see, measure and track the business impact of very different projects when assessed in silo. With EPPM in place, key decision-makers can see the whole puzzle, not just the individual pieces. This way, they can accurately oversee multiple initiatives in the context of the enterprise and make better-informed decisions.

What are the Roles and Responsibilities of Enterprise Portfolio Management?

Senior leadership teams or Enterprise Portfolio Management Offices (EPMOs) will typically lead EPPM to maintain a high-level view of all projects and understand how they support business objectives. Some of the critical job roles and their responsibilities might include:

A leader, ‘head’, or director of EPPM oversees the entire approach. This will include implementing best practices, setting goals, and ensuring activities align with business objectives.
Portfolio managers are in charge of one specific portfolio. Their role will include project selection and prioritization, resource allocation, and more.
Project managers are leaders of individual projects or tasks within a portfolio. They are responsible for the project’s execution and success.

Every business is different, and in turn, so is every EPMO. Job titles will vary, and in some instances, so will roles and responsibilities. They may include but are not limited to:

Portfolio governance
Project forecasting to determine success or failure
Tracking projects against objectives and KPIs
Ensuring an understanding of priorities based on broader business goals
Improving the visibility of projects across the entire organization
Facilitating communication
Providing accessible, accurate data to inform business decisions
Building and promoting agility across the enterprise

What are the Key Elements of EPPM?

Successful EPPM provides businesses with effective frameworks and standards to create a centralized and comparable view of all projects across different portfolios and divisions.

While every project, portfolio, and department has unique requirements, EPPM ensures everything is working to support the broader business goals. Key elements of the EPPM approach include:

A well-defined strategy that communicates corporate objectives, budget prioritization, standardized project and proposal evaluations, and more.
Project and financial forecasting
Reducing costs by eliminating duplicate efforts, streamlining execution, tracking progress, and monitoring cost and revenue
Cross-functional resource prioritization and dependency planning to improve productivity
Business intelligence and analytics to inform decisions
Implementing an agile and ‘always improving’ culture

If you are looking for a way to manage multiple projects effectively, we can help. Get in touch.

Extreme Programming (XP)

One of the first Agile software development methods, which emphasizes excellence of development skills over complex project management.

In XP, twelve technical practices based on the values of communication, simplicity, feedback and courage structure short iterations focused on the delivery of high-quality products. The customer is highly involved in the definition and prioritization of the functionalities (story cards) to be developed, while the small (12 people or less) self directed and closely integrated development team uses continuous testing and planning, and short feedback loops to deliver shippable software at very short intervals (1 to 4 weeks).

F

Feature Driven Development (FDD)

An Agile software development method suitable for larger scale projects (allows multiple teams to work in parallel) which uses features as basic unit of work and very short iterations.

An FDD project starts with the creation of a model (domain), which is broken down into features that can each be implemented in less than 2 weeks (usually 1 to 3 days). Each feature will then be planned, designed and built following an iterative and incremental process. Progress of the project is monitored through a central colour-coded feature list, and the object model is updated with each iteration.

G

Gated process

In a gated process, a project is broken down into smaller stages or phases, each delimited by a gate. At each of these gates, the project decision-makers meet to review the project and decide, based on specific criteria and the information available at the time, whether to continue, stop, hold, recycle or modify it.

A classic three-phase project would include (1) Specification discovery, (2) Development / prototyping, and (3) Testing / validation. To each of these gates corresponds one or several deliverables.

Gated process are often used in new product development (NPD) projects where they provide structure and allow early termination of low value projects.

I

Ideation (or idea generation)

In its strictest sense, the process of generating, developing and communicating ideas.
In the context of PPM, ideation takes a broader meaning and includes the processes of evaluating, comparing and selecting ideas, and the grouping and merging these ideas into new project proposals, or extensions of existing projects.

Ideation plays a key strategic role in ppm, as it powers an organisation's innovation capacity, and thus conditions the sustainability and renewal of its portfolio(s) over time. The ideation management process can also determine the success or failure of a project, as empirical studies show that errors at the conception stage have the most sustainable impact.

L

Lean Software Development (LSD)

The application of lean management principles and techniques to software development. LSD is generally considered part of the family of agile approaches, and often used in combination with one or several other methods.

LSD is founded on principles of simplicity and economy (eliminate waste, deliver fast), global and integrated view of the project (build integrity and quality in, optimize the whole), continuous learning and improvement (using short iterations, continuous testing and team and user feedback), reducing uncertainty risks (by delaying commitment and integrating feedback quickly), and valuing people (by empowering team members and giving a central place to the customer).

Long-range planning

A business exercise which aims at looking at the organisation and its environment beyond the usual short and mid-term future to identify opportunities and threats, areas of growth and expansion, how constraints may evolve, and prepare for potential disruptions.

Long-range planning is carried out at the strategic level and mostly relies on forecasts extrapolated from current conditions and trends.

N

New product development (NPD)

The process of developing a new product, service, technology or process (or innovating on an existing one), from the initial idea to its launch.

Classically, NPD can be divided into 6 stages, each with a deliverable and often a gate: Idea screening (selection of the most promising ideas), Concept testing (feasibility and market study, identification of prospective users and testing of the concept), Business Analysis (will this product be profitable?), Prototype testing, Product implementation, and Launch.

O

OPX2

The former name of the Planisware solution, today OPX2 is now referred as Planisware Enterprise. The change came in the year 2009 with the publication of the 5th version of the solution.

Initially, the name OPX2 was chosen during the initial development of the solution within Thales. In 1996, however a spin-off is decided and Planisware is created. At the time, the initial team decided to keep the name of the solution, as it was already known by a few customers.

However, by 2009, with Planisware increasingly successful on a variety of international markets, it was decided to align the name of the solution with the name of the company. In addition, many customers at the time were already referring to the solution by the name of the company, thus making the rationale for the shift even more obvious.

Initial development of the Planisware Enterprise solution

In the 90s, Planisware debuted OPX2, a revolutionary enterprise project portfolio management software designed to enable comprehensive vision and control over the entire organizational portfolio. From the very beginning, OPX2 offered unparalleled configurability and scale-up capabilities.

Throughout the years, OPX2 software rapidly evolved - expanding in both its operational as well as strategic portfolio and decision support capabilities, adding capabilities to address specific business needs, and incorporating industry leading practices, all while maintaining an intuitive interface.

P

PACE methodology (PACE)

A gated methodology for the development of new products and services developed by Michael McGrath in his book Next Generation Product Development.

PACE stands for Product and Cycle-time Excellence, and relies on seven interrelated elements to ensure project success and minimize time-to-market.

These elements can be divided into two groups: four elements at the project management level:

a gated NPD process,
a small cross-functional Core Team empowered to make all decisions about the project,
a structured development process that ensures consistency, and
efficient use of development tools and techniques.

And three elements at the program/portfolio level:

a Product Strategy Process that provides a framework for product development decisions,
comprehensive technology management, and
pipeline management which provides a framework for project prioritization, cross-project resource management and aligns functional capabilities and project requirements.

Parametric estimation

A method for estimating project cost and duration, used particularly in the Life Sciences, Engineering and Construction industries, in which the project is modeled using predefined algorithms.

Parametric estimation is often perceived as one of the more accurate and reliable estimation methods, but requires a high effort upfront.

What is Parametric Estimation?

Parametric estimation is one of the four primary methods that project companies use to produce estimates for the cost, duration and effort of a project.

For parametric estimation, the person in charge of the estimates will model (or describe) the project using a set of algorithms. For instance: let’s say that your project includes carrying out a survey of 300 people. Each interview contains 20 multiple-choice questions, and past experience has shown that they take 10 minutes to administer. According to parametric estimation, the total effort for this task will be:
E = nb of interviews × 10 minutes = 3000 minutes = 5 hours

"Parametric Estimation in a nutshell" Read the presentation

How is Parametric Estimation different from Analogous Estimation?

Both Parametric and Analogous Estimation used historical data to construct the estimates. But the process they each use to perform the calculations are very different.

For Parametric Estimation, the project manager will break down the project into sub-components (usually a deliverable) and match them with the appropriate equation to obtain the estimates. Whilst the equations can be derived from past projects, the specific circumstances of these projects will be removed when the equations are created.

For Analogous Estimation, by contrast, the project manager will break down the project into tasks or deliverables and match them with similar tasks completed in past projects. The estimates will be based on the actuals for these past projects. But depending on the project that is selected, they will also be influenced by the specific circumstances of those past projects.

Phase-Gate or Stage-Gate

What is Phase-Gate or Stage-Gate?

Phase-Gate or Stage-Gate is a project management model that uses a 5-stage process with 4 review points called ‘gates’. This helps structure and speed up new product development projects.

Each stage consists of activities (the work that must be done) and an integrated analysis (of all the functional activities). These result in the creation of deliverables. Each gate comprises one or more deliverables (resulting from the stage it closes) and criteria (usually both financial and qualitative, organized on a scorecard). Together, these result in an output or decision.

What is the Phase-Gate Process?

Stage-Gate or Phase-Gate (used interchangeably) is a popular Project Management (PM) methodology. Project managers break a project into manageable sections called ‘stages’ or ‘phases’. Completing activities within a stage or phase equates to a deliverable(s). A typical breakdown of these stages might look like:

Ideation / Discovery
Concept / Business Case
Development
Testing / Validation
Launch

After each stage, you’ll find a decision point known as a ‘gate’. Here, stakeholders must review the previous stage’s success. This will help them decide whether to continue to the next stage or stop the project altogether, known as a ‘Go/Kill decision’.

Stage-Gate’s structured approach benefits fast-growing businesses that need a reliable, robust process. The same goes for organizations with cross-functional projects and high-growth objectives.

What are SAFe Phase-Gate Milestones?

Scaled Agile Framework or ‘SAFe’ is a popular and comprehensive PM framework. It helps large organizations adopt and then scale Agile methodologies. The structured framework includes several milestones to aid and speed up product development. It is more associated with Agile Methodologies than Phase-Gate. But SAFe milestones can benefit both because businesses can deploy Agile and Phase-Gate in harmony. The main 3 types of milestones are:

Program Increment (PI) Milestones

At the start of each project or program segment (called an increment), teams must come together to set goals, plan upcoming work, and prioritize activities. Project teams must repeat this process approximately every 8-12 weeks to prepare for the next iteration.

Fixed-date Milestones

These are non-negotiable dates and times that will impact your project. These are pivotal events or periods in your project development timeline, influenced by external factors or third parties.

Learning Milestones

When the opportunity to learn presents itself, project teams must take it. Agile methodologies focus on continuous development. So, feedback and insight from customers, users, and stakeholders is vital.

What is Stage-Gate Review in Project Management?

A gate review is an essential step in the Stage-Gate process. Think of the ‘gate’ as a boundary or checkpoint between each stage or phase. At each ‘gate’, stakeholders and project teams must make decisions about progress. This a gate review. Decisions include moving to the next stage or phase, making changes, or killing the project. This process ensures consistent project evaluation. This minimizes risk, increases visibility, and helps project teams focus on strategic alignment.

What’s the Difference Between Stage-Gate and Agile?

Stage-Gate and Agile are both applicable methodologies for project managers, each with pros and cons. Stage-Gate is a simple, straightforward, and easy-to-adopt project management methodology. Some of its benefits include:

Bringing discipline to your project execution
Helping to define duties better
Increasing transparency
Ensuring there are no missing steps
Mitigating risks

Stage-Gate’s structured nature means businesses can apply it to most projects.

But the natural innovation process is not a linear one. Thus, Stage-Gate can often be too structured for fast-paced and evolving projects. That’s where Agile comes in.

Agile methodologies allow for change at any stage in the project. The project team starts with a simple project outline and develops functionalities in later versions (called iterations). Unlike Stage-Gate, where teams complete every step before moving forward, Agile prioritizes the delivery of a shippable product after every iteration.

You can use Agile and Stage-Gate methodologies harmoniously. Agile Stage-Gate pairs Stage-Gate’s structured approach with Agile’s adaptability and focus on delivery.

PPM

Can refer to:

Product Innovation Strategy

A component of a company’s overall strategy that sets the direction and parameters of its innovation and new product development efforts. The product innovation strategy is one of the four components of the Innovation Diamond.

Product lifecycle management (PLM)

An umbrella term that designates the process of managing, from an engineering perspective, a product from the initial idea, its design, development and manufacturing right to its end of life.

PLM is often considered one of the four strategic pillars of modern businesses together with Enterprise Resource Planning (ERP), Supply Chain Management (SCM) and Customer Relationship Management (CRM), and should be integrated with these other pillars for maximum effect.

PLM can be divided into three main phases that align with the maturity of the product: New Product Development, Sustaining, and End of Life Management.

Product portfolio

Is composed of all of a company’s products, from innovations under development to legacy products ready to be retired. It may include several categories or types of product, different product lines and individual products.

A product portfolio provides executives with an overall picture of the market positions both present and projected of each product, and allows them to manage them as a coherent entity.

The most widely-known method for evaluating products as part of a portfolio is the BCG matrix which plots them according to the market growth rate and their relative market share. The resulting matrix provides a photography of each products maturity and profitability.

Product portfolio management

A series of tools, methodologies and strategies to analyse, prioritize and manage the elements in a product portfolio.

Product portfolio management allows decision-makers to allocate resources optimally between the different products, identify areas of potential improvement, balance the product mix to ensure profitability and sustainability, and maintain alignment between the company’s products and strategy.

related articles: planisware enterprise demo: building an innovation strategy into your product portfolio, planisware enterprise demo: managing high-tech/it products

Program(me)

A group of related projects and activities that are managed together to reach a larger, overarching set of objectives.

Classic examples include the development of a new line of cars, where the range = the program (e.g. the Ford Focus), and the model = the project (e.g. the Ford Focus Zetec Navigator); or the launch of a new airplane (the program), where each feature or system will be a project.

A program is focused on a tactical goal, on how the projects are carried out. By contrast the portfolio is concerned with strategic goals: which projects and programs to carry out, who should get priority for resources etc.

Project Management Office (PMO)

What is a Project Management Office (PMO)?

A Project Management Office (PMO) is a unit or department that standardizes project management processes and helps share resources, best practices, tools, and techniques across the company.

Depending on its maturity, the PMO can provide simple support services (administrative support and sharing of best practices), expertise on crucial project performance elements and metrics (e.g., estimations, scheduling, risk management, and quality assurance), and act as a consultant/advisor to project managers (including issues relating to HR). At its most advanced, a PMO can play a crucial role in strategic and performance-related decision-making.

What are PMO Roles and Responsibilities?

A PMO is made up of various team members, all with their specific roles and responsibilities. Job titles, key responsibilities, and number of members will vary from business to business, but may include:

A leader, ‘head’, or director of the PMO is in charge of the entire function. They are responsible for sharing and encouraging best practices, setting clear objectives, and ensuring projects always support broader business goals.
Portfolio managers oversee one distinct portfolio. They must prioritize tasks, allocate resources, and support the execution of the projects within their portfolio.
Project managers lead individual projects or a small number of related projects within the same portfolio. Their role includes bringing the project to fruition, working within budget, and meeting the specified deadline.

Some of the more general roles and responsibilities of the PMO include but are not limited to:

Standardization of the Project Management Process

PMOs standardize methods, processes, tools, and templates across the businesses. By developing and implementing a ‘standard’ way of working, projects and tasks are more comparable to each other and easier to deploy across the organization. PMOs are also responsible for showing employees/staff how to use or adhere to these standards correctly.

Support Project Implementation

The PMO must lead project implementation and manage all the moving parts, including:

Problem-solving issues like capacity planning and resource allocation
Selecting the proper project methodology and building business cases for projects
Facilitating communication and collaboration to ensure everyone's on the right page
Providing accurate real-time data to empower stakeholders to make the best possible decisions and create a single source of truth
Mentoring and training project managers to ensure they have the right skills

Provide a Consolidated View of All Projects

PMOs must bridge the gap between projects and their stakeholders with thorough reports, tailored dashboards, and a consolidated view of all projects. This means your PMO must:

Develop and track Key Performance Indicators (KPIs)
Manage and communicate budgets, forecasts, actuals, and margins
Consolidate all information and build a project dashboard designed for stakeholders
Provide essential, real-time data for any project reporting

Strategic Portfolio Management and Governance

Strategic Portfolio Management ****(SPM) aligns your project execution with your company’s strategic vision. The PMO’s role is to narrow down projects and prioritize them based on the organization’s overarching goals. This will include developing business cases, assessing the cost/benefit ratio, and completing risk assessments.

What is the Role of the PMO vs PM?

A Project Manager (PM) manages individual projects and their day-to-day running. Conversely, a PMO is often a whole team that operates at a high level and supports the project managers in meeting business goals, optimizing time, prioritizing projects based on business needs, providing a centralized view of all company information, and more.

A Project Management Officer, then, is a critical part of the project management office of an in-house team. Their role is administrative and technical, ensuring projects are complete, accurate, on time, and within budget and scope.

What is a Digital PMO?

A digital PMO is a system or tool that standardizes and digitizes a business’s processes, projects, and data. It performs the tasks of a PMO or project manager. Benefits include real-time data, reduced human error, the ability to schedule projects in advance, digitized workflows, enhanced productivity, and eliminating repetitive or manual tasks.

What are PMO OKRs?

Objectives and Key Results (OKRs) are tangible outcomes that PMOs put in place to measure and track the success of a portfolio of projects. A PMO should set an objective for each portfolio and identify the key results they or the team must achieve to meet it. OKRs will, of course, depend on the nature of the portfolio. Some examples of the types of OKRs that PMOs might set are:

Project execution OKRs, such as improving resource utilization, developing standardization, and increasing efficiency.
Financial OKRs, based on performance, budgets, ROI, and cost-effectiveness.
Growth and innovation OKRs, which focus on product launches, continuous learning and development, and adaptability.
Product Management OKRs, such as understanding end users better or improving product performance.

OKRs must be very specific and include a measurable element. For example, if the portfolio’s objective is to gain a better understanding of end users, then key results may consist of:

Conduct one customer survey per quarter to gain valuable insight, aiming for 40% total participation.
Create a suite of buyer personas in Q1 based on quantitative existing customer data and qualitative customer success team data.

This structure enables more effective success tracking of projects and portfolios.

What are PMO Processes?

Every business is different; thus, every PMO’s processes are, too. Some examples of processes your PMO may define and standardize are:

Resource allocation
Prioritization
Risk assessment
Budgeting
Reporting and ROI
Project feedback and changes

What are the Different Types of PMO Structures?

These structures define the characteristics and level of control each PMO has. These are the most common PMO classifications, though there are others.

The Supportive PMO

The supportive model provides “a consultative role to projects” and works best for organizations with low project management maturity. This role includes registering products and resources, standardizing tools, and supporting the wider PPM team(s).

The controlling PMO

The controlling model ensures compliance, data quality, and validating stages within the project lifecycle. This model is suitable for organizations with a higher level of project management maturity or who already have the supportive model.

The directive PMO

The directive model heavily controls resource and project management and oversees project/program/product managers. Organizations with a higher level of maturity or that already have the supportive or directive model in place will benefit from the directive PMO model.

There are many things to consider before selecting a PMO. If it doesn’t align with your business objectives, you can course-correct and find a model that suits you better.

Several factors will influence the right type of PMO for you. These include:

Industry
Organization size
Existing PMO Structure and Maturity
Anticipated PMO Function

Our eBook dives deeper into the multiple considerations involved in selecting a PMO type, but these are a few examples of types of PMOs and the PMO structure they might adhere to.

A Business Unit PMO that delivers training and resources to a specific division will suit a Supportive structure.
A Strategic PMO that aligns project deliverables with business goals may assume a Controlling function.
A PMO that closely controls budgeting manages project leads, and defines and deploys data quality processes will likely perform a Directive role.

What are PMO Skills?

There are several skills an effective PMO must have. Communication, people management skills, and technological know-how are vital to success. They must clearly understand the business and its goals and have a centralized view of all ongoing projects. This will help them prioritize projects, allocate resources and budget, and effectively report — all critical PMO skills.

What are PMO Standards?

Standardization is a key benefit of PPM. Your PMO will establish and implement best practices — and then promote them throughout the organization. Essentially, they must develop or identify an effective ‘way of doing things’, which is rolled out organization-wide. These standards may include:

Templates and documents such as project proposals, reports, briefing forms, etc.
Frameworks and methodologies such as the PMO model the business opts for and the approach for identifying and managing risks.
Establishing the decision-makers for projects, teams, and the broader business to develop a smooth and trusted approval process.
Training staff using the same resources, tools, and best practices to ensure consistency and ease of future collaboration.

If you are looking for a way to manage multiple projects better, we can help. Get in touch.

Project portfolio

What is a Project Portfolio?

A project portfolio is a set of project proposals, projects, programs, sub-portfolios, and operations managed together to achieve an organization's strategic objectives.

For instance, a company in the energy sector might have a business objective to "reduce carbon emissions". The corresponding project portfolio would only include projects aligned with this objective. It could consist of sub-portfolios such as "improving the efficiency of solar energy production" or "streamlining transport routes".

Defining portfolios allows project-rich organizations to gain an overall perspective on their current and future projects. It also enables them to prioritize allocating resources to projects most likely to help them achieve their strategic objectives.

What is the Difference Between a Project and a Project Portfolio?

In simple terms, a project is a single series of tasks carried out over a predefined timeline with a clear, intentional goal (or goals). Projects within organizations can be limited to one team or department, but they usually require skillsets from multiple teams to complete.

A project portfolio is a group of projects selected for their strategic value to an organization. The projects will have a clear link that connects them and will be managed together. Taking this approach maximizes their efficiency and ROI. A project portfolio might be grouped around:

Geographical location of the projects
Specific business objectives
Specific capabilities (IT, HR, Engineering, Manufacturing)
Target audience (employees, customer segments, suppliers)

Project proposals, programs, sub-portfolios, and the operations needed to run them are also included in a project portfolio.

A project portfolio helps focus investment and resources where they have the most impact. So, this top-down, strategic approach to project management is necessary for most large enterprises due to the volume of projects running simultaneously. But it can also benefit medium-sized organizations with ambitious growth objectives.

For example, a domestic energy sector challenger may have an objective to grow their market share. The organization might set up a project portfolio that aligns with this goal, including “optimizing the digital customer journey” and “creating a referral program.”

What Should You Include in a Project Portfolio?

The focus of a project portfolio will determine the projects that are included. If you develop a project portfolio for new product innovation, you would only have projects with new products as an outcome. To decide which projects to include in a project portfolio, follow these initial steps.

Understand the overall business objectives.
Define the role of this project portfolio, aligned with business objectives.
Create a set of inclusion criteria for the project portfolio.
Speak to project managers (PMs) and stakeholders to source current projects and ideas.
Analyze the strategic value of relevant projects and compare the results to inclusion criteria.

How Many Projects Are in a Project Portfolio?

There is no magic number of projects to include in a project portfolio. The size of a project portfolio will depend on several factors that are unique to every organization:

How Many Resources Do You Have? Successful project portfolios require excellent management, and individual projects need teams to deliver them. Resource requirements need to be scoped and agreed upon upfront with department or business unit leaders.
How Much Risk Can Your Organization Take On? The more projects in a portfolio, the higher the potential for risks. Scheduling, dependencies, and communication are just some risks that need to be analyzed before adding more projects to a portfolio.
What Are the Current Business Priorities? Not all projects contribute equally to an organization’s strategic goals. Before projects are added to a project portfolio, they need a strong business case, including predicted outcomes and associated costs.
What Are Your Project Management Capabilities? Has your organization already adopted a Project Portfolio Management mindset? If you are in the early stages of securing buy-in for project management transformation or building the capabilities of your PMO, consider how ready your PMs are to transition to this new approach.

What is a Project Portfolio Matrix?

A project portfolio matrix is a visual framework used by PMs or PMOs. It can be used to map out the potential value of projects compared to the technical complexity (and, therefore, level of investment) required to complete them. A project portfolio matrix can also be an effective way to visually communicate the status of projects within a portfolio to executive stakeholders.

How Do You Prioritize Your Project Portfolio?

A project portfolio should always be prioritized based on an organization’s strategic objectives. Think of it like buying property in Monopoly. If your strategic objective is earning the most money before the game ends, you will want to prioritize locations with higher rent. Questions that can help prioritize a project portfolio include:

If this project is delivered successfully, what is its minimum impact on KPIs?
Do competitors’ projects threaten the organization’s strategic objectives?
How much risk is associated with the project, and what is the current tolerance for risk?
Are enough resources available to deliver the maximum value of the project?

Planisware Enterprise can simplify this prioritization process. With Scenario Comparison & Optimization, you can streamline decision-making by creating comparisons between varying, complex projects using quantitative data from previous projects.

What is Project Portfolio and Program Management?

Project portfolio management (PPM) and program management describe different management approaches for different types of PMO activity.

Project Portfolio Management

Project Portfolio Management (PPM) refers to the ongoing processes involved in analyzing and optimizing the strategic value of a project portfolio. It includes best practices for project management and the technology needed to facilitate delivery and reporting. The PPM technology stack often centers around a powerful project and portfolio management tool that can provide visibility and access to all key stakeholders.

Program Management

Unlike a project, a program doesn’t always have clearly defined goals or a timeline. A program might include projects that contribute to its intended outcome, but the program itself may not have an end date or a fixed scope. One example could be a program to “improve internal net promoter score (NPS),” which includes a project to “migrate to a new intranet provider” but also involves internal communication campaigns and regular NPS surveys.

Program management focuses on coordinating and managing a group of projects and other activities with an intended outcome but not necessarily a final delivery.

If you’re ready to unlock strategic value for your organization through PPM, Planisware has the key.

Project portfolio management (PPM)

What is Project Portfolio Management (PPM)?

Project Portfolio Management (PPM) is a series of tools, methodologies, and strategies to analyze, prioritize, and manage the elements of a project portfolio. Its purpose is to predict issues, track progress toward operational goals, and manage budgets.

PPM aims to evaluate projects as accurately as possible to assess their strategic importance, the relative use of resources, and actual/projected profitability, and make corresponding allocation and go/kill decisions.

Furthermore, it aims to group and sequence projects in a way that:

Ensures the optimal use of existing resources
Leverages common work products and processes
Balances risk, costs, and constraints
Anticipates capacity and resource needs
Meets strategic objectives

What are the Different Types of PPM?

Every organization will deploy PPM in different ways and for different reasons. The type of PPM you choose will vary depending on the size of your business, the initiatives that matter most to you, your industry, and so on. There are many types of PPM that a company can adopt. These include but are not limited to:

Strategic Portfolio Management (SPM)

SPM connects a project portfolio’s execution to the organization’s vision. This includes making strategic decisions about the portfolio — what to prioritize, how significant a project is, and its impact on broader business goals. Effective SPM ensures investments and resources focus on the initiatives that drive your strategy forward, even as it evolves.

Agile PPM & Agility at Scale

In fast-paced, fast-growing, and evolving organizations, flexibility is vital. Agile PPM is defined by its responsiveness to change while continuing to ensure project efficiency and relevancy. This type of PPM is best suited to a company with an agile culture. It is most effective when paired with a Lean PPM approach — which centers around waste reduction and resource utilization.

Governance-based PPM

No matter how well-connected your teams and departments are, individuals will always have a unique way of working. When managing projects, a lack of standardization can slow things down, cause confusion, and waste resources. Governence-based PPM refers to developing standardized processes, practices, and templates that everyone in the organization must follow. This ensures consistency, improves comparability, and helps create a more integrated business.

Financial PPM

Financial PPM refers to prioritizing projects that deliver the highest return on investment (ROI). This approach ensures every portfolio is cost-effective, so it is particularly beneficial for any business that relies heavily on financial impact for its decision-making.

What are Project Portfolio Management Tools?

Project Portfolio Management software refers to the digital tools that enable Project Management Office (PMOs) to do their jobs more effectively. They work by creating a central hub for all project data, which everyone in the business can access. This provides team members and stakeholders with real-time, accurate business data.

The tool or platform will feature a project management dashboard, which visually represents this data. Platforms will vary, but dashboards will include project status, finance and budget metrics, schedules and timelines, and more.

Planisware, for example, is a cloud solution PMOs use to strategize, plan, and deliver projects, programs, and products.

What are the Benefits of PPM?

Implementing PPM into your business presents you with multiple benefits, including:

You have a centralized view of current and future projects.
Stakeholders can identify and eliminate duplicate tasks and share best practices.
Teams are more likely to complete projects on time, in scope, and within budget - with minimized risk.
Leadership can make informed and data-driven decisions about whether to continue or kill projects.
You have real-time insights into costs, return on investment (ROI), and more.
Better alignment and prioritization of projects with the overarching business plan.
Accurate and fair resource allocation.

Why is Project Portfolio Management Important?

With a Project Portfolio Management Office (PPMO) and high-quality, adaptable PPM software, you can identify needs across the whole company, consolidate ideas, prioritize projects, and better manage tasks, time, resources, budget, and capacity. This increased visibility of projects provides business leaders with real-time, accurate data such as revenue attribution, time allocation, and more. PPM helps future-proof your organization and ensure projects support the broader goals.

What are Some Project Portfolio Management Roles and Responsibilities?

PPM plays many roles and has several responsibilities in every business. This includes analyzing projects to ensure success, prioritizing high-value projects, and qualifying or validating projects where necessary. Other PPM roles and responsibilities include but are not limited to:

Ensuring all projects reflect the business strategy
Identifying and implementing an appropriate project management methodology to suit the project at hand, such as Agile or Waterfall
Creating a standardized approach to streamline projects within a portfolio
Managing, anticipating, and forecasting costs to maximize project/portfolio ROI
Developing a centralized view of all projects that everyone can access
Identifying and consolidating projects, their characteristics, and their teams
Defining and presenting financial and resource constraints
Prioritizing tasks and allocating resources effectively
Deploying resources such as time, budget, and team members to specific projects
Facilitating cross-team communication
Monitor ****and track key performance indicators (KPIs)
Measure project impact in real-time and provide accurate, reliable project reporting

If you are looking for a way to better manage multiple projects, we can help. Get in touch.

Project proposal

A project that is still in the planning stage, that hasn't been yet staffed or started. Project proposals also include any idea projects and idea campaigns, ie projects or campaigns whose aim is to generate new ideas for future projects.

Project Support Office (PSO)

See project management office (PMO)

related articles: building an effective enterprise portfolio management process

R

Resource Management

In the context of PPM, a set of tools, strategies and techniques used to actively allocate resources within a project, program or portfolio. Resources include workforce skills, budget, inventory, technical infrastructure, production resources etc.

Whereas capacity planning is concerned with the organisation as a whole and considers resources from a high-level point of view, resource management handles resources more actively and with more granularity within a smaller perimeter (a project, a program or a portfolio).

Related articles: planisware enterprise demo: capacity planning, planisware enterprise demo: operational resource management

Roadmapping

A visual planning technique which aims at building a big-picture view of a complex subject, starting with the long-term need, and working backwards to map all the possible ways to respond to that need.

The very flexible nature of roadmapping means that no two roadmaps will be the same, though they will generally share similar components such as long and short term needs, change drivers, internal and external constraints, and performance targets.

Roadmapping is particularly useful when a company (or an industry) is facing rapid technological change, disruptive competition, and cross-industry partnerships, as it helps visualise the objective alongside all the critical factors that may influence the end result, and allows for more effective, business aligned decision-making.

S

Scrum

A lightweight agile project management framework very popular due to its simplicity and flexibility, and often used in conjunction with other methods as it does not prescribe any technical practices.

Scrum uses 30-day iterations (called “Sprints”) and small (4 to 9 members) self-organising teams to deliver functional software with the highest business value. Before a sprint, the team members choose and review the backlog items that need to be implemented (the Sprint Backlog). During the sprint, each team meets daily to discuss what was accomplished since the previous meeting and any roadblocks that should be escalated or managed in priority (the daily Scrum). Once the sprint backlog is depleted and a new release can be produced, management closes development and the team perform the testing, documentation and training necessary.

Six Sigma

A management framework, originally invented by Motorola, that aims at maximizing the quality of an organisation's end products by identifying and eliminating sources of defects and reducing variability, until processes produce less than 3.4 defects per million opportunities for deviation.

Six Sigma uses statistical methods and the DMAIC / DMADV methodologies to systematically analyse and improve existing or new processes.

With the framework's increasing popularity, the expression "Six Sigma" also evolved to designate a business philosophy focused on meeting customer needs, and sustaining and developing the organization's products and processes using a disciplined data-driven approach to improvement.

Star Shema

The star schema consists of one or more fact tables referencing any number of dimension tables. It is the simplest style of data mart schema and is the approach most widely used to develop data warehouses and dimensional data marts.

Strategic Portfolio Management (SPM)

What is Strategic Portfolio Management (SPM)?

Strategic Portfolio Management (SPM) is a set of processes and business capabilities that aid in selecting the right investments to meet strategic goals. SPM is conducted at the top executive level of the organization.

SPM is about articulating a global, enterprise-wide strategy with its associated goals and expected outcomes. It aims to continuously deliver through projects, products, and services that transform the organization in the desired direction.

The term “Investments” in the context of SPM refers to many actions that touch on many business aspects. Some examples include:

Large-scale business projects (such as exploring a new market or investing in a significant new product development project)
Major transformation projects (such as digitization of a significant part of the business)
Major financial decisions (such as share buyback programs)

SPM has close ties to PPM and Project Management but at a much broader scope. SPM is becoming popular due to the need for more organizations to reinvent themselves in the face of disruptions.

What is the Difference Between PPM and SPM?

Project Portfolio Management (PPM) has been used for over two decades, but a newer model is emerging. Strategic Portfolio Management (SPM) is gaining popularity in larger organizations with ambitious goals. So, what is the difference?

Defining PPM

PPM allows businesses to centralize project management and align all projects and portfolios with broader objectives and goals. It refers to the tools, methods, and strategies used to manage a specific project portfolio, which includes overseeing several connected projects with a shared goal or outcome. PPM helps businesses streamline and optimize project delivery, as well as assess the value of individual projects and entire portfolios to the organization using real-time data.

Defining SPM

SPM’s key differentiator to PPM is its top-down approach and focus on enterprise-wide strategy-to-execution alignment and adaptation. In a 2017 report, Forrester Research introduced Strategic Portfolio Management (SPM) to the landscape. The difference lies in the modern need for digital transformation, agility, and a ‘single source of truth’ — which SPM presents to its users. This makes it suitable for large businesses and those looking to grow fast, scale at pace, or undertake many high-stakes projects at once.

How Does Strategic Portfolio Management Help Governance?

Governance describes the processes, practices, and people that have authority over and are accountable for business decisions. This includes standardizing processes, defining roles and responsibilities, and assigning key decision-makers for final approval. SPM provides a framework for standardizing, measuring, and reporting on projects, ensuring they relate to the company’s broader strategic goals.

Effective SPM supports governance by streamlining and centralizing all projects at an enterprise level. This ensures that everyone and every task is working towards the organization’s strategic goals. With standardized practices, methods, and templates in place, governance becomes more straightforward thanks to easier decision-making, clearer accountability, greater transparency, and more.

What is the Role of a Strategic Portfolio Manager?

A Strategic Portfolio Manager plays several crucial roles in a business. There will likely be some overlap with PPM. However, SPM takes a higher-level approach, more focused on connecting activities, tasks, and portfolios to business outcomes. The role includes but is not limited to:

Aligning projects with strategic goals
Identifying risks to the business, finances, and timelines
Providing information to solve issues
Ensuring teams complete high-priority projects first
Managing and allocating resources
Reporting on, predicting, and managing budget and finance
Increasing project visibility and creating a ‘single source of truth’
Gathering and utilizing data to make better business decisions

What Are the Benefits of SPM?

SPM helps businesses ensure that organizational goals are the focus of projects and portfolios, emphasizing the significance of strategic alignment. This higher-level approach presents many benefits, including but not limited to:

Better communication between teams, stakeholders, and the enterprise as a whole
Prioritizing projects that better align with the business’s strategic goals
Enhanced project ROI thanks to more centralized goals, objectives, and key results
Increased adaptability and clear visibility of when it’s time to kill a project
Accurate, real-time data to measure project success
Easier prioritization of projects and, in turn, resource allocation
A clear and centralized view of all information, projects, tasks, and budgets
Enterprise-wide standardization of processes and templates

If you are looking for a way to manage multiple projects better, we can help. Get in touch.

Sustaining innovation

A type of innovation in which sometimes small, sometimes larger creative features or evolutions are integrated to existing products, services, technologies or processes on an ongoing basis.

Sustaining innovation is an enterprise-level strategy that requires placing customer value at the top of the company’s priorities (and thus move other priorities such as shareholder value further down). It often will influence – sometimes significantly – the organisation’s managerial culture and processes.

Unlike disruptive innovation, sustaining innovation does not fundamentally alter the industry’s dynamic or upset its hierarchy.

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Technology roadmap

A type of roadmap that centres on a new product, process or an emerging technology.

Technology roadmaps are particularly useful to identify how incremental changes in current technologies may snowball into new products with a potential to disrupt existing markets, or where critical technology gaps (and opportunities for R&D investments) exist. They help develop a consensus about what current and future needs might be and what will be needed to satisfy them, and spot areas where combining R&D efforts could yield proportionally better, more effective results.

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Waterfall methodology

A product development methodology in which a project is broken into phases that follow each other sequentially in a steady flow downwards.

The classic sequence is composed of 5 broad phases: Analysis (or requirements gathering), Design, Implementation, Testing, and Maintenance, each ending with a checkpoint and deliverables.

Unlike the agile methodology, a project cannot move to the next phase until the current one is complete, and it is not possible to make changes to a previous step without starting the whole project from scratch. Each step is meticulously documented, which ensures continuity of the project if the team members change, and the overall process provides a structured approach that helps create from the start a clear image of what the end product will look like.